Will London eat itself?
Are 'dark kitchens' and 'dark stores' as evil as they sound?
If you’ve found it harder (or more expensive) to order a cab recently, the reason is probably because more people are ordering takeaway food.
Demand for taxis went right down during lockdown, while demand for meal deliveries went up. And the way in which the ‘gig economy’ functions means that it’s not hard for drivers to leave their job driving for Uber and switch to driving for Uber Eats (or Deliveroo, or JustEat). More burgers get delivered, more drivers jump ship, cabs become more scarce and fares go up.
But as well as creating more surge pricing and the rage-inducing “rides being cancelled while drivers are en-route” this massive surge for food delivery services is also changing London in other, more fundamental ways.
Lockdown habits aren’t going away
In the last few weeks we’ve seen results announcements from all the big food delivery companies, and the clear message seems to be that food-on-demand is still very much …well, in demand.
Uber’s results announcement was such a masterclass in obfuscation and flimflammery that we don’t have the space to go into it all right here (if you want more, Cory Doctorow did a marvellous dissection, and there’s a much more in-depth examination by Hubert Horan over at Naked Capitalism). For the purposes of this newsletter, let’s just say that Uber as a company is effectively broke and is losing billions of dollars, but Uber Eats has “bolstered the company” and has “stayed strong even as Covid restrictions eased around the world.”
Deliveroo has recovered a little from that mortifying Stock Market flotation and saw its orders double to 148.8 million in the first half of 2021 “while the value of its transactions also doubled” (i.e. people spent more per order as well as ordering more often). The company has also “signed up 10,000 new sites in recent months” (that’s about a 30% increase) and increased their monthly active users to 7.8m (up from 3.7 million in the first quarter of 2020). They are also talking big about bringing “400 skilled tech jobs” to the UK over the next year, including “software engineers, data scientists and designers”.
Over at JustEats the number of orders placed went up by 58 million in the first six months of this year as households ordered 3.2 times a month on average, as opposed to 2.5 times a month in 2020. JustEast also said that their market share in London went up by 10% and they saw “triple-digit order growth” here.
When is a kitchen not a kitchen?
When Uber’s CEO (and former economic adviser to President Trump… and general scumbag) Kevin Kalanick stepped down from the company in 2017, one of the first things he did was start buying majority stakes in companies that rent out commercial kitchen space (i.e. spaces with no customer-facing facilities, where food is prepared solely for the intention of delivery). In 2018 one of those companies acquired the British startup FoodStars. As of January this year FoodStars operates 12 of these ‘dark kitchen’ sites across London (and Kalanick has begun to extend his kitchen empire across Europe in typically secretive manner).
There are now around 750 of these dark kitchens (also known as virtual, cloud or ghost kitchens) in the UK, and two-thirds of them are in London. Deliveroo has its ‘Deliveroo Editions’ infrastructure (16 sites across the UK, housing about a hundred separate kitchens) and Just Eat has its own sites. In fact the only big player that doesn’t have them is Uber, they decided they didn’t want to compete with their ex-CEO, and closed their Paris-based dark kitchen last year.
More and more restaurant chains are opening dark kitchens to facilitate the delivery market. Wendy’s announced last week that it is going to “open a string of dark kitchens in the UK” with the initial batch all in London, including some in Stratford and Croydon. Pret has one in north London, while Wagamama has sites in Balham, Hackney, Bow and Peckham. Shake Shack uses them. So does Burger King. McDonalds opened their first dark kitchen in Kentish Town in April (in partnership with FoodStars).
And more and more of London’s real estate is transforming to accommodate them. Earlier this year, two warehouses in Brent Cross and Streatham were snapped up for £13.5m so a FoodStars competitor called Jacuna could install over 100 dark kitchens in them.
So what’s the problem?
Back in April, East London Lines went to have a look at some of Deliveroo’s dark kitchen sites and spoke to some of the people working in them.
It maybe won’t surprise you to know that they found many dark kitchens offering “low-paid, zero-hour jobs” with some paying “just over minimum wage”. The only employee benefits to speak of were “being able to wear ‘casual dress’ to work and ‘discounted or free food’”. Whoop-de-fucking-do.
The East London Lines article also quotes this report from the Royal Society for Public Health, which describes dark kitchens as…
“Small boxes inside which cooks prepare food for delivery companies. While food may be sold under the name of an established restaurant or takeaway, in reality it is being produced by chefs in a dark, cramped and low paid environment which is frequently either too hot or too cold.”
If you’ve ever been inside a commercial kitchen at peak time (or ever watched an episode of Kitchen Nightmares) you’ll know that they are generally stressful, uncomfortable and cramped environments (there’s a reason so many kitchen staff end up with drug or drink addictions).
Now take away all the diners, shrink the amount of space and ramp up the pressure. Then reduce the wages and move the whole thing to a Portakbin under a railway line in Blackwall. Seriously, imagine cooking fried chicken to order in one of these all day:
The other big issue is that, if a company like Deliveroo can produce its own food with fewer overheads, that means it can undercut traditional neighbourhood restaurants who may already be struggling due to the pandemic.
As the Guardian reported earlier this year, when a local restaurant signs up to Deliveroo it has to account for “commission amounting to 35% plus VAT on every order” so they have to put their prices up. When customers see that alongside the delivery and service fees it’s maybe not surprising that they scroll right past to look for a cheaper option - maybe one that’s been produced in a ‘super kitchen’ (which is what Deliveroo laughingly call their Portakbins).
(This is, of course, on top of all the existing issues faced by many delivery drivers, including earning less than minimum wage.)
It’s not just restaurants that are going dark
That image above is from an article in last week’s Telegraph on how ‘dark kitchens’ fuel our delivery addiction. That article also highlighted the other ‘dark’ element which is set to transform the make up of the capital: dark stores.
Thanks to the growing ‘rapid grocery delivery’ business, London is now “in the epicentre of [a] dark store battle” according to Deliveroo’s CEO, with around a dozen startups trying to become the dominant player in the race to deliver loo roll and booze to people’s doorsteps.
Just last week an American grocery delivery group called (somehow) Gopuff bought a London-based start-up called Dija “which promises to deliver orders in ten minutes”, while London'-based Getir “already has a valuation of $7.5bn - more than both Deliveroo and Marks & Spencer,” despite the fact it only launched in January.
You don’t have to be an economist or a competition lawyer to see that this might not be great news for our corner shops and other local business. As Michelle Meagher (who is actually a competition lawyer) wrote back in June:
'“According to this version of the future, our local high streets look very weird indeed. Consumers will be able to buy groceries from dark stores where they can’t physically shop, or order restaurant food from dark kitchens where they can’t dine. And what will count as essential products? My corner shop sells Turkish kefir alongside Polish kielbasa, West African fufu flour, gluten-free spaghetti and heritage tomatoes – a hyperlocal offering to cater to a few north London streets. Delivery apps may turn all this flavoursome variety and richness into bland uniformity.”
How do you stop funding ‘bland uniformity’?
When it comes to dark kitchens there is one business that is doing things differently. Karma Kitchen was profiled by Wired recently and they noted their “bright and open” kitchens where there are “chic, coral-pink tiles and the walls are decorated with cheery vinyl wraps”. More importantly, Karma’s kitchen porters receive the London living wage.
As a consumer though, you can’t choose which dark kitchen provider you want to support. The only power you have comes at the point of purchase, and unfortunately that space is dominated by companies like Deliveroo and Uber who are able to use VC money to create artificially low prices (what the NY Times recently dubbed the ‘Millennial Lifestyle Subsidy’) so they can drive mass adoption and create a monopoly.
It’s hard for any small, local business to compete with tactics like that, but some are trying. Wings, is a rider-owned co-operative which was launched last month by three former ‘gig economy’ workers and which offers London Living Wage and sick pay, plus they prioritise local, independent businesses over big chains.
But until more of these independent, local offerings spring up, your best option is to order your next takeaway directly from your favourite local restaurant.
Thanks to Covid, a lot of restaurants now have their own in-house delivery drivers, or you could just go old school and pick it up yourself. That way you’re avoiding the massive third party surcharge and all the money goes to the restaurant rather than the ex-banker who only agreed to pay his workers a living wage after the government forced him to (while giving himself a 22.5% pay rise).
And the rest…
Related to all that: The Big Issue reports that the Uber Eats driver app has been “sacking people automatically” because it can’t recognise their faces. The app uses Microsoft’s facial recognition software which was found in a MIT study “to be more error-prone on darker skin”.
And just when you thought eating and drinking in London couldn’t be any more problematic, The Guardian reports on Soho residents complaints about alfresco dining causing disruption such as “people are singing at the top of their lungs” and “drunk men urinating” outside people’s houses. We’re not exactly sure where the link is between eating outside and pissing outside, but apparently it’s so bad that people who’ve lived in Soho for years are considering leaving the area.
The pandemic has also wreaked havoc on Heston Blumenthal’s empire, as the Telegraph reports that “auditors have raised concerns over the ability of certain parts of Mr Blumenthal’s restaurant empire to continue trading” (including his Heathrow Airport cafe which we were never convinced was a good idea).
In non-food related news, a new report by City Hall has shown that almost every London school is in an area where air pollution levels exceed World Health Organization limits.
Some good news: London has been named the ‘top city for runners in Europe’ by Puma. The factors Puma looked at to make their decision included temperature, traffic congestion, number of running clubs, green space, quality of water and…erm, air pollution (we’re assuming they didn’t take sexual harassment into account).
And while we’re talking about warehouses and groceries, we have to mention the fact that a fire at an Ocado warehouse in south-east London last week was caused by “three of its robots colliding”. Apparently “no humans were injured” in the fire but there was “some residual smoke smell” and thousands of shopping orders were delayed. Stupid robots.
This is a great piece, thank you