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Comment by Animats | Hacker News Reader

Amazon had a restaurant business?

The funny thing is, Amazon probably could do a good delivery restaurant business. There are already many "delivery only restaurants"[1] Uber Eats encourages others to start them. But Amazon, unlike Uber, is capable of building physical infrastructure. The future of this is "food fulfillment centers", large warehouse spaces which house various specialty kitchens. Common functions, such as shipping, cleaning, equipment maintenance, and order handling are shared. Surprising that Amazon didn't go that way.

[1] https://ny.eater.com/2016/9/26/12717518/delivery-only-restau...

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> large warehouse spaces which house various specialty kitchens. Common functions, such as shipping, cleaning, equipment maintenance, and order handling are shared.

Deliveroo in Australia does something like that.

https://foodscene.deliveroo.com.au/restaurant-profiles/secon...

https://www.news.com.au/lifestyle/food/restaurants-bars/deli...

Who announced a $575M funding round led by Amazon three weeks ago.

I tried it twice, back when I had Prime.

Amazon's mapping system puts my house in the wrong location, and to make matters worse, in my experience the drivers are utterly nasty about it.

I have stood in front of my house as I can see the driver go by multiple times. I will jump up and down and wave and try to flag them down, and they just speed by. I call them to give them directions, and they ignore everything I have to say. I was often talking to them on the phone when I see them speed by, and they're not even paying enough attention to see me flagging them down with one hand while I have my phone at my ear. I ask them to open Google Maps because that has my address in the right location, and one guy shouted at me "This is Amazon Prime! We don't use Google!".

Both times, I complained to corporate because my food was an entire _hour_ late, and it was ice cold by the time it got here. The first time, I got credit for my next order, which is the only reason there was a second time. There was never a third time, and I let my Prime subscription lapse without renewing it not too long after that.

I think you might be partially on to something here; generally the idea being that food delivery is essentially commoditized and Amazon is uniquely suited to thrive in commoditized industries with their vast infrastructural advantages.

They do have Whole Foods and Amazon Go, which both supply ready-to-eat foods along with meal kits. It would be a minor logistical challenge to simply start preparing their own meal kits on-demand and delivering them via Prime Now (which operates inside the exact same markets as Amazon Restaurants?) with the bonus benefit of owning quality control in the kitchens.

The main problem is that kitchens operate with dirt cheap labor costs. In a market like New York, all those cheap hole in the walls are paying their workers cash under the table and running with razor thin margins.

It’s one thing to target a cushy market like bookstores, but restaurants are cutthroat, and on top of that meal kit customers are fickle.

> a cushy market like bookstores

Haven’t book stores been in a perilous position for decades?

Yes, and Amazon started selling books in 1995. Ie when it was still a cushy market.

Bookstores used to not be a cushy market, and bookstores generally pay sales taxes and minimum wages, practices that anecdotally are less followed with restaurants.

Yeah it did, and restaurants actually put up stickers for it on their doors!

What you're describing is what Travis Kalanick bought and have been building in LA and San Jose since last year. There are other commissary kitchens that's now doubling as virtual kitchens with half a dozen brands sharing utility, equipment and even staff.

I'll do you even one better, here's the real future in less than three years:

Restaurants will shed front of house as most low end full service will be liability, instead restaurants will consolidate, rely on DSPs (especially GrubHub because unlike the other two chooses to break apart their commission structure), and merge with digital agencies in order to brand, market, create content, and manage communities.

I'm doubtful. No service, low-cost restaurant setups are not a new thing (quick service/counter-based) and full-service restaurants are still everywhere.

I don't know if that's because profit isn't overwhelmingly the most important driver when running a restaurant or because restaurants make most profit off of aspects that don't translate to counter-service/delivery, such as drinks. But I would expect these type of virtual restaurants to complement existing restaurants, not meaningfully replace them.

Yes where I live in the UK this has been a thing for years one of the oldest Indian's in my town has had a delivery only kitchen for over a decade.

Generally, when we in the tech industry turn our gaze to something we know nothing about, we assume that the first thought we have about it is revolutionary.

Which is actually a good way to raise money, because most VCs don't know much about other industries either.

This first sentence is so on point and frustratingly correct, I don't know what to do other than upvote it :-(

100% agreed. I look at these cloud kitchens / no front facing kitchens to only be an efficient, cheap, clean food option like for office lunch, etc. I would much prefer a fine dine / full service front facing restaurant for celebrations and special occasions (even if I'm just ordering in).

However, I can imagine a subset of full service restaurants to be affected because of losing users that are on the fringes.

That misses a major purpose people go to sit down restaurants is for the atmosphere. Whether it be for casual dining, or celebration, or a date, or business meeting. The point is not the food, it’s to facilitate a social interaction under the common setting of needing to eat.

You’ve always been able to get good food without a front of house.

> That misses a major purpose people go to sit down restaurants is for the atmosphere.

Also the contextual break (from your desk or your home), or as a "neutral ground" (for dates or less formal meetings).

Have you? Until fast-casual restaurants became popular in the 2000s there wasn't much for "good food without a front of house". I remember when most grocery stores were mostly groceries and not very much pre-made meals.

I meant restaurants without waiters and whatnot.

Automats were a thing until the 1970s or so.

And you also had delivery services before the Internet. Delivery services would hand a book full of menus along with a page containing their phone number. You call the number, order off the menus, food gets to your door, and you pay. Works just like ordering a pizza used to.

Honestly, if we're bringing back no-FOH restaurants, can we get automats again? I've heard stories about them from my parents and seen a re-creation of one in Agent Carter, but I'd really like to actually get to experience one.

https://www.eatsa.com/

Just as there are already “enough” physical cars, there is also already enough physical restaurant infrastructure, so today it’s more a question of efficient utilization. What Uber Eats is doing in this space is really smart: Keeping track of local food search keywords, and reaching out to local restaurants saying “Hey, if you provided such-and-such food items at such-and-such time of day in your area, we think you’d do really well. You can sell these items on Uber Eats under a different brand if they don’t fit in your existing cuisine niche.”

Longer-term you’re probably right that centralization could be more efficient in some cases, but looking too far into the future often makes less economic sense today. See: Webvan.

But a "restaurant on wheels" is a idea that will be truly profitable, at least in theory! Its true that restaurants abound in localities today but mobility of people (and their eating preferences) from one location to another has also increased. Restaurants which are profitable today may not be tomorrow. A restaurant on wheels can easily adapt to changing demands by constantly moving on from low demand areas to high demand ones. Maybe, Amazon can even build an AI or something to guide it for most efficiency.

"restaurant on wheels"

Have you reinvented the taco truck?

Why specifically tacos?

> There are already many "delivery only restaurants"[1]

"Delivery-only restaurant" sounds self-contradictory, a restaurant is by definition a place where you can eat.

These sounds more like takeouts, or traiteurs.

While I understand what you're saying, I think the distinction is useful because "takeout" has more of a specific meaning and association with more 'casual' food. Whereas these 'delivery only restaurants', or 'dark kitchens' are existing restaurants that people enjoy, but with an offsite, delivery-only location.

'Delivery-only takeout' would also be self-contradictory, wouldn't it.

Kinda, but way closer still: you're not eating on premise, however the shop brings you food rather than having to get food from the shop.

>Surprising that Amazon didn't go that way.

Maybe customers can over look Amazon workers not getting bathroom breaks and being forced to urinate in plastic jugs so they can get their online orders next day...but customers might not overlook those working conditions when they find out the people handling their food are urinating in the kitchen because they don’t get bathroom breaks.

Not to mention the stories of 100 degree warehouses so amazon can save on electricity, I wouldn’t put it past them to not keep food as cold as it should be to save a few bucks.

Take a look at what Deliveroo is doing with their "Editions" brand. They get some space, set up small takeout only kitchens and enable a restaurant to expand their delivery range (different neighborhoods or even cities).

https://foodscene.deliveroo.co.uk/promotions/deliveroo-editi...

I can see asking Alexa to bring me a three meat pizza, and the delivery drone places it on my personal robot, which grabs a beer from the fridge before it brings it to me at my recliner. That's Prime delivery!

So the goal is to be like a food court, but cheaper and/or better because, due to delivery-only, the location can be cheaper, and the space can be more efficiently used (no customer seating)?

Right. The location can be cheaper, and better laid out for a volume business. Like having a loading dock. If you can handle big trucks, you get to cut out a layer of restaurant service middlemen.

There’s lots of competition and it’s a low margin business. Probably just didn’t see it as a market worth fighting for.

That sounds overdue.

Restaurant food is massively overpriced compared to raw materials (despite basic dishes like pasta and sous vide steak taking basically no time and effort to prepare), and mass producing it along with mass delivery using vans might fix that.

A price of an item is rarely if ever based on its raw material cost. With restaurant food even more. You pay for location, rent, heating, staffing etc etc etc

Not really rebutting GP’s point.

More importantly, the price of an item comes down to how much people are _willing to pay for it_. Price does have to cover overhead(unless you're WeWork and care more about revenue than profit), but a comparable competing product can have the same overhead and charge way more if its audience is willing to pay more or it.

If it takes no time or effort why not just do it at home? The results will be better.

It most certainly takes time and effort to have kitchen infrastructure, inventory, cook to order, and delivery.

Cooking at home has many of the same costs beyond raw materials that a restaurant has, like kitchen infrastructure, inventory, and labour costs, driving the cost of cooking at home well beyond the raw material cost. The parent is suggesting that a business producing food at massive scale could bring the cost of preparing food much closer to the raw material cost.

It is not exactly a wild idea. The model has already proven itself to a limited extent. What we have really struggled with is maintaining quality at scale across a variety of foods. To be more specific, the parent is suggesting that there is room in the market for quality prepared food produced at scale.

Except you probably already have some semblance of a kitchen in your apartment. Preparing some simple meals--stir fries, steak, fish filet, etc.--has very little incremental infrastructure or skill associated with it.

That a portion of the cost of operating a kitchen at home is a sunk cost is the only thing that keeps cooking at home cost-competitive with eating out at restaurants. The price of eating at a restaurant that is well above the cost of materials is already operating at an efficiency that is above what one can achieve eating at home, all things considered.

If the hypothetical prepared meal service could deliver food for near-material cost, it would quickly start to be difficult to justify cooking at home. At least on a cost basis; there are certainly other reasons why one might want to cook at home, even if it costs substantially more money to do so.

Outside of a dormitory situation (and sometimes even then), how many people are seriously willing to dispense with even the most minimal kitchen (say, refrigerator, burner, toaster oven, kitchen sink, maybe microwave)? To a first approximation, no one wants to order out for an egg and a couple slides of toast in the morning.

So most probably can't/don't want to eliminate the kitchen entirely and that minimal kitchen is probably not that different from a lot of urban kitchens in areas like Manhattan.

> no one wants to order out for an egg and a couple slides of toast in the morning.

Why do you think that is? To me, having eggs and toast 'magically' appear in front of me when I get up in the morning sounds wonderful and I am really not sure why everyone wouldn't want that if the infrastructure to provide it was there.

While the actual act of making an egg and some toast is not terribly difficult, everything else that goes along with it, like having to plan the meal ahead of time such that you have the supplies on hand, starts to add up into a big job. A big job that I cannot imagine why someone who doesn't love cooking would want to take on unnecessarily.

I can see how it may be necessary under the status quo as we lack the technology to really deliver on the vision, but our discussion is not about the status quo, but rather a hypothetical future where industry has figured out to produce quality prepared food at scale such that the costs start to approach that of the raw materials.

Off topic, I just videos on cooking sous vide steak and I'm totally sold on the technique. Where has this been all my life???

Raw materials aren't the reason restaurant food is expensive, the biggest cost of running a commercial kitchen is labor. And that is even after considering that kitchen staff are often low-wage positions. How, exactly, will this save money? Sure, you don't have to pay waitstaff the ludicrously low rate of ~1.25/hour, but the delivery drivers need paid and the app will take its middleman cut of the profits.

And have you ever eaten hospital food or other cafeteria e? That is the quality to expect from a industrial scale kitchen. Delivery is convenient, but nothing about this business is very revolutionary, and I certainly don't see the restaurant industry being 'disrupted' anytime soon.

Hm kind of reminds me of Ikea's food racket. Actually I'm sitting here trying to think of why that wouldn't work but I honestly can't. Cool idea!

What is "Ikea's food racket"?

Ikea is a chain of furniture stores which (among other things) have food courts in them.

Yes I'm fully aware. I just don't see what the racket is.

I believe the racket is that the stores are so maze-like that food is required, since it seems to take half a day even for a short trip.

Sometimes HN... Racket meant just as an operational endeavor. Not the kind where you nefariously earn money.

Racket: a person's line of business or way of life.

Edit: oh yeah kids are out of school. I thought things felt dumber around here lately

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