Sunday, July 15, 2018
Business

OpenTable Says Employee Used Rival Service to Book Hundreds of Fake Restaurant Reservations

An eight-person party on New Year’s Eve. Several groups of six on Saturday nights.

Danny Beck, the owner of the Pearl’s Southern Comfort restaurant in Chicago’s Edgewater neighborhood, began noticing such no-shows, often at crucial moneymaking times, at an unusual frequency in recent months. Such failed reservations leave tables open for hours, depriving servers of tips and forcing walk-in diners to be turned away.

It turned out dozens of other restaurants using Reserve, an online reservation system, were having similar problems with no-shows. And this week, as detailed in a story at Eater, the company said it had discovered the cause: An employee at OpenTable, a rival reservation system that is considered the giant of the industry, had used Reserve to place more than 300 reservations at 45 Chicago restaurants, with the intent of leaving the tables empty.

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OpenTable confirmed that the employee had been fired, insisting that he or she had gone rogue and that no one else in the company knew of or directed the plan. It pledged to reimburse the restaurants for lost money and apologized, in a statement on Monday, for "this disgraceful, unsanctioned behavior."

Some of the restaurant owners harmed by the scheme were livid.

"I just think that’s one of the lowest, dirtiest tactics I’ve ever heard," Beck said in an interview Monday.

The fake reservations started in December and peaked around Valentine’s Day, said Greg Hong, chief executive of Reserve. The person tried to conceal his or her identity and used multiple email addresses, but company investigators were able to trace the person to OpenTable, he said.

Hong contacted OpenTable executives on Feb. 20, and the employee was fired on Feb. 22, an OpenTable spokeswoman said. The company did not describe the employee’s role or possible motive.

Executives at OpenTable and Reserve declined to share specifics of their investigations, but both companies said the person appeared to be the only one involved. Christa Quarles, chief executive of OpenTable, said the tactic was "antithetical to who we are."

"We agreed that this person acted by themselves and terminated them quickly thereafter," she said. "It was a really cut-and-dried situation in our mind."

But that did not fully appease Reserve or some of the restaurant owners. Hong called it a "deceitful way to try to make Reserve look bad."

"The byproduct of this is the restaurant is impacted," he said. "So now the restaurant doesn’t have seats filled and other customers are blocked out. And ultimately, the restaurant is the one that’s harmed the most."

Peter de Castro, an owner of Tavern at the Park, said Monday that his restaurant had 25 no-shows at crucial times over two months, all groups of four and up. The result was turning customers away and higher staffing based on the expected demand — "a perfect storm of losing money," he said.

He didn’t believe the explanation that the OpenTable employee was a lone wolf.

"It justs seems a little fishy that one employee would do this without orders from higher up the food chain," he said.

Quarles said that she understood the frustration and that the company was working to rebuild trust. She sent a memo to OpenTable’s staff last week that disavowed the action and encouraged employees to use an ethics hotline if they spotted inappropriate behavior. She also sent a letter to Chicago restaurants that use OpenTable, describing the incident and saying that it "goes against everything we stand for."

"The first rule of hospitality is if something goes wrong with a restaurant, you make it right," she said. "You’ve got to make it right, and we’re going to do that."

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