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Food delivery is a booming business without any sign of slowing down, and some major players are expanding the scope of real estate's involvement.
Uber has been secretly piloting a program in Paris where it leases industrial or empty real estate and fits it out as commercial kitchens for restaurants to lease as satellite operations that focus on delivery, Bloomberg reports. These "ghost " or "virtual" or "dark" kitchens, which could also house delivery-only businesses, would be serviced by Uber's UberEats app.
Uber's pilot has not been announced publicly, and its founder and (infamously) former CEO Travis Kalanick has been similarly secretive with his own entry into the virtual kitchens market. Kalanick announced last March that he had purchased and become CEO of real estate company City Storage Systems, whose subsidiary CloudKitchen builds ghost kitchens out of distressed real estate, though it buys rather than leases. Kalanick has not granted any interviews since he took over CSS.
CloudKitchen tenants are not tied to any specific delivery service, and Dara Khosrowshahi, Kalanick's successor as Uber CEO, called it one of UberEats' partners. It is unclear how that partnership will fare if Uber's pilot grows into something more widespread, and Uber has reportedly confronted Kalanick about his recruitment of Uber employees for CSS. Another potentially complicating factor is Kalanick's seat on Uber's board; the company's upcoming initial public offering could give shareholders the power to oust him, Bloomberg reports.
UberEats could have another avenue toward scaling up its ghost kitchen business and its delivery range in general if it completes its attempted purchase of Deliveroo. As of November, the two sides were reportedly "far apart" on Deliveroo's valuation. The company has a network of ghost kitchens across its home territory of the UK, and it is active in more European cities than UberEats.
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