Start-Ups Such As Postmates Aren’t Just Delivering Food, They’re Opening Kitchens Too

By Tracey Lien
Los Angeles Times

WWR Article Summary (tl;dr) Start-ups such as Postmates are reshaping their role in the restaurant industry to be less delivery dispatcher, more business planner.

SAN FRANCISCO

Last fall, the delivery start-up Postmates approached Los Angeles noodle house Tatsu Ramen with an offer: The start-up would rent a commissary kitchen just west of downtown in an area with a dearth of ramen restaurants.

It would supply all the equipment needed to make steaming bowls of ramen. And Tatsu could use it, with no upfront charge, to prepare dishes for delivery.

The catch? Tatsu could use the kitchen only to prep orders for Postmates, and Postmates would take a larger commission from each sale.

“It was a no-brainer for us,” said William Khoe, the owner of Tatsu Ramen, which has restaurants in Fairfax and the Westside. “It was a low investment on our end, and we could test the market fairly quickly.”

San Francisco Bay Area delivery apps such as Postmates, UberEats, DoorDash and Caviar used to only be middlemen in the restaurant world.

Customers logged on to the apps to find the food they were craving and the apps would deploy delivery drivers to pick up the meals from restaurants and drop them off at diners’ doors.

But being the middlemen also meant that they amassed a ton of data about restaurant popularity, consumer preferences and which neighborhoods are lacking certain cuisines, information that most restaurants struggle to collect on their own.

Armed with this valuable data, start-ups such as Postmates are reshaping their role in the restaurant industry to be less delivery dispatcher, more business planner.

“If we see a merchant being very successful on the platform, we can bring them to a new geographical area,” said Vivek Patel, Postmates’ vice president of business operations.

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