Restaurant revolution

Notorious ex-Uber CEO riding into Austin with revolutionary new culinary startup

Notorious ex-Uber CEO riding into Austin with new culinary startup

2 Nikki Favor food delivery app January 2015
CloudKitchens will offer space for delivery-only restaurants. Photo by © RP[Mx]

A startup owned by embattled former Uber CEO Travis Kalanick is driving into Austin with a new concept. Kalanick and team have plans to build what you might call an "uber-kitchen" catering solely to preparing food for delivery.

CloudKitchens wants to establish a 15,665-square-foot mega-kitchen on the nearly 1.6-acre site of a shuttered Baby Acapulco restaurant at 5610 N. I-35 in North Austin, public records show. The space would contain a cluster of more than three dozen rentable commercial kitchens, with each individual kitchen measuring at least 220 square feet.

Baby A’s, which closed last year, would be torn down to make way for the CloudKitchens operation; a February 2018 electrical fire at the restaurant caused about $25,000 in damage. The kitchen concept still must clear various City of Austin regulatory hurdles.

Representatives of CloudKitchens couldn’t be reached for comment.

Rentable kitchens are rising in popularity as more restaurant chains, independent eateries, food trucks, and web-only establishments dive into the online food delivery market, which is dominated by players like DoorDash, Grubhub, Uber Eats, and Favor (owned by H-E-B). One forecast says the U.S. market for online food delivery is expected to exceed $24 billion in 2023.

“There could be a scenario where by 2030 most meals currently cooked at home are instead ordered online and delivered from either restaurants or central kitchens,” investment bank UBS wrote in a 2018 report.

CloudKitchens rather quietly is establishing so-called “cloud” or “dark” kitchens in the U.S. and other countries, with two already up and running in Los Angeles. These setups enable businesses to rent shared space and equipment so they can fix food for delivery without relying on pricier brick-and-mortar locations. A Financial Times article refers to this idea as “WeWork for kitchens.”

As noted by the TechCrunch news website, CloudKitchens aims to help restaurateurs boost sales while decreasing overhead costs. Unlike restaurants, these kitchens lack waitstaff and tables.

Aside from buying or leasing space for communal food preparation and equipping the space with kitchen gear, CloudKitchens develops software to help restaurateurs manage their back-office systems and connect with food delivery platforms, according to the Financial Times.

“We are building the next generation of food delivery where drones, robots, and humans will all be among your colleagues,” CloudKitchens brags in an employee recruitment pitch on the AngelList website.

CloudKitchens is part of Kalanick’s Los Angeles-based real estate startup, City Storage Systems LLC. Kalanick, now a billionaire investor, co-founded the Uber ride-hailing service in 2009. He was ousted as CEO in 2017 in the wake of workplace scandals.