When he left Uber in 2017, Travis Kalanick said someone told him 13 percent of all miles driven in San Francisco were “Uber miles.” The co-founder of the ride-hailing giant recalled thinking, “Can we do that with food?”
Kalanick, who bought CloudKitchens parent company City Storage Systems in 2018, was on stage today at the Food On Demand Conference in Las Vegas to talk about his vision for an online food ecosystem and what his platforms are working on to make it possible. The often secretive entrepreneur—“Post-Uber, I really went under the radar,” he said—explained the purpose of his work life is all about “digitizing the physical world,” and for restaurants and other food companies that will require lowering the cost of meal delivery while still ensuring its convenience.
“Can you do to the kitchen what Uber did to the car?” he questioned, and make food delivery so efficient and less expensive that a meal delivered starts to approach the cost of going to the grocery store. To achieve that lofty goal, Kalanick envisions an “Internet food court,” where customers can order anything online, the food experience is “hyper personalized” and the desire for instant gratification is met by 15-minute delivery times, not 90.
“To get the cost of that meal down, production has to be completely automated,” said Kalanick, “and logistics has to get completely automated.”
“We paint where this all goes, but there’s a road to get there and we call it infrastructure for better food,” he continued. “That’s the mission of my company.”
CloudKitchens, which has more than 400 ghost kitchens live across its network, is part of that infrastructure. The ghost kitchen model, though, continues to face challenges as restaurants and the kitchen providers grapple with cost pressures and a slowdown in customer demand growth from the height of the pandemic boom. CloudKitchens itself has dealt with staff cuts and location closures as, like other restaurant, tech and real estate companies, it works to keep expenses in check while the operating landscape shifts.
Kalanick, however, noted enterprise brands offering their menus via CloudKitchens are seeing an average unit volume of $1.2 million. And by drawing on the data from Otter, another subsidiary of City Storage Systems, restaurant brands can understand where a location will perform best as order volumes are analyzed.
The Otter software and platform, described by Kalanick as a new generation point-of-sale system called “mission control,” helps restaurants manage food delivery company orders in one place. It bills itself as a restaurant operating system with functions such as “Always On,” which monitors online ordering and makes sure it’s active at all locations of a restaurant chain when it should be. If online locations are marked “closed” when they shouldn’t be, that means lost sales, said Kalanick, and Otter automates the process of ensuring those sales are captured. Other functions include redirecting ad spend to the third-party delivery platforms when in-store traffic is slower and providing a revenue recapture tool.
On the automation front, City Storage Systems last year began testing robotics in the kitchen under its Lab37 subsidiary. “We call it the Bowl Builder, our first initiative on the robotics side,” said Kalanick. “I call it, look Ma, no hands.”
The Bowl Builder, running out of Lab37’s facility near Pittsburgh, can put out 100 bowls per hour. It follows the introduction of similar makeline technology debuted by Sweetgreen; Chipotle is testing a system by Hyphen. Robots are coming to the restaurant industry in many forms, but automation is far from easy.
Kalanick acknowledged there’s a lot to achieve between now and his internet food court reality, and the restaurant companies themselves are an essential component. Restaurant partnerships, he said, are “how we bring the future faster.”
The seventh annual Food On Demand Conference, which offers insights from key restaurant and foodservice players in mobile ordering, delivery, virtual restaurants, catering and technology, continues through May 10 at the Bellagio in Las Vegas.
Update: This story was updated May 13 to clarify that the Otter platform is a point-of-sale system.
