ReservationHop Makes Money by Squatting Over Something That’s Free

reservations anyone?ReservationHop, the new restaurant reservation app, takes a working, functional, free system — calling restaurants and making reservations — and monetizes it.

Specifically, it monetizes the system by calling San Francisco area restaurants in advance, making a number of reservations under fake names, and selling those reservations back to the general public. (To quote CNN: “The going rate for a reservation on the site appears to be $12.”)

The ire is already out. Plenty of people think ReservationHop is unethical and unfair to both patrons and restaurants. It’s the equivalent of ticket scalping, only it’s a bit worse because restaurant reservations, unlike concert tickets, are supposed to be free.

How bad is the ire? TechCrunch ran an article with a giant middle finger. Here are a few tweets that sum things up:

“@bmmayer” would be ReservationHub founder Bryan Mayer, who responded to the outrage with the humblebrag blog post “How I Became The Most Hated Person in San Francisco, For A Day.” (He leads with “I built it over the weekend after waiting at Off the Grid for 30 minutes for a burrito from Señor Sisig.”)

There are a lot of things to pick apart here — what if ReservationHop can’t sell back all of its reservations, what if restaurants decide they don’t want to reserve tables for fake names, what if the restaurants DO really like the idea — but the really interesting part of this story is the idea that ReservationHop is trying to make money by squatting over something that was already free.

We’ve already seen the apps that try to make money by squatting over an inefficient paid service, the way Uber squat over taxis, but ReservationHub is one of the few apps that dares to squat over something free, fill its hands with the free resources, and then make you pay to access them.

Imagine the other services startup companies could monetize. How about LibraryHold: one company puts holds on all the popular library books, then sells them back to you. Or an app that squats in parking spots until you pay them to relinquish the space — oh wait, that one already exists.

If the giant pool of money, to borrow a phrase, appears to be growing smaller, people will start to lay their claim to services that are free. ReservationHop might not have touched restaurant reservations if there had been an inefficient paid service for them to restructure and re-monetize. But taxis, hotel rooms, laundry, etc. were already taken, and reservations were still available.


Photo: Christopher Sessums


12 Comments / Post A Comment

Yeah this is worse than ticket scalping. In that case, the venue and the band already got their money, someone is trying to make extra money.

In this case, a restaurant could potentially end up with a full reservations list and an empty restaurant.

Pretty disgusting how the tech world is becoming a way to extract money from people under the guise of “efficiency”.

Liz the Lemur (#3,125)

I cannot imagine any restaurant that would be in favor of this system. At all. Between the anger of restaurant owners and customers, I can’t imagine this surviving.

ronswansonluva (#6,465)

Oh my God, I have seen this start-up written up everywhere, but I am just realizing – Brian Mayer is my friend’s terrible ex! I am totally unsurprised by this.

samburger (#5,489)

@ronswansonluva DIRT PLZ

Amanda M. (#7,040)

@ronswansonluva !!

bgprincipessa (#699)

Regarding the parking squat app mentioned in the tags: someone here in Baltimore started a similar one called Haystack (like… looking for a parking spot is like looking for a needle, I guess…). He invested a lot of $ (possibly his parents’ if the rumors are true…) and did a TON of marketing when it launched. And as far as I can tell so far, everyone’s basically been like LOL NO and the app hasn’t done much business at all.

guenna77 (#856)

it pretty much is what everyone hates about start-ups. some rich lazy dickwad sees an opportunity to cockblock people using technology and money, instead of waiting his turn like everyone else. this isn’t providing any kind of service – it’s just a semi-legal hostage situation.

I generally avoid restaurants that have reservations anyway. This makes me want to avoid them even more.

cryptolect (#1,135)

It’s funny, the phrase “squat over” just makes me envision these apps pooping on everything.

Lily Rowan (#70)

@cryptolect ME TOO

themegnapkin (#444)

I read about a group of Stanford students doing this as part of a class project to come up with and implement a business with $5 + 2 hours labor (planning time as long as desired). So douchey and terrible.

HelloTheFuture (#5,275)

@themegnapkin Wait, I remember this anecdote from when I took an entrepreneur class! (Also, note to self: write Billfold piece about the time I took an “entrepreneur class.”)

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