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Daily news and analysis about the food tech revolution

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Food Tech News Show: Blackbird Launches Pay, DoorDash Delivers Big Numbers

This week on the Food Tech News Show, we are joined by Kristen Hawley, long-time restaurant tech journalist who writes for Fast Company, Eater and her own site, Expedite.

The Food Tech News Show

Blackbird Launches Blackbird Pay

This week, Blackbird, founded by Resy and Eater’s Ben Leventhal, launched Blackbird Pay. Blackbird is a blockchain-based guest loyalty and payments platform designed to better connect restaurants and diners. Diners can use the app to pay at participating restaurants with stored credit card information or loyalty points, and Blackbird charges a 2% processing fee per transaction, lower than standard restaurant POS systems.

Andrew Simmons Ends Pizza Automation Experiment

Andrew Simmons announced the end of his Pizza Roboto project after investing over $300K. His post on Linkedin details the challenges he faced around spinning up new locations and the mixed success of his pizza subscription plan. This news coincides with RestoGPT launching a pizza subscription program based on Simmons’ plan.

DoorDash Sees Digital Orders Surge Despite Industry Headwinds

Amid financial pressures, DoorDash reported a 19% year-over-year increase in total orders and a 23% rise in revenue in its Q2 2024 earnings report. The company noted that digital ordering remains resilient compared to declines in other restaurant industry channels.

Yum Brands to Expand Voice AI Across Taco Bell Locations

Yum! Brands announced plans to expand Voice AI technology to hundreds of Taco Bell drive-thrus in the U.S. by the end of 2024, with future global implementation across KFC, Pizza Hut, and Taco Bell. Currently in over 100 Taco Bell locations, the company believes the technology will enhance operations, improve order accuracy, and reduce wait times.

Amazon Unveils New Just Walk Out AI Model

Amazon revealed details of its new AI model powering the Just Walk Out platform, despite removing the feature from Fresh stores earlier this year, indicating the platform’s continued development and potential.

You can listen to the full episode on Apple Podcasts, Spotify,, or by clicking play below. Don’t forget to like, rate, and review!

Delivery Giants DoorDash and Uber Eats Join The Rush to Integrate AI Into Ordering Platforms

Over the last six months, we’ve watched as seemingly every quick-service restaurant chain jumped on the AI freight train, integrating new generative AI technology into apps, chatbots, and voice ordering tools to expedite the customer experience.

Now, it looks like food-ordering platforms DoorDash and Uber Eats are taking their turn to roll out AI tools.

This week we learned of DoorDash’s AI-powered voice ordering, which the company is rolling out as part of its merchant solutions portfolio. At first available in select markets, the new AI voice agents will be the first point of contact for restaurants leveraging DoorDash’s white-label voice-order platform. The company says AI voice ordering can take orders in different languages.

The AI will be trained on each operator’s menu and make personalized upsell recommendations. DoorDash makes clear that live human agents will be standing by to jump in if additional support is needed.

And, courtesy of Bloomberg, we also learned this week that Uber Eats is working on a new AI-powered chatbot for its food-ordering app. Techcrunch writes the new AI chatbot will ask users about food budgets and preferences and help them place an order. The Uber Eats AI chatbot news comes a month after DoorDash confirmed it is also working on an AI chatbot.

The news of AI-powered tools by the two delivery giants comes after a string of AI rollouts on the quick service front. This spring, Wendy’s announced it was working with Google to develop an AI for its drive-thru called FreshAI, and early this month, White Castle announced it was working with SoundHound to develop a drive-thru AI.

As I mentioned in my writeup of the food AI workshop ethics workshop, one of the first areas I expect to see AI and automation impact food is on the front lines of quick service. The historically low pay and high turnover for these jobs make them low-hanging fruit when it comes to AI tool integration, particularly for order taking, which is often the biggest bottleneck and the most easily automated part of the entire food purchase process.

We’ll be talking AI and how it will change the restaurant business at our Food AI Summit on Oct 25th in Alameda. Get your ticket today to join the conversation!

Doordash & Roku Want You to Order Dinner Before You Stream That Next Episode of ‘The Last of Us’

Want to order dinner before watching that next episode of your favorite streaming series? Pick up your Roku remote, click on that special offer, and you’ll have piping hot food sitting in front of you before Ellie surprises or infuriates Joel once again.

That’s the hope anyway for the streaming company and Doordash, who together just announced a new multiyear partnership that makes Doordash a key promotion partner on the Roku platform.

Here are the specifics of the deal:

Complimentary Dashpass: New and existing Roku account holders with a linked streaming or smart home device can get six months of complimentary DashPass.

For those unfamiliar with Dashpass, the delivery company’s subscription plan allows customers to order food without being charged a delivery fee (which ranges from about $2-$5 nowadays). The Dashpass offer is a big win for Doordash since Roku has a massive subscriber base (65 million accounts as of November 2022), and converting just a percentage point or two of the streamer’s subscribers into paying Dashpash subscribers will be a big boost for the delivery company.

Shoppable Ad Offers: DoorDash will be the exclusive marketplace ad solution partner for DoorDash US restaurants and grocers that buy interactive shoppable ads on Roku for the first year of the partnership.

Today Roku gets the bulk of its revenue through advertising (and less every year from streaming hardware), which is why Roku customers (like myself) are seeing more ads pop up on the streaming device nowadays as they navigate their way to shows.

And now, the chances of those ads featuring a special offer for a restaurant down the street have gone up. DoorDash merchant partners can run ads directly on Roku, and if a customer decides to bite, they’ll get the TV ad promotion offer via SMS/email. From there, the customer is led to the storefront directly in the DoorDash app to redeem the offer.

Food delivery promotion via streaming isn’t anything new – Just Eat launched an Apple TV app in 2016 – but it’s getting easier to do as platform players like Roku bake partners like Doordash more tightly into the platform. But even after the attempt to make it easier to order food on our TVs has been going on for almost a decade, the integrations are still mostly about retrieving special offers.

I’d really like to see Roku or other platforms make it possible to see content from local restaurants and food makers I’m interested in. For example, imagine learning more about how the buzzy new pizza place in your town makes pizza or hearing from the chef about the latest item on the menu.

While It might not be smell-o-vision, it would still be pretty darn cool.

Q&A: The Spoon Talks With DoorDash’s Tom Pickett About Why The Delivery Giant Acquired Bbot

Earlier today, DoorDash announced they had acquired Bbot, a maker of order & pay software solutions. We sat down with DoorDash’s chief revenue officer Tom Pickett to hear about the thinking behind the deal. Answers have been edited slightly for clarity.

What motivated you to do this acquisition?

We’ve been watching this space over the course of the last year, and we’ve seen it evolve from this contactless solution to something that we feel is going to be a core part of what restaurants use going forward. In a similar way, online ordering wasn’t that big of a thing before COVID, but as COVID happened and digital commerce started to become a more important thing for the restaurant, we accelerated efforts and built our Storefront product and that’s now part of the arsenal for any restaurant. And so we think the same thing is starting to happen with digital ordering. I’d say we’re still in the early side of that, but we see the same trends, and we want to get ahead of it and make that easy for restaurants to be able to adopt.

Do you plan to sunset the Bbot name and replace that with DoorDash eventually?

We haven’t made final decisions on that yet, so for now, it’s still Bbot.

Anyone who’s gone into a restaurant with any degree of frequency over the past six months has had the option to pay at the table. That just seems like it’s the frequency that is just going up and up and it makes it much more convenient for the customer. I think the waiter is probably pretty happy with that as well.

From the waitstaff perspective, Bbot has told us that there’s more leverage in the model. So waiters can handle more tables and, in the end, that translates to more tips. So the waitstaff generally is happy with this type of solution. The restaurant management staff is generally happy because they can handle more demand.

And what we’ve also found is that customers tend to order more when they have access to a digital solution. That could be just because of the latency of having to wait for a waiter, and if the customer wants to order that extra drink, they can just go ahead and pull it up on their phone and order that. But the ticket size tends to go up with a digital solution.

What will (Bbot CEO) Steve Simoni’s role be post-acquisition?

Steve will be joining our product organization and he will be leading our digital in-store solutions that we continue to build. The first step is we want to integrate the Bbot solution into our broader technology stack. He’ll be driving that. And this will become part of our broader suite; if you think about Storefront, plus digital online, plus a digital in-store ordering solution, we want to make that integrated and easy to onboard and sell into our broader base of restaurants.

You are responsible from a sales perspective for both Bbot and Chowbotics (the bowl food robotics startup DoorDash acquired last year). While these are obviously very different products, they are both a part of an effort by DoorDash to diversify its product offering. Do you see any similarities between these two businesses?

On one hand, they both have to do with efficiency. The digital in-store solution is an efficiency lever, but it’s also a great customer experience addition as well. So it’s really the combination. Restaurants are learning how to operate more efficiently and the Bbot solution definitely helps in that regard. Chowbotics, on the one hand, can be an efficiency lever, if you think about Chowbotics as a back of store model, but the other side of robotics is a front of store model where we put that out to expand the footprint so it’s really more of a sales growth model.

Do you think we’re going to start seeing more of these types of acquisitions, not necessarily from DoorDash, but across the landscape?

I think we already are seeing some of that. Just look across some of the recent announcements, I think we’re early in the ecosystem. A lot of technology players out there, so I think there’s going to be a natural evolution, one way or the other through acquisitions, some of those technologies are just not going to make it over time.

Thank you for your time.

You’re welcome.

DoorDash Acquires In-Venue Order & Pay Specialist Bbot

Food delivery giant DoorDash announced today they have entered into an agreement to buy Bbot, a New York-based maker of order and pay software for restaurants. The terms of the deal were not disclosed.

Bbot, which offers a suite of off-premise and in-venue ordering solutions, is best known for its in-venue QR code offering that allows customers to pull up the menu, order, and pay for items with their phones. The company has seen rapid growth over the past couple of years as restaurants raced to upgrade their digital ordering capabilities and install contactless payment solutions during the pandemic. The company’s fast growth led to not one but two funding rounds in 2021 and was enough to convince Doordash to scoop up the company.

For DoorDash, which launched its restaurant e-commerce platform DoorDash Storefront in 2020, the BBot deal helps expand its digital suite to include payment and in-venue offerings.

“We’re excited to bring our combined suite to an even wider selection of merchants across the hospitality space – including bars, hotels, and ghost kitchens – so these businesses can engage with more customers, increase their quality of service, and grow sales,” said Tom Pickett, DoorDash’s Chief Revenue Officer, in the release.

The Bbot deal is the latest in a string of recent acquisitions for DoorDash. The company moved into Europe with an $8 billion acquisition of Wolt late last year, and before that, acquired robot bowl-food maker Chowbotics.

For Bbot, today’s news marks the culmination of a journey that started with building a robotic beer delivery system on the ceiling of a bar. The company added QR code ordering as almost an afterthought to enable customers to order beer delivered via the conveyor belt.

“After launching in January of 2018, the next place was like ‘I’ll take all of it except the robots,'” said Bbot CEO Steve Simoni in an interview with The Spoon last year. “That was March of 2018. From there, we pivoted fully into that.”

The Minnow Pickup Pod

CES 2022: Minnow Shows Off Pickup Pod, an Unattended Cubby System Designed for Food Delivery

Food tech startup Minnow showed off their contactless, asynchronous smart lockers for food delivery at CES 2022 — and The Spoon got a demo and sat down to talk to CEO Steven Sperry.

Minnow began shipping the pods in the last four weeks through Hatco, a manufacturing partner who creates Minnow pods on demand. On one end of the spectrum, Hatco is serving customers where food is picked up, including restaurants, ghost kitchens, and cafeteria operators. On the other end, Minnow is focusing on selling their pods into commercial real estate including office buildings, residential spaces like apartments and condos, and college campus locations — basically, where food is delivered.

While delivery lockers aren’t a new idea, Minnow differentiates by being designed specifically for food. Each pod is insulated, lit from the inside, and includes UV lights and antimicrobial surfaces.

“We did research and found that people don’t like the idea of reaching into a dark space to get their food — they want to know that the space is clean and sterile,” said Sperry.

Not only is the Minnow pod designed for food and strong connectivity with 5G on board, it’s also providing a standardized and easier way for third-party delivery drivers to find a delivery location to drop off food without navigating secure lobbies and elevators, gated entryways or confusing campus maps.

When asked about Minnow’s support model and whether a multifamily property owner would be able to use the Minnow pod “as a service” versus a straight purchase, Sperry responded, “The purchase typically has a SAS component because the device is always connected to our servers and monitored in real-time. We monitor the food continually, we know what’s happening in every pod and in most cases, it’s considered an amenity for the residents of that building.”

The Spoon video crew was able to get a quick demo of a Minnow pod live on the CES show floor — check it out below.

CES 2022: Demo of the Minnow Pick Up Pod

DoorDash Enters Ultra-Fast Grocery Market, Hires Couriers in Break From Gig Worker Model

Today DoorDash announced it is entering the hyper-competitive ultra-quick grocery delivery market with the launch of a new DashMart location in New York City. According to the announcement sent to The Spoon, the new location will stock up to 2000 items and complete deliveries within 10-15 minutes of a customer’s order.

The new initiative follows the launch of DashMart, DoorDash’s own branded dark grocery network, in 2020. The expansion into hyper-fast is a logical next move, especially for a company with as robust a nationwide logistics and delivery network as DoorDash.

DoorDash’s new effort also represents a significant departure from the company’s traditional gig worker model. Instead of using freelancers to deliver groceries for its new effort, DoorDash will hire its own couriers for the first time. The company plans to hire sixty workers to staff the effort, each getting paid $15/hour plus benefits and tips to start. The new couriers will work for a new DoorDash subsidiary named DashCorp.

The move to hire a courier workforce is, in part, due to pressure from states like New York, which have begun to pass legislation placing greater protection on gig workers. The move also makes sense in that the ultra-fast grocery model requires a ready stable of couriers to deliver goods to consumers as they come in.

“Millions of people across the country turn to platforms like DoorDash to earn supplemental income when, where, and how they choose, providing them with unique flexibility and choice that is so valuable,” said company president Christopher Payne. “We’re proud to be a leader in providing economic opportunities that fit the lives of so many people. And now, we’re excited about the new employment opportunity that DashCorps offers for a different type of work.”

DoorDash’s latest moves follow discussions by the delivery giant to invest in Berlin-based fast-grocery pioneer Gorillas. The talks, which would have given DoorDash a buy option on the Berlin-based company, eventually fell apart, and it’s unclear how much of DoorDash’s newly launched fast-grocery initiative was a direct result of the fizzling effort between the two companies. Whatever their intention, it’s clear now with the launch of its first fast-grocery outpost and the launch of DashCorp that DoorDash is building infrastructure for roll-your-own strategy in this nascent but fast-growing market.

For Gorillas, JOKR, Gopuff, and others in this new space, DoorDash will undoubtedly represent a potentially significant new competitor. The delivery company commands a 55% market share in the US food delivery market and a year ago had 20 million monthly active users. While JOKR, Gopuff, and others have had no problem raising eye-popping amounts of venture funding, these companies have to invest much of their venture funds into user acquisition and logistics, areas which already have been well-developed by the more mature DoorDash.

Let’s Unpack the Possible DoorDash + Gorillas Deal

Last week the Financial Times reported that third-party delivery giant DoorDash was in talks to buy a stake in German speedy grocery delivery startup Gorillas. While there weren’t a ton of details, such as how big any such stake would be, a follow-up story from Axios said the deal could give DoorDash the option to acquire a controlling interest in Gorillas eventually.

This could actually be a good deal for DoorDash for a number of reasons.

The sudden rise of speedy grocery delivery has been one of the big food tech stories of 2021. These fast delivery services operate a network of smaller dark stores that carry a small inventory and deliver goods to a limited radius in as short a time span as 10 minutes.

Europe in particular has been a hotbed of activity in the speedy delivery space, with startups such as Getir, Glovo and Gorillas each raising hundreds of millions of dollars a piece to expand their operations. Here in the U.S., speedy delivery is currently centered in New York City where Fridge No More, 1520, JOKR and Buyk operate, though we are seeing services like Food Rocket in San Francisco.

In terms of fundraising, Gopuff has left players on both sides of the pond in the dust, having raised $2.5 billion in just this past six months and $3.4 billion in total. Gopuff is a little different from other players in that it does not promise super fast delivery, opting instead for the comparatively sluggish half-hour delivery times (though the service delivers around the clock). But it’s enough of a comp to be included among the new wave of startups shaking up grocery delivery.

Gopuff’s now-sizable warchest has probably spurred DoorDash to get moving on speedy delivery. DoorDash has been steadily moving beyond just restaurant delivery and into the convenience store and grocery categories, and last year DoorDash launched DashMart, the company’s own chain of delivery-only c-stores. But Gopuff is aggressively expanding its operations across the U.S. and now operates 450 delivery facilities in 850 U.S. cities. Additionally, Gopuff is starting to encroach on DoorDash’s core restaurant turf with the addition of Gopuff ghost kitchens that offer hot meals like pizza, pasta and more for delivery. In other words, DoorDash can probably feel Gopuff nipping at its heels.

This brings us back to Gorillas. The Financial Times speculated that DoorDash investing in Gorillas was a play for European expansion. But there seems to be plenty of value right here in the U.S. Though it’s based in Germany, Gorillas expanded into the U.S. with its launch in New York City in May of this year. Since then, it’s been the first speedy delivery service to set up operations on both coasts as it hires out teams in San Francisco and Los Angeles. (It’s also moving into Chicago.)

An investment and potential controlling stake in Gorillas does a few things for DoorDash. First, there is probably some FOMO for DoorDash. While speedy grocery delivery services are new, they have the potential to upend the way we shop for groceries, as they turns the act of grocery shopping into something more like a utility — always there when you need it. Ten-minute delivery could become the new standard, and DoorDash doesn’t want to miss out.

But this is what makes the reported two-step investment structure of the Gorillas investment interesting. DoorDash, which is flush with its own IPO cash, can pony up some money right now and learn from Gorillas as it scales up both here and abroad. Speedy delivery startups have yet to prove if they can economically scale, and right now, they need to be in areas that are densely populated to make money. There’s still a good chance that Gorillas and the like could become the next Kozmo.com. If speedy delivery catches on, then DoorDash can swoop in, gobble up the rest of Gorillas and re-brand the entire operation as DoorDash. If Gorillas flames out, well, that’s a bummer, but DoorDash still has all of its other delivery businesses.

A smaller side story to watch with all this is whether any DoorDash investment in Gorillas would also translate into Gorillas getting Chowbotics food robots. DoorDash acquired Chowbotics earlier this year and is reportedly using the robots to create ready-to-eat salads and microwaveable meals for its DashMart stores. As I wrote last week, food robots could be a killer app for speedy grocery delivery because they create customized meals in a very small footprint.

Should DoorDash invest in Gorillas and wind up with a controlling stake, such a union would set up a bit of an existential question for DoorDash. For good and ill, DoorDash was built on the backs of contract labor. Part of the pitch from Gorillas and other speedy delivery services is that their delivery drivers are employees that receive a salary and benefits. Speedy grocers have explained to me over the past few months that having their own drivers means they can ensure faster delivery. Speedy delivery services know how many people to staff, when they are out on deliveries, when they will return, etc. DoorDash, on the other hand, has to send out delivery jobs to a network of contractors each time to find a delivery person. If speedy delivery is a game of minutes, then every second counts.

The Financial Times said that the deal is being finalized and could close at the end of this month. If the deal goes through, DoorDash could quickly become an 800 lbs gorilla in the speedy delivery space.

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More Headlines

John Deere Acquires Bear Flag Robotics for $250M – The autonomous tractor tech startup had only raised roughly $12 million.

DoorDash Users Can Now Add C-Store Items to Their Restaurant Orders – DoubleDash is currently available for 7-Eleven, Walgreens, Wawa, QuickChek, and The Ice Cream Shop. It is also available for orders placed at DoorDash’s DashMart.

JOKR and Too Good To Go Team Up to Help Eliminate Food Waste with Mystery Boxes – The so-called “Surprise” bags each feature $15 worth of groceries for $5.

Q&A: Tools for the Data-Driven Restaurant, According to Sevenrooms Founder Allison Page – Before her appearance at our upcoming Restaurant Tech Summit, Page gave us some high-level thoughts around the future of the data-driven restaurant. Grab a ticket to the show here.

DoorDash Users Can Now Add C-Store Items to Their Restaurant Orders

DoorDash this week launched a new feature, DoubleDash, that lets users bundle items from different businesses like convenience stores together into a single transaction. DoorDash customers can add c-store items to their original restaurant order and checkout with a single transaction and no extra delivery fees, according to a company blog post.

DoubleDash is currently available for 7-Eleven, Walgreens, Wawa, QuickChek, and The Ice Cream Shop. It is also available for orders placed at DoorDash’s DashMart convenience store operation.

Customers placing a restaurant order can look for the DoubleDash option to add items from these stores. Available stores are indicated on the app inside the DoorDash app. Theoretically, orders from these different stores and restaurants are supposed to arrive at the same time, though a line at the bottom of today’s blog post notes that “deliveries may arrive separately.”

In certain cities, DoorDash is also offering DoubleDash for local restaurants. In these markets, users can add “complimentary items” from other restaurants to their existing order. 

All of this is further evidence that DoorDash is very serious about becoming a go-to service for more than just restaurant food. Besides launching DashMart last year, the San Francisco-based company has also launched a grocery delivery service and has existing deals in place with some c-stores. As of this week, DoorDash is also said to be in talks to invest in Germany-based service Gorillas, which offers speedy grocery delivery from small “dark stores” located in dense residential areas.

At the end of last month, DoorDash also opened a new location of its ghost kitchen facility. For now, that operation only delivers restaurant food.

DoorDash Expands Its Ghost Kitchen Operation in California

DoorDash has launched a new location of its ghost kitchen operation, the company announced today via a press release sent to The  Spoon. DoorDash Kitchens San Jose will house six different restaurant concepts from both nationally known restaurants and those from the San Francisco Bay Area. 

This is the second DoorDash Kitchens location. DoorDash launched the first almost two years ago in Redwood City, California, and has served the Peninsula area of the state ever since. The new location will offer delivery and pickup orders for customers in San Jose proper as well as Saratoga and Campbell.

Restaurants in the new location include Aria Korean Street Food, Canter’s Deli, Curry Up Now, Milk Bar, The Melt Express, and YiFang Taiwan Fruit Tea. Canter’s, in particular, is notable on this list because it illustrates how ghost kitchens can potentially improve a restaurant’s geographical reach. Canter’s is so famous in Los Angeles it’s practically an institution. It also only has one brick-and-mortar location, in Los Angeles, though in the last couple years it has expanded its reach in Southern California via a partnership with Kitchen United. Teaming up with DoorDash gives Canter’s a presence in Northern California without requiring the buildout of a full restaurant.

As part of the new facility, DoorDash has launched DoorDash Kitchens Full Service, where the delivery service assumes day-to-day operations like cooking and boxing up orders instead of requiring the restaurant to do so. That requires less work from the restaurants themselves, but it does place even more control over the brand in the hands of DoorDash. DoorDash has partnered with culinary operator A La Couch to hire cooking staff and prepare meals. The last mile, of course, will be handled exclusively by DoorDash and its own couriers. 

DoorDash said part of the motivation behind Full Service is to offer restaurants even less labor-intensive ways to run a delivery-only kitchen. And nowadays, it doesn’t seem like such a bad idea, as many restaurants continue to struggle with high margins, a dearth of labor, and uncertain times in general. 

Full Service handles the hiring, training, and day-to-day tasks in the kitchen such as procurement and inventory management. Restaurants receive a portion of the revenue in return. A specific percentage was not given.

 

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. 

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.