“Ghost Kitchens” Are Also Rising Fast. These Are Kitchens That Cook Specifically For Delivery Of Food Via Robot Or Pickup
A startup called Reef wants to un-clog city streets and deliver food to your door via robot A robot the size of a small cooler sits on the sun-soaked fake grass in a segment of parking lot close to Brickell, Miami – the city’s shiny-towered financial district overlooking Biscayne Bay. Nicknamed “Reefy”, the electric-powered autonomous delivery robot wheels smoothly in front of a series of trailers set up to cook food for companies with names that sound as if they were created by algorithm to cater to stoners (MrBeast Burger and Man vs Fries) and another that serves as a storage unit for an online convenience store called Goodees – slogan: “Late Night Cravings Don’t Need Validation.”
The robot is owned by Reef Technology, Miami’s first “unicorn” – a startup valued at more than $1bn. It’s a pretty high price tag for a three-year-old company, but maybe not if it can pull off its ambitious plans to transform the way we use the car parks that have dominated downtown real estate in cities across the planet for decades. Reefy is one of two food via robot in a 3/4-mile radius of downtown Miami. More are planned. The other deliveries are done in the more traditional way, via bike or car, ordered for home delivery from the smörgåsbord of apps like Uber Eats and Deliveroo. For Reef, food delivery is just the beginning.
Reef describes itself as “the neighborhood company”. The cash-rich startup has plenty of neighborhoods to explore. Reef now operates more than 5,000 parking locations across 50 cities worldwide, from Miami to New York to Paris and London, where the company has 25 sites already and is building a “hub” in Kentish Town that will host an electric bike station, a vertical farm, an electric vehicle charging station from BP and a kitchen for Wendy’s, the US fast food chain. Most of its money comes from parking at present, but it wants to use those sites for something far more ambitious. Autonomous vehicles, ride shares, e-scooters and bikes could one day reduce the need for car parks in busy city centers. Reef sees those spaces as hubs for all sorts of local services, including healthcare (it has partnered with medical companies for Covid-19 testing) and as a depot for groceries and other food via robot deliveries that could be dropped off in bulk at a car park then delivered food via robot locally. Other sites will act as “parks” with pop-up retailers, beer gardens, outdoor dining and other services. One day Reef’s sites may also host air taxis: Reef recently signed a deal to allow Archer Aviation to launch its electric mini-helicopters from the top of its parking garages.
Reef started life in 2013 as Parkjockey, a tech company founded by entrepreneurs Ari Ojalvo, Umut Tekin and Phillippe Saint-Just that uses technology to make better use of parking lots. But the founders believed there was more they could do with their portfolio of giant eyesores. In the US half of downtown real estate is used for cars – space that is heavily used during peak hours and often empty at other times. Parkjockey changed its name and expanded its vision in 2018. The shift has investors excited. Reef has raised more than $1.5bn in funding from Japan’s SoftBank, Abu Dhabi’s Mubadala investment fund, UBS and others.
Parking is the company’s main “application” – as its execs like to call how they use the space – but “ghost kitchens” are also rising fast. These are kitchens that cook specifically for delivery of food via robot or pickup, a sector that has become highly competitive as inventors take advantage of downtown retail locations and other sites that have failed, either because of the shift to online shopping or the economic impact of Covid, to set up shop for food delivery companies.
Reef has developed its own kitchen trailers that it rents out to restaurants in return for a share of revenues, and provides and trains the kitchen staff to work with those restaurateurs to cook the types of food they want to sell. It’s a one-stop shop for anyone with a food delivery idea. “It’s very similar to what happened on the internet. In the 90s if you wanted a website, you had to know about servers, do your own coding. Now there’s a whole infrastructure for the creator economy, essentially what we are doing for the physical world,” says Saint-Just. The idea has taken off. Before the pandemic Reef had 50 kitchens up and running. Now it has just over 300.
Bill Bonhurst, founder of Man vs Fries, is one of Reef’s first breakout stars. A former tech consultant, he has always been obsessed with fries (“I have never understood why they are just ‘a side’,” he says). After starting a successful taco restaurant he saw an opportunity to run another, delivery only, restaurant out of one of his locations. When ghost kitchens materialized he saw a bigger opportunity.
The fries-centric menu – featuring items like the “SoCal Burritto: Hella big flour tortilla, carne asada vs pollo asado, Cheetos® Flamin’ Hot®, straight-cut fries, cheese, sour cream, guacamole, secret sauce, side of queso”, has proved a hit. He now has 151 locations across the US, eight in Canada, one in Dubai, and plans to open in London later this year. “It’s kinda crazy,” he says. “Under the old model this would be impossible.” Starting a sit-down restaurant is hard and expensive and difficult to scale unless you have very rich backers. Ghost kitchens offer a cheaper way to experiment and see what works, he says.
“Man vs Fries is like software. You build it once, then all you need is kitchens,” says Bonhurst. There are plenty of very well funded alternatives to Reef, including the Uber founder Travis Kalanick’s CloudKitchens, and Alphabet-backed Kitchen United and Deliveroo in London. But Bonhurst said Reef’s commitment to quality and brand support won him over. “Their training program is crazy,” he said. “They spend months training people.” Reef is attracting big names too. Wendy’s plans to open 700 ghost kitchens across the US, UK and Canada by 2025 through a partnership with Reef.
Too much takeout, however, can leave you feeling ill. There are now so many online food brands, a trend driven by people ordering more food at home during the pandemic, that Bonhurst is worried many will fail. “You can order 18 different chicken wings right now,” he laughs. “I think there may be some fatigue.” In that environment, quality will be key, he says. “If you don’t have quality, you will be a flash in the pan,” he says.
Saint-Just too expects a “rebalancing” as the pandemic fades but, he says, the pandemic also highlights the need for “logistical infrastructure at the neighborhood level.” And for him the kitchens business is just stage one. “Our vision is to rethink how buildings are used and developed in our cities. We don’t have to live with designs that were made for the way we lived 40 or 50 years ago.” Reef isn’t the first property/technology startup to emerge with a big, bold, well- funded promise to redefine our cities. WeWork promised to do the same for the sleepy office rentals sector only to implode spectacularly in cinematic levels of egotism and hubris.
Like WeWork, Reef is backed by Softbank, which lost billions on the real estate company. They even share the same office space and taste in interior decor – dark walls, 20 different types of coffee, a pink neon flamingo, heavy on the plants – but there was no sign of WeWork’s notorious free beer station. Saint-Just, however, is nothing like Adam Neumann – WeWork’s messianic founder. Soft-spoken and low-key, he likes to talk about evolution not revolution. “I’m skeptical of revolutions. Maybe it’s my French background. For me everything is evolution,” he says.
Nor is he a big fan of the “gig economy”, the use of often poorly paid contractors, which has been used to power so many other “disruptive” tech platforms like Uber and Lyft. Reef kitchen employees are staff and get paid $20 an hour. “Our approach from the beginning was that this has to be a business built on ownership and accountability,” he says. “In general I don’t believe in the fundamentals of building a business on gig workers. You are at odds with them at some point. It becomes about how much money you make versus how much they make.” But for all the niceness there is something fundamentally dystopian about Reef.
As if on cue a worker walks past in a T-shirt that reads “Fast Wasn’t Fast Enough”. If Reef is successful it will only hasten the shift to a world that was forming before the pandemic and has been supercharged by the coronavirus: a world divided between the delivered and the deliverers; a world where those with the means expect whatever they want delivered ever faster and brought to them by those without the means – assuming they haven’t been replaced by robots.
The pandemic highlighted cracks in urban living that have long been widening – our roads are clogged with delivery vans, the supply chain has snapped under the strain of the pandemic. Perhaps Reef’s local hubs can help with that. But, just when we should be thinking most about how to redefine our cities, it seems unlikely that the grand plans of billionaire-backed tech companies are best suited to solve them, or end the growing problem of income inequality.
“Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody,” the always prescient Jane Jacobs wrote in The Death and Life of Great American Cities. Typically Saint-Just is less gloomy. “I think that things will normalize. It’s not all about speed – it’s convenience that will win out.” What he hopes Reef can do is rethink how we use city property to build “better spaces, better communities”. Bonhurst says the “ghost kitchen” too will become normal soon enough and will add, not subtract to a city’s dynamic. “People will always want to go out and eat. That’s never going to die,” he says. “But this, this too is here to stay.”
This news was originally published at The Guardian