This comes off as excessively negative. They had a hypothesis, found out it isn't how they thought both from consumer and restaurent perspectives, moved away.

Far worse ideas sprout everyday and many get positive attention as well. Judge the process along with the idea.

With the context in this thread I would implement it as dynamic cancellation fees. You pay to reserve, but 100% reedeemable on bills. If you cancel, you lose a clearly notified percentage based on how popular the time slot is. Might work while still staying true to the idea of fairness.