Inside The Fastest Growing Food Delivery Service In The World

Posted: Jun 30, 2018



Uber Eats Jason Droege discusses the past, present, and future of data-informed food delivery

So at the time, it was the old CEO, Travis Kalanick. Were you like, “Travis, we could do something with food, people are eating”? What were the first conversations?

So over 2014, my job was to build a small team, look at a bunch of different industries, look at who was doing what, and start running some experiments. And in August of 2014, we launched a few experiments. One was around convenience retail, one was around generalized delivery, and one was around on demand food. And very quickly, we saw that people wanted their food delivered.

I’m actually from Toronto. The first iteration of on-demand food was in Toronto, right?

There were actually two versions of the product. There was a product that was, hit a button and get a meal, and it would show up in the, actually, the-



Yeah, it was a bunch of cars driving around with chill boxes, or hot boxes in the trunk.

Exactly.

And that was a system in which there was one meal a day. So if you wanted that, they would bring it to you really fast, if you didn’t want it, bugger off.

We didn’t say that to them, but yeah, that was the idea, is like it’s fast, but there’s low selection. And even with that, we saw a lot of demand at lunchtime. And we launched that in LA in August of 2014.

In December of 2015, we’d gotten a lot of customer feedback. We talked to restaurants. And about mid-2015, we said okay, we need a lot more selection. Our customers kept telling us. And that’s when we launched in Toronto. That was the very first city for what you now know as UberEats.

So then the modern UberEats was born. The quote I read everywhere is, now the number of trips by UberEats drivers grew more than 24 times between March 2016 and 2017. The service is available 120 markets around the world, and profitable in 27. Are those the same numbers as today?

No, today we have a lot more cities. We have 280 cities.

International.

International, yeah. We’re in ... I believe it’s 35 countries. I might be getting that wrong by one or two. We have 80 or 90 markets that are profitable. So we continue to flip markets profitable as we launch, but we continue to launch a lot of markets as well. So the business is growing quite rapidly, even since those numbers, and continues to do so, and we’re excited about the business.

And I think it was reported last year, you guys did six billion in food?

So in Q1 of this year, we were on a six billion run rate, which means if you took first quarter and multiplied it out over four quarters, you would have about six billion dollars.

Sure. So how big is the delivery industry as a whole?

I don’t have the numbers off the top of my head, but the delivery industry is an interesting one because you’ve got take-out and then you’ve got delivery, and then you’ve got digitized take-out and digitized delivery. And so a very small percentage of the market is actually delivery through an app. The bulk of delivery in the world today is still calling on the phone or faxes. And so I think the numbers are 35 billion dollar market for app-based delivery-

Well that’s all we’re worried about, right?

But the actual market for current ... For delivery today, I think is five to 10 times that.

Oh, wow.

And then take-out on top of that is even bigger.

Basically, in terms of app-based delivery programs, there’s two point systems and three point systems, right? There’s Seamless and GrubHub. Those are the ones that connect you with a restaurant, you place an order, and then they’ll send it to you or you pick it up and then there’s Uber, Postmates, Caviar, DoorDash, a lot of the other ones, where you guys will actually coordinate the delivery process. Is it as simple as that?

So I think the differences are that roughly 10 percent of restaurants in the world do their own delivery today. And so how do you get the food from the other 90 percent of restaurants? And so what we’ve done with Eats is we’ve armed them with the logistics network, the driver network we have on Rides, allowed all those drivers to opt in to become Eats drivers in the US so that we can power delivery for all the other restaurants. And we’ve done that globally.

Why do you think that Eats has expanded so much faster than a couple of the other delivery apps?

I think it’s in Uber’s DNA to expand. One of the really awesome things about working at Uber is we have a global operations team. We have offices around the world, we have legal around the world, we have all of the infrastructure necessary to expand a good idea when we have it. And when you work at Uber, it’s an interesting experience, because launching in Melbourne, Australia can feel as close to you as launching Chicago, Illinois. And it’s ‘cause you have a team there, they’re staffed, and when there’s a good idea, you build the team either externally or internally, but certainly with the same playbooks as we built with the Rides business. So that allows you to expand very, very fast. And we have a rider base that we can market new products to. And it’s food. Food, it’s convenience, it’s access to more food than you would have without the app, and it’s an affordable price. And so it’s a very appealing value proposition around the world.

So when you first started, and you’re like ... You first started Eats and you’re like, okay, we’re going to do a food thing. A lot of people say that you guys know delivery but you might not know kitchens. So how did you immerse yourself in the world of kitchens? Did you work a line somewhere? Did you take a stodge out in Paris or something?

Even before Eats, for some reason, even as a kid, I always wondered why ... There used to be this place in San Jose called Kirk’s Steakburgers. And it was my favorite place to get a hamburger as a kid, but it was super hard to get to. And so I always wondered, from an early age, why is it so hard to get access to the food that I want when I want it?

Wow.

And of course, I never knew that would transpire ‘til today, but it’s always been this curiosity of mine, about, why am I so bounded by where can I go, or excuse me, I’m bounded by my logistical access to the restaurants around me. Why can’t I have access to hundreds of restaurants at once rather than just a few that I can walk to? And so I never really knew what the answer was, and I’m like, this is just weak. I want what I want. And there are creators out there, who are the people creating food, that might not have access to real estate teams or logistics or whatever.

So when Eats came along, we said, all right, how do we go super deep with restaurateurs and all of these amazing people who are making this great food, and then allow them to plug into the infrastructure and logistics and customer base that Uber has? And a big part of that, to your point, is, how do you go really really deep with a food maker, with a restaurateur, to really understand their business? Because we had to build software to help them out. And we’ve done a lot of things you’ve said. I’ve worked in a restaurant-

You have?

Yeah. And so we’ll man the tablet, or some people will work a line, or we’ll pop up a kitchen somewhere, just to see what is that experience? What are the day to day pains and joys of doing that type of work?

What does that mean? So you worked in a restaurant that has already had Eats up and running?

Yes, I have.

Right. What was that like? Was it your first time working at a restaurant?

I worked at a restaurant when I was a teenager, like many of us. But yeah, you just see the chaos of it. One of the issues with being in Silicon Valley is, you can get a little bit myopic in terms of what the world’s really like outside of software. And so going in and seeing, okay, you have a tablet that’s ringing. And then you also have a customer that’s asking for their food, and then you have a line making food for people in the store and for Eats. How do they balance all these things, and how do we build software or do systems integrations with the software that they already have on site?

This isn’t why I became an engineer.

It’s almost empathetic to what the problems they have are. And so just being there, you feel it. And we try to push everybody to either become a delivery driver or work a restaurant or on a tablet, or ... Empathize with the customers that we have to really understand the pains and pleasantries of the work.

What was the pop up restaurant you guys put together? The world’s most efficient restaurant?

No, it was literally ... We’ll make food we don’t actually always sell on Eats. Just for some internal reasons. But we’ll make food just to understand making food. And one of them was a breakfast burrito shop. And so it was like, how do you even ... So that exercise was around, how do you even think about branding a pop up restaurant? So one of the differences between delivery and maybe opening a restaurant in the physical world is how you think about branding.

When you’re in delivery, the branding around the product is a very important piece of it, potentially, because let’s say you sell breakfast burritos but you’re not that well known. If you call your place the Breakfast Burrito Shop, you’re going to get more people clicking on that than if you call it Al’s. Because if I don’t know what Al’s is, and what it stands for, then I don’t know to click into it. It’s kind of similar to-

Whereas in the real world-

Whereas ... Al’s is the diner that you go to and they have five different cuisine types. So in a world where you have access to hundreds of restaurants, the cuisine type, the specific food type, actually becomes the focal point, along with the brand of the restaurant. And so you’ve got a situation where it’s similar to content, actually, in the ‘90s and 2000s, where you went from only having access to newspapers and magazines that were published, into a world where you could get articles and information on anything.

And so if you think about how food goes digital as well, you’re going to have access to a much longer tail of food, a much longer tail of options, in a delivery world, because restaurants can create lots of different things that can be represented in the app.

So Chef Jason, when you guys pop open a restaurant, have you opened a burrito place? You guys have actually done this?

No, I just ... Just worked and helped out.

Right. So what goes into these pop up places?

Just to be clear, this isn’t something we do on a regular basis.

Sure, sure. And you’ve actually sold food on the app before?

We have not. We have some internal reasons why we don’t do that, because we’re not a restaurant company. But we go through the process of what would it be like, and synthesize all of that together, in terms of how we build the app. And so we have to observe-

Tell me you guys have a full-size simulation somewhere, with angry customers and everything.

We don’t have that today but it’s something we might build.

Really?

Being close to our customers is a very important part of building software. In the software business, you’re constantly in this world of, how do we connect with the people that are actually doing the work in the physical world? ‘Cause it’s a messy place. Running a restaurant is super hard. There’s a lot of operational details. And how do we constantly stay in touch with their pain points and not go back to, hey, this is Silicon Valley and hey, everything should just be in software and everything should be homogenous. ‘Cause that’s not the real world, the real world is not homogenous.

Okay, yeah, we’ll get back to ... So those are just things you’ve observed, right? Finding the pain points. That’s what’s your looking for.

It has to be seamless for restaurants. It can’t be a situation where the restaurants feel that this is the highest friction point of their day. It needs to build into their workflow. And there’s just a huge body of work necessary to make that happen, because the paradigm of restaurants for the last 50, 75, 100 years has been largely dine-in. We’ve moved to takeaway over the last 10, 20, 30 years. But as you move into delivery, that means even different things, ‘cause the person you’re interacting with is maybe the delivery person, and you’re only interacting with the eater virtually.

So can you talk us through the very basic steps of signing up a restaurant? Do you guys send people IRL to walk into a restaurant and say, hey, we can facilitate delivery for you?

It happens through a bunch of different ways, but I’ll just take one, which is, if we’re launching a new market, we’ll call a restaurant and say, “Hey, we’re coming to town and we think we can supply you with new business.” And a salesperson will have a conversation with the restaurant about how the program works. The restaurant, if they sign up, gets a tablet, and the tablet-

It’s free?

The tablet comes with the package. We don’t specifically charge for the tablet. But restaurants will pay a fee, the fee varies by market, per order, and then sometimes there’s a setup fee to get engaged. There’s the tablet, there’s photography, there’s a bunch of things that we supply that have a cost.

But you will actually send in a photographer?

Mm-hmm

What is your goal in day one with a restaurant?

Day one is to make sure that that’s restaurant’s brand and food are as well represented ... Represents the brand and food that you are going to get. And it’s not just a list of items. And so the first step towards that ... From the very beginning, we’ve always had photography of five to 10 items per restaurant. A photographer will come out, they’ll schedule a shoot, they’ll take pictures of all the food. That’ll go into the app. We don’t always get everything, ‘cause sometimes there’s 50 or 60 things. But our goal is to provide a richer and richer experience, so you feel like you’re interacting with the restaurant, and not just a menu.

And what’s gone into ... Have you had consultants come in to do photography work? What steps have you taken to make sure your packaging is as good as it can be?

Packaging for photography or packaging for actual food-

Photography and menu items and what the customer sees.

The menu starts out as just the menu that the restaurant has. And we’ll work with the restaurant, where they’ll say, “Hey, I think these things deliver well, and these things I’m not so comfortable with.” Because they want to preserve quality or something like that. Sometimes fried foods don’t deliver as well. And so it’s the restaurant’s choice whether or not they put those items in, or they work with us in terms of, hey, will this deliver well and what are your opinions, and we partner with them on that.

On the photography side of things, we want to keep the photography consistent with the food that the restaurant has, but not inconsistent with the Eats app, because we want the photography to feel similar across the menus. But obviously, we’re representing the restaurant’s brand through that photography.

So you know a lot. You guys have a shit ton of information of what is working well, what menu items are being selected by people. If you know a dish is working very well in a market, how do you go about telling a restaurant, hey, you should put this on the menu, or you should take this one off because ... What does that look like?

We do a few things on that front. One is just, we don’t look at the experience on a market by market basis. We look at it on a customer by customer basis. So if you’re a regular Eats user, and I am, when we open up our apps at the same spot, the same time, of day, the restaurants displayed and the items displayed will be different. And that actually goes through to the menu as well. And this is in early stages, but even optimizing the menu by eater. Because if a restaurant offers hearty meals, salads, different calorie counts, different cuisine types, and I’m always eating Italian all the time, then we’re going to push that to the top of the menu.

So we try to match the eater profile with what the restaurant has that would match the best. And so there’s a fair amount of personalization there. And we’re going to continue on that front.

Does that mean actually hiding menu items?

No. We don’t ever hide menu items.

Just changing-

Just changing the priority. Like at the top of the menu, you’ll see recommended for you, or ... We change the language for testing, but-

But if you know I’m a cold, ruthless vegan, and I’m ordering from the deli next door and they have a steak, you’re still going to show me that steak?

Yeah, I mean-

It’s just going to be low on the list.

Potentially. Potentially. This is all governed by data science, algorithms and things like this. And so we’re just trying to score how likely you are to be interested in things. And still early days. We’re not perfect at this. Personalization takes a lot of effort, takes a lot of data. But this is where we’re going. I want to be able to open up my app, and with the same sort of transactional ease of, oh, there’s a car. Hit the button. It should be like, oh, here’s the three things that I actually do feel like right now. Because we have your time of day, we have your location, your order history, and some basic information about you-

You’ll know if I’ve had a meeting with my boss, I’m stressed out, I want a milkshake.

We don’t go that deep. But we have enough contextual information to be smarter about it.

Food trends. Something like sweet potato fries or acai bowls or things that are doing ... I can only speak to New York. But how do you know if something like that is starting to spike?

We have a global business. We have 280 cities. So we have a lot of information about what’s becoming popular. We also have some tools that can show us where a cuisine type would potentially be popular. So classic example is, in the outskirts of Chicago, in a suburb ... I think it was Oak Brook, we noticed that there was no poke shops. And so we went to a bunch of sushi restaurants and said, hey, we think poke would be popular with just a tablet. And in your expertise, if you came up with a name for your restaurant, and you built poke bowls, we think you’d sell a lot more out of your sushi restaurant.

And they tried it, and it worked.

And they were like, okay, but we don’t want to have poke in the name, and you were like, no, yes you do.

I think that’s an important part of discovery. If you were to call it something obscure, it would just get discovered less. And so they’ll call it something ... Poke something, or something poke. And the demand was pretty high. I think it was 60 percent more-

So you got someone to do it.

We have hundreds of these restaurants that are just actually ... They’re virtual. They’re restaurant brands located in physical restaurants. And the brand only exists on UberEats. And so what they get from it is, they get to utilize their kitchen more, they get to sell more, they increase the size of their delivery business. They don’t compete with their in-store menu, and so it can be completely incremental to whatever they’re doing in-store. We see high end restaurants, like you’ll have a high end Vietnamese restaurant who then will make a more affordably priced Vietnamese menu. And they’ll offer that for delivery only. So you have a lot of the same components, but maybe the protein is different. Or maybe other things about portion size or prep are different. And so then they can just do more business while still having their higher end concept.

So is that an actual conversation? Are you like, hey, you should open a poke place? Or this is an email that goes out to all of them?

No, no. We’ll contact them. We’re still in early days of this idea, and we’re big believers in having a positive relationship with our restaurant partners because one, we want to, two, the operational complexity of this stuff requires a real collaboration on a person to person basis. So no, we interact with them and talk to them.

But that’s as far as you’ve gone with food suggestions. Will you call restaurants and suggest a single menu item? Like if you see that zillions of people are ordering burgers with sweet potato fries and they’re only offering regular potato fries-

Right, we’re in the early days of doing that. But that’s absolutely part of the plan, which is, how do we make sure that restaurants have all of the data about what’s popular, what could benefit their business? Obviously in an anonymized form, at their fingertips? Today, restaurants can see, how is their food rated, how is their delivery rated? They can see free form comments, which, in the real world, you don’t really know how happy your lunch rush was. But in the delivery world, we ask for, how was the delivery experience, how was the restaurant, how was each of the items? What’s the free form feedback? It’s a lot of information to collect, but the restaurants really value it because it’s quantifiable.

Of course, yeah. And no one says it in person.

It’s completely anonymized, and restaurants have actually used that information to change their menus in store.

So the way that the system works is, the restaurant receives an order, right, and then they tell you that they’ve started working on it, and then you have a time, a projected time that you think it’s going to take them to finish it?

That’s right.

And then you want a car to get there and pick it up in as little time as possible. You don’t want the car waiting there for the food, right?

Well, you don’t want either waiting. So that’s the magic. And so-

But food is notoriously difficult to time. Only the most perfect restaurants have ever gotten close to getting this timing down. So how do you deal with that window?

There’s two things that you can do here. One is, you can work with the restaurant to help them understand how our system works and how we gauge their preparation times and the importance of the preparation time from a food quality and system efficiency standpoint, and they’re usually very willing to have that conversation. ‘Cause they want the best food at the customer’s doorstep, too. And they don’t want drivers coming and having to wait for 15 minutes. That’s not good for them, either. So just working with the restaurant is a very simple step you can do. And they’re awesome to work with on this because it improves the overall experience for everybody.

The second is, the world is a complicated place, so we have a lot of data scientists working on predictive models for, how do we time these things and how do we shave milipercentages or tenths of a percent, off of that time? So that’s something that’s a sustained effort and something we’ve done from the very, very beginning. But a lot of these things end up being a giant math problem that you optimize over time.

But I’m sure, even if you give someone all the feedback in the world and you help them, you teach them how your windows work and how they can be better, I’m sure there are places that will just always, always screw up, right? And just always be late. Are you dinging them in some way? Are you taking them off the system if they’re screwing you over too many times?

There’s a lot of factors that go into the ranking that you see on the front of the app. Some of it’s around how likely is it that the eater will want this food, some of it’s around delivery time, some of it’s around defects and how likely is the prep time to match what we think it’s going to be or what we’ve worked on. And the more reliable and the faster the delivery and the prep time is, that tends to influence the prominence of the restaurant.

So it’s helping them in the algorithm.

There’s not hard lines there because we don’t believe in that yet, because this stuff is all very ... There’s a reasonable degree of error so we don’t want to penalize someone who is maybe having a bad week. But typically, what we do before any of that happens, whenever we see behavior that pops up that’s not good for the eaters or the marketplace or the restaurant, we’ll just go to the restaurant and call, and say, “Hey, this is happening.” We also have a dashboard that shows, hey, here’s how your delivery times, here’s how your prep times match up to comparable cuisines. And so they can benchmark. And they can choose to follow that feedback or not, or call us and have a conversation about it.

What did those calls look like?

It’s pretty simple. If they were to call us or we were to call them, it would just be, hey, here’s the problem. The problem is, you’re saying that I’m making my food faster or slower. How do I improve? Or what data are you seeing? And then we just go through, hey, here’s the range of prep times we’re seeing. On average, Mexican food for example is made between eight and 11 minutes. I’m being overly specific here just for sake of the example, but that’s how the conversation goes. And then it’s like, okay, restaurant might make some changes, they might not. It’s totally up to them.

But if the people there are like, sure, Mexican food is eight to 11 minutes, but my mole takes 25 minutes to stew on order. Are you saying, well, that’s unacceptable? Or okay, we’re going to need to change your projected delivery times?

There’s never a situation where it’s like, that’s not acceptable. It’s usually actually around some deviation of range. If you’re regularly making your food in 20 minutes and it’s always 20 minutes, that’s totally fine. That’s not the intent here, to get them to speed up. It’s just, the intent is to get the delivery as fast as possible, in the best quality to the eater. And what that means is that the driver shows up right about when the food’s getting done, and that’s a coordination effort on both of our sides. And so it’s really a collaboration, it’s a partnership. It’s not a hard rules-based engine.

A problem child. Are you eventually going to kick them off? Are they eventually going to lose their spot?

Usually that’s only around if there’s a health hazard or something like that.

Yeah. If a restaurant has a lower ... If their health rating or something goes down, is that something you guys know about?

That’s not something that we have a feedback loop on today. That’s something that we’re going to be working on in the future, because I think it’s part of ... We believe in transparency, and os the more transparency there is on everything, what’s in your food, health scores, et cetera, we think that helps consumers, eaters, make a better choice. And that choice leads to more business for all.

You’re putting numbers on a lot of things. You obviously have cracked the code on logistics. Is there anything that you are seeing in kitchens that is super frustrating? That’s ... Start frying five minutes later and everything will be ready at the same time? Have you guys taken your optimization into the kitchen at all?

Not yet.

But are there things you personally notice? Are you more interested in how kitchens are working now? Are you obsessed when you go to restaurants?

Absolutely. I think that one of the conflicts restaurants have as they’re delivery business builds is, how you service a table logistically is different than how you would service a delivery order. For some restaurants. Especially if you have a dine-in experience. And so I think it’s incumbent upon us to work with restaurants to optimize the preparation flow. They do it as well, but we like to do this in collaboration when possible so that their delivery business runs as smoothly as possible.

But it’s just a little bit different. If you have a stream of orders coming in, 100 order come in in two hours. Maybe an easier example, 10 order come in in two minutes. The order in which you make those, in some ways, determines the efficiency in which they’re made.

Of course.

If you could batch together all the burgers, and they could make three burgers, and then three fries, that’s probably easier than a burger and fries, and then a salad, and then a burger and fries. That’s probably slower to make together. And so I think over time, what you’re going to see is, just data and more intelligence applied to that production process. But it’s early days for everybody on that. And it’s an incredibly complicated problem, and we don’t claim to be the experts there. The experts are making the food today. We merely provide technology and data to help it.

Is that why you think you guys work so well with McDonald’s? Because they are obsessed with their own timings?

I think that’s a great partnership on many fronts. One of them is the operational excellence and efficiency that we’re both striving for. And they’re an incredible operator and we’ve learned a lot from them about their operations. And they’ve actually changed how ... They’re a little bit different. They can actually make food faster than we can get the driver there. So they can make food in a minute or two. Maybe even faster, I don’t want to speak for them. But super fast. If it takes us three or four minutes to get a driver there, that’s fine for your typical restaurant, where the driver might go to the restaurant while the food is being made. A lot of times, the food at McDonald’s would be made as the driver is arriving. Because it’s so fast. And that really ensures that high quality food. The pickup is really seamless, the driver can just be on his way, or her way. And it’s the best experience for the consumer, too.

So I think the big question, and I don’t know the answer to this, but maybe ... How old were you when you were obsessed with that burger place?

I was probably eight or nine.

Yeah. Well I think the big question is, is all this stuff actually good for restaurants? It seems to me that it’s an extra source of revenue. They’re selling more than they would. Young Jason is getting his burger. But what is that conversation like these days?

Well, I think that we’re all here to service the consumer, right? And the eater. And I think eaters today want convenience, they want value, they want flexibility, and they want choice. And delivery offers all of those things. And restaurants choose to participate in delivery. And so if they don’t believe it’s valuable as a channel to connect to their consumers, or maybe new consumers, or reach new people with their brand, then that’s okay. We’re here to provide a conduit between the two. Not to tell them how to run their business.

So the horror story, though, they start delivering with a delivery service, they realize this is a huge new source of revenue, they build their business, they tailor their business more towards delivery. And then the delivery fees start to go up, and they start to eat a larger percentage of their sales. Is this something you’re worried about?

We haven’t changed fees on restaurants. So the deal that they get up front is the deal that they can operate under as they grow. To the extent that the delivery business is getting to a point where it’s so big that there are concerns about the economics, that’s something that we’re more than happy to work with them on and talk to them about.

I don’t think that ... We’re in a world where we both have costs, and the consumers really want delivery. So there might be changes to the business model over time in terms of, do you really need real estate that’s as expensive as what you’re in today? There’s models out there where restaurants have delivery-only kitchens in cheaper real estate. So I think that as demand increases, there’ll be a lot of opportunities for restaurants to adopt different models.

But today, we have 120,000 restaurants active every single week, and most of them are pretty happy.

Some people would say that McDonald’s is not necessarily good for the world in terms of health or whatever. Are you conscious of ... Are you looking at health trends? Are you editorializing at all?

I think you have to consumers what they want. And you have to give them access and choice. And that’s why I’m a big believer in continuing to push on transparency, which is, it’s not our job to editorialize food. It’s our job to deliver what you choose to eat, and connect you with it as seamlessly as possible. And over time, hopefully provide more transparency into that food. I think that’s what’s important. I don’t think of myself as an unhealthy guy. And I eat McDonald’s twice a month.

I’m at once.

So why would I ... Why should Uber take that role? I don’t think that we should.

So let’s talk about future of Eats. There are some companies, some UK companies that are making their own food. Are there any things out there that you’re like, we could do that.

I think there’s a lot of models out there. There’s a lot of people trying a lot of things. We tend to play our own game in terms of what we think makes sense for our business and for the restaurants that ... If we can offer value to our restaurants that we work with, we’ll do it and we’ll invest in that. I’m not a restaurateur. I believe that the world is full of awesome, creative people who will come up with better food, better ingredients, really innovative things. And I’m not a big believer in centralizing that. I think the decentralization and enabling all of the creative food makers out there to connect to the world is a very powerful thing, and it’s going to be awesome to see what happens when you take away the boundaries that restaurateurs have today, and we’ll see how that plays out.

So what are some ways that you are helping restaurants do what they do on a larger scale?

One is just delivery itself. You’ve got restaurants that don’t have prime real estate, who have a big percentage of their business in delivery. Maybe they’re on an alleyway, maybe they make the best sandwich in town but they’re hidden in a deli. And that meritocracy is something that we’ve seen come out. And it’s something that I’m excited to see more of. The best food should win. If you make the best food and we can take some of the pieces of difficulty when it comes to scaling, then great. And if we can continue to offer that, then even better.

And there’s models, as you mentioned, people are talking about real estate, people are talking about leasing equipment and time-sharing equipment. And there’s all these different models that are out there. I still think it’s early days to make a call on where all that goes.

But it’s not worth trying?

We try things all the time that we don’t talk about.

Like your burrito place.

That’s right. That’s right.

So last year, you guys bought Ando from Dave Chang, which was his delivery-only restaurant. What did you see in that property, or that name?

Today, we have ... Our interface with the restaurant is a tablet. And we do point of sale integrations as well. We just bought a company called Order Talk to do POS integrations. And so we are very aware that in order to make this a seamless operational experience, that we need to connect with the internal systems that you have in an existing kitchen. And we’re big believers in that macro trend. Like I said, it’s unclear how it’s going to play out. Ando had a ton of experience in terms of what does a dedicated kitchen look like? What are all of the challenges? They had employees and engineers who saw that stuff firsthand. And that experience was valuable for us in that deal. And so that was the primary benefit, is ... It’s a fast moving space, we want to bring in people that have as much knowledge about food prep and its connection to technology as possible to create that empathy.

And all their gear was still there, right? Their fryers and their ... All that kind of stuff? Pots and pans?

We didn’t talk the physical assets. That wasn’t part of our deal.

Okay. That went somewhere else. So there’s no ... And what about this model of ... I know you mentioned it, but renting real estate to allow restaurants to have spaces closer to downtown? Like the commissary kitchen style thing? Is that something you think there’s a future in?

Like I said, a bunch of people are testing it. Here in New York, you’ve got restaurants that operate that way anyway on delivery networks, without any assistance from anybody else. And so you’re seeing this even without us in the market in your busiest cities. We see it on Eats, too. Absent our participation, there are delivery-only kitchens that have popped up on Eats that people are making a living on. Like in Austin, there were some college kids who created ... I think it was a barbecue restaurant, a dessert place, and possibly sushi-

All in one place.

All in one commissary kitchen, put three restaurants on Eats. And they would make money ... I believe, Thursday, Friday, Saturday, Sunday. And the real estate was very cheap, it was very flexible. They could turn on and off the apps. And so we’re seeing people start to experiment with these models.

Is it not an opportunity to give people that are doing really well more space and more opportunity?

Again, I don’t totally know how this is all going to play out. I think that if you look at the challenges of a restaurant, very high capital expenditure, pretty high operational expenditure, high marketing. Restaurateurs have to do something that very few business owners have to do, which is they have to be good at marketing, creating food, operations, sourcing, negotiating, logistics, real estate, super complicated business. And how much more creation will we have in that space if you could give some reprieve on some of those operational elements? I can’t see what those elements are going to be.

It’s funny, Dave Chang, in an interview, he just thinks that Uber and all the companies are just going to make all the food in the end anyway.

The last thing I want to do is have a world where we are consolidating taste. I think the world that I would want to live in is a world where I get to experiment. I want a longer tail of food. I want a longer tail of perspectives and fusions of food. I don’t know that that happens from centralization.

So you want customers’ options to be as different, as unique as possible? You’re not looking for the thing that is the most efficient?

We often ask ourselves, what does the future look like and what world we want to live in.

Helicopter delivery food.

And I want to live in a world where the street food that I have in Mexico City that was amazing, and the recipe was handed down from generation to generation. I want to live in a world where that is more accessible to me. I don’t necessarily want to live in a world where all pizzas taste the same. That sounds like a terrible world to live in.

How is that possible? How can we get that Mexican food to you right now?

That’s the challenge.

Yeah.

And that’s what’s exciting over the next five to 10 years of changing how people want to eat.

Teleportation?

Who knows, right?

Would you ever do a thing where you have some super famous chef in a city doing 10 meals, and they’re like, whoever gets them first? Three Michelin-star delivery or something?

We’ve done stunts like that-

Like the DJ Khaled Lyft ride, or whatever that was.

Look, I think there’s lot of fun things that our ops team and marketing teams do around the world. With so many cities, we might have already done that.

What are some mind-blowing experiences, non-delivery food experiences that you’ve had?

I’ve had a lot. We just went to ... And I’m from San Francisco, so we went to Lazy Bear, which is more of a high end experience.

Was your head going crazy? Like how can we deliver parts of this?

I just look at that experience and I’m like, we have a long way to go to replicate this experience in delivery. The restaurant is part of the experience, right?

Of course.

The communal aspects. I think that those experiential restaurants will continue to get more experiential, and our goal is to just bring you the best food and you get to choose your experience at home. Or at the office or at the park, or wherever.

Right. Or the chef could come and set up the whole dining room and everything.

That’d be amazing, too. I’m not sure that we’re going to pack a chef and a whole team of people in a car and deliver them to you, but we’ll think about it.

Do you think that’s what it’s like, though? That the experiences are getting more experiential and delivery and home experiences are just ... That middle ground is just evaporating?

Hard for me to say. I just know from my own personal experience that-

When you go out, you want to feel-

When I go out, it becomes an event. And I have two kids, so staying home is a pretty cool experience. You eat in the backyard, you get to choose your own adventure. But certainly, experiential dining is something that we believe will become more and more popular over time.

Have you given any shady feedback to restaurants on UberEats?

Have I?

Yeah.

No.

No cold, soggy fries?

I don’t think so. I actually haven’t had that many bad experiences lately.

Well, cool. Jason Droege, thank you so much for coming on. I really appreciate your time.

Great, yeah, thanks. This was fun.

By Amanda Kludt and Daniel Geneen June 29, 2018 Source: Eater.com





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