The restaurant you just ordered delivery from may not actually exist — here's why. - Business Insider

The rise of delivery apps like Uber Eats has also led to the rise of. And if the pandemic has accelerated existing trends, one of those trends has been the shift to delivery and online ordering. Dining rooms were becoming less relevant to a restaurant's online presence even before the pandemic. But now that sit-down dining is heavily restricted or banned in most states, the financial success of a restaurant has become dependent on two things: its kitchen and its delivery capabilities.

Delivery-only restaurants are especially well-positioned to battle the woes of the pandemic. Without dining rooms and the staff required to operate them, rent and payroll costs are significantly lower. Virtual restaurants share kitchen space either with a primary-brand full-service restaurant, or with other virtual restaurants in a WeWork-like. Since shared kitchen spaces don't have to be in bustling parts of town, restaurants are able to save money both by sharing rent for and avoiding a location premium.

Business Insider spoke with Jim Collins, the CEO of Kitchen United, a ghost kitchen company headquartered in Pasadena, California. Collins told Business that his company has seen success in its space from both national chains and independent operators. "The size of your restaurant doesn't matter as much as the vibrance of that digital consumer connection," Collins said.

That digital consumer connection is largely facilitated by third-party delivery platforms. Among its competitors, Uber Eats has been especially aggressive about experimenting with delivery-only restaurants. The high fees that third-party delivery services charge restaurants may be untenable when high rent and staffing costs are part of the equation. But Uber Eats' 35% average commission could be easier to swallow for restaurants that only have to worry about making the food.

Then who... did... i.... just... talk... to?

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