City Council wants more oversight of “ghost kitchens”

Kitchen delivery startup apps and delivery-only warehouse space have attracted investors, too

TRD NEW YORK /
Feb.February 07, 2020 10:15 AM
City Council Speaker Corey Johnson (Credit: Getty Images, iStock)

City Council Speaker Corey Johnson (Credit: Getty Images, iStock)

The City Council is looking to increase oversight of the rapid proliferation of “ghost kitchens,” or delivery-only kitchens.

In a meeting held yesterday, the Committee on Small Business said it was looking to gauge whether the phenomenon threatens local businesses, Commercial Observer reported.

There are different ghost kitchen models: a single operator can manage a shared space, or just a single-tenant prep space without a dining area. In New York, some restaurants that offer delivery currently lose money on the strategy, paying up to 30 percent in commission to apps, some testified at Thursday’s hearing.

No regulations or policy options were discussed at the meeting, but the committee will continue to look into the issue. Startups have piled into the sector, and the delivery-only kitchen model has already attracted investors.

CloudKitchens, a Los Angeles-based startup backed by Uber founder Travis Kalanick, acquired at least 10 properties in several major U.S. cities since early 2017, and received financing from Goldman Sachs. [CO] — Georgia Kromrei


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