Uber founder Travis Kalanick once got upset at an employee for asking why the company’s cafeteria no longer served quinoa.
Kalanick, who was Uber’s CEO at the time, was annoyed that the employee would complain about quinoa in the midst of an all-hands meeting instead of focusing on work.
The story lingered for Kalanick, according to an exclusive report by Insider’s Meghan Morris. Now at his $5 billion startup CloudKitchens, the phrase “No Quinoa” is branded on some employees’ T-shirts and laptop stickers, sources told Morris. Some new hires are also told the “No Quinoa” tale as a warning to stay focused on the company’s mission.
The culture at Los Angeles-based CloudKitchens mimics that at Uber during Kalanick’s time at the ride-hailing company. CloudKitchens doesn’t offer many of the posh perks, like laundry service and nap pods, that have become common among other Silicon Valley companies. Kalanick wants employees’ focus to instead remain on company’s core work – a sentiment that is expressed in phrases like “no quinoa.”
CloudKitchens declined to comment on Insider’s investigation.
CloudKitchens, which is backed by Saudi Arabia’s sovereign wealth fund, operates as a ghost kitchen company that rents commercial space and turns it into shared kitchens for restaurateurs.
In 2018, Kalanick invested in City Storage Systems, renamed it, and took over as CEO. Since then, it has expanded to at least 29 cities in the US and brought on customers including Chick-fil-A and Wendy’s.
CloudKitchens founder Travis Kalanick refused to change controversial customer branding, despite internal employee complaints over perceived racism and misogyny, sources told Insider.
Kalanick’s startup rents commercial kitchen space to restaurant brands that focus on food delivery and pickup. Through its Future Foods arm, the company also creates and licenses food brands to local entrepreneurs looking to get into the booming business of food delivery. Former employees told Insider that they spoke to Kalanick and others about their concerns over Future Foods branding, like “Happy Ending” for dessert at an Asian restaurant.
When employees complained, they said Kalanick’s response was that his startup did not seek to accommodate the press or woke culture.
CloudKitchens operates “ghost kitchens,” or commercial kitchen space focused on food delivery and pickup. The pandemic has helped the budding industry take off, as consumers cut back on restaurant dining and ordered more food for delivery.
In some CloudKitchens meetings, former employees told Insider that Kalanick lambasted headlines about himself. During an all-staff meeting in 2020, he called a report that he owns a $43 million mansion “fake news.” The CEO also apparently told employees not to trust people who trust the news.
More than 300 corporate executives have left the startup since the start of the year, Insider reported. CloudKitchens was not immediately available for comment for this story and declined to comment or to make executives at the company available for interviews for the larger investigation into CloudKitchens.
Matt Newberg is the founder of HNGRY, a subscription media platform exploring the overlap of food and technology through trends like ghost kitchens, dark stores, and more.
Newberg writes that up-and-coming ghost kitchen startup CloudKitchens is spending spends hundreds of millions of dollars converting old industrial warehouses around the US into dozens of individual kitchen spaces.
REEF Technology is another ghost kitchen startup that operates delivery-only restaurant kitchen trailers and deploys them in parking lots across the country.
“CloudKitchens is more like an Amazon fulfillment center, while REEF is more like a 7-Eleven,” explains Newberg. This difference allows REEF to access more locations by volume but gives CloudKitchen has an advantage in overall scale.
Over the past three years, Travis Kalanick, the ousted founder CEO of Uber, has been quietly purchasing real estate in major cities across the country while simultaneously investing in ghost kitchen business internationally for his ghost kitchen startup, CloudKitchens.
While CloudKitchens got an early start, in 2019 a startup called ParkJockey announced that it had raised money from the sovereign wealth fund of Dubai and Softbank to roll up the two largest parking operators in North America. This built the platform for what has been rebranded as REEF Technology, a startup that operates delivery-only kitchen trailers and other micro mobility applications on top of under-utilized parking spaces.
REEF’s core bet is that as we move towards shared autonomous vehicles, the demand for parking will plummet.
With $1 billion in newly raised capital, $300 million of which is dedicated to purchasing real estate, REEF is looking to transform parking lots into what it calls a “proximity platform” that supports the on-demand economy through applications like ghost kitchens, micro-fulfillment, and COVID-19 testing sites.
According to PitchBook, CloudKitchens has raised $700 million in equity and has a debt facility of $200 million from Goldman Sachs to support its real estate acquisitions and build-outs according to a deed of trust document discovered by HNGRY.
Despite the fact that both companies have raised large sums of capital to repurpose distressed real estate, they are quick to distinguish themselves from one another. CloudKitchens is more like an Amazon fulfillment center, while REEF is more like a 7-Eleven.
CloudKitchens spends millions of dollars converting industrial warehouses into 30 to 40 individual kitchen spaces, while REEF purchases and deploys a single kitchen trailer per parking lot that it either owns or manages.
For example, CloudKitchens owns two properties in Miami: a 58,500-square foot warehouse in Wynwood and a 16,441-square foot former Brazilian restaurant in South Beach. By contrast, REEF has blanketed the city with a dozen trailers across six zip codes, each of which can prepare as many as seven different delivery concepts. While these trailers aren’t as mobile as food trucks, they can be quickly removed or deployed from any permitted site.
CloudKitchens leases its kitchens to large QSRs like WingStop, Chick-fil-A, and Panda Express while REEF operates delivery-only franchises on behalf of mostly smaller brands like Fuku, Umami Burger, and Wow Bao.
By and large, both teams are focused on the same markets, with a high concentration of overlap in LA, San Francisco, Seattle, Portland, Austin, Houston, and Philadelphia.
While REEF’s modular form factor lends itself to more locations per city, both companies share a similar number of locations in cities like Chicago and LA. Unlike its stealth rival CloudKitchens, REEF has made noticeable attempts brand its trailers and give them the appearance of a neighborhood-friendly destination – despite the fact that its trailers’ sole purpose is to fulfill delivery orders.
In some cases, REEF lays out astro turf and picnic benches outside of its trailers as a welcome mat despite the fact that all orders must be placed via a delivery app.
At the other end of the spectrum, CloudKitchens’ facilities go out of their way to disassociate themselves from their parent company, opting to brand each property as a “Food Center,” “Food Nest,” “Food Hall,” “Food Hub,” or “Food Junction” instead.
The front-of-house areas are primarily designed as waiting rooms for delivery drivers with waiting benches, order screens, and bathrooms. Interior renderings of newer locations depict food lockers for customers to order ahead and pick up as well as ordering tablets for walk-up orders.
REEF has the ability to deploy a greater number of locations by volume in a shorter time span than CloudKitchens, while CloudKitchen has a distinct advantage in scale.
With their current footprints, CloudKitchens can support nearly 10 times the number of brands in a single location than REEF, because the average Cloud Kitchen facility houses 30 individual kitchens that can list themselves as four different concepts, for a total of 120 brands from one CloudKitchen location. REEF, meanwhile, can host just 7.
On top of this, CloudKitchens is expanding into CloudRetail to add consumer items like ice cream, alcohol, and everyday household essentials to consumers’ food delivery baskets.
There are glimpses of the grander ambitions CloudKitchens has, beyond just delivering takeout and groceries: Last April, the company briefly tipped its hand by launching the “Internet Food Court,” a virtual food hall that allowed consumers to order across all of its concepts in a single batched order from its second facility in Koreatown, Los Angeles before being mysteriously deleted from the internet a day later.
Matt Newberg is the founder of HNGRY, a subscription media platform exploring the cutting edge of food and technology through trends like ghost kitchens, dark stores, fungi-based meat, and personalized nutrition. Subscribe to the free weekly newsletter here or try a premium subscription for $5 with promo code INSIDER5.