DoorDash is opening a shared delivery kitchen in Redwood City. What does that say about the future of the restaurant industry? | Peninsula Foodist | Elena Kadvany | Almanac Online |

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About this blog: I am a perpetually hungry twenty-something journalist, born and raised in Menlo Park and currently working at the Palo Alto Weekly as education and youth staff writer. I graduated from USC with a major in Spanish and a minor in jo...  (More)

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DoorDash is opening a shared delivery kitchen in Redwood City. What does that say about the future of the restaurant industry?

Uploaded: Oct 14, 2019
Food delivery service DoorDash is looking to the Peninsula to test out a new concept: a shared commissary kitchen that allows more restaurants to deliver locally without the risk and cost of opening their own brick-and-mortar spaces.

DoorDash's first-ever shared kitchen and only to-go concept is officially opening Monday at 1531 Main St. in Redwood City. Under one roof, four Bay Area food businesses — Nation's Giant Hamburgers, Rooster & Rice, Humphrey Slocombe and The Halal Guys — will now be able to deliver to Redwood City, Palo Alto, Menlo Park, Atherton, Woodside, Belmont and San Carlos. People who live in other Peninsula cities can also go to the space, dubbed DoorDash Kitchens, to pick up takeout orders.


DoorDash's new shared commissary kitchen will serve the Peninsula. Photo courtesy DoorDash.

The kitchen, a bright red 6,000-square-foot building last occupied by a meal delivery service, is emblematic of shifts and tensions in the dining industry today, spurred by the growth of third-party delivery apps like DoorDash, Caviar, UberEats and others. Many Bay Area restaurants are seizing the opportunity to make more money in a profit-thin business, while others are decrying the costs that delivery poses to brick-and-mortar restaurants.

DoorDash piloted its kitchen concept in 2017. The company partnered with Little Star Pizza, which operates locations in San Francisco and the East Bay, to open The Star, a delivery-only concept in San Jose. At the time, about 20% of Little Star's revenue came from delivery and take-out orders; the percentage could jump up to 70% some nights, according to DoorDash.

"They know the power of delivery," DoorDash said in a blog post announcing the concept, which the company plans to expand across the country.

DoorDash said it was the first delivery platform in the country to launch a commissary kitchen. The model benefits both customers — it gives them access to favorite restaurants whose physical spaces are too far away from where they live to deliver — and restaurant owners, DoorDash said.

"What we've heard throughout the years is merchants are looking for new and alternate ways to help drive and grow their revenue," Fuad Hannon, head of new business verticals for DoorDash, said in an interview. "DoorDash Kitchen grew out of that."

The commissary kitchen allows restaurateurs to expand to a new market, with DoorDash handling tasks like permitting, kitchen operations, maintenance and marketing. The kitchen also requires less staff than a restaurant would.

"They're able to very quickly out of the gate develop a new market and generate new sales without having to do the upfront investment and building work that they would normally have to do," Hannon said.


A Halal Guys employee assembles food to go out for delivery from the DoorDash kitchen in Redwood City. Photo courtesy DoorDash.

The current restaurateurs have signed two- to three-year leases at the Redwood City kitchen and pay DoorDash rent. DoorDash also charges them the same commission rate as for delivery from their restaurants. DoorDash and at least two participating businesses, Humphrey Slocombe and Rooster & Rice, declined to disclose their rates.

Zareen Khan, who owns Pakistani-Indian restaurant Zareen's in Palo Alto and Mountain View, said she pays between 16% to 20% for different delivery services. Another local owner who asked to remain anonymous due to a nondisclosure agreement with DoorDash said that the company charges 25% on the restaurant's deliveries.

Min Park, the chief financial officer of San Francisco-based Rooster & Rice, said their team had spent time researching options for local cloud kitchens — shared cooking spaces for delivery-only businesses — but decided to partner with DoorDash for the benefit of a kitchen that is directly connected to an established delivery app. Rooster & Rice is a fast-casual restaurant that specializes in khao mun gai, or Thai chicken rice, with six locations in San Francisco, Pleasanton and San Jose with others on the way at Stonestown Galleria in San Francisco and Westfield Valley Fair in Santa Clara.

Park declined to share what percentage of Rooster & Rice's business comes from takeout and delivery. He said they turn off the apps during peak lunch and dinner hours because the restaurants get so busy; they don't want delivery demand to negatively affect customers choosing to dine in person.

Park has read the stories about restaurant owners blasting third-party delivery apps for contributing to the decline of their businesses. When San Francisco's Mission Pie closed in May, the owner took a stand against the impossible competition app-based food delivery companies pose for small, locally owned businesses. Last month, the owner of the now-closed Green Chile Kitchen in San Francisco said: "I honestly believe the delivery culture is really killing restaurants, and we only have ourselves to blame. When you take that large of a percentage, it's way too much."

What does Park make of comments like that?

"It's kind of like taxis," he said. "If you're not going to be able to adapt to this new delivery structure, you're going to just be left in the dust and have to close."

Some restaurants do hit a plateau where delivery ends up costing more, Park acknowledged. That's partly why they're partnering with DoorDash on the commissary kitchen — to explore a new business model and ensure they make money on each delivery no matter what.


An employee cooks rice for Rooster & Rice at the shared Redwood City kitchen. Photo courtesy DoorDash.

"It's the future," echoed Sean Vahey, co-founder of ice cream company Humphrey Slocombe. "We're getting in there early and being part of something new that's not going away."

Humphrey Slocombe has a strong customer base on the Peninsula, Vahey said, so this is an easy way for them to respond to local expansion requests. They've teamed up with Rooster & Rice so customers can add a pint of ice cream to a lunch or dinner order, and vice versa. Humphrey Slocombe also plans to offer corporate parties and special events in the Redwood City kitchen, another frequent customer request.

"If this wasn't something good for us and good for our guests," Vahey said, "we wouldn't be doing it."

As delivery grows in the Bay Area, "I want to be part of it, or at least explore it and make sure that we're not being left out," he said.

DoorDash's end goal, Hannon said, isn't a world where we only eat food delivered from restaurants that have no actual physical presence.

"At the most simple level people are eating three times a day, seven times a week. There are dozens of eating occasions in a given month for any given consumer," he said. "Delivery broadly helps augment different eating occasions.

"We don't see a world," he said, "where consumers are no longer going into brick and mortar restaurants."

Meanwhile, there's room for additional restaurant-tenants at the Redwood City kitchen, and the company will likely expand the shared kitchen concept, though Hannon wouldn't say where or when.

"When they add a new kitchen somewhere, we'd like to be in it," Park said.
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Comments

 +   2 people like this
Posted by charles reilly, a resident of another community,
on Oct 15, 2019 at 6:29 am

Friday night, we got together with some old friends and went out to a popular fish restaurant in San Mateo. It took FOREVER for the waiter to come, bring the food and finally; a long, long time for him just to bring the check. I would have been perfectly happy to have ordered on-line, stayed home, and avoided the $100 + tip expense. Ironically, the restaurant wasn't that busy; just time-consuming and expensive. $40 for a $10 bottle of wine !


 +   7 people like this
Posted by Jake, a resident of Gunn High School,
on Oct 15, 2019 at 7:09 am

[Portion removed.]
DoorDash damages the US economy by exploiting desperate drivers, restaurants and lazy consumers in favor of shareholders. [Portion removed.]
People who are desperate for cash put undue wear and tear on their vehicles. Working for a food delivery app is NEVER a good deal because of mileage, gas, and vehicle repair costs down the road.
In summary, show some respect to people's personal vehicles, get off you butt, get dressed and go sit at a restaurant with your loved ones and dine the old-fashioned way. Turn off your silly smartphones while you're at it!

[Portion removed.]

Former DoorDash driver


 +   7 people like this
Posted by Failure , a resident of Esther Clark Park,
on Oct 15, 2019 at 8:28 am

Jake- door dash is not a Chinese Company. Founded by Chinese Americans. Located in the US.
Looks like you are an embittered ex employee who couldn't do the job right

Web Link


 +   5 people like this
Posted by Jake, a resident of Gunn High School,
on Oct 15, 2019 at 8:43 am

They obviously have investments in China, like so many other tech companies.
The CEO Tony Xu is Chinese himself, or at least, Chinese American.
Probably the majority of its investments are in China.
Of course Wikipedia isn't gonna give you the full picture.
That very article you linked states at the top:

"This article contains content that is written like an advertisement. Please help improve it by removing promotional content and inappropriate external links, and by adding encyclopedic content written from a neutral point of view. (October 2019) (Learn how and when to remove this template message)"

Tech companies are always on top of making their true interests opaque, and they know that they must keep their own Wikipedia descriptions airtight.

But go ahead and keep complaining about tipping workers while you enjoy the luxuries and finer things in life!


 +   9 people like this
Posted by Coooper, a resident of another community,
on Oct 16, 2019 at 1:25 am

Seems I'm not getting the authentic food of Restaurant X if the food really came from an external kitchen at DoorDash.


 +   14 people like this
Posted by Pre-Tasted Food, a resident of Atherton: Lindenwood,
on Oct 16, 2019 at 5:40 am

Ever seen the videos of drivers tasting/eating their delivery foods?
You get to pay extra for that, oh and cold food.
Great business model, hahaha.


 +   4 people like this
Posted by BoldRed, a resident of Charleston Meadows,
on Oct 16, 2019 at 12:36 pm

Not crazy about their bright red facade, but hopefully this will help restaurants focus on their in-dining guests. I have been to a few places where the service was slow and the staff seemed preoccupied with filling DoorDash and other delivery service orders. In general, I have noticed a lot of understaffed restaurants lately. As much as I like the convenience of delivery, I don't want it to convert the restaurant industry into an all delivery service. I enjoy dining out. For one thing, food is better served hot and fresh.


 +  Like this comment
Posted by WilliamR, a resident of another community,
on Oct 17, 2019 at 10:16 pm

A few years ago, some company was experimenting with a food delivery service using the little self-driving 'ice chests on wheels'. I used to see them in downtown Redwood City, always with a human monitor walking along with them. But I haven't seen one now for quite a while. Does anyone know what happened to the project?


 +  Like this comment
Posted by BoldRed, a resident of Charleston Meadows,
on Oct 19, 2019 at 9:06 am

@WilliamR Those robotic ice chests are still delivering in other cities, like Berkeley.


 +   1 person likes this
Posted by Gourmand, a resident of Menlo Park: Downtown,
on Oct 20, 2019 at 7:17 pm

Junk food made in a junk kitchen with junk ingredients.

There sure is a market for it as many don't care about what they eat and where it comes from.


 +   6 people like this
Posted by Pam, a resident of Charleston Gardens,
on Oct 21, 2019 at 4:50 pm

OK. I own a small business in Palo Alto, and it's been around for thirty years. I guess I'm really sensitive to the numbers, and small business survival, basically.

I chat with small business owners all the time, because I make a point of using them consistently, for obvious reasons.I NEVER, ever use delivery services from restaurants. I would love to, it's so wonderfully convenient, right? Here's the bad news - the delivery services often take 30% or more of the total price of the bill.

Figure it out, Palo Alto. Those numbers just do not work. What with needing a brick and mortar location to prepare the food, buying quality food, paying employees - 15 dollars minimum wage in PA to cook that food - many restaurants will be gone, sooner rather than later.

Nobody likes to think about the costs, but I enjoy and really value restaurants that have been around for a long time, family- owned ones - not chains and nationals.

f you want us, support us.


 +   2 people like this
Posted by $80.00 for a few burritos, a resident of Another Mountain View Neighborhood,
on Oct 22, 2019 at 2:40 pm

I can attest to the abhorrent mark up these services put on the tab. I seriously cannot imagine anyone being stupid enough to use them. Cold food, dirty driver hands sometime taking tastes and all at a monstrous mark up.

Unless you're a shut-in who doesn't care whatsoever about value or sanitary food, it makes no sense.



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