As demand for food delivery continues to grow, restaurants and their delivery app partners are finding ways to serve more customers. One method that’s proven intriguing with investors is the advent of so-called “virtual restaurants” — kitchens that exist only to serve delivery customers — and now popular delivery app DoorDash is getting on board.
DoorDash has launched a new 2,000-square-foot commissary kitchen in Silicon Valley that encompasses space for four different delivery-only restaurants, Reuters reports. Called DoorDash Kitchens, the company charges each occupant rent based on a percentage of their gross sales.
The virtual restaurant model represents a way for restaurants to expand their delivery area and customer base while cutting back on labor and rent costs, and/or test a new concept without investing huge amounts of cash into a brick-and-mortar operation.
Deliveroo, the reigning food delivery app in the UK, has been on the virtual restaurant commissary train for some time now; it recently got a fresh influx of funding to the tune of nearly 300 million pounds, and plans to use the money to add more delivery-only kitchens.
Individual companies have experimented with the virtual restaurant model, too: SF-based startup Munchery, which creates and produces its own meals, was one of the first companies to pioneer the virtual restaurant model. It began delivering ready-to-eat meals produced in its own commissary kitchen in 2010, and has since expanded with additional kitchens in LA, New York, and Seattle. Meanwhile in New York, Momofuku king David Chang launched Ando, a delivery-only restaurant, in mid-2016, delivering cheesesteaks and halal-style chicken and rice to hungry New Yorkers.
DoorDash seems to be following in the footsteps of the Deliveroo model by charging restaurants a fee to use its commissary, rather than a model like Munchery, which relies on its own labor force and menu development: The startup says it had an enormous amount of food that went unsold and made some staff cutbacks, though it says it still plans on expanding nationally.
DoorDash says it hopes to expand its commissary kitchen model to other cities.