The Rise of the Virtual Restaurant
Uber and other delivery apps maintain that they are helping restaurants, not hurting them.
“We exist for demand generation,” said Ms. Sallenave. “Why would a restaurant be working with us if we weren’t helping them increase their orders?”
Delivery-only establishments in the United States date to at least 2013, when a start-up, the Green Summit Group, began work on a ghost kitchen in New York. With Grubhub’s backing, Green Summit produced food that was marketed online under brand names like Leafage (salads) and Butcher Block (sandwiches).
But Green Summit burned through hundreds of thousands of dollars a month, said Jason Shapiro, a consultant who worked for the company. Two years ago, it shut down when it couldn’t attract new investors, he said.
In Europe, the food-delivery app Deliveroo also started testing ghost kitchens. It erected metal kitchen structures called Rooboxes in some unlikely locations, including a derelict parking lot in East London. Last year, Deliveroo opened a ghost kitchen in a warehouse in Paris, where Uber Eats has also tried delivery-only kitchens.
Ghost kitchens have also emerged in China, where online food delivery apps are widely used in the country’s densely populated megacities. China’s food delivery industry hit $70 billion in orders last year, according to iResearch, an analysis firm. One Chinese ghost kitchen start-up, Panda Selected, recently raised $50 million from investors including Tiger Global Management, according to Crunchbase.
Those experiments have spread. Over the last two years, Family Style, a food start-up in Los Angeles, has opened ghost kitchens in three states. It has created more than half a dozen pizza brands with names like Lorenzo’s of New York, Froman’s Chicago Pizza and Gabriella’s New York Pizza, which can be found on Uber Eats and other apps.