Back in late 2008 — in the midst of the Great Financial Crisis — Travis Kalanick had a brilliant idea.
Lower the cost of transportation, for everyone, by democratizing the taxi industry so that anyone with a car could provide a ride for anyone needing to go somewhere.
And so, the concept of ride-sharing was born.
Over the next decade, Kalanick’s company — Uber (NYSE:UBER) — went from idea to multi-billion-dollar disruptor of the transportation industry.
Today — amid another enormous financial crisis — Kalanick has, of course, come up with another brilliant idea.
Lower the cost of doing business, for all restaurant owners, by creating a new class of super-small, delivery-only restaurants that eliminate everything but the kitchen.
And so, the concept of ghost kitchens was born — a concept that has taken off amid the Covid-19 pandemic as more and more consumers have leaned into delivery channels, and as more and more restaurant owners have had to tighten their budgets and close stores.
Over the past year, Kalanick’s new company — Cloud Kitchen — has raised more than $400 million to help turn this idea into a ubiquitous reality.
Make no mistake. That’s exactly what will happen.
Super-small, delivery-only ghost kitchens represent the future of the fast-casual restaurant industry, because they:
- Better align with shifting demand (U.S. meal delivery sales have risen ~300% since 2018)
- Dramatically lower recurring costs (lower labor costs, lower rent costs, lower decoration costs, etc)
- Provide significantly more flexibility (traditional restaurant locations operate on 5+ year leases, whereas ghost kitchens are typically rented out monthly)
- Allow for more rapid, cost-effective geographic expansion (traditional restaurants cost upwards of $250,000 to open, and such openings take several months; ghost kitchens cost about $20,000 to open and open in less