Taco Bell, owned by Yum Brands, is integrating artificial intelligence (AI) into its operations, showcasing “Byte by Yum,” an AI-powered tool for restaurant managers. This initiative is part of a larger $1 billion investment in digital technology, aimed at improving efficiency and customer experience. The announcement was made at a Yum investor meeting in Brooklyn, NY, where executives highlighted the current and future applications of AI in Taco Bell restaurants. According to Chief Digital Technology Officer, Mathews, AI implementation is already underway in areas concerning labor and inventory. Chief Operating Officer Jason Kidd presented a video demonstrating a restaurant manager interacting with the Byte AI Restaurant Coach, which assists with tasks such as managing employee schedules and drive-through operations. As of now, approximately 500 Taco Bell locations in the U.S. have implemented AI voice technology to manage drive-through orders, a significant increase from the 100 locations using the technology in July 2024.

The Byte AI Restaurant Coach can identify when employees have not clocked in for their shifts and suggest solutions, such as reassigning drive-through duties. It also monitors competitor activities, such as reduced operating hours, and suggests extending Taco Bell’s hours to capitalize on late-night sales. Additionally, the AI assistant aids in inventory calculation, saving managers time. While Yum has not confirmed whether AI is currently performing all of these functions, the company has plans to expand AI applications. According to analysts from Bernstein, Yum’s internal software suite could potentially be marketed beyond the Yum ecosystem. Taco Bell’s adoption of AI reflects a broader trend in the fast-food industry, with companies like Chipotle and McDonald’s also investing in AI and automation. Despite challenges faced by McDonald’s in its AI ventures, Taco Bell is confident in its AI-powered drive-thru system, which has been tested and refined for over two years.

Taco Bell is not alone in using AI, as other fast-food chains like Wendy’s, Carl’s Jr., and Del Taco are also implementing AI technology at their drive-thrus. Wendy’s has created “Wendy’s Fresh AI,” a generative AI platform focused on quality and customer needs, while Carl’s Jr. Uses “Tori,” an AI device designed to improve accuracy, speed, and revenue in the drive-thru ordering process. Del Taco uses AI-generated Presto Voice to greet customers, take orders, and upsell. Taco Bell aims to optimize operations, improve customer satisfaction, increase order accuracy, reduce labor costs, and decrease wait times through AI. The company believes that AI can ease the workload for team members, allowing them to focus on front-of-house hospitality and engage with customers in meaningful ways.

Taco Bell’s AI-powered drive-thrus utilize digital menu boards, Yum! Brands’ Poseidon POS system, and the Taco Bell Rewards loyalty program. The company’s “Go Mobile” restaurant model, introduced in 2021, eliminates indoor dining space to address drive-through bottlenecks, featuring dedicated parking for mobile and delivery orders, an outdoor pick-up window, and grab-and-go shelves. Taco Bell now has an AI-enabled labor scheduling program in more than 5,000 U.S. locations. The AI is designed to improve efficiency through improved forecasting, which should enable a more efficient use of labor. The chain is also using more AI-based marketing campaigns, which are designed to increase customer engagement and drive more purchases. Yum projects an 8% increase in same-store sales for Taco Bell in the upcoming quarter.