In an effort to boost his dark kitchens business, Travis Kalanick is going after restaurant aggregators.
The Uber co-founder and onetime CEO is now putting his focus (and hundreds of millions of his dollars) into his CloudKitchens virtual restaurant company — and is also throwing his weight behind a group lobbying for legislation that would compel aggregators to share customer data with so-called “dark kitchens” and set a cap on the fees they charge, the Financial Times reported Wednesday (Oct. 5).
The outlet noted that the Digital Restaurant Association was started in March by lobbying company Tusk Strategies, which in turn was recently tapped by CloudKitchens’ parent company City Storage Systems (of which Kalanick is the CEO) to handle the dark kitchen operator’s legal and public policy efforts.
The Financial Times also noted that an executive from City Storage Systems’ payment platform was removed from the group’s board following its inquiries but that ties between the payment platform and the lobbying group remain, though the association disputes the financial relationship between the two.
The Digital Restaurant Association’s site noted that the group “fight[s] to ensure restaurants have access to their own data” and aims to “create clearer guidelines and limits around transparency on the fees and commissions that delivery companies take.”
CloudKitchens stands to be a clear winner if the group achieves its aim of pushing through legislation favoring virtual restaurants, given that the company is valued at $15 billion with the backing of tech companies as influential as Microsoft. Virtual restaurants rely almost entirely on aggregators for their sales.
Related news: Kalanick’s CloudKitchens Expands as Restaurant Ordering Gets the eCommerce Treatment
The opportunity is certainly there, though digital delivery orders make up only a small share of restaurants’ overall sales. In fact, research from “The 2022 Restaurant Digital Divide: Food Aggregators Find Their Footing,” for which PYMNTS surveyed more than 2,200 consumers about their ordering habits, finds that only 2.5% of restaurant orders are placed via third-party aggregators.
Read more: Aggregators Account for Only 2.5% of Restaurant Orders
That being said, aggregators’ total audience includes a large share of consumers. Data from the July edition of PYMNTS’ ConnectedEconomy™ series, “The ConnectedEconomy™ Monthly Report: The Rise of the Smart Home,” which drew from a survey of more than 2,600 U.S. consumers, showed that 43% had ordered food for same-day delivery using an aggregator in the previous 30 days, and the majority of those consumers did so once a week or more.
See also: New Data Shows Convenience Drove Smart Home Upgrades for 83M Consumers in 2022
Typically, restaurants struggle with the third-party delivery channel. On the one hand, consumers are seeking foods that they can get brought right to their doors. On the other, these ordering platforms levy steep commissions, and restaurants’ margins are notoriously narrow even with traditional ordering channels. Additionally, with aggregators owning the transaction, they notoriously build loyalty to their marketplaces at the expense of consumers’ loyalty to the brands themselves.
If the dark kitchen company can limit aggregators’ fees and can gain access to their data about the brands’ customers, these virtual restaurants have a better shot of success down the line.
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