14 ms·

Uber’s Restaurant Empire

171 points by PretzelFisch 8y ago

SideburnsOfDoom 8y ago
Seems similar to this: https://www.theguardian.com/business/2017/oct/28/deliveroo-dark-kitchens-pop-up-feeding-the-city-london https://www.theguardian.com/business/2017/oct/28/deliveroo-d... Which talks about "dark kitchens" i.e. existing, well-known chain, having a branch that purely serves delivery services.
KeepTalking 8y ago
hmmmm.... I wonder if Uber eats can do what AirBnb did to the hotel business by allowing home chefs-after-6pm to take low risk experiments and launch micro Uber only restaurants from their home kitchen or a common kitchen (managed by Uber eats to deal with sanitation challenges).
- zby 8y ago
  Sounds risky. Not that uber drivers are riskless - but food can be spoiled in less obvious ways than driving.
- stephengillie 8y ago
  It would have to be a common kitchen, and they would need everyone to pass a food handler's class. Given Uber's reputation for bucking regulation, I would be doubly-hesitant to trust meals from their kitchen.
- extrapickles 8y ago
  It would have to be from a commercial kitchen to pass health regulations in most places. There are a few restaurants than share kitchens with the one next door, and I would not be surprised if they had a virtual restaurant or two for delivery only. No reason that the kitchens that food trucks use can’t support this as I suspect they dont have much demand for space around 5pm.
  - dawnerd 8y ago
    In Portland damn near every food cart is on some delivery platform. It’s actually made ordering from some of my favorite spots almost impossible in person since their order volume is just too high.
  - Forge36 8y ago
    I agree with your point on kitchen sharing, but I'm wondering if we sharing an incorre assumption: should we expect that the laws will be followed? Policing unlicensed taxis _should_ have prevented Uber from succeeding. I recall early Uber being a considered "ride-sharing" in attempt to avoid this problem. How will unlicensed restaurants be enforced? Will people simply call the practice food-sharing or splitting-meals? Start from the same model: two friends living across the city but one didn't cook, the other makes large meals. Uber meals is just a delivery service. Combine with money transfer app: it's not a restaurant, is a group of friends pitching in for a good meal. Uber successfully managed to get driver's to assume the risk when running unlicensed taxis. It wouldn't surprise me if they could reimagine that success here. The biggest hurdle I foresee: keeping the branding, and scale small enough to fly under the radar until it's well established
    - petra 8y ago
      If you sell food without a license, in some states you could go in jail. So it's pretty different from getting a fine which UBER pays.
    - extrapickles 8y ago
      There are a few places that stay under the radar, but generally they don’t heavily promote the food side of the “experience”, and aim their businesses at non-locals who would be less likely to report them if they are not perfectly happy. Another problem is that health laws are generally stronger and better enforced than taxi law. See [0] for the definition of a Food Establishment for Washington State. Also there are generally tip lines for reporting restaurants and it only takes 1 person to have a bad experience to shut down a location. [0]: http://apps.leg.wa.gov/wac/default.aspx?cite=246-215-01115 http://apps.leg.wa.gov/wac/default.aspx?cite=246-215-01115
- esotericn 8y ago
  Individuals are not allowed to opt out of commercial food safety in most advanced economies. It could be done using a decentralized platform, but any registered company attempting that sort of business model wouldn't last very long.
  - acover 8y ago
    Individuals weren't allowed to run unlicensed hotels or operate unlicensed taxis. I've never gotten sick from home cooking but have from restaurants. I always hear horror stories about the conditions of restaurants. Does anyone know why the risk rate of food production in a home kitchen thought to be higher? Can that be mitigated somehow?
    - kevin_b_er 8y ago
      Your "home cooking" wasn't required to make profit. This perverts the incentive from "good food" to "profit". Also your home cooking has a reputation issue. Uber Eats will not have a reputation issue. Any given "restaurant" can be a facade easily recycled into a new brand name. Any problems Uber can pawn off as a problem with that restaurant and not a fundamental problem of Uber operating above the law and not having safety regulations on its "independent contractors". As Uber has repeatedly shown a disregard for laws, we can expect it will continue to show a similar disdain for safety, including food safety.
    - jaequery 8y ago
      I guess there too many variables. But most important is. Depends on the cleanliness of the home and willingness of the chef to properly handle food
    - crazygringo 8y ago
      > I've never gotten sick from home cooking Well then you and your family and friends happen to follow good hygiene standards... but plenty of people don't, and are even more incentivized not to if there's a buck or two in it. ("I think I can still use this meat..." "I'll just wash off this mold...") I don't know why you'd trust random strangers cooking out of their homes with zero food safety training whom you haven't personally vetted at all. It's not to say commercial kitchens are perfect, but there are verifiable processes in place to try to hold them to certain standards and ultimately shut them down if they don't, which simply aren't scalable to apply to home kitchens.
- disappearance 8y ago
  I think Deliveroo Editions use commercial kitchens from temporary shipping containers, dropped in 'dead space', out of hours car/ industrial parks. Ah, from 2017: https://www.theguardian.com/business/2017/oct/28/deliveroo-dark-kitchens-pop-up-feeding-the-city-london?CMP=share_btn_link https://www.theguardian.com/business/2017/oct/28/deliveroo-d...
PretzelFisch 8y ago
It would be interesting to have access to an anonymized uber eats order dataset.
ben_jones 8y ago
Op-ed from a former power user: Uber eats caters in part to the socially anxious and introverted demographic with moderate to high levels of disposable income. It pushes high margin, low-quality, foods at 2x or more pricing - particularly pizza, wings, chinese, and burgers. With some exceptions a large portion of these restaurants delivered already for lower prices, but with less convenience such as order tracking or ordering through an app. Over-time many "power users" of Uber eats and similar apps will regress to only a couple favored restaurants or stop using the app entirely. Uber eats will optimize for these power users to the detriment of non-chosen parties for the worst of the ecosystem as a whole.
- stephengillie 8y ago
  Many of these stores have a counter or wall full of tablets - 1 for each delivery service. They have an Uber Eats tablet, a GrubHub tablet, DoorDash tablet, Bite Squad tablet, etc.
  - fjsolwmv 8y ago
    Maybe in SF. In the rest of USA is just Uber
    - stephengillie 8y ago
      Seattle, actually.
      - cwilkes 8y ago
        I’ve seen some restaurants with more than one tablet from the same delivery company. Couldn’t understand that, surely one tablet can handle multiple orders?
    - reaperducer 8y ago
      GrubHub owned online delivery in Chicagoland five years before Uber was even founded, and still does a better job than UberEats. I believe it also owns Seamless, and a couple of other services like Eat24.
kerng 8y ago
Had never thought about this, but it's pretty smart idea. Wondering if this will become more and more the norm, especially catering singles. Is there a way to search for these online only restaurants exclusively?
tardo99 8y ago
The thing that really impresses/surprises me about the growth of services like these is that people have so much disposable income to pay for stuff like this. In the news one reads constantly about how people are stressed financially. Maybe people are diverting money they once would have spent on other luxuries (cable tv maybe?) toward this kind of expense.
- r00fus 8y ago
  One word: kids. For a family of 4 or 5 or if you have baby, going to a restaurant is much more challenging than eating in. We order in usually once a week - sometimes from DoorDash sometimes from the restaurant directly.
- huac 8y ago
  couple factors - growing inequality: more people at each end of the spectrum; rich get richer (and have more income for food delivery), poor get poorer and lack full-time job opportunities (and are more incentivized to take low income, insecure delivery jobs) - it's expensive to be poor: working more hours means fewer opportunities to buy groceries or take time to cook.
- pjc50 8y ago
  The inequality slope is increasing. There's a fairly large upper middle class of people who work+commute long hours and are prepared to pay for extreme convenience. While at the same time there's also a precariat of people for whom earning a small and variable amount outside normal working hours sounds like a good idea, providing cheap labour to these services. https://delong.typepad.com/sdj/2009/02/changing-relative-prices.html https://delong.typepad.com/sdj/2009/02/changing-relative-pri... : "In Agatha Christie's autobiography, she mentioned how she never thought she would ever be wealthy enough to own a car - nor so poor that she wouldn't have servants..." Perhaps that is now reversing. Or the gap is wide enough to have a servant with a car.
- actuator 8y ago
  Cable TV? I am quite sure in the future we are going to pay almost the same amount what people were paying for cable TV. Not all content is available on each service so in the end people will end up subscribing for Netflix, Amazon Prime, HBO, Disney whatever etc. Plus more for sports. Also, good luck to people who don't have true unlimited plans, as streaming all those high definition bits over the internet just means paying your ISP more.
diogenescynic 8y ago
I will not order take out from Uber. I’ve seen drivers with the food on the floor with passengers sitting over it. Deliveries also aren’t quick.
- icebraining 8y ago
  Weird; in the two cities I've seen them, all UberEats drivers use mopeds, they don't drive people as well. How does that even work? I don't think the apps let you coordinate the delivery and ride.
actuator 8y ago
I think this is pretty common across industries where a platform acts as an aggregator/marketplace. Case in point services like Amazon.com, Netflix have their own brands/content as well. Netflix is known for using data of people's content consumption to make new content. I think this makes sense for two reasons:- - Tighter control over what you produce, so higher margins and potential differentiators(like the burger example in article). - Acts as a defensible strategy for the aggregator if it can tie these brands with itself. The only scary thing is when these marketplaces/aggregators just kill small businesses because of controlling the "storefront", discovery and leveraging economies of scale. Example search in Amazon: https://imgur.com/a/zHDueIk https://imgur.com/a/zHDueIk
- vageli 8y ago
  > I think this is pretty common across industries where a platform acts as an aggregator/marketplace. Case in point services like Amazon.com, Netflix have their own brands/content as well. Netflix is known for using data of people's content consumption to make new content. I think this makes sense for two reasons:- In this case it's quite different, I believe, in that Uber will notice an underserved market and reach out to existing players/small business in that area to expand into that market. This sounds very different than Uber using their market knowledge to create a competitive advantage for themselves.
  - actuator 8y ago
    This is just the cynic in me; but I think this is just for now, because it allows them to test these theories and ramp up faster. In the future Uber might just decide to go the Amazon way or just cut deals where they earn significantly higher margins compared to other restaurants.
    - brubrant 8y ago
      I doubt. Making food had nothing to do with their core business...
    - fossuser 8y ago
dawhizkid 8y ago
I'm still waiting for someone to figure out how to make "Etsy for food" work at scale. My guess if/when it happens it will look somewhat like what Uber has i.e. rent licensed "ghost kitchens" to small cooks by the hour and make all deliveries originating from those kitchens.
- appwiz 8y ago
  Sounds like Cloud Kitchens is trying this model - https://www.cloudkitchens.com https://www.cloudkitchens.com
- netsharc 8y ago
  Seems that's already happening: https://www.theguardian.com/business/2017/oct/28/deliveroo-dark-kitchens-pop-up-feeding-the-city-london https://www.theguardian.com/business/2017/oct/28/deliveroo-d... Article lead: As appetite grows for upmarket takeaways, delivery service is setting restaurants up with satellite kitchens inside metal boxes.
- foolfoolz 8y ago
  That’s Gobble https://www.gobble.com https://www.gobble.com They’ve been around a long time
  - hayksaakian 8y ago
    That sounds more like the ikea.com of food. As I understand Etsy, you're ordering complete products
    - karthikvellanki 8y ago
      Gobble went through various iterations/pivots in their seven years of existence. One of the iteration was an Etsy for food - which didn't work. As you said, they are currently operating on the Ikea for food model.
      - foolfoolz 8y ago
blatherard 8y ago
Seamless had virtual restaurants at least 5 years ago. I remember in particular my wife liked to order burritos from a certain restaurant, named "Coastal" on the UWS. We tried visiting the restaurant based on the address, and found out that it was actually "Citrus", an upscale latin american place with an entirely different menu (that has since closed).
- smmnyc 8y ago
  I used to live on the UWS and remember Citrus. Never encountered Coastal but do recall an eclectic menu. (No burritos though!)
QML 8y ago
In reflection, it’s a good idea. Consumer preferences are hard to gauge; there isn’t much of a feedback loop right now with restaurants beyond you either have business and are sustainable, or you don’t and lose it all. This is comparable to YouTube giving you different advertisements, but that these ads (restaurants) are really expensive to run and experiment with. Virtual restaurants essentially bring A/B testing from the digital realm to the physical one. They provide and shorten the feedback loop, lowering the cost of exploration by centralizing and by economies of scale; and resulting in greater exploitation (not in the economic sense but in the multi armed bandits framework).
ikeboy 8y ago
What's annoying is when you try to order from an existing restaurant and notice they marked up their menu across the board for Uber Eats, then there's delivery on top of that.
- draw_down 8y ago
  We call that “market segmentation”
- wenc 8y ago
  That's because Ubereats (and most food delivery platforms) take a huge cut (up to ~30%). Many low-margin restaurants wouldn't be able to survive without making that up somehow. I sometimes wonder why restaurants bother to list on food-platforms at all. Maybe they figure it's loss-leader marketing? Or perhaps being that food markups are usually in the ~50%, and drinks are several hundred percent, they can afford to make less?
  - sharkmerry 8y ago
    UBer eats $500/sign up + 35% of orders Grubhub 27.5% if order comes from grubhub, it from restaurants website its 10% Eat24 - 25%
  - ikeboy 8y ago
    Restaurants are low margin because of fixed costs and a limited number of customers for their fixed space. Delivery doesn't add to their fixed costs, and their gross margin is high. FTA: >For restaurateurs, it can be a chance to spread their fixed costs over a higher volume of orders.
    - wenc 8y ago
      Makes sense. Thanks.
  - dannyw 8y ago
    35% in Australia. https://mobile.abc.net.au/news/2018-04-22/uber-eats-criticised-over-conditions-on-restaurant-owners/9662814 https://mobile.abc.net.au/news/2018-04-22/uber-eats-criticis...
pietroglyph 8y ago
The most interesting part of this is their use of user data. Traditionally, it seems like there isn't a great way to judge demand for a restaurant until you open it, so it makes sense that user tracking (to gauge interest) and the ability to operate out of an already profitable space (reduced upfront cost) gives establishments a significant advantage (although the article doesn't exactly comment on number of failed online restaurants, so selection bias cannot be ruled out.) I wonder how competitors like GrubHub use data to gauge interest...
dpeck 8y ago
See Mac’d from the last yc batch as well. There’s some cool stuff happening in food. Ghost kitchens have existed for a while, and I’ve had a restaurateur friend mention them to me quite a few years ago, but it seems like they’re hitting scale and getting very interesting.
jasonwilk 8y ago
I have always thought this space will turn into the Netflix of food. First you differentiate by having a good array of content (food) but will eventually need to create original content with exclusivity (Uber creating or funding their own restaurants just for delivery) to differentiate.
baseballMan 8y ago
The biggest thing I've noticed with uber eats is the outrageous delivery fees. I'm not really interested in paying an extra $6.99 for a meal and I'm surprised other people are fine with it.
- foobaw 8y ago
  In my area, a lot of them are either free or $1.99, $2.99. (It will vary by demand though). I think my threshold is $2.99 - in some scenarios when I'm extremely sick.
  - bllguo 8y ago
    in mine, fees used to be around there. I was comfortable with the 2.49 or lower fees. Around 1 month ago they raised delivery fees by ~$2-$3 across the board.
sytelus 8y ago
There are two fundamental issues in food delivery business: 1. Per hour cost of a delivery person is usually $20 after taking in to account vehicle, gas, down times etc. If you assume each delivery takes minimum of 20 mins (accounting for restaurant-customer-return hops), we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier. My question is: Does these startups taking on losses to build customer base? 2. Cooked food is notoriously perishable. Think about eating burger lying around for 30-60 mins before you eat. This not only limits items you can deliver but also puts on pressure that you are always running against clock. One mistake and you are bound to lose a customer for factors not in your control. So, food delivery idea is not new. It had been tried and failed to takeoff probably couple of dozen times mainly due to above two issues. What really has changed now to mitigate these two issues?
- chrisseaton 8y ago
  > we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier I don't understand. Why does the value of the thing being delivered make a difference to the value of the fact that it's delivered? Should we expect it to cost more to deliver a more expensive item? I don't see why. Why should it cost less to deliver a less expensive item.
  - ergothus 8y ago
    You are correct that the value of the delivery does not change with the cost of the item. As a cost impact, it makes sense to instead compare to the time and cost of traveling myself to get the item. But the OPs point is valid if you think about the impact to your budget. Saying a meal delivered represents a 50% markup in your food entertainment budget is a legit consideration. Were we talking about a 5% or 10% impact to the budget it would less dramatic.
    - bobthepanda 8y ago
      In an urban area, there's two related costs; money and time. Depending on where you're trying to go and how to get there it can be a lot. Not everybody can afford the time to go out, and throw in parking a car in there and you can easily waste way too much time trying to get food. And that's assuming you can even find free parking.

171 points by PretzelFisch 8y ago

Seems similar to this: https://www.theguardian.com/business/2017/oct/28/deliveroo-dark-kitchens-pop-up-feeding-the-city-london https://www.theguardian.com/business/2017/oct/28/deliveroo-d... Which talks about "dark kitchens" i.e. existing, well-known chain, having a branch that purely serves delivery services.

KeepTalking 8y ago

hmmmm.... I wonder if Uber eats can do what AirBnb did to the hotel business by allowing home chefs-after-6pm to take low risk experiments and launch micro Uber only restaurants from their home kitchen or a common kitchen (managed by Uber eats to deal with sanitation challenges).

zby 8y ago
Sounds risky. Not that uber drivers are riskless - but food can be spoiled in less obvious ways than driving.
stephengillie 8y ago
It would have to be a common kitchen, and they would need everyone to pass a food handler's class. Given Uber's reputation for bucking regulation, I would be doubly-hesitant to trust meals from their kitchen.
extrapickles 8y ago
It would have to be from a commercial kitchen to pass health regulations in most places. There are a few restaurants than share kitchens with the one next door, and I would not be surprised if they had a virtual restaurant or two for delivery only. No reason that the kitchens that food trucks use can’t support this as I suspect they dont have much demand for space around 5pm.
- dawnerd 8y ago
  In Portland damn near every food cart is on some delivery platform. It’s actually made ordering from some of my favorite spots almost impossible in person since their order volume is just too high.
- Forge36 8y ago
  I agree with your point on kitchen sharing, but I'm wondering if we sharing an incorre assumption: should we expect that the laws will be followed? Policing unlicensed taxis _should_ have prevented Uber from succeeding. I recall early Uber being a considered "ride-sharing" in attempt to avoid this problem. How will unlicensed restaurants be enforced? Will people simply call the practice food-sharing or splitting-meals? Start from the same model: two friends living across the city but one didn't cook, the other makes large meals. Uber meals is just a delivery service. Combine with money transfer app: it's not a restaurant, is a group of friends pitching in for a good meal. Uber successfully managed to get driver's to assume the risk when running unlicensed taxis. It wouldn't surprise me if they could reimagine that success here. The biggest hurdle I foresee: keeping the branding, and scale small enough to fly under the radar until it's well established
  - petra 8y ago
    If you sell food without a license, in some states you could go in jail. So it's pretty different from getting a fine which UBER pays.
  - extrapickles 8y ago
    There are a few places that stay under the radar, but generally they don’t heavily promote the food side of the “experience”, and aim their businesses at non-locals who would be less likely to report them if they are not perfectly happy. Another problem is that health laws are generally stronger and better enforced than taxi law. See [0] for the definition of a Food Establishment for Washington State. Also there are generally tip lines for reporting restaurants and it only takes 1 person to have a bad experience to shut down a location. [0]: http://apps.leg.wa.gov/wac/default.aspx?cite=246-215-01115 http://apps.leg.wa.gov/wac/default.aspx?cite=246-215-01115
esotericn 8y ago
Individuals are not allowed to opt out of commercial food safety in most advanced economies. It could be done using a decentralized platform, but any registered company attempting that sort of business model wouldn't last very long.
- acover 8y ago
  Individuals weren't allowed to run unlicensed hotels or operate unlicensed taxis. I've never gotten sick from home cooking but have from restaurants. I always hear horror stories about the conditions of restaurants. Does anyone know why the risk rate of food production in a home kitchen thought to be higher? Can that be mitigated somehow?
  - kevin_b_er 8y ago
    Your "home cooking" wasn't required to make profit. This perverts the incentive from "good food" to "profit". Also your home cooking has a reputation issue. Uber Eats will not have a reputation issue. Any given "restaurant" can be a facade easily recycled into a new brand name. Any problems Uber can pawn off as a problem with that restaurant and not a fundamental problem of Uber operating above the law and not having safety regulations on its "independent contractors". As Uber has repeatedly shown a disregard for laws, we can expect it will continue to show a similar disdain for safety, including food safety.
  - jaequery 8y ago
    I guess there too many variables. But most important is. Depends on the cleanliness of the home and willingness of the chef to properly handle food
  - crazygringo 8y ago
    > I've never gotten sick from home cooking Well then you and your family and friends happen to follow good hygiene standards... but plenty of people don't, and are even more incentivized not to if there's a buck or two in it. ("I think I can still use this meat..." "I'll just wash off this mold...") I don't know why you'd trust random strangers cooking out of their homes with zero food safety training whom you haven't personally vetted at all. It's not to say commercial kitchens are perfect, but there are verifiable processes in place to try to hold them to certain standards and ultimately shut them down if they don't, which simply aren't scalable to apply to home kitchens.
disappearance 8y ago
I think Deliveroo Editions use commercial kitchens from temporary shipping containers, dropped in 'dead space', out of hours car/ industrial parks. Ah, from 2017: https://www.theguardian.com/business/2017/oct/28/deliveroo-dark-kitchens-pop-up-feeding-the-city-london?CMP=share_btn_link https://www.theguardian.com/business/2017/oct/28/deliveroo-d...

PretzelFisch 8y ago

It would be interesting to have access to an anonymized uber eats order dataset.

ben_jones 8y ago

Op-ed from a former power user: Uber eats caters in part to the socially anxious and introverted demographic with moderate to high levels of disposable income. It pushes high margin, low-quality, foods at 2x or more pricing - particularly pizza, wings, chinese, and burgers. With some exceptions a large portion of these restaurants delivered already for lower prices, but with less convenience such as order tracking or ordering through an app. Over-time many "power users" of Uber eats and similar apps will regress to only a couple favored restaurants or stop using the app entirely. Uber eats will optimize for these power users to the detriment of non-chosen parties for the worst of the ecosystem as a whole.

stephengillie 8y ago
Many of these stores have a counter or wall full of tablets - 1 for each delivery service. They have an Uber Eats tablet, a GrubHub tablet, DoorDash tablet, Bite Squad tablet, etc.
- fjsolwmv 8y ago
  Maybe in SF. In the rest of USA is just Uber
  - stephengillie 8y ago
    Seattle, actually.
    - cwilkes 8y ago
      I’ve seen some restaurants with more than one tablet from the same delivery company. Couldn’t understand that, surely one tablet can handle multiple orders?
  - reaperducer 8y ago
    GrubHub owned online delivery in Chicagoland five years before Uber was even founded, and still does a better job than UberEats. I believe it also owns Seamless, and a couple of other services like Eat24.

kerng 8y ago

Had never thought about this, but it's pretty smart idea. Wondering if this will become more and more the norm, especially catering singles. Is there a way to search for these online only restaurants exclusively?

tardo99 8y ago

The thing that really impresses/surprises me about the growth of services like these is that people have so much disposable income to pay for stuff like this. In the news one reads constantly about how people are stressed financially. Maybe people are diverting money they once would have spent on other luxuries (cable tv maybe?) toward this kind of expense.

r00fus 8y ago
One word: kids. For a family of 4 or 5 or if you have baby, going to a restaurant is much more challenging than eating in. We order in usually once a week - sometimes from DoorDash sometimes from the restaurant directly.
huac 8y ago
couple factors - growing inequality: more people at each end of the spectrum; rich get richer (and have more income for food delivery), poor get poorer and lack full-time job opportunities (and are more incentivized to take low income, insecure delivery jobs) - it's expensive to be poor: working more hours means fewer opportunities to buy groceries or take time to cook.
pjc50 8y ago
The inequality slope is increasing. There's a fairly large upper middle class of people who work+commute long hours and are prepared to pay for extreme convenience. While at the same time there's also a precariat of people for whom earning a small and variable amount outside normal working hours sounds like a good idea, providing cheap labour to these services. https://delong.typepad.com/sdj/2009/02/changing-relative-prices.html https://delong.typepad.com/sdj/2009/02/changing-relative-pri... : "In Agatha Christie's autobiography, she mentioned how she never thought she would ever be wealthy enough to own a car - nor so poor that she wouldn't have servants..." Perhaps that is now reversing. Or the gap is wide enough to have a servant with a car.
actuator 8y ago
Cable TV? I am quite sure in the future we are going to pay almost the same amount what people were paying for cable TV. Not all content is available on each service so in the end people will end up subscribing for Netflix, Amazon Prime, HBO, Disney whatever etc. Plus more for sports. Also, good luck to people who don't have true unlimited plans, as streaming all those high definition bits over the internet just means paying your ISP more.

diogenescynic 8y ago

I will not order take out from Uber. I’ve seen drivers with the food on the floor with passengers sitting over it. Deliveries also aren’t quick.

icebraining 8y ago
Weird; in the two cities I've seen them, all UberEats drivers use mopeds, they don't drive people as well. How does that even work? I don't think the apps let you coordinate the delivery and ride.

actuator 8y ago

I think this is pretty common across industries where a platform acts as an aggregator/marketplace. Case in point services like Amazon.com, Netflix have their own brands/content as well. Netflix is known for using data of people's content consumption to make new content. I think this makes sense for two reasons:- - Tighter control over what you produce, so higher margins and potential differentiators(like the burger example in article). - Acts as a defensible strategy for the aggregator if it can tie these brands with itself. The only scary thing is when these marketplaces/aggregators just kill small businesses because of controlling the "storefront", discovery and leveraging economies of scale. Example search in Amazon: https://imgur.com/a/zHDueIk https://imgur.com/a/zHDueIk

vageli 8y ago
> I think this is pretty common across industries where a platform acts as an aggregator/marketplace. Case in point services like Amazon.com, Netflix have their own brands/content as well. Netflix is known for using data of people's content consumption to make new content. I think this makes sense for two reasons:- In this case it's quite different, I believe, in that Uber will notice an underserved market and reach out to existing players/small business in that area to expand into that market. This sounds very different than Uber using their market knowledge to create a competitive advantage for themselves.
- actuator 8y ago
  This is just the cynic in me; but I think this is just for now, because it allows them to test these theories and ramp up faster. In the future Uber might just decide to go the Amazon way or just cut deals where they earn significantly higher margins compared to other restaurants.
  - brubrant 8y ago
    I doubt. Making food had nothing to do with their core business...
  - fossuser 8y ago

dawhizkid 8y ago

I'm still waiting for someone to figure out how to make "Etsy for food" work at scale. My guess if/when it happens it will look somewhat like what Uber has i.e. rent licensed "ghost kitchens" to small cooks by the hour and make all deliveries originating from those kitchens.

appwiz 8y ago
Sounds like Cloud Kitchens is trying this model - https://www.cloudkitchens.com https://www.cloudkitchens.com
netsharc 8y ago
Seems that's already happening: https://www.theguardian.com/business/2017/oct/28/deliveroo-dark-kitchens-pop-up-feeding-the-city-london https://www.theguardian.com/business/2017/oct/28/deliveroo-d... Article lead: As appetite grows for upmarket takeaways, delivery service is setting restaurants up with satellite kitchens inside metal boxes.
foolfoolz 8y ago
That’s Gobble https://www.gobble.com https://www.gobble.com They’ve been around a long time
- hayksaakian 8y ago
  That sounds more like the ikea.com of food. As I understand Etsy, you're ordering complete products
  - karthikvellanki 8y ago
    Gobble went through various iterations/pivots in their seven years of existence. One of the iteration was an Etsy for food - which didn't work. As you said, they are currently operating on the Ikea for food model.
    - foolfoolz 8y ago

blatherard 8y ago

Seamless had virtual restaurants at least 5 years ago. I remember in particular my wife liked to order burritos from a certain restaurant, named "Coastal" on the UWS. We tried visiting the restaurant based on the address, and found out that it was actually "Citrus", an upscale latin american place with an entirely different menu (that has since closed).

smmnyc 8y ago
I used to live on the UWS and remember Citrus. Never encountered Coastal but do recall an eclectic menu. (No burritos though!)

QML 8y ago

In reflection, it’s a good idea. Consumer preferences are hard to gauge; there isn’t much of a feedback loop right now with restaurants beyond you either have business and are sustainable, or you don’t and lose it all. This is comparable to YouTube giving you different advertisements, but that these ads (restaurants) are really expensive to run and experiment with. Virtual restaurants essentially bring A/B testing from the digital realm to the physical one. They provide and shorten the feedback loop, lowering the cost of exploration by centralizing and by economies of scale; and resulting in greater exploitation (not in the economic sense but in the multi armed bandits framework).

ikeboy 8y ago

What's annoying is when you try to order from an existing restaurant and notice they marked up their menu across the board for Uber Eats, then there's delivery on top of that.

draw_down 8y ago
We call that “market segmentation”
wenc 8y ago
That's because Ubereats (and most food delivery platforms) take a huge cut (up to ~30%). Many low-margin restaurants wouldn't be able to survive without making that up somehow. I sometimes wonder why restaurants bother to list on food-platforms at all. Maybe they figure it's loss-leader marketing? Or perhaps being that food markups are usually in the ~50%, and drinks are several hundred percent, they can afford to make less?
- sharkmerry 8y ago
  UBer eats $500/sign up + 35% of orders Grubhub 27.5% if order comes from grubhub, it from restaurants website its 10% Eat24 - 25%
- ikeboy 8y ago
  Restaurants are low margin because of fixed costs and a limited number of customers for their fixed space. Delivery doesn't add to their fixed costs, and their gross margin is high. FTA: >For restaurateurs, it can be a chance to spread their fixed costs over a higher volume of orders.
  - wenc 8y ago
    Makes sense. Thanks.
- dannyw 8y ago
  35% in Australia. https://mobile.abc.net.au/news/2018-04-22/uber-eats-criticised-over-conditions-on-restaurant-owners/9662814 https://mobile.abc.net.au/news/2018-04-22/uber-eats-criticis...

pietroglyph 8y ago

The most interesting part of this is their use of user data. Traditionally, it seems like there isn't a great way to judge demand for a restaurant until you open it, so it makes sense that user tracking (to gauge interest) and the ability to operate out of an already profitable space (reduced upfront cost) gives establishments a significant advantage (although the article doesn't exactly comment on number of failed online restaurants, so selection bias cannot be ruled out.) I wonder how competitors like GrubHub use data to gauge interest...

dpeck 8y ago

See Mac’d from the last yc batch as well. There’s some cool stuff happening in food. Ghost kitchens have existed for a while, and I’ve had a restaurateur friend mention them to me quite a few years ago, but it seems like they’re hitting scale and getting very interesting.

jasonwilk 8y ago

I have always thought this space will turn into the Netflix of food. First you differentiate by having a good array of content (food) but will eventually need to create original content with exclusivity (Uber creating or funding their own restaurants just for delivery) to differentiate.

baseballMan 8y ago

The biggest thing I've noticed with uber eats is the outrageous delivery fees. I'm not really interested in paying an extra $6.99 for a meal and I'm surprised other people are fine with it.

foobaw 8y ago
In my area, a lot of them are either free or $1.99, $2.99. (It will vary by demand though). I think my threshold is $2.99 - in some scenarios when I'm extremely sick.
- bllguo 8y ago
  in mine, fees used to be around there. I was comfortable with the 2.49 or lower fees. Around 1 month ago they raised delivery fees by ~$2-$3 across the board.

sytelus 8y ago

There are two fundamental issues in food delivery business: 1. Per hour cost of a delivery person is usually $20 after taking in to account vehicle, gas, down times etc. If you assume each delivery takes minimum of 20 mins (accounting for restaurant-customer-return hops), we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier. My question is: Does these startups taking on losses to build customer base? 2. Cooked food is notoriously perishable. Think about eating burger lying around for 30-60 mins before you eat. This not only limits items you can deliver but also puts on pressure that you are always running against clock. One mistake and you are bound to lose a customer for factors not in your control. So, food delivery idea is not new. It had been tried and failed to takeoff probably couple of dozen times mainly due to above two issues. What really has changed now to mitigate these two issues?

chrisseaton 8y ago
> we are talking average of $6+ per delivery. Considering a cost of a meal is usually $10-20, this is significant barrier I don't understand. Why does the value of the thing being delivered make a difference to the value of the fact that it's delivered? Should we expect it to cost more to deliver a more expensive item? I don't see why. Why should it cost less to deliver a less expensive item.
- ergothus 8y ago
  You are correct that the value of the delivery does not change with the cost of the item. As a cost impact, it makes sense to instead compare to the time and cost of traveling myself to get the item. But the OPs point is valid if you think about the impact to your budget. Saying a meal delivered represents a 50% markup in your food entertainment budget is a legit consideration. Were we talking about a 5% or 10% impact to the budget it would less dramatic.
  - bobthepanda 8y ago
    In an urban area, there's two related costs; money and time. Depending on where you're trying to go and how to get there it can be a lot. Not everybody can afford the time to go out, and throw in parking a car in there and you can easily waste way too much time trying to get food. And that's assuming you can even find free parking.