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The Spoon

Daily news and analysis about the food tech revolution

Delivery & Commerce

Farm.One Launches a New Vertical Farming Facility in Brooklyn

NYC-based indoor ag company Farm.One cut the ribbon on its new urban vertical farm recently, this one located in Brooklyn, New York. According to the Brooklyn Reader, the 10,000-square-foot facility and will start planting seeds in the coming weeks. The Brooklyn farm is the company’s second large-scale farm, following its existing one in Manhattan’s Tribeca neighborhood.

Farm.One started out supplying its vertically grown greens to New York City’s high-end restaurant scene. The original goal was to grow rare, unusual plants restaurant chefs could then use in their dishes, a plan that worked until the COVID-19 pandemic started shutting down restaurants last year. 

In response, Farm.One took the same direct-to-consumer route many companies shifted to in 2020. NYC-based consumers can now sign up for a Farm.One subscription and receive greens and a few other local goods delivered to their doorsteps. The company has also teamed up with Brooklyn-based indoor farming company Smallhold to sell “local luxury mushrooms.” An additional collaborations with Rawsome Treats provides smoothies and plant-based bottled milks. Farm.One uses bikes for all deliveries and packages all items in reusable containers the company retrieves once they are empty. The shift to this model proved so popular that there is currently a waitlist to even get products. 

Hence the new farm space in Brooklyn’s Prospect Heights neighborhood, which opened at the end of last week. The space will grow various microgreens as well as herbs and some flowers. All crops are grown using the hydroponic method and artificial lighting, with plants harvested “hours before delivery,” according to the company. 

The Brooklyn farm will also include an event space where attendees can sample plants on “tasting tours” and attend lectures on food and agriculture. In future there may also be a daytime cafe as well as a cocktail menu.

Farm.One also licenses its technology out and currently has locations at the EATALY NYC Flatiron location and a Whole Foods in Manhattan. 

All of these offerings would classify as premium, targeting higher-end consumers. It remains to be seen if Farm.One’s demographic reach will widen as it adds more farms and is able to serve more parts of NYC and beyond. 

Hey, New Yorkers! You Have a Bunch of Dark Delivery Grocery Stores. Are You Using Them?

Bloomberg ran a story over the weekend about Russian grocery delivery service, Samokat, expanding into New York City this August. The U.S. operations will go by the name Buyk and will use the dark-store, limited-delivery radius model that has become all the rage this year.

According to Bloomberg, Buyk already has agreements to open up a number of dark stores that will each deliver to a roughly one-mile radius. The company says that because it developed the technology three years ago and already has experience scaling in Russia, it will have an advantage over its competitors here in the States.

And it will be facing competition when it opens up in New York. By our count, Buyk will be the fourth such, small, speedy, grocery delivery service operating in the Big Apple by the end of this summer, joining Fridge No More, Gorillas and JOKR. Interstingly, Buyk and Gorillas are both foreign companies (Russia and Germany, respectively) that are looking to gain an early foothold in the U.S. early on in the speedy grocery delivery game before more homegrown competitors spring up.

My question for our New York-based Spoon readers is: Are you using these services? Granted they are really new so you may not have had time to check them out yet. JOKR just launched in June, Gorillas launched at the end of May and Fridge No More in October of last year. Given the newness of these services and their small, neighborhood-focused approach, a lot of people probably still haven’t learned about or have access to this new type of on-demand-groceries-in-less-than-fifteen-minutes service.

But at least one New Yorker, The Wall Street Journal reporter Anne Kadet, appears to be hooked after testing Gorillas, Fridge No More and JOKR. Earlier this month, Kadet wrote:

My conclusion? Whether you need a full grocery delivery or just a carton of milk for the pancake batter you’ve already started, you can’t go wrong with any of the three. They all offer a user-friendly app, no minimum delivery, decent prices and service that lives up to their speed guarantees.

As I’ve written before, on-demand speedy grocery delivery has the potential to upend the way we shop for groceries. Whether we need a last-minute ingredient, are throwing an impromptu party or are just feeling lazy, the ability to summon our food and drinks with a few taps could alter our relationship to grocery retail. This, in turn, could put pressure on existing large retailers like Albertsons and Kroger to change the way they do business. That is, if these new speedy upstarts can scale economically. Which means they’ll need a lot of customers in those small delivery areas.

Which is why I’m asking, New Yorkers, are you using any of these services? Leave a comment or drop us a line and let us know!

Report: Eat Just Aiming for $3B IPO in 2021

Eat Just is reportedly targeting Q4 2021 or early 2022 for its IPO, which currently has a valuation of $3 billion, according to an Eat Just investor. Forbes was first to break the news after one of its contributors spoke to an anonymous investor in the company.

To date, Eat Just has raised $440 million, with its most recent fundraise being a $200 million round led by Qatar Investment Authority earlier this year.

Eat Just is best known right now for its plant-based egg products, which are available in the U.S. through grocery retailers as well as at restaurants. The company has also steadily built a significant international presence over the last few years, too. Notably, that includes teaming up with China-based QSR chain Discos to replace traditional eggs on the latter’s menu and expanding across Canada in March of this year.

Of late, however, Eat Just has grabbed the most headlines for its cultivated meat business, GOOD, which won the world’s first regulatory approval to sell cultured meat this past December in Singapore. The company has since sold its GOOD cultured chicken bites on the regular at restaurants in the city-state and even partnered with Delivery Hero subsidiary Foodpanda to deliver them.

GOOD raised its own $170 million in May of this year. At the time, Eat Just CEO Josh Tetrick hinted to The Spoon that regulatory approval in the U.S. was on its way for the company. In its report today, Forbes name-dropped China as another potential country that could next grant regulatory approval to sell cultured meat.

Whether the company will go public before achieving these regulatory milestones or after is not clear at this time.

Local Kitchens Raises $25M for Its Virtual Food Hall Network

Virtual food hall Local Kitchens has raised $25 million in Series A funding roughly one year after launching. The round was led by General Catalyst with participation from existing investors Human Capital and Pear VC. New investors Fifth Wall and Penny Jar Capital also participated. Local Kitchens says this round brings its total funding to $28 million. 

The San Francisco Bay Area-based company was founded by three ex-DoorDash employees in the summer of 2020. There are currently four Local Kitchens locations, all of which are in California: Cupertino, Menlo Park, San Jose, and Lafayette. 

These facilities function as combination ghost kitchen/virtual food halls. Orders from all participating restaurant concepts are cooked under one roof, while customers can order via the Local Kitchens website or onsite at a self-service kiosk. 

One notable feature of Local Kitchens is its ability to offer customers mix-and-match functionality when ordering digitally. In other words, customers can order from multiple different restaurant concepts and bundle them into a single transaction, rather than having to create a separate transaction for each restaurant. Kitchen United uses a similar approach for its ghost kitchens, as does Crave Collective, C3, and the newly opened Helbiz Kitchens.

“Bundling” virtual restaurant concepts together is one of those technological functions that looks simple on the surface but is rather a complicated execution on the back end. Speaking recently with The Spoon, Kitchen United’s Atul Sood explained that this idea is time consuming and expensive from a development perspective, and suggested that we may see more third-party restaurant tech in the future that helps ghost kitchen facilities integrate this feature. 

For Local Kitchens right now, customers can only order meals for pickup, though the company says delivery is “coming soon.” It is yet unclear who will delivery the food: a third-party service like DoorDash or an in-house operation. Up to now, the default delivery method has been third-party services. Lately, though, more ghost kitchen facilities have started using their own fleets, and Local Kitchens currently has an open position for Delivery Driver on its jobs website. 

The company says the new funding will allow it to build out more locations in California and eventually expand beyond its home state. 

Google Launches a Tool to Help Americans Struggling With Food Security

Google launched its new Find Food Support website today, which aims to connect people struggling with food insecurity to resources like food banks, school lunch programs, and food pantries. Google said in a blog post that it worked with No Kid Hungry, FoodFinder, and the U.S. Department of Agriculture to capture data on food assistance programs around the country.

Google pointed out in its post today that the COVID-19 pandemic made the problems of hunger and food insecurity worse for many Americans. The number of people without access to “a sufficient quantity of affordable food” rose to 45 million in 2020, a nearly 30 percent increase from 2019.

The company also said that over the last year, Google searches for “food bank near me,” “food stamps application,” “school lunch pick up,” and other similar phrases reached “record highs.” And while anyone could type these terms into a search bar on their own, the Find Food Support tool centralizes all this information and can offer more precise results.

The tool includes a Google Map locator with which a user can find their nearest food bank, school lunch program, or other assistance program. There are currently 90,000 locations across all 50 U.S. states included, with more locations on the way. To find a nearby location, users simply type their address into the search bar and pull up relevant results. 

In addition to the locator, users can also view SNAP benefits in their area, find support for seniors, see state benefit sites, and access assistance hotlines and text lines, among other things. Those that want to donate food, time, and money can also find relevant information via the tool.

The Find Food Support tool follows other efforts in the food industry to connect food insecure individuals with resources. In April of this year, Instacart expanded its EBT SNAP payment integration to three new grocery retailers (though the SNAP payments can only be used for food, not Instacart’s delivery fees). Also in April, the USDA said it is expanding its P-EBT program to cover kids meals for summer months. 

Mobility Service Helbiz Opens Its First Ghost Kitchen

Italian-American mobility company Helbiz announced today it is launching its own ghost kitchen/food delivery/virtual restaurant business called Helbiz Kitchens. The concept will initially be available to customers in Milan, Italy, with plans to open additional locations in the U.S. and Italy in the future.

Helbiz’ main service is operating fleets of e-scooters, e-bikes, and e-mopeds customers can rent on demand via the Helbiz app. Service is available in Italy, Washington, D.C., Atlanta, Miami, and a few other U.S. cities. 

The Milan operation of Helbiz Kitchens is housed in a 21,500-square-meter (roughly 23,000 square feet) facility and offers customers a choice of six different menus: pizza, sushi, salad, burger, and ice cream. Customers order and pay via the Helbiz app and can bundle different items from each menu into a single order and payment transaction. 

Couriers, known in the company as “Helbiz Butlers,” will deliver the food using the company’s own electric scooters, which makes sense, given how many of these it currently has in Milan and other cities. The setup is similar in some ways to DoorDash Kitchens, a ghost kitchen operation in Northern California that uses DoorDash couriers to deliver meals to customers from Chick-fil-A and other restaurant chains. Crave Collective, a ghost kitchen/virtual food hall based in Boise, Idaho, also employs its own fleet, despite never having pre-existing mobility infrastructure like DoorDash and Helbiz.

Unlike the other two concepts, however, Helbiz’ food concepts are entirely in-house creations and its team of chefs is entirely employed by the company, not a third-party restaurant. The company’s tech stack, which will power everything from online ordering for consumers to fire times in the kitchen and driver tracking, is also the product of an in-house IT team. 

Part of this focus on keeping things in-house is related to economic recovery. Like most other places, Italy’s economy suffered greatly during the pandemic and is now slowly trying to rebuild. Helbiz says its new ghost kitchen operation will provide 80 new jobs for this first location in Italy, with more to come as the concept expands to other parts of the country.

Service will initially be available, as of today, from 11:30 a.m. to 11:30 p.m. Additional locations are planned for Washington D.C. and other cities in Italy in the future. 

2021 Restaurant Tech EcoSystem: Serving Up a Digital Lifeline

In collaboration with TechTable and Culterra Capital, we are pleased to share an updated 2021 Restaurant Tech Ecosystem map, sponsored by Back of House, a community of restaurateurs to find and share top-reviewed tech solutions. Download the map here. 

It is an understatement to say that the restaurant industry went through a massive shift since we published our 2019 Restaurant Tech Ecosystem map. The pandemic’s economic toll on the industry has been grave, though notably, the toll was not evenly distributed. A higher level of digital maturity was a clear success indicator for most restaurants that survived the crisis (as detailed by McKinsey here). 

Thus, in a year that was challenging for all, we did find one bright spot from the pandemic: many of our past predictions around tech adoption were significantly accelerated, shrinking from years to months. 

In fact, in the past 18 months, technology solutions across the restaurant and hospitality industry evolved at such a fast pace that keeping up with changes proved challenging, even for those of us who work in the space. This rapid rate of adoption in the industry caused even the technophobes in hospitality to rapidly embrace tech solutions. 

The most notable growth areas were in the areas of Ordering/Delivery and On-Premise Ordering/Payments Tech, including kiosks, mobile ordering and payments, and cashierless checkout. In addition to the acrobatic feats from restaurant operators, we also saw tech companies reinventing themselves to stay in business during the pandemic.

With that in mind, we are pleased to share our 2021 Restaurant Tech Ecosystem, which serves as a current heat map of the broader ecosystem (and is clearly not exhaustive). 

Click to Enlarge

In order to help operators, entrepreneurs and investors continue to understand and digest this quickly evolving landscape, we also highlight some of the essential shifts and sector themes below, plus a few predictions for the year to come.

Help Wanted

Finding and securing hospitality staff has never been so challenging. As thousands of hospitality workers were left unemployed by the pandemic, or stymied by the risks of the frontlines, many have moved on to find work in other fields, leaving a huge gap in talent. 

As a result, the urgency to leverage robotics, automation, computer vision, and voice technologies will continue to increase as the hospitality industry aims to do more with less staff. And while discussions around robots within hospitality have always been cautious — because we don’t want to put people out of work — we believe we will continue to see more opportunities in the near-term for human-assisting robots (versus human replacement by robots). 

For example, as restaurant operators seek to offset workforce challenges, there are numerous opportunities for specific task automation of repetitive, dangerous or mundane tasks like dishwashing, precision preparation/cooking, food waste management, bar/food inventory, and quality control.

Another area ripe for automation via AI-driven voice tech includes drive-thrus and digital ordering. When people think of a traditional drive-thru, they likely picture a garbled voice and screaming the order into a speaker, hoping their order is correct. But we are seeing many of the larger chains replacing human voices with automated voice assistants to speed up service, order accuracy, and upsell rates. We’ve seen estimates that drive-thru automation can reduce customer wait time by 10 to 25 percent, which is compelling given that the former CEO of McDonalds previously declared that for every six seconds saved at a drive-thru is equal to an increase of 1 percent in sales.

Ghost Kitchens: It’s Complicated

While many restaurant operators were broadly familiar with the concept of ghost kitchens and virtual brands before the pandemic, these formats are now prevalent in most discussions on the burgeoning post-pandemic restaurant industry. 

Whether part of an existing kitchen or a separate commissary kitchen, the ghost kitchen’s purpose is to fulfill online orders for delivery or pick up. Ghost kitchens have the potential to solve real challenges for their restaurant customers, and there are tremendous variations on the economics, setup, and ideal use cases.

So then what’s so complicated about ghost kitchens? 

The rapid growth in consumer demand for restaurant delivery and the high usage of third-party ordering/delivery apps pushed restaurant operators to explore different avenues to expand their access points and footprint beyond their existing restaurants. 

However success (a.k.a. profitability) within the confines of a ghost kitchen business model is primarily driven by volume of daily orders, average order value, and percentage of direct channel sales versus third-party sales. This is why ghost kitchens are primarily well-suited for larger brands, as most local restaurants simply do not meet the average requirements to warrant a ghost kitchen endeavor. (If you are curious to crunch the numbers, check out this excellent ghost kitchen calculator created by Kitchen Fund.)

Further, the lines are beginning to blur between delivery and ghost kitchen platforms. We are entering a world where these platforms are increasingly supporting their own virtual brands and/or next-gen food courts, oftentimes by using the ordering/menu data captured from current restaurants using their platform. Thus local operators will be battling for market share against larger chains which are using ghost kitchens to extend their reach and volume, as well as additional competition from ghost kitchen platforms themselves.

Enter the The Mobile-Only Experience

Stateside, we’ve increasingly been adopting mobile-first ordering and marketing strategies, but the mobile-only approach (often seen in Asia) wasn’t widely embraced before the pandemic. Now, whether via QR codes, apps or mobile web, there has been a huge shift towards mobile-optimized menus, ordering and payments which eliminate or reduce most employee/customer contact. This can help to improve the guest experience via increased speed and fewer errors. For fine dining, this also saves time/costs in printing and sourcing supplies for paper menus. 

Successful operators will prioritize their tech strategy to capture as much digital data as possible in order to personalize offers, segment customers and influence behavior, and a mobile-first/mobile-only approach creates a compelling opportunity to increase both first-party and third-party data capture.

As it can be dizzying for operators to decide how to best leverage their digital data, we predict high growth for the tech partners which are helping operators utilize customer data to better uphold their brand, funnel customers into more profitable channels, and make better decisions about merchandising, pricing, and promotions.

Aggregators Will Continue to Disrupt the Customer Journey

While many of the technologies we discuss here are more operational, we also want to address the customer search and discovery experience. While this was an important topic in pre-COVID times, it is all the more so now, when disruptions and uncertainties are pushing customers to regularly search for what nearby food options are actually open, and whether they offer delivery, curbside, or takeout options. 

We have also reached a point where Google/Google Maps have become the defacto top of the funnel for a majority of restaurant consumers. Thus it is increasingly critical for restaurant operators to proactively manage their full digital footprint, and provide up-to-date information that customers can trust — especially across all third party platforms. 

For example, even though Google profiles include a link to a restaurant’s own website, that little link is eclipsed by the amount of ad-driven real estate that the third-party aggregators/marketplaces get within each profile. 

Growth Categories to Watch in 2022

  • Voice / Bot Technology
  • Robotics / Automation
  • Shared / Ghost Kitchens
  • Food Safety / Quality (a new category for the 2021 map)
  • Ordering and Payments will continue to evolve
  • Marketing Analytics / CRM, and Order / Delivery (both B2B and consumer-facing marketplaces) will continue to consolidate.

As always, we welcome your thoughts and reactions, and look forward to continuing to follow this sector together in the coming years.

Hear Brita and other restaurant tech leaders at The Spoon’s Restaurant Tech Virtual Summit on August 17th. A limited number of complimentary tickets are available, so register today!

Home-cooked Meal Marketplace Foodnome Launches in the San Francisco Bay Area

Home-cooked food marketplace Foodnome announced today it has received approval for its first Microenterprise Home Kitchen Operation (MEHKO) in the San Francisco Bay Area. Called Bao House, the virtual restaurant will have its grand opening this Thursday, at which point its menu will be available through the Foodnome platform. 

Bao House Chef Akshay Prabhu, who is also CEO and founder of Foodnome, has been a part of the home-cooked food delivery market since 2014, though laws have prevented him from taking his various initiatives too far. The passing of the Home Restaurant Bill (AB 626) in 2018, now makes it legal to sell homemade food in California, paving the way for platforms like Foodnome.

Users of Foodnome can browse and order available meals from home chefs, then pick them up at a time and place designated by that chef. (The full address is not disclosed until after the customer completes their purchase.) So far, the marketplace serves a few different locations in California, including Riverside, Davis, Moreno Valley, and, now, Berkeley. 

Presence from other states could soon follow, since Utah passed its own MEHKO-focused bill recently and there is pending legislation in New York and Washington states.

Foodnome says that in Riverside County, which was the first place to opt into AB 626, it has helped more than 150 home chefs with planning, permitting, and marketing their businesses. Home chefs must follow a rigorous set of steps in order to get approval to cook and sell food from their own kitchens, including submitting their SOPs to health departments, getting a kitchen inspection, passing an exam, and paying a permit fee. Being on the Foodnome platform helps home chefs get through some of this red tape faster.

California remains one of the few states where it’s legal to make and sell food from one’s own kitchen. Shef, based in the San Francisco Bay Area, operates a similar service to Foodnome. On the other side of the country, Woodspoon does much the same thing for NYC residents. 

Grab Launched AHBOI Robot to Cover Middle-Meter Meal Delivery in a Singapore Mall

We’ve covered “middle mile” deliveries before, but a new robot in Singapore is covering what we’ll dub the “middle meter.” Last week, Singapore-based delivery service Grab launched its AHBOI robot at the Payar Lebar Quarters (PLQ) mall to speed up delivery orders placed at the restaurants located inside the shopping center.

AHBOI, which stands for Autonomous Handling and Batching Operating Intelligence, is a large, green rectangular mobile locker that acts as a food expediter. According to a Grab corporate blog post, the AHBOI collects delivery orders from different restaurants inside the mall and autonomously brings them to a central collection point where delivery drivers pick them up for the last mile delivery.

By shuttling food from restaurants across these middle meters to central pickup point, Grab says it can shave as much as 15 minutes off of a delivery time because the delivery driver doesn’t need to navigate their way to and inside the mall.

We are starting to see more automation appear over the middle meters and miles for food delivery. QSRs like Burger King and McDonald’s are eyeing conveyor belts at restaurants to speed up the movement of food from the kitchen to drive-thru customers. And companies like Valqari are setting up smart lockers where drones can drop off meals at a central location for delivery drivers or customers to pick up from. Using robots to consolidate orders in a large indoor setting like a mall makes a lot of sense.

As part of its blog post, Grab encouraged users to place more orders from the mall that would use AHBOI. The idea being that the more the robot traverses PLQ, the more AHBOI will learn about its environment and the better the robot will get at driving itself around the mall. Of course, more orders also means more revenue for Grab, which they could use to make more robots.

Are You Creating the Next Big Tech Tool for Restaurants?

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This time last year, the restaurant biz was grappling with pandemic-related shutdowns and restrictions and innovating on the fly to survive the fallout. Digital menus. Virtual tip jars. Ad-hoc drive-thru windows. These mannequins. 

As the year wore on, much of the restaurant-related innovation turned to tech, a shift more or less forced by the pandemic. By some accounts, technological shifts expected to unfold over the course of a decade happened in a matter of months. Online ordering is the norm for many, which means so, too, are the technologies that power that process, whether in-house creations or third-party platforms. Virtual restaurants run from ghost kitchens are everywhere now, including in existing restaurant locations. Someone’s revamped the automat (see above), the robots are coming, and investors have a sudden interest in funding tech that promises to make the back of house more efficient.

There are also a lot more questions than previously around which tech tools restaurants actually need, where investment is most likely headed (spoiler: it’s the back of house), and, most important, what’s going to bring the most value to everyone’s restaurant experience moving forward. 

We could debate all of that here. Instead, I invite you to tell The Spoon about your restaurant tech innovation this summer at The Spoon’s Restaurant Tech Summit, set to take place August 17 virtually. 

Whether you think you’re the next Olo, want to entirely disrupt the drive-thru, or have a robot mannequin to track food waste, The Spoon would like to hear from you. Tell us about it by applying for the Spoon’s Restaurant Tech Innovator Showcase, which will happen as part of the aforermentioned Restaurant Tech Summit. 

The Spoon team and panel of restaurant experts will choose the 10 most interesting teams building innovative and potentially game-changing new products. Those 10 companies will then get an opportunity to do a four-minute pitch about their company that will be featured as part of the main stage at the event.

A few general guidelines apply. Companies need to be at early stage, with fewer than 10 employees and less than $1 million in funding/investment. Companies should also have an actual tech product (software, hardware, etc.)

Your pitch will be seen by attendees at the Restaurant Tech Summit and your company will be covered by The Spoon.

More Headlines

San Francisco Makes Restaurant Fee Caps for Delivery Services Permanent – San Francisco, California voted to permanently cap the fees delivery services charge restaurants at 15 percent. The San Francisco Board of Supervisors unanimously approved a resolution.

ResQ Raises $7.5M for Back-of-House Restaurant Tech – ResQ, whose software platform manages restaurant repair and maintenance tasks, has raised $7.5 million in seed funding, bringing its total funding thus far to $9 million. 

Grubhub and Resorts World Las Vegas Partner on New Hotel Concept – Resorts World Las Vegas has announced a partnership with Grubhub for a new mobile order service. 

‘Store-Hailing’ Startup Robomart Launches Fleet of Mobile Mini-marts in West Hollywood

“Store-hailing” startup Robomart announced today that they are launching their first fleet of mobile mini-marts in West Hollywood, California.

The new store fleet is initially made up of two types: Pharmacy Robomart and Snacks Robomart. The mobile pharmacy version will sell items such as shampoo, batteries, condoms, and Ibuprofen, while the Snacks Robomart will feature chips, candy, sodas, and other snacks. Robomart is also developing a Grocery version that will include fresh fruits and vegetables and other refrigerated items. According to the release, the company says it also has plans “to expand its fleet to include the Pantry, Deli, and Café Robomarts in coming months.”

Robomart customers don’t shop on the app as with other delivery services. Instead, after hailing a Robomart with the app, customers select from the roughly 40-50 different products after the store arrives. Once the customer chooses the items they want, their total is calculated using RFID tags, their credit card is automatically charged, and a receipt is available via the app. The company is working with vehicle fleet provider Zeeba and Avery Dennison for its RFID tag technology.

How much does it cost to shop at a Robomart? Robomart charges a hailing fee of $2 per customer visit and says pricing for products is the same as “in-store” — which probably means typical 7-11 or other convenience store pricing. No tipping is required. All this seems reasonable but makes me wonder how the company will make enough money over time on $2 hailing fees and convenience store markups.

When Robomart launched at CES in 2018, the original pitch featured mobile mini-marts that were fully autonomous. Since then, the company has adjusted to today’s regulatory and technical reality and launched its first fleet to include human drivers. The driver, however, does not interact with the consumer.

And according to Robomart CEO and cofounder Ali Ahmed, the company still envisions a future that includes fully autonomous vehicles and has already built a prototype. “We built a driverless Robomart to showcase our vision of the future,” Ahmed told me. “We plan to add more driverless vehicles to our fleet in the coming years as regulation catches up.”

As part of the announcement, Robomart also said they are working with REEF to provide inventory management and restocking services. Spoon readers may know about REEF for the ghost kitchens they operate in their regional parking lot-centered logistic hubs. In addition, REEF’s Light Speed division will be the first merchant selling products through Robomart.

While Ahmed didn’t say where his company plans to go next, they hope to replicate the model they’ve built with REEF as their replenishment partner in new cities.

“We’re really excited about the partnership with Reef, ” Ahmed told me. “They have set up the station in our first operating zone and are managing supply, inventory, and restocking. We see ourselves replicating this model and playbook with Reef for every major city.”

San Francisco Makes Restaurant Fee Caps for Delivery Services Permanent

San Francisco, California voted this week to permanently cap the fees delivery services charge restaurants at 15 percent. The San Francisco Board of Supervisors unanimously approved a resolution. 

The 15 percent fee cap was first introduced in April 2020, when Mayor London Breed issued an emergency order that dictated the limits of what third-party delivery services like DoorDash could charge restaurants in commission fees. The cap was in response to a two-fold problem. Historically, delivery services have charged restaurants (in S.F. and everywhere else) commission fees that can run as high as 30 percent per transaction for being on their marketplaces. Said fees became even more problematic once the COVID-19 pandemic shut cities down and restaurants were left with no way to reach customers save through these delivery platforms.

The original fee cap was set to expire on August 15, 60 days after restaurants were allowed to reopen dining rooms at 100 percent capacity. The new resolution will permanently cap commission fees at 15 percent. 

This week’s resolution marks the first time ever a city has passed a permanent cap on commission fees. Certain amendments are still up in the air, including one that would allow delivery services to charge “marketing fees.”

It’s also unclear how this resolution will change existing moves by delivery services, which have already introduced initiatives that look to be their own answer to the commission fee debate. Most notably, DoorDash introduced tiered commission plans in April that start with commission fees at 15 percent. However, that tier covers only the smallest delivery radius and has the highest cost to customers, who would ultimately have to shoulder the cost burden. 

DoorDash and others have said these fee caps ultimately lower order volumes and hurt the drivers and couriers doing the last mile of food delivery, and that fee caps in certain markets mean customers will wind up paying more for their food.

San Francisco was one of the early movers when it came to capping fees. Dozens of other cities followed, though the cap percentage varies from 5 percent (Chicago) up to 20 percent (NYC). Many of those caps have now expired, though NYC is also considering a permanent cap.