Why No Dining App Is the ‘Airbnb of Food’ Yet
eater.com
eater.com
Then there's the fact that this is basically illegal in much (most?) of the US, Canada, and likely elsewhere. You can't prepare meals for the public without the food being prepared in an inspected and licensed establishment. Just like you can't run a hotel without the proper permits.
Also, as a side note, I was a cook/chef for 10 years (now an older university student), my last gig being a head chef job in a fine dining restaurant. I've toyed with the idea of starting a food-related business. I would personally love to be able to serve people in my home instead of spending $100,000+ (actually more like $500,000) on a small restaurant, or $50,000 on a food truck or other mobile establishment.
But allowing unlicensed establishments to operate opens up a huge can of worms - what happens to businesses who pay thousands of dollars in taxes, who buy liquor licenses often for upwards of $100,000, who are forced to pay exorbitant amounts of money to build a kitchen which follows the various health codes? Will they be compensated? Will the meal-sharers be forced to upgrade their kitchens? Will they be inspected?
We have to decide, as a society, if we want to allow businesses to operate in residential areas. We can't simply encourage people to break the law because it makes some guy with an app money...
Edit - just found a good article about the legality of food sharing/underground dining: https://lawreview.uchicago.edu/page/regulating-underground-s...
I really thought where you were going here was not about zoning, but was going to be "We have to decide, as a society, if we want to undo a couple centuries' worth of public health regulations because it makes some guy with an app money... "
1) Nobody's working on this kind of stuff just for the money, and if they are then they've lied to a lot of people and are fucking up. If you're a strong engineer with good quantitative skills, the expected value of working on wall street, working at googazonsoft, or even becoming a realtor in the bay (if you have the soft skills) is much higher than striking out on your own to create something new. A technical founder I met from one of these companies could have easily done one of these other things but felt really passionate about improving our relationship to food. I really doubt there's a money grubbing evil genius working on food sharing apps in order to amass great wealth and power.
2) You can't really manipulate society with $50M of facebook ads and no product (and I think that's more than any of these companies have raised). If you're making a consumer app and it's not something people want, there's no "marketing, combined with PR, government relations, and legal" that's going to get them to use it and "conform to the goals of the business".
IDK, maybe I'm just a dumb optimist but I'm excited about what the future holds for this stuff.
With an essentially zero chance of becoming a billionaire.
If you're driven by the desire to become a billionaire, startups it is.
Without those advantages, it's almost laughable to replicate that career path
That said, I disagree completely and vehemently with most of what you said. Allow me to respond to what I believe the salient pieces were. I'll rephrase for brevity, but please let me know if I've mis-represented your position in doing so:
1 - "Sharing economy doesn't undo regulations, they just demand new types." To date, we haven't seen the sharing economy demand "new types" of regulations; we've seen it completely ignore existing regulations and lobby against any replacement, even where those regulations are reasonable (e.g., requiring commercial drivers to have commercial auto insurance, w/r/t Uber).
2 - "Don't fit well ... not a reason to dismiss them entirely." That is a strawman. I did not advocate for dismissing them entirely. I don't generally advocate for eliminating viable business models out of bureaucratic laziness. The current situation, however, is "ignore public health regulations until we kill enough people to draw attention to ourselves." That is not an acceptable road forward under any circumstance, and being adamantly opposed to it is not the same as being entirely opposed to the existence of an "uber for chefs", or whatever we're calling it.
3- I disagree about the "order of magnitude" argument. It's rather like dismissing an Uber approach to user safety on the argument that each driver is just one driver. We must address it as the entire service, which collectively - if it scales, and let's be fair, scaling is the point - would end up serving enormous numbers of people.
4- "Imagine if healthy, home-cooked dinner was cheap and convenient." An appeal to pathos. Largely irrelevant to the discussion, and also to the services as they exist(which generally involve sit-down meals for groups of people at fairly immodest prices).
Here's one from the OP that's starting with affordable stuff (users price, kind of like sidecar): https://josephine.com/
I think what they're doing is pretty cool and I've heard it's mostly busy parents buying the meals. Hope they come to LA soon as I'd love to try some of the yummy smells I pick up walking around Echo Park in the evening! (sorry for the pathos?)
In other words, new startups pushing the envelope should be expected, and there's nothing wrong with that. We just have to decide as a society how far they should be able to code and adapt the regulation accordingly.
Really, a huge numbers of modern laws and restrictions are as far removed from utility as possible.
And unlike in "Chesterton's fence" case, it's not like they are old and we don't know why they come up with them back in the day.
Quite the opposite. We DO know why the come with them, and for a lot of them, we witnessed lobby groups and special interests, concerned citizens "think of the children", etc press for them -- and it has been mostly BS.
https://mises.org/library/zoning-laws-destroy-communities
http://www.theatlantic.com/business/archive/2015/11/zoning-l...
http://www.strongtowns.org/journal/2010/12/17/best-of-blog-t...
Though the situation and intent of lots of these is much worse, "City of Quartz" (book on LA's development) is quite illuminating for example.
But lots of bad food laws too, e.g:
http://www.theguardian.com/lifeandstyle/wordofmouth/2013/apr...
We have a share of BS laws in Europe too, that killed small producers with "safety regulations" and requirements designed so that only big buck corps can afford them -- despite having no issues whatsoever with said producers' products for centuries up until the 1990s or so when the laws got drafted...
Well, that's not an example of a lobbyist-sponsored food law. The FDA has old regs on the books about the maximum number of mites/cheese sample, apparently written for "cheeses at large," to limit the dissemination of contaminated food, rather than one specific type of intentionally mite-ridden cheese. A single instance of a border check resulted in an imported shipment was recorded. In that article, the border control "wouldn't specify what the safe level was." It took 30 seconds to find that the regulatory level is 6 mites / cc, and that the samples they examined exceeded that, some by up to ~660x. This was not part of a broader law or effort on the behalf of the FDA, and future shipments of the cheese got through import checks just fine. Literally, the media and the media alone made up a storm in a teacup over an "attack" on small oversea dairies.
Do you have any other bad food laws in mind?
Except for that in practice the only way you can get the law changed is if you can get enough people to break it.
Both Uber and AirBnB have followed this arc. Uber even gives preference to drivers who work full-time.
Zoning is related to building codes. All the rules around waste disposal, fire codes, and so forth are dramatically different between a restaurant and a private home. And the financial incentives with a “dine-sharing” business will be to ignore safety until forced to comply, as they have been historically with almost all businesses.
Who is going to check that there are even working smoke detectors and a fire extinguisher? For that matter, who will even check that there is a cooker hood removing grease?
We don’t enforce these things for private homes because when you cook for yourself, your family, and people you know, there are social incentives in place to control safety. There’s no such incentive in place when you’re cooking for strangers.
And of course, this is a dramatically different story when you compare to ride-sharing. Private cars have the same safety features as the taxis already on the road, and drive on the same roads. Private kitchens do not have the same safety features as restaurant kitchens, and are not housed in the same buildings.
Private cars operate in public, with some expectation that the police will intervene if the car appears to be driven improperly, like speeding. Not perfectly, but there is enough oversight to provide incentives to drive safely. There is no such oversight for private kitchens.
Ride-sharing apps have a high degree of tracking: They monitor the car’s location and speed continuously. Location is shared with the passenger’s app. Will dining apps monitor the food being cooked? Do they know if the eggs are past their best-before date?
Dine-sharing is unlike ride-sharing or home-sharing in a number of substantial ways that are at relevant to zoning and the concept of what is and isn’t a fit establishment for cooking for strangers.
People tell me to do a food sharing experience for the public and I quickly say no. First, I don't want strangers in my house especially if they are drinking. It's illegal to sell alcohol. It's illegal to sell food without health inspection and license. I've never in my entire career have had someone come back to me suffering from food poisoning from something I've served, however, there is serious personal liability concerns over health risks and if someone gets into an accident after drinking at my party. A restaurant can prepare a stock that can be used over a couple days in several different dishes. At home, I have to prepare a stock for only one dish. It is very inefficient. I can't buy only the amount of parsley I need, I have to buy the whole bunch and it's like $3 now. The worst is the prohibitively expensive price of purchasing food at retail prices especially gourmet products. If I purchase a whole filet, lamb from Costco, or cod and tuna from the local fish monger, I'm still paying $25 - $30 per person for food. Economically scaling is a huge problem. I can make a risotto for 8 people with almost the same effort I can make the same dish for 35 people. Running a 8 seat restaurant in my house economically and legally doesn't work.
You must be popular for dinner parties with friends though. Something i've wondered about though, if and when you're invited to other peoples' dinner parties, is that weird? I have a friend who is a relatively good (not Michelin star or anything, but does it as her day job, and quite well IMHO) chef, which always makes me a bit jumpy / stage-frighty when cooking in front of her...
What do you do at Nucleics? My first job cooking in high school was doing micro preps for my dad, isolating DNA, PCR, agar gels, in David Baltimore's lab at Rockefeller University. My dad was in Walter Gilbert's lab at Harvard before that. Needless to say he was not amused I didn't go into the family business.
Nucleics is easier for me to answer. Nucleics has done a lot of things over the years (like me), but these days it sells software for improving Sanger DNA sequencing. A bit of of a niche market, but one that is surprisingly resilient.
I love science and in a perfect world I would still be a full time scientist, but I would never be disappointed if my children chose another field - science these days is just too cut-throat to encourage anyone to enter.
Underground restaurants have been operating for decades in countries all around the world with varying levels of formality and risk. For the most part, they're no more disruptive than that other friend on the block who likes to have dinner parties once a week. There may be a few who verge more into the full time restaurant side of the spectrum but they make up an exceedingly tiny percentage of underground dining. Most underground dining restaurants operate only one or two nights a week, in a single service, for 2 - 20 guests. This is a far cry from the multi-hundred covers a typical restaurant does and trying to apply the same standards of safety seems inappropriately draconian.
No matter how popular underground dining gets, it's still dwarfed by many magnitudes by the "having friends over for dinner" scenario which remains completely unregulated. It's hard to imagine any risk for underground dining even ever approaching that which already exists through our normal social dining rituals.
For the most part, report any underground restaurants that are truly disruptive but leave the rest alone and be happy that people are being entrepreneurial and doing something productive.
Having eaten at some of these underground restaurants, particularly in Mexico, Cuba and Argentina, I can comment that the experience was extremely positive. This is, I assume, due to regulation and corruption making it difficult for independent restauranteurs. However I would have much higher expectations of the same in say, California, where I might expect an independent restaurant to be extremely unique and have qualities you couldn't find in a regular setting.
And as the owner of a AirBNB-style "restaurant", you actually have to buy groceries and do a good deal of work. Without volume there's no good way for you to pipeline the food preparation process as most restaurants do. Every time you have "customers", you can't work that day. You probably make nowhere near a day's worth of salary preparing meals for a couple of people, so it can't be your main source of income.
As an AirBNB owner you can have a full-time job elsewhere AND some side income by renting out that extra bedroom, making it attractive to a lot of people.
Of course running a restaurant can be extremely tiring and frustrating. The money is good because not many people have the patience to work 60 hours a week for 10 years straight to make a million dollars. It's just better to do a startup or get a full time job making games or something.
Obviously you are taking according risks, which is my the more typical LTV for but-to-rent mortgages is around 50%, which with 2% growth would give you only 4% return (but with a 50% LTV you'd likely have money left over after paying for the mortgage).
But in general, the capital growth combined with the potential for leverage is the reason rental is so competitive, and the reason why returns on the rental income itself is deceptively low.
Residential area without businesses sounds crazy. I have three bakeries and around ten restaurants within 300m of my current apartment, not counting general stores.
I uses to live where there was a handful stores and nothing else, and moving was one of the best things I ever did.
I also have food businesses within 300m of where I live. There are mixed-use towers downtown. But that's not the same as businesses being inside your apartment building, one door over...
You're right though, mixed use neighbourhoods are great. I enjoy them too. I love high-density neighbourhoods in Europe and elsewhere.
But many suburbanites hate it. Many apartment dwellers would also be in for a big shock. It's something which isn't really part of our current city planning, and residents get mad when the government changes rules, never mind when neighbours suddenly decide to just flout the rules.
Depends. If you are a young, single person without a car, yes, suburbs might not be a great place to live.
On the other hand, if you have a family, and can afford it, you look for a neighborhood with good schools and low crime rate.
You can pick your bakeries on your way back from work, and you can drive to any restaurant, local or not.
Very few people lived next to any noisy businesses, but everyone lived near shops.
This also holds for Bed-and-breakfasts, but somehow Airbnb is getting away with it.
Reduces property value for everyone around them. Causes a nuissance. Can be a safety hazard, having a steady stream of non-residents coming and going in an apartment block.
We allow the same things here - you can sell a limited selection of items in a bake sale at a community centre or farmers' market.
But that's a far cry from a home-based restaurant, which goes well beyond the scope of laws like this.
David Chang may not have figured out how to pay good salaries and make money, but many others have. And regardless, one failing restaurant (group) doesn't negate the fact that restaurant dollars are out there...
I had the good luck of working with several chefs who wouldn't accept the 'status quo' of food cost, labour cost, ideal markup, etc... Including one who paid off all his debts (he was smart and didn't let investors take any equity) in about 2 years. We're talking capital investments well over a million - paid off in 2 years.
And then there's the whole 'Bistronomie' movement in France and Europe, propagated by guides like 'Le Fooding'. By contrast, North America is running restaurants like Europe did 15 years ago. Some are making great profits, but too many are controlled by their investors, leaving little profit for the workers.
> Of course not, but you can't deny the fact that restaurants are extremely risky investments.
Tech startups are as well. It's just that founders are generally more insulated from the risks. Restaurants likely have a higher 'success' rate than startups, considering how many live off venture capital for years.
I could rant for hours about what's wrong with restaurants (I did work in them for most of my working life). But that doesn't mean the 'industry' as a whole isn't booming.
http://www.bloomberg.com/news/articles/2015-04-14/americans-...
For the right entrepreneurs, the money is there. They just need to operate more efficiently.
David Chang himself demonstrates what's wrong with his model. He's not charging enough. He fears that what he's creating isn't worth more than he's charging, but he can't make a great profit. He should either charge more, or change his product to something he can charge more for. He's right - no one will pay $27 for ramen. Many restaurants specialize in ramen. He can't compete with that. I haven't been to all his restaurants, but it does seem as though he's become more and more conventional as his enterprise has grown - his first several ventures were definitely off-the-wall sorts of places. Looking at menus at his new places - they're far larger, more complex, and more conventional in format, even if the dishes themselves are quite interesting.
IMO, the future is in smaller restaurants. Less workers. Limited menus. No investors sucking up profit. In many ways I see Japan as a glimpse into the future - entire neighbourhoods comprised of restaurants that are the size of a closet, with one artisan creating your food/drinks. It's not necessarily a 'scalable concept' like American investors like. But it's a way for workers to make a good living, and still create art and an 'experience'.
And I would venture a guess, if one were to look at statistics, that the average restaurant is getting smaller...
"In other ways, however, underground dining seems quite similar to old-fashioned, antiregulatory libertarianism, with chefs playing the role of factory owners who would prefer to produce goods without having to worry about expensive and burdensome health and safety regulations.
You can, it's called AirBnB.
With Uber you just need to get from place A to B - a much easier sell, we already did that with strangers driving taxis anyway.
With dining, you want to relax, and be in an environment you like. And you need to trust the cooking and all that, and you don't want an afternoon out with your friends/family/spouse/romantic interest to get ruined from unfit hosts.
The same reason "rent-a-tool-from-your-neighbors" social services haven't caught on.
http://www.fastcompany.com/3050775/the-sharing-economy-is-de...
I'm not sure that's entirely true otherwise the likes of Meetup.com wouldn't have been a massive success.
Part of the reason I wouldn't use the "rent-a-tool" services is I know that sod's law dictates when I really, really need to use my drill, I'll have rented it out to someone else.
There's a lot of things in life that I would only use perhaps an hour in its lifespan but when you need to use them, you need them on hand and not elsewhere.
But I don't go to google when I want to eat while being in my hometown. Because, well, it's my hometown — even if I'm not eating at home I already know some places myself, I can ask friends for advice, I can go for a walk and "find" something.
Actually, thinking of it, I might be one of these guys who would actually like socializing like that (which might not be rare, but certainly not as common as wanting to sleep under a roof, while staying in a country far away from home), but it never occurred to me that such practise exists.
On the demand side there's no significant value-add for customers over restaurants.
That's not to say that there's no business model that might work in the space, but rather it will require more innovation.
The obvious model would be for people to operate their own takeaway businesses. Services like Deliveroo and UberEATs essentially mean that all you need to be a takeaway is a kitchen, everything else (marketing, payment process, delivery, etc.) you can outsource to your platform. Takeaways are much more scalable than "eat-in" allowing for more revenue and the demand-side doesn't care if you have a shop-front or not.
If they can capitalize on the economics while having tables of two or four, I'll be down for these pseudorestaurants.
It's almost like being invited to a dinner party where you know very few people. If you are lucky the people you meet are great.
I eat out quite a and have eaten anywhere from Noma to French Laundry, Eleven Madison etc. and you can't really compare it. It's two very different experience.
I like taking my friends to hidden gem restaurants I find myself because if its good they'll be surprised. If an app was an charge any restaurant it points me to will be rammed and a sucky experience anyway.
I'm guessing airbnb is the de-facto "airbnb with hookers" at the moment?