Uber Eats Cracks Down on Virtual Brands

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Uber can’t stand the heat and wants them out of the kitchen.

Uber Eats is purging thousands of virtual brands from its app and bringing in new, stricter rules for online-only brands, the company told The Wall Street Journal. Uber’s Head of Dark Kitchens (also a real job title) John Mullenholz told the WSJ that the company is toughening up because the app has become a “Wild West, anything goes kind of situation.”

Attack of the Menu Clones

Dark kitchens (sometimes called ghost kitchens) came into their own as a business model during the early pandemic when restaurants were forced into delivery-only and takeout leaped into action to satisfy society’s existentially urgent need for comfort food. Dark kitchens, which operate out of rented spaces rather than actual restaurant buildings, are banking on the permanence of that trend.

Theoretically, virtual brands operate out of brick-and-mortar restaurants and offer exclusive delivery-only items. Some major restaurant chains including IHOP and Denny’s use this model. In reality, the Venn diagram of dark kitchens and virtual brands does overlap, and now there’s just too many of them. Mullenholz said the app has a problem with lots of virtual brands offering identical menus:

  • Mullenholz said users are “effectively seeing 12 versions of the same menu,” adding: “It’s fair to say that kind of erodes consumer confidence.”
  • Besides removing thousands of virtual restaurants, Uber’s solution is to demand a degree of originality from menus; more than 50% of a virtual restaurant’s menu will have to differ from its parent brand or other brands using the same kitchen.

It’s kind of like the takeout version of cracking down on bots, as some brands appear to be creating multiple virtual restaurants as a way of gaming Uber Eats’ search results. To give you an idea of scale, Uber Eats told the WSJ it found 20 brands replicating the menu of a single restaurant in San Francisco.

Ghost of CEO Past: The future of the dark kitchen business is crucial to Uber founder and ex-CEO Travis Kalanick, who heads up CloudKitchens. The company sets up restaurateurs in rented warehouse spaces with kitchens, but an Insider report from September 2022 painted a grim picture of the service, with entrepreneurs describing unsanitary conditions and a lack of communications from CloudKitchens. “They absolutely do not care — they don’t respond to emails,” one chef said. Ghosted indeed.