(Bloomberg) -- Uber Eats is exploring a novel way to expand their food delivery business even as they help a celebrity chef open her first restaurant.
The food delivery app has teamed up with star chef Rachael Ray to create the virtual restaurant Rachael Ray to Go, an operation that will serve meals in 13 cities across the U.S. and in Canada, starting October 17th through the end of the year. The stunt coincides with the tv host and magazine publisher’s latest cookbook, Rachael Ray 50 (Ballantine Books; $28).
There will be no brick and mortar Rachael Ray to Gos; rather, a network of independent, delivery-only kitchens will prepare the meals. If you want her pulled buffalo chicken chili with ranch, you have to order it via Uber Eats. (Or make it yourself.)
Rachael Ray to Go also marks an unconventional path for Uber Eats in the increasingly crowded, and profitable, online food delivery market: Tapping notable food professionals who don’t have restaurant spaces to create dishes for delivery, from restaurateurs to authors, like say, Chrissie Teigen. Online food delivery is projected to be worth $161.7 billion globally by 2023. Uber Eats generated $3.39 billion in gross bookings in the second quarter of 2019, up 91% from the second quarter of 2018. The company’s first virtual restaurants opened in Chicago in early 2017; they now have more than 5,500 globally and over 2,100 in the U.S. and Canada. But they’re not the biggest players: in August 2019, Door Dash represented 36 percent of meal deliveries in the U.S.; Uber Eats stood at 15 percent.
Though it has the earmarks of a one-time publicity gimmick, Janelle Sallenave, head of Uber Eats U.S. & Canada, says the company is actively planning more of these activations. “Combining Rachael’s passion for food with the infrastructure we have is the beginning of a pattern we’re excited to develop. With all kinds of restaurateurs.” Sallenave says that the company is already moving forward with other projects. “We’re not waiting; we’re having conversations with different chefs and authors and restaurateurs.”
According to Ray, Uber Eats reached out about the partnership. She had explored the idea of a restaurant before. “Every time I looked at a property, the terms would change or the economy would change,” she says. If this run is successful, Ray sees long-term possibilities,. Though her best-known recipes are thirty-minute meals, she could use the service as a way to introduce her fans to more elaborate dishes.
“A sardine sandwich, a four-day porchetta, I could never teach that on my show, or in my magazine,” Ray says. “A virtual restaurant gives me a more specific relationship to people in my audience. It’s me, joining people for dinner.”
The Rachael Ray to Go menu will include around 11 options, many of which are in her cookbook, including the pulled buffalo chicken chili with blue cheese ranch, one of Ray’s most downloaded recipes. Also on the menu: a dozen spiced fried chicken drummettes, jalapeño popper grits and tagliatelle with Bolognese. “That’s the dish I’m most concerned with transporting. It needs to be greasy in a good way, and not dry.” A link to the virtual restaurant and the menu will appear in the app for customers in New York, Los Angeles, Baltimore, Austin, Dallas, Houston, Minneapolis, Portland, Seattle, Miami, Fort Lauderdale, Chattanooga and Toronto. Ray says the initial city list was smaller; Uber asked to add more presumably high traffic cities.
Ray won’t be the first celebrity chef to have someone else manage the menu. She sent her director of special projects, Andrew Kaplan, to taste and troubleshoot the dishes in a handful of the cities, including extended 40-minute delivery times. Each order will include a thank you note and a sweet; 250 customers in each city will receive a copy of the book. Pricing is not confirmed.
“As the menu is finalized and the labor, we will set prices. We do want to connect with as many people as possible, and keep the price point in a range that will do that,” says Sallenave. She won’t share the financial agreement around the partnership but suggests that the company is willing to lose money on this initial endeavor. “Our interest in the space is long term. We are absolutely committed to doing these kinds of partnerships,” she says. Eventually that could open the door for ghost restaurants to make signature dishes from hard-to-get into restaurants—the cacio e pepe from Chicago’s Monteverde, egg salad sandos from Konbi in L.A.— available across the country. Uber Eats doesn’t share financial details on partnerships but in June the Miami Herald reported that they get a 30 percent cut on orders from their virtual restaurant partners.
To recreate Ray’s recipes, Uber Eats is working with Reef Kitchen, a division of the Miami-based Reef Technology, that helps create and optimize delivery-only kitchen spaces across the country.
Sallevave also cites another, more unexpected partner: Travis Kalanick, Uber’s former CEO. Kalanick has been investing in CloudKitchens, a competitor in the meal delivery game. “We have a long standing relationship with Travis,” says Sallevave, with a laugh. “We are partnering with his kitchens on the platform today.” She declines to name specific collaborations because they involve a third party, but confirms that some are in Los Angeles, the base of Kalanick’s CloudKitchens.
To contact the author of this story: Kate Krader in New York at kkrader@bloomberg.net
To contact the editor responsible for this story: Chris Rovzar at crovzar@bloomberg.net
©2019 Bloomberg L.P.
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