Ghost Ops: Counterfeit Kitchens in the Pandemic Age

A report on Los Angeles’ cloud kitchen scene

6.8.2020

magine driving for Postmates or Caviar or any online food ordering platform in the midst of a global pandemic. Imagine that you live in Los Angeles, where neighborhoods are separated by vast freeway constructions alongside which houseless inhabitants have built makeshift homes from discarded Amazon boxes. Imagine, if you will, crossing the dismal, four-lane gulf of tarmac to collect an order of “Krispy Heaven” from a restaurant called Krispy Rice in Hollywood.

Except that when you arrive at the designated address, Krispy Rice is nowhere to be found. In its place, at 615 N Western Ave., sits an unmarked building. There’s a line of people outside — mostly silent, middle-aged men clutching smartphones, hovering 6-feet-ish apart.

Inside is unsettling in its blankness. Mounted on a low wooden table, a solitary black tablet displays 20 or 30 restaurant names, one of which corresponds, hopefully, to your order. Like a self check-in kiosk at the airport or increasingly, at the doctor’s office, your remote interaction triggers a ticket at a window further along the wait line. You queue a while longer, anxious that your customer, expecting prompt service, might ding your tip for the unanticipated delay. In front and behind you, other mute delivery drivers pace on the spot; a vague and abstract aura of hostility emanates from the line, threatening to dissolve the studied equanimity that unites you. Eventually you make it to the window, where a disgruntled employee checks your phone and retrieves a paper bag from dozens of indistinguishable others cooling on an industrial U-Line shelf. You race back to your car, speed to the customer’s Spanish-style duplex in Silverlake, drop the food — contactless — on their porch, and make out with about $10 in earnings.

Welcome to “cloud kitchens”; the “future” of delivery-only dining and newest invisible enemy of the techno-capitalist age.

WTF IS A CLOUD KITCHEN?

Generally speaking, cloud kitchens, ghost kitchens, or dark kitchens, so called for their elusive status, are food preparation facilities for delivery-only food service. Cloud kitchens have been around for a while, but 615 N Western Ave. exemplifies a new and rapidly expanding cloud kitchen model: a multi-tenant real-estate operation that hosts numerous tiny, commercial-grade kitchens under one roof. At 615 N Western Ave., 30 individual micro kitchens prepare delivery-only menu items for one or more virtual restaurant brands (and sometimes, for conventional establishments, too).

Floor plan for 615 N Western Ave.

CK: UNLOCKED

In the context of late stage, free market capitalism; in the context of widespread ecological and epidemiological crisis; in the context of Elon Musk, Jeff Bezos and Peter Thiel; in the context of Jeffrey Epstein, no less, there is nothing, on the surface, particularly novel or particularly evil about cloud kitchens as a concept. Sure, the building at 615 N Western Ave. was suspiciously absent of signage. Sure, the energy of the place was unnerving. But it’s hard to say why, exactly, we felt compelled to return. Maybe the pandemic had heightened our sensitivity to threat? Either way, the hidden labyrinth of stovetops and extractor fans was enough to give rise to an amorphous unease that drove us back the following day. We wanted to find out who owned the facility. Actually, we wanted to talk to a staff member, or someone that could shed light on the building’s opaque services. The line of harried gig workers was shorter this time, but we were still met with resistance at the kiosk. “I can’t really talk about it,” the guy working the line whispered, peering down the row behind us. “The owner doesn’t like to give interviews.”

As it turns out, there is urgent reason to investigate the cloud kitchen hub at 615 N Western Ave. And as it turns out, the owner is ex-Uber Technologies CEO Travis Kalanick. In fact, Kalanick is affiliated with at least three cloud kitchens around L.A., operated by his secretive startup named CloudKitchens®, which bills itself as “a turnkey solution for delivery-only restaurants.” According to food blog HNGRY, the company upholds a strict gag policy that prohibits employees from listing their jobs on LinkedIn or engaging with press. So while there are other cloud kitchen endeavors operational in L.A. (Google’s Kitchen United, for example), CloudKitchens® stands out as the most cryptic, which is to say, the most ominous. That 615 N Western Ave. feels like an inhospitable food depot isn’t necessarily surprising given the company’s entanglement with major figures in the tech investment realm. With a little help (to the tune of $400 million dollars) from Yasir Al-Rumayyan via Saudi Arabia’s sovereign-wealth fund, CloudKitchens® is poised to redefine the middle-class dining experience as we know it, which might very well mean destroy it.

CLOUDKITCHENS®: A HISTORY

CloudKitchens® emerged around 2015, co-founded by Boingo founder Sky Dayton and Kalanick’s pal Diego G. Berdakin. Berdakin’s CV presents him as a rare millennial success: a serial techno-preneur who invested early in Uber, Postmates, Dropbox…; custodian of the Berdakin Family Foundation, his family’s million-dollar private philanthropy outfit; and even adjunct professor in cinematic arts at the University of Southern California, proving once and for all the immense degree to which academia and art have capitulated to the financial sector.

Locations affiliated with CSS and Delta Gamma Bravo Holdings LLC

After establishing Delta Gamma Bravo Holdings LLC, Berdakin purchased an 11,386 sq. ft. warehouse spanning 1840–1848 W Washington Blvd. in the Pico-Union district of L.A., allocated as a “State Enterprise Zone” (meaning businesses here can qualify for operational tax incentives). Berdakin’s business entity “CloudKitchens | Urban Kitchens” was registered to the warehouse, the interior of which which was then remodeled to accommodate 27 individual commercial micro-kitchens.

Unassuming, uninviting and unmarked, the CloudKitchens hub at 1842 W Washington Blvd. faces the historic Angelus-Rosedale Cemetery. As a solitary gig worker laboring in the midst of global catastrophe, one experiences a profound and lonely irony in collecting a stranger’s food from an anonymous ghost kitchen that exits to a verge of crumbling headstones.

Angelus-Rosedale Cemetery as seen from 1842 W Washington Blvd.

In the nascent days of the CloudKitchens venture, Travis Kalanick was embroiled in multiple lawsuits regarding, among other allegations, failure of fiduciary duties as CEO at Uber Technologies. He officially resigned in June 2017, plunging his wealth into new venture fund 10100 (apparently named after his childhood address — a sentimentality only marginally undermined by its resemblance to binary code).

One of the first maneuvers made by 10100 was to invest in City Storage Systems, the real-estate oriented parent company of CloudKitchens, likewise co-founded by Dayton and Berdakin. Outlined in characteristically clipped verbiage, CSS’s mission is to source “distressed real estate assets” to repurpose for new food service businesses. In March 2018, Kalanick became CEO of CSS, securing a controlling interest in the company with a $150 million investment.

GHOST OPS

Kalanick’s arrival to the cloud kitchen scene appears to have kicked opened the door for other local entrepreneurs. Between 2018 and 2019, a slew of early adopters on-boarded with 1842 W Washington Blvd., including Robert Niksefat & Kevin Khalili of Alliance Hospitality Group; Rob Krauss of the Virtual Food Group; serial entrepreneur and founder of pandemic-inspired survivalist subscription service Bunkr, Zev Norotsky; Harrison Litvak of LIT Media; and John Kolaski, affiliate of mega-conglomerate SBE Entertainment Group, among others, all of whom registered new LLCs from which to launch cloud kitchen ventures. With company names like “Impasta” and “GhostGrub”, these initiators signal cavalier complicity in a network of at best, ambiguous (at worst, outright deceptive) practices. If an imposter is a person who pretends to be someone else, especially for fraudulent gain, then Impasta is probably not your mom’s spaghetti.

Cloud kitchen entities 2018-2019

One of the more prominent newcomers to the ghost kitchen scene is Sam Nazarian, founder, chairman and CEO of hospitality conglomerate SBE. In November of 2019, Nazarian partnered with real estate investment trust Simon Property Group to form “Creating Culinary Communities”, aka C3. “I view C3 as the Netflix-equivalent of food and beverage,” Nazarian told PR Newswire, “as we focus on constantly creating culinary content that can be delivered to consumers via non-traditional distribution channels.” Serving as an incubator of “single operator, multi-branded” limited service culinary brands, the company intends to launch scores of ghost kitchens across 200 locations by the end of 2021. Operating from micro kitchens at 615 N Western Ave, C3 produces menu items for Krispy Rice and a handful of other virtual restaurant brands.

***

Unraveling the clandestine entities behind virtual food brands is difficult but not impossible, and one can loosely group ghost kitchen operators/restaurant groups into three tiers. Operators in each tier have different motivations driving their investment in the cloud kitchen economy:

  1. Entrepreneurial/start-up restaurant groups majorly focused on virtual brands. These are tech and lifestyle investors with links to Silicon Valley, eager to pitch a stake in an emerging billion-dollar market. They’re bold, experimental, actively engaged in A/B testing for novel restaurant concepts. Emphasis on profit over quality/experience.
  2. Major and mid-level franchise groups extending pre-existing menus, seeking to capitalize on the expanding delivery-only market. They have strong preexisting business models and consumer brand loyalty. They’re in the game to expand their reach/delivery zone at low cost with low risk.
  3. Independents and individuals seeking to launch homegrown ventures. These are largely mom n’ pop grafters or individuals with zany food visions attracted by low overhead costs and reduced barrier to entry. Emphasis on building an identity around food. Serious interest in cuisine/food culture/customer experience.

From the consumer’s perspective, there is no viable method to determine if a burger is made with love or lack.

Seven subgroups operating within CloudKitchens’ marketplace

LOW-RES GAZPACHO

If 1842 W Washington Blvd. is ground zero for L.A.’s accelerated cloud kitchen scene, best described as a matryoshka-esque nest of start-ups and their illustriously titled virtual restaurant concepts, then 615 N Western Ave. — CloudKitchens’ other operational L.A. location — is its four-million dollar enfant terrible.

Plunked on a busy thoroughfare in Hollywood, the 12, 550 sq. ft. property (formerly Roman Deco furniture warehouse) has been subjected to a few failed branding experiments executed in a spirit of apoplexy unique to Los Angeles’ “creative directors.” Temporarily unveiled as West & Mel Food Co., the space was transformed earlier this year in a 24-hr media snafu implicating “World famous designer 2 the starz” Ryan Haskins. It happened like this: a month into L.A.’s shelter-in-place mandate, while we were preoccupied with survival, 615 N Western Ave. reformed, by way of pop bubble decals, into a socially-distanced dine-out marketplace dubbed “Internet Food Court” — said to be “like a mall food court, except less mall and more internet.” Seemingly overnight, though, as if mere hallucination, the project was scrubbed from existence — Internet Food Court was cancelled. Kalanick’s team issued a new statement denying any prior knowledge of the campaign. It was the work of a rogue employee, they claimed. Per CloudKitchens’ M.O., Haskins is unable to speak of the project.

Ryan Haskins: Internet Food Court via It’s Nice That

But this is 2020, and this is the INTERNET Food Court, after all. Traces of the project linger. The question then isn’t whether or not IFC existed, but why won’t anyone discuss it? As is often the case in the realm of conspiracy, the answer might be startling obvious. It might have something to do with nothing. It might have something to do with the nothing that branding conceals. Something akin to Fyre Festival. To Monstera Deliciosa. To JUUL. To the Kardashians. To Donald Trump.

The conviction that one can make something from nothing, and vice versa, has particular purchase in L.A. — a city of real estate transactions, McMansion builds and wildfire-related teardowns; a city where movie sets — full buffet spread included — are assembled and deconstructed in a day. In the last few years, it feels as though encounters with pre-packaged emptiness have become the norm. At the outset, there’s a thrill in locating the new. Invariably, though, we discover the truth; invariably we are left mute and bereft, with a cognitive dissonance so crippling that we flock to virtual therapists advertised on Instagram. In many ways, CloudKitchens crystalizes this trend, propagating virtual restaurant concepts that brazenly populate online food delivery dashboards as little more than visual ciphers, telegraphing their nothingness as a coat of arms.

CLOUD NOTHINGS

Take, for example, Ryan Haskins’ other CloudKitchens related project. In August 2019, Haskins began sharing graphics for his “re-brand”* of $ushi $nob — “THE WORLD’S BEST $U$HI” (*There is no evidence that “$ushi $nob” existed at all before this date). In this project, Haskins goes ham with his irreverent visual syntax that mashes a dizzying range of pop cultural references with decontextualized stock graphics. The results are undeniably captivating, but there’s something disconcerting at play. The brand ethos eschews even the most restrained inflection of cultural sensitivity in favor of provocative sloganeering, clearly intended to appeal to a gen-z consumer base that wants to be in on the joke — of which they themselves, ostensibly, are the butt.

$ushi $nob is possibly the most extreme example of style over substance in the CloudKitchens arena. For a virtual restaurant with a total of 12 reviews spread over Yelp and Google (well, eleven really, since one reviewer is Ryan Haskins himself) it’s really more of a hypothetical restaurant with a vast website retail store featuring approximately 20 $ushi$nob branded items, ranging from beach towels to fanny packs. Why so much merch for a restaurant no one’s heard of? In the 2020 ghost kitchen economy, design is the product. The specifics of a menu, the integrity of the cuisine — both, ultimately, are of little concern. The branding signals only to itself, to a mood, an energy, a current, an idea of an experience. Ghost kitchen food providers have finally, it seems, relinquished the tired conceit of authenticity — a conceit tethered to attitudes from another time — and embraced the ubiquity and genericism of our contemporary, globalized industrial food economy.

$ushi $nob web graphic

BITCH DON’T GRILL MY CHEESE

May 2020. You’re idly browsing the Postmates dashboard. Now UberEats. Now GrubHub. Why are there so many restaurants with cringe edgelord names like Fire Ass Thai, Send Noods, Best Damn Grilled Cheese, F#ck Carbs, F#ck Gluten, Bad Mutha Clucka? Funny how they each list 615 N Western Ave. as their address, no explanation. What irks most, though, is the visual similarity of their marketing. Your eyes balk at the repetition of saturated pop colors, diagonal lead lines and benign, plate-as-pattern arial view abstraction. It’s as though each restaurant was branded according to a plug-and-play Design Foundations template: a-political geometric abstraction meets vaporwave netflix-and-chill. A kind of zillennial geo-pop, defined by copy-paste optics that direct emphasis away from the photographic image, which is to say away from the millennial Yelp-foodie photographic trend, which is to say away from the food item itself, towards an abstracted design graphic. Instead, the food product becomes one visual element among others in a highly choreographed yet extremely banal composition. In this sense, the aesthetic approach mimics the ideological relation CloudKitchens has to cuisine and the culinary experience at large, where food is secondary to brand identity. In an era marred by bombastic false promises (of civil rights, social justice, better jobs, free healthcare) Silicon Valley wagers that we’ve departed from sensory pleasure as a value marker of the dining experience, privileging optics and convenience instead; a productivity inspired framework that birthed such wonders as Soylent and lunch break yoga.

Promotional material for virtual brand concepts

Of late, CloudKitchens has aided the release of ever more ridiculous ghost kitchen concepts into the virtual marketplace, concepts like “Cheese Shell Tacos by the Seashore” and “WTF is a Quesorito?!”, which take existing cultural cuisines and combine them into increasingly novel, bizarre and borderline offensive interpolations. Sometimes, in the absence of a website or Yelp review page, one can accept the more palliative notion of “WTF is a Quesorito?!” as an item of pure image exchange value floating in an empty utopia of on-demand clickery, a la TurboSquid; one can dismiss the fact that a vaguely associated, barely edible foodstuff exists somewhere, someplace, in relation to this image, corrupting its pristine existence with possible viral contagions, COVID-19 or at best, bacterial salmonella.

DECEPTION 5G

Arguably the most pernicious aspect of the cloud kitchen phenomenon is the proliferation of shadow restaurant brands. Nowhere on any third party delivery app does it state, for example, that THAI THAI THAI, SEND NOODS, and FIRE ASS THAI are in fact hollow virtual restaurant concepts operating from a single micro kitchen. Possessed with an unhinged desire for proof on behalf of all Thai food aficionados, we ordered the chicken satay option from each of these “restaurants”. Unsurprisingly, despite each order having arrived in its own packaging from its own restaurant “brand”, the food was identical. What’s more, it looked nothing like advertised.

Three orders of “Chicken Satay” from Thai Thai Thai, Send Noods, and Fire Ass Thai

As a customer, it’s one thing to accept that your $ushi $nob sashimi might not be the freshest slice you’ve ever tasted, it’s another entirely to realize that $ushi $nob doesn’t exist in any affirmable way, and that your day-old yellowfin was probably sliced by an anonymous contracted staffer in a micro “execution kitchen” that services a smorgasbord of generic fish food concepts.

This kind of rampant outsourcing is especially difficult to trace when the ghosts leave the [cloud] kitchen. Increasingly, existing brick and mortar restaurants around the city, inconspicuous in their stature, find themselves operating as ghost kitchens for virtual restaurant brands, having been approached by entities with vested interest in scaling the cloud kitchen enterprise. Case in point: THAI THAI THAI is also prepared by Chuan Chim Thai Cafe in East Hollywood, Chao Krung in Beverly Grove, and Emporium Thai in Westwood (though none of these restaurants’ websites or storefronts advertise this fact).

When consumers realize they’ve been duped — fooled by colorful creative direction — the comedown is almost as bad as the aftertaste (though not nearly as painful as some of the documented cases of food poisoning attributed to these kitchens). The real kicker, evidenced in much of the start-up gig realm and not necessarily unique to CloudKitchens, is a total lack of accountability on the part of the service provider. Contingent not only on clarity, but also on transparency, there is no one to contact, no identifiable chef to talk to, no actual restaurant to phone, no name, no interface, no nothing. The true extent of the farce is revealed when an allergy-prone customer attempts to call her “local” restaurant and reaches a young woman in Manilla.

***

Why is the quality of food supplied by virtual restaurant brands so overwhelmingly low? In the cloud kitchen industry, one can correlate extreme decentralization, minimal regulation and poor customer experience. Given the fragmented operations of dispersed restaurant concepts, it’s unlikely that cooks will ever interact with customers or witness the food’s destination, begging the question, why should they care? Quality control, at the end of the day, relies on a minimum consent by the participating workforce.

View expanded PDF report on our website (link below)

And yet something radical is occurring. Reading through Yelp reviews for some of the worst-offender cloud kitchen brands, it’s stunning to witness delivery app drivers advocate on behalf of their ordering customers, publicly vocalizing their discontent with the restaurant vendor. Whether in solidarity or in fear of losing work, third-party delivery drivers have flipped the script, reorganizing traditional labor relations by rallying against the noticeable deficit of cloud kitchen labor force accountability.

DELIVERY OR DIE

Welcome, then, to 2020, when an undercooked cauliflower pizza can be delivered more than an hour late and still set you back $20.00. When a vegetarian salad arrives with a free floating shave of chicken thigh or an open bottle of Gatorade in the bag and there’s no one to call or to whom you can lodge a complaint. Welcome to a glimpse of a near future in which data dictates our preferences and we are all freelance gig workers engaged in what author David Peetz cites as “not there” employment, pretending to enjoy “not there” dining because it’s all we have left.

Craigslist ad for “runner” at CloudKitchens’ 615 N Western Ave

During the first few weeks of confinement that began in March of 2020 in L.A., our attention was diverted to all things pandemic. The focus of those who had — fortuitously, it must seem to them now — invested in the cloud kitchen marketplace was probably not on PPEs but on an emerging opportunity. One thing is clear: CloudKitchens will get rich-er off the back of this global pandemic. What might have taken 5 years to socially engineer into mainstream acceptance forcefully materialized overnight in March: contactless, delivery-only dining became the new default.

Since third-party food ordering platforms exist in mutual symbiosis with cloud kitchens, they too stand to benefit from the longterm integration of virtual restaurant brands into our social framework. Since 2017, UberEats has initiated about 4,000 virtual restaurants, many of which are exclusive to the app). As HNGRY’s Matt Newberg speculates, Kalanick’s venture is more likely concerned with longterm monopolization of the delivery-only market. One can imagine a scenario in which CloudKitchens forms its own in-house courier service as well as its own complete suite of ghost kitchen cook staff, severing ties with third-party clients all together — the ultimate techno-libertarian utopia.

Signage for CloudKitchens’ liquor license application outside of 1842 W Washington Blvd. O.G. Distributions appears to be a subsidiary company of CSS. Note: applicant name “CloudKitchens” has been blacked out, with original name visible on the reverse.

Integral to a CloudKitchens vision of the future is Otter, the company’s proprietary point-of-sale management software. Billed as “the command center for your delivery business,” Otter’s supplemental function as a mass data aggregator for CloudKitchens should alarm even the most genial Silicon Valley sympathizer. Scouring the fine print of its T&Cs, one notices that Otter exerts the right to “access, retrieve and use information” pertaining to a kitchen’s third-party vendors. It is accepted, then, though perhaps not wholly understood, that using Otter simultaneously provides CloudKitchens an uninterrupted view into consumer behavior en masse. As soon as a company, CloudKitchens, for example, can accurately predict patterns of consumption contingent on location, income and time of day, they are better equipped to provide faster and cheaper deliveries. But data capitalism, as well we know, serves not only to predict our social-consumptive behavior, but to shape it (for corporate profit). It isn’t much of a stretch to envision a future where ghost kitchens, stealthily embedded across the nation, prepare and dispatch the requisite number of meals to certain neighborhood sites before customer orders have even been placed. “Nobody has replicated what worked in other ecommerce with food,” Mohamad Ballout of Dubai-based cloud kitchen group Kitopi told the Financial Times in February. “People are still operating last-mile logistics out of a front-of-house store. We are trying to replicate the third-party fulfillment hub that is used in other ecommerce verticals, in food.” Obfuscated by an incredible tumble of tech jargon is Ballout’s desire to relegate the once social component of dining to a soulless, streamlined, and above all profitable transaction.

But what if we don’t want our dining experience to mimic that of Amazon Subscribe & Save? What about slow, languorous meals in spaces with people not entirely like us? What about being tempted by the chef’s special? Or what if we just want to trust that the restaurant we’re ordering from is actually the/a restaurant? What if we’d like to be able to talk to a human, check up on an ingredient? Hold the soy sauce.

THE TRANSACTIONAL SUPPER

When the ground starts moving, all bets are off. Someone said this and meant it literally, referring to L.A. and earthquakes, but it works just as well as metaphor when considering the presence of cloud kitchens in L.A.’s food scene. Clearly the dynamics of the food service industry are changing, or being changed, by broad strokes initiatives led by men with big money. CloudKitchens specifically appears to be out to disrupt traditional relations to middle-tier, owner-operated eateries, and in so doing, redefine the hospitality landscape. To the extent that we’re able, it is incumbent that we examine the particularities of the tremors only now being felt in cities all across the U.S. and Europe as CloudKitchens pursues its rapid global expansion.

This isn’t a rile against futurist markets or innovative development. We aren’t nostalgic for some “other” time; we ourselves admit a kind of admiration for scalable intervention, for disruptive measures that enhance reflexivity and support civic growth. Besides, cloud kitchens are here to stay. In an increasingly chaotic, unstable and potentially uninhabitable world, it’s possible that our species’ survival will rely on the kinds of social-distancing measures that make delivery-only food service crucial. But we have always to ask who gains and who loses as the ground shifts beneath us? Whose interests are promoted and whose are neglected? To what degree of difference?

Cloud kitchens are symptomatic of changing consumer preferences, the dynamics of which approach practical, narrative, cultural, historical, economic and identity-based dimensions. As our relationships with food become ever more transactional, other values fall by the wayside. Should we not be concerned, though, about the loss of centuries of cultural heritage, passed down through recipes and hand-to-mouth knowledge economies? There is an implicit offense in embracing a ubiquitous virtual brand like THAI THAI THAI, in that it asserts there is one universal menu standard for Thai food in general. As a restaurant brand whose production is literally outsourced to a handful of independent Thai restaurants, THAI THAI THAI denies the actual array of diversity and subtle regional variations inherent to cultural cuisine. It also forgoes the consumers’ choice as to which establishment is handling their food prep.

Can we imagine instead a different kind of functioning, delivery food service platform, one that protects our best shared interests? That operates with transparency and accountability? That prioritizes workers’ protections and consumers’ rights within a framework of ethical governance and regulation? As it stands, there is such little regulatory oversight for the cloud kitchen marketplace that inevitable poor management leads to breakdown leads to revolt. Or a guy breaking into your HQ in the night, smashing a security cam and sending the whole thing up in flames.

Download the full PDF report: here.

Special thanks to Matt Newberg of HNGRY for his early and extensive reporting on L.A.’s contemporary food scene.

@b4k6rsf16ld

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