With the huge growth of apps such as DoorDash within the last few years it’s no wonder that restaurants were able to see out the pandemic and still maintain a loyal customer base whilst their doors were closed.

However, whilst some problems were shortlived and driver-based problems are now no longer a problem with so many people willing to work for the likes of Uber Eats – new problems have arisen.

Ghost kitchens have always been a small thorn in the side of individual and self-owned restaurants. But now this thorn is starting to become a lot larger.

A decade ago, ghost kitchens were generally single-man operations, or at least only a small team of people trying to make a quick buck. Fast forward to the back end of 2022, ghost kitchens are now running sophisticated bot farms to boost themselves to the top of algorithms and are able to get around the T&C’s of food delivery companies by passing checks and staying within a grey-area that allows them to legally operate as a kitchen.

Furthermore, ghost kitchens have a competitive advantage over traditional restaurants. For a start, they do not need to rent a prime location within Portland. They can simply sit in an industrial building on the outskirts of the city and operate with full access to the online market. A store front is not needed, neither is furnishing or trained staff. Aside from the expenses of a cooking equipment, ghost kitchens have much lower expenses than their competition.

$63k Per Week

John Wirtz is only 31 years old, yet has acheived more financial success than most restaurant owners will make in their lifetime.

Boasting 40-50 employees, Wirtz runs a huge variety of virtual restaurants from a single building within north-west Portland. Turning over at least $60000 per week through 5000 orders, it is clear to see how this may start to create a dent within the traditional restaurant business model.

If customers are not aware of a local restaurant, their chances of finding it on a food delivery app are relatively slim given that Wirtz has so many virtual restaurants running in direct competition.

Helping The Community Or Destroying Local Businesses?

In general, public sentiment towards ghost kitchens is generally negative. Simple economics shows that one dollar in to the pockets of a ghost kitchen is likely a dollar out of a local restaurants till.

Adding to this, customers who are not familiar with the Portland food scene or non-local residents will likely have no idea that they are ordering food from a ghost kitchen. There is no real way to differentiate between food that has come from a brick and mortar restaurant via delivery apps unless you are to do 5-15 minutes research on each order you make.

However, there is no denying that ghost kitchens do employ a large number of people and generate tax revenue for the city. John Wirtz’s operation employs over 40 people which is clearly not a terrible thing given that unemployment is currently at a relatively high figure.

What Will Happen In The Future?

Until delivery apps make a policy against large scale ghost kitchens, nothing is likely to change. Both the state of Oregon and the said apps benefit financially from ghost kitchens.

The state are able to receive a large amount of tax dollars from profits generated. Where as the likes of DoorDash can keep increasing delivery orders which is essential for their survival in a competitive marketplace. If UberEats were to offer a greater variety of restaurants, this could remove shareholder confidence and cause the company to nosedive.

Either way, this is not good news for those who own independent restaurants in Portland. Until legislation is passed on a state level – it does not look like ghost kitchens are going away any time soon.