You are viewing...

Restaurants being "Killed" by Food Delivery "Apps". Long live Cloud Kitchens.

Updated on June 21, 2020 at the 14th hour
Posted under:

DISCLAIMER: Expressed views on this blog are my own.

Sensational news galore.

I stopped ordering from restaurants in general because costs too much compared to buying ingredients and making a decent version of what I want. Y'know kinda like how software works and I love making customized software.

Keyword for food delivery is time.

I don't wanna spend my time to walk to the restaurant, wait, get a waiter, order, wait, wat, wait, get some food, probably some service from the waiter, eat, wait, wait, paycheck, wait, waiter pick up paycheck, wait, wait and write some tip and leave.

So I don't always want the "restaurant experience", just order pick up then. That means having to order, wait, wait, wait, wait, get notification, transport yourself to the restaurant (car, walk, bike, scooter, bus. I've done 3 of these.) then wait, finally available cashier to ask about your order, wait, pay for meal, and transport yourself home (hopefully the food isn't cold and/or overcooked by then).

Then there's the third option: let someone else do it. Y'know the part that Uber and co. provide as a service. Right, so I order and wait, wait, wait, notification about food being picked up wait wait and delivery.

The third option is highly attractive, so why are some restaurants complaining about it? Volume and a bad contract.

The business owners understand food delivery is a business they did not want to get into, so they outsourced it. Turns out the contract is shit for them, but they took on the deal anyway. As in the article, these business owners are now trying to shift orders towards the second option. Uh huh, wtf?

Restaurant is asking me to do the harder thing instead of the easy thing because they have a bad contract. If you ask me, if 90% of your business is food that is going out then it is time to build that brand rather than complain that you don't wanna change. Spent a fortune acquiring the best place, but most of my customers actually want to order online! Here are some options.

1. Your contract doesn't scale and you feel you have no leverage. Renegotiate your contract or leave the business and find a more favorable delivery partner.

2. Cut the middle man and form a delivery partnership between restaurants in your area. Open source whatever tools that are needed to form these cooperatives.

These complaints are exactly why I am bullish about Cloud Kitchens as an restaurant aggregation model.

With Cloud Kitchens, on the customer side, I can order any choice of food/drinks ranging from entrees to dessert with drinks like milkshakes or soda. Each item can be fulfilled by a restaurant in the kitchen, packed up so that the delivery(wo)man will pick it up from the cloud kitchens' kitchen and deliver. That alone cuts the number of trips and time on all sides while leaving the customer with good food.

How could you cut the fees more? Cut out the humans at least for short distance. Drones, land, air and sea, can and will deliver food over short distances to customers while keeping the food warm or cold (feature that humans cannot do). Drones can ferry food from Cloud Kitchens' kitchen to kitchen to lighten the load on stressed kitchens or increase the range of available offerings.

3. Join Cloud Kitchens and decrease base restaurant costs and potentially increase customer range.

Cloud Kitchens are huge business and it will deliver. There is and will always be space for the traditional eats and food delivery. I just think that Uber Eats and co will be eaten up or at least tied in with Cloud Kitchens where available. I think it is obvious that the beginnings of businesses has high costs until it hits a volume that drags down prices. Kitchens who partner up will have to be smart about negotiating with respect to scale or find themselves being dragged.

Little story: When UberEats first came out, I was slightly skeptical, but ordered with my Uber Credits. Coworkers were highly skeptical and believed that the food was cold, so they hardly if ever ordered. Weird beliefs and followers I suppose. I was hooked and then a bull. Food in 20 mins. Of course, this was when Uber had a very limited selection. When they expanded to today's model a few short months later, food was always within 40 or so minutes. I was still bullish about it until I stopped ordering in the city. Outside of that were shitty choices such that DoorDash was the better option. That's where Uber screwed up and/or had no chance of penetrating. I'm not a bull on UberEats or DoorDash, as a model, anymore.

I always thought it was silly that I could not order across restaurants especially in the same vicinity. Oh well, long live Cloud Kitchens. Travis Kalanick and other Cloud Kitchens founders have made a very smart bet.

You just read "Restaurants being "Killed" by Food Delivery "Apps". Long live Cloud Kitchens.". Please share if you liked it!
You can read more recent posts here.