With the introduction of Uber style delivery services, I wonder if there are new food business models coming our way? When food trucks became a thing, it meant you no longer needed a brick and mortar restaurant, and the expense that comes with it, to serve the food of your dreams. Proliferation of a dynamic food logistics service could result in the quick creation of a delivery-on (or carry out) restaurant without a fleet or other delivery related overhead (insurance, drivers, repairs). If you wanted to start a delivery-only sandwich shop, one would only need an inspected kitchen. The barrier to entry cost is quite low.
As mentioned, food trucks are a good option for those financially strapped. But even food trucks have significant costs, and scalability and geography remains an issue. To run an inspected kitchen has costs, but rent would be extremely manageable for a space without dining and for which location is nearly a non-issue. Assuming a growing offering of Uber and Lyft style drivers, maintaining a vast geographic coverage of the metro area, business owners instantly have a fleet of drivers who “happen to be going” all over town, with the ability to deliver your product. It’s the last-mile problem, applied to food delivery. It’s extremely scalable, assuming driver availability, as well as your ability to create enough demand for and supply your product. Once could then use success in this area to finance growth, even if a brick-and-mortar restaurant is the end goal.
As an example, I’ve long wished we had a legit breakfast burrito place (such as you find on every corner in Austin) in Atlanta. I even day dream that if the shit ever hit the fan in my business, that I would take a crack at it, in my mind I’ve kicked around a King of Pops style model, with warmed coolers full of wrapped breakfast burritos, with a delivery van resupplying street corner/parking lot vendors as needed. (Btw, I’m talking about the small $1-2 San Antonio style breakfast burritos with just two fillings – been and cheese, egg and potato, potato and bean, etc).
With larger burritos and more complex, custom orders, this isn’t possible. Most places in Austin have the larger format, and you can pick and choose 3-4+ items for the $3-5 burritos. The King of Pops idea doesn’t work, and that idea may have had too many health code and logistical issues tied to it anyways.
Opening up a breakfast burrito truck requires capex for the truck, many employees to cook, someone to accept the orders, and a good place to sell burritos. Atlanta is fairly terrible when it comes to finding good places to setup a food truck.
But what about a breakfast/burrito delivery service utilizing Uber? Customers can order online or through Uber/some other ride sharing service. If there is an Uber available nearby, they are hailed with the option to pickup the burrito and deliver it. Perhaps the driver is heading that way anyways?
All of the sudden you have a fleet available to deliver your product, assuming it’s a deliverable product. Overhead and risk are low. Customers are paying a fair price and are hopefully getting a prompt delivery due to the arm of ride-sharing drivers crawling the town, which could be tough for an in-house delivery fleet to match. The technology piece of ordering, paying for the product, and facilitating delivery are already covered.
I used Postmates this weekend to order a burrito, for which they had a special in the “Howell Mill area” – $3 for a burrito, plus fees. I ended up paying $9 with 20% tip and all fees for a burrito to be delivered to my house from La Fonda (not the best, but it certainly was acceptable, and it was a ton of food.) With a new age upon us, we can finally sit back, tap a few buttons, wait for our food at a fair price, and get back to what we need to be doing – working and/or screwing around on our computers.