[johnbenwoo]

The 'need' is that there are open seats at restaurants that don't have any open reservations, due to people showing up late or not showing up at all. This inefficiency can be looked at as unavoidable friction, or as opportunity for innovation.

Other industries in the hospitality world have their own ways around this. Most hotels have 24-hour cancellation policies and airlines have dynamic pricing. This is a new one for the (fine) dining industry, and one that will likely spawn different models for different types of restaurants.

[ghaff]

Some higher-end restaurants do take a deposit when you make a reservation but it's not common. I find it interesting that there's so much variation among different types of services (hotels, rental cards, hotels, restaurants, theater) with respect to cancelation or no show policies. It doesn't obviously always track to the cost.