Deliveroo, the on-demand delivery service for restaurant food, has begun investing in its own kitchen space, as a means to help solve the supply-side problem and expand the offering.
Dubbed RooBox, the startup has launched an off-site kitchen initiative that is bringing restaurant brands to areas of London that have a large residential population but are currently underserved in terms of available restaurants via the Deliveroo app (or otherwise).
The idea, Deliveroo co-founder Will Shu tells me, is to help the service expand to more areas (specifically those where supply isn’t currently meeting demand) and sees the company making the up front capital investment of each so-called RooBox but declined to offer any further details of the commercial contracts its signed with participating restaurants.
The draw for restaurants participating, however, is certainly to lower the risk and commitment normally required for them to begin offering delivery in a new area of the city. Deliveroo can’t expand without restaurant supply and now it’s telling restaurants it will not only bring the customers but can also supply the kitchens.
At launch, which I’d heard actually happened some months ago, Deliveroo is providing equipped kitchens to Tommi’s Burger Joint and Yoobi Sushi. I also understand that currently each RooBox is being used by a single restaurant brand only.
However, it’s easy to see how, should the model prove effective, the company could build out much larger kitchens that house multiple restaurant brands, which would undoubtedly help streamline the model further. There are obvious logistics advantages to centralised kitchens where the sole way of getting orders out the door would be Deliveroo.
That said, Shu was keen to stress that, at least for the time being, this is really about better customer service and expanding to more locations within a city. (Deliveroo still isn’t available in my area of London, which I hope Shu is becoming tired of hearing.)
“Deliveroo’s on a mission to transform takeaway, and RooBox is an exciting step towards that,” he says in a statement. “Not only will this expand the options available to customers in areas of limited restaurant supply, but it also helps our partner restaurants expand to new areas at low risk.”
It also means the startup, which is backed to the tune of $200 million, is able to stick to its hyperlocal delivery zones — a 2km radius, apparently — rather than risk food arriving cold or not expanding into a particular area where there is a large residential population but not the types of “quality” restaurants that fit with the Deliveroo positioning (hello Just Eat, Hungryhouse et. al).