Fledgling chains of high-tech gyms and recreational spots that don’t have on-site employees are cropping up nationwide – and some are grappling with shoplifting and randy customers.
Their novel business model is employee-lite during a stubborn labor shortage — and they seized on a soft commercial real estate market during the height of the pandemic to secure locations at bargain prices.
One’s a ping pong parlor where customers book a reservation with their phones and let themselves in — all unattended; another’s a pool hall that works the same way.
But even landlords have questions about renting to businesses that have no one manning the store, conceded David Silberman, co-founder of PingPod, which operates three locations where people can reserve a ping pod table any time of day or night in Williamsburg, Brooklyn, on the Lower East Side and near Times Square.
Here’s how it works: Customers let themselves into a PingPod location by using their pre-paid online reservation, which displays a pink tab on their smart phone that lets them unlock the door with a tap. A table costs between $15 and $40 an hour depending on whether it’s a peak time.
The vast majority of customers have entered the unsupervised locations, played their games and left without incident, Silberman said, adding that there have been no fights between customers either. But PingPod, which debuted in early 2020, has had to address some inappropriate behavior.
Despite high-tech security systems with intercoms — and multiple cameras overlooking each table that monitor everything from customers overstaying their allotted time to drinking alcohol in the pods — some people have overstepped boundaries.
“There has been some canoodling in our private pods where hands are moving into areas where they shouldn’t,” said PingPod co-founder Max Kogler.
In one instance a couple started to get frisky on the couch next to the ping pong table in one of the private pods, he said.
PingPod’s security team interrupted the lovebirds via the intercom, “reminding them to keep it clean,” Kogler said. “We’ll ‘voice down’ [on the intercom] when things like that happen,” he added.
Sticky-fingered customers have also made off with some of the merchandise that’s for sale on-site, including $24 hats, $18 T-shirts, snacks and beverages.
“We are thinking about putting a hold on our credit card reservations for more money than the play time to cover our costs,” Kogler said.
PingPod is among half a dozen or so “autonomous” businesses focusing on recreation that have either cropped up during the pandemic or expanded their operations with fresh capital from investors who see the value of a business with low labor costs and a reliance on technology.
PingPod angel investor Ben Borton said for most of these “rec tech” businesses their biggest expense is rent rather than labor.
In New York City alone there are at least 14 such locations, including pool halls, squash courts and recording studios with at least another half dozen outlets in the pipeline.
“It doesn’t make sense to have someone sitting there all day to do a boring job,” said Jessica Ressler, co-founder of Sharks, a pool club that launched in September 2020 and has since opened six locations in New York City.
All of the businesses rely on apps for reservations, remote access technology and surveillance systems mostly manned by outside firms. They also contract with cleaning services.
Their nearly worker-free presence comes at a time when fast food restaurants, retailers and warehouses and delivery operations are relying more heavily on technology to replace hourly workers.
Some, like PingPod, which is opening another four locations — including one in Philadelphia this year — are open 24-7.
So far, the businesses say customers are mostly behaving themselves. SquashRx operates two locations in Manhattan “where nothing crazy has happened,” founder Brian Mathias told The Post.
At Sharks, customers will occasionally steal the 8 ball, Ressler said. “It’s pretty PG to be honest,” she added. “People take off their shoes and dance or parents bring their kids for a night out.”
Shark’s allows customers to bring alcohol and food into its facilities — which makes for an inexpensive outing considering that Sharks charges just $36 per hour for four guests at its Brooklyn and Queens locations and $50 for four players in Manhattan. Each additional person costs $10.
At Silofit, a Montreal-based gym chain that offers hourly rates of $20 to $40 for private workout spaces, the most controversial behavior management has to contend with is customers who get too hot and shed their shirts or shoes.
“When you have a private space, people feel free to do what they want,” said Silofit chief executive, Wilfred Valenta. “The challenges are keeping up with cleanliness and ensuring that people follow our protocols.”
While Silofit installed cameras in the individual rooms, they are not monitored, Valenta said, and there is no intercom system — but there are panic buttons in case someone injures themselves.
Silofit raised $10.2 million last year to help it open another 15 locations and to expand into the US, where it’s opening gyms next month in Miami, and by September in Chicago and New York City, where Valenta says Silotfit gyms could operate 24-7.
“We likely raised our [first-round] funding faster because of the availability of cheaper real estate in the US because of the pandemic,” Valenta said.
Talking to customers via an intercom can be jarring, Kogler of PingPod conceded.
Some customers have complained about the “stern” tone of the security official who might warn that a customer is staying “20 minutes past their reservation and might be charged,” Kogler said. “But we’d rather err on the side of being a little more stern, because safety and security is our concern.”
Borton, the angel investor, for one, was reminded during the height of the pandemic to keep his mask on.
“I’d lowered it for a minute and security immediately told me to put it back on,” he told The Post. “But it was sort of reassuring to hear that.”
But the PingPod cameras aren’t just used for security purposes.
There are replay buttons next to the tables that allow customers who make a great shot to have a replay of it sent to them in an email.
“As soon as someone hits a great shot or a funny shot people start yelling ‘press the button’ and pointing to the button,” Kogler said. “It’s definitely become a thing at PingPod.”