For better or worse, food delivery apps are reshaping American restaurants
Delivery-only establishments fired up their grills around 2013, when Grubhub backed the Green Summit Group, a restaurant startup that produced food for various delivery-only brands out of its own kitchen in New York.
Today, as more and more people order in, Grubhub and its competitors like Uber Eats, DoorDash and others have helped thousands of new age restaurants get off the ground through their apps all across the country.
But, while delivery app technology changes up the menu on the food service industry, it’s also taking a fresh Nakiri knife to the restaurant dining experience, and it’s phasing out some restaurants that have long relied on their own delivery service as a major revenue stream.
I ain’t afraid of no ‘ghost-kitchen’
The shift has bolstered 2 new kinds of digital eatery establishments — “ghost kitchens” and “virtual restaurants.”
Virtual restaurants, which are attached to real-life restaurants but make different food specifically for the delivery app market, are leading the charge — revitalizing some seemingly doomed local culinary staples.
Of course, as the world leans toward ordering in over sitting at a restaurant with no Netflix, it’s only a matter of time before Ghost kitchens, AKA remote kitchens that exist entirely for delivery services, become the new norm.
It’s not just the big boys
CloudKitchens, founded by Uber’s ex-CEO Travis Kalanick, has leased space to several restaurants in LA (including Sweetgreen), and Pasadena, CA-based Kitchen United plans to build 400 ghost kitchens across the country over the next few years.
Ghost kitchens have also emerged in China. The country’s food delivery industry hit $70B in orders last year, and the Chinese-based Panda Selected recently raised $50m from investors.
Not every restaurant is adapting
Uber Eats and other delivery apps insist that their apps have increased sales for restaurateurs by an average of more than 50%.
Many restaurants report that Uber’s figures are accurate.
But others — particularly those that relied on delivery orders for revenue since before Uber was even an idea in Travis Kalanick’s diary — have struggled to pay these platforms’ standard 15% to 30% commission fees and subsequently had to turn off their grills.