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well, they aren't running a restaurant. it's a delivery only service and the economics are very different. For example, in the Brooklyn branch of the service t

well, they aren't running a restaurant. it's a delivery only service and the economics are very different. For example, in the Brooklyn branch of the service the prep kitchen and delivery center was located in Gowanus (low rent, industrially zoned neighborhood) and they were certainly not running a full-compliment of front-of-house and back-of-house staff the way a restaurant would. They also don't have to pay high rent for a good location. They also don't have a head chef on premises, and they aren't locked in to a specific menu style. I'm not totally familiar with the economics of it but I can easily imagine that it could, in principle, be a profitable operation even with the overhead of having a technology division to produce the website and app. for point of comparison: https://order.andofood.com/ https://order.andofood.com/ that's David Chang's delivery-only food service, which also has a technology division that produces a website and app. the prices on ando's menu are in line with their competitors in NYC. Munchery was always overpriced. I don't know if ando is taking a loss on every order or what, but I doubt it.

vkou 10y ago
That's the problem - they don't think they are running a restaurant. But they are - a restaurant with a ton of expensive, unnecessary overhead. That's why they will be out of business as soon as VC patience runs out. (And why Ricky's Pizza Joint, or a nearly-identical business will still be around.) The lack of head chef isn't an upshot for their business. It's a symptom of the problem. Compared to the cost of an engineering team, it's penny-wise and pound-foolish. If no-front-of-house-delivery-only could afford this kind of extravagance, then street food trucks would have gold-plated steering wheels.
petra 10y ago
On top of that, you can add significant saving on materials(maybe 30%-50%), and a lower labor cost per dish - both because of large volumes.
potatolicious 10y ago
The economics are different - though I'd hesitate to call them very different, but that's probably splitting hairs. I just took a look at the Munchery menu for my zip code, and honestly not sure why I'd ever use them in a market as competitive as NYC. The "aren't locked into a specific menu style" thing seems like more of a bug than a feature - lack of specialization means I drift towards more specialized restaurants that deliver. Why go for their beef stroganoff when I can get it from the amazing Ukrainian place that delivers to me? Why get the Korean rice bowl when there are several Korean places nearby? Chicken teriyaki - no shortage of Japanese-focused places that deliver, also. The nature of NYC's food market (and I'm sure true of other places too) is that delivery restaurants are running incredibly lean operations on razor thin margins - I think it's far from a given that a no-front-of-house-delivery-only restaurant operation can generate the kind of numbers that justify stratospheric VC-tech valuations. I'm also skeptical that they can achieve the kind of volume/market share they'd need to make their unit economics work. There seems to be this weird idea that, by serving 10-15 dishes a day, that they can capture a significant fraction of the total delivery orders in their service areas - in every zip code they operate in NYC they are up against literally hundreds of other delivery places. To the consumer they appear as one restaurant in a sea of many choices - I don't see how they can expect to capture and outsized portion of orders this way.

vkou 10y ago

That's the problem - they don't think they are running a restaurant. But they are - a restaurant with a ton of expensive, unnecessary overhead. That's why they will be out of business as soon as VC patience runs out. (And why Ricky's Pizza Joint, or a nearly-identical business will still be around.) The lack of head chef isn't an upshot for their business. It's a symptom of the problem. Compared to the cost of an engineering team, it's penny-wise and pound-foolish. If no-front-of-house-delivery-only could afford this kind of extravagance, then street food trucks would have gold-plated steering wheels.

petra 10y ago

On top of that, you can add significant saving on materials(maybe 30%-50%), and a lower labor cost per dish - both because of large volumes.

potatolicious 10y ago

The economics are different - though I'd hesitate to call them very different, but that's probably splitting hairs. I just took a look at the Munchery menu for my zip code, and honestly not sure why I'd ever use them in a market as competitive as NYC. The "aren't locked into a specific menu style" thing seems like more of a bug than a feature - lack of specialization means I drift towards more specialized restaurants that deliver. Why go for their beef stroganoff when I can get it from the amazing Ukrainian place that delivers to me? Why get the Korean rice bowl when there are several Korean places nearby? Chicken teriyaki - no shortage of Japanese-focused places that deliver, also. The nature of NYC's food market (and I'm sure true of other places too) is that delivery restaurants are running incredibly lean operations on razor thin margins - I think it's far from a given that a no-front-of-house-delivery-only restaurant operation can generate the kind of numbers that justify stratospheric VC-tech valuations. I'm also skeptical that they can achieve the kind of volume/market share they'd need to make their unit economics work. There seems to be this weird idea that, by serving 10-15 dishes a day, that they can capture a significant fraction of the total delivery orders in their service areas - in every zip code they operate in NYC they are up against literally hundreds of other delivery places. To the consumer they appear as one restaurant in a sea of many choices - I don't see how they can expect to capture and outsized portion of orders this way.