A new lawsuit is just the latest example of why AI probably shouldn’t be used for everything. A Pizza Hut franchisee claims the chain’s AI-powered delivery system, meant to optimize orders and speed up deliveries, instead backfired and cost it more than $100 million. Earlier this month, in the Texas Business Court, Chaac Pizza Northeast sued Pizza Hut after its restaurants were forced to use an AI delivery management platform known as Dragontail. Pizza Hut’s parent company, Yum! Brands, acquired Dragontail Systems in 2021. Chaac Pizza Northeast operates more than 100 Pizza Hut locations in New York, New Jersey, Maryland, Washington, D.C., and Pennsylvania. The company alleges that before it adopted Dragontail, more than 90% of its pizza deliveries arrived within 30 minutes of an order being placed and that it consistently received high satisfaction scores from customers.
But Chaac claims the system’s rollout caused “cascading operational breakdowns and customer dissatisfaction.” The main issue appears to be that Dragontail gave DoorDash delivery drivers access to real-time status, workflow, and order timing. Chaac alleges that some drivers used that information to wait up to 15 minutes in the restaurant for additional orders, leaving pizzas sitting out after they came out of the oven and resulting in longer delivery times.
