Dark Kitchens Are Just Food Trucks
The reality is that dark kitchens don’t have anything to do with parking. Outside of the occasional placement of a food truck that’s able to pay more rent than a car, there’s not a scalable business there for most parking operators.
Of course, there are exceptions: transient food trucks serving office workers may rent space in a downtown lot during their lunch breaks. Or, in places like Austin and Portland, food trucks may permanently take over a lot and take it off the market for daily parking operations. It’s a different business than parking (and we've done it for years...food trucks, film productions, even retail pop-ups and brand activations).
Then came 'dark kitchens,' also known as ghost kitchens.
These began appearing alongside the growth in delivery apps several years ago. The idea was that these kitchens would only serve delivery orders and so wouldn’t have any seats or front-of-the-house at all. It would be all kitchen, all the time. That way, delivery orders wouldn’t back up a traditional restaurant kitchen, making it much more seamless (and ideally profitable) to serve delivery alongside eat-in operations.
Initially, these kitchens would be in commissary kitchens, permitted bricks-and-mortar spaces. Eventually, the idea expanded into mobile kitchens. 'We can put these closer to the customers,' the thinking went. Yet, there wasn’t much thinking beyond that. It turns out that parking lots aren’t the ideal places for intensive, high-use things like mobile kitchens.
There are some real considerations to make when evaluating the potential of dark kitchens as a stable source of income for parking operators. Here’s some food for thought.
#1: Dark kitchens: expectations vs. reality
While this may be a bit extreme, there’s a nugget of truth in The Guardian’s John Harris assessment that dark kitchens provide poor working conditions, similar to those of the Industrial Revolution. From his article:
'The boxes have no windows, and many of the chefs work with the doors open … Working in the metal boxes is either hot or cold, depending on the weather and whether they are cooking or prepping. In one kitchen, there is only a small fan heater for cold days. Another houses a pizza oven that takes up more than a third of the space and makes it extremely hot.'
Of course, the pandemic revealed how little most people pay attention to where their stuff comes from. Even so, small boxes without windows or interaction with customers aren’t pleasant. Working in a windowless box won’t do anything to help restaurants with the epic hiring crunch. As working conditions struggle to meet those at other well-paying jobs, restaurants will continue to find it hard to hire.
#2: Dark kitchens as a competitive threat
Dark kitchens serve the delivery industry, making its income from people who decide not to go out. Dark kitchens are disruptive not just to restaurants but to entire downtown cores, where entertainment districts rely on customers to enjoy a night on the town.
Of course, the delivery business supplements income; it can be a reliable revenue stream for specific locations. But, once most restaurants account for the steep fees, it’s not entirely clear that dark kitchens will help restaurants survive. It looks more like a replacement that doesn’t quite live up to its image. And with fewer restaurants, our city centers suffer, which has a cascading effect that threatens what we all love about our neighborhoods and entertainment districts: vibrancy.
#3: Dark kitchens as the latest VC shell game
Part of the issue around dark kitchens upending the economics of foodservice is that they’re nearly always subsidized by VC. Just look at Reef Technology which raised $700 million in a massive round led by Softbank - the same firm that brought us the WeWork debacle.
With a plethora of promises, Reef sounds like it’s building some sort of utopian vision where the parking lot is the center of urban mobility and renewal, connection, and community. The rosy view distracts from the fact that its model doesn’t make money and only seems to survive because VC money subsidizes everything.
If we build an entire delivery system based on dark kitchens in parking lots, what happens when the economics fail? Even if overhead is lower due to location, it’s still expensive to pay all these people and move food from A to B. We’ll end up with no independent restaurants and just a couple major companies running dozens of ghost restaurants. It won’t be sustainable - and it’s not a worthwhile risk for most parking operators.
#4: Dark kitchens as PIAs
Finally, consider how much traffic the average dark kitchen needs. You have food vendors, delivery drivers, mechanical service trades, grease trap cleaners...the average dark kitchen needs all kinds of support day-to-day.
Even if only on scooters or bikes, there’s a lot of coming and going. This has a measurable impact on the safety and experience of the average parking lot. It starts to become more like a traffic control operation, which is not only a nuisance to neighbors but a headache for operators.
Does the world need more industrial kitchens? Especially in a world where we have thousands of empty restaurants that are better set up (and often better located) than parking lot kitchens.
By trying to serve endless use cases for 'the future of parking lots,' you may end up serving none well at all. Frankly, it’s just one giant PIA!
Keep the main thing, the main thing
That’s why you need to keep the main thing, the main thing. Don’t chase the shiny new object. Focus on what you do best, and then grow your business methodically. That could involve incremental revenue (including value add services), but it shouldn’t be a rush to dive into an unproven model.
Again: It’s all about keeping the main thing, the main thing. The endless pursuit of incremental revenue streams is misguided without analyzing exactly what the bottom-line benefits are. The priority should be serving our customers and making it easy for them to get out into the world.