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Bloomberg has a story about former Uber CEO Travis Kalanick, who the story notes was ousted from that company “after a series of scandals,” and how he now is heavily invested in a new business that actually will end up competing with Uber.

The story describes how after leaving Uber, “Kalanick purchased a controlling stake in City Storage Systems for $150 million. The company buys buildings or plots of land, making a bet that the gig economy will forever alter the value of real estate in major cities. Kalanick particularly embraced one business idea, for so-called smart kitchens. It would allow people to open pseudo-restaurants when they couldn’t otherwise afford a location of their own or where doing so would be impractical.” These facilities rent out “fully equipped, commercial-grade kitchens to serve businesses selling food on delivery apps like Uber Eats.”

Some of these so-called “cloud kitchens” serve business that are all-digital, having no bricks-and-mortar footprint; it also seems to be expected that more and more, they could serve existing restaurants that are not designed for, or simply cannot handle, a robust take-out business.

Uber, while not as aggressive as Kalanick’s CloudKitchens business, has been making steps in this direction as well: “Last year, Uber’s food delivery team began quietly leasing real estate in Paris, according to a person familiar with the project. It has been stocking the space with ovens, refrigerators, sinks, stoves and other appliances, and renting them out to restauranteurs planning eateries that cater exclusively to delivery customers.”

The problem is that Kalanick remains on Uber’s board, though he’s also been hiring away some Uber employees for his CloudKitchens enterprise; Uber has warned him against continuing this practice, and there are reports that as Uber goes through an IPO, it is possible that Kalanick could lose his board seat in a reorganization.

While Uber Eats could end up being the delivery mechanism for CloudKitchens, it also seems probable that they could end up competing against each other.

“The early success of CloudKitchens,” the story says, “has demonstrated the promise of the model. That leaves Uber with a dilemma: Should it invest in its own virtual restaurants on a worldwide scale or partner with a company like CloudKitchens and avoid another conflict with its co-founder? There’s a good argument to partner. Uber could avoid the risks associated with buying or leasing real estate and focus on using its drivers to deliver meals.”
KC's View:
I’m not a Kalanick fan by any means, but I think his insight on the value of cloud kitchens is right on … and I wonder if there is a play here for food stores looking to have a greater impact in the food-to-go space.

I was at the Food On Demand conference last week in Chicago, the the notion of cloud kitchens came up a lot among restaurants and chains trying to figure out what models will be most effective and efficient. I think food stores can play a role here in an organizational and infrastructural way, as they figure out how best to target and serve their shoppers.