Leading up to and during the pandemic, virtual brands exploded in popularity – filling third-party delivery platforms with new menus and brands not attached to physical restaurants. As the virtual brand boom begins to calm down in a post-pandemic world, consumers have been critical of the need for regulation of the still-burgeoning sector of the restaurant industry, and now Uber Eats is stepping up to the plate.
Uber announced Tuesday that the company will be launching a virtual restaurant certification program (a cross between a ghost kitchen mentorship program and virtual brand incubator), and will simultaneously be cracking down on any redundant or poorly performing virtual brands on its platform.
“We wanted to make sure that all restaurants on Uber Eats had the flexibility to experiment in this space,” John Mullenholz, head of dark kitchens for Uber Eats told Nation’s Restaurant News. “[…] There are now 40,000 virtual restaurants on the platform, up from 10,000 virtual restaurants just over a year ago […] We started to realize that instead of playing whack-a-mole with concepts that look very, very similar, we wanted to create a blanket policy that could apply fairly at a national scale to help address some of the issues we’re seeing.”
This strategy is two-fold: the virtual restaurant certification program, in partnership with big-name virtual brand companies like Virtual Dining Concepts and Nextbite, is meant to provide support for restaurants that want to launch virtual brands in the future. The second aspect — the crackdown on virtual brands— is meant to provide quality control for brands and menus that already exist on the platform.
Uber Eats has told partner restaurants on their platform that in order for virtual restaurants to be in compliance with the new quality control guidelines, they must include menu images of at least five menu items, descriptions for all menu items, and if they have a brick-and-mortar parent restaurant, the virtual brand must have menu items that are at least 60% different from that parent restaurant. Both the parent and virtual brands must maintain a 4.3-star rating or higher, have 5% or fewer orders canceled by the operator, and have a minimum of 10 orders rated. Merchants are also not allowed to launch more than one virtual brand per location every four weeks, and all virtual brands must comply with each of these standards.
“We have software that runs in the background that looks for duplicative menus that use a single brick and mortar location with a single mailing address,” Mullenholz said. “That's an issue that we've seen pop up on social media with some customers talking about how they're seeing two brands that have the exact same menu but one says John’s Burgers and the other says Joanna’s Burgers.”
First, Uber Eats is creating an internal list of virtual restaurants not in compliance with these standards, internally reviewing it to make sure the data is correct, and then beginning the process of communicating with operators. Then, they will begin to remove redundant or subpar virtual brands from the Uber Eats platform.
Although there are many restaurants out there that are trying to outsmart delivery platforms with these duplicate brands, there are many more operators that are trying to get into the virtual restaurant industry for the right reasons. The virtual brand certification program is meant to help make that process easier. Uber Eats just launched the free program, and it is designed to help several different categories of would-be virtual restaurant operators, including digitally savvy SMBs that are already launching a virtual brand within their brick-and-mortar portfolio, people who are just curious and want to educate themselves more about the space, and especially operators that want to launch a virtual brand but have no idea where to start.
The Uber Eats virtual brand certification program is partnering with seven of the top performing concepts from Virtual Dining Concepts, Nextbite and Acelerate, including MrBeast Burger (VDC), Huevorito (Nextbite) and Scratch Chicken (Acelerate) to help provide first-hand educational and training resources for future virtual restaurant brands, including training, merchant support, and account management. The seven brands represent a wide variety of concepts, including breakfast, lunch, and dinner brands to provide a more personalized mentoring experience for would-be virtual entrepreneurs.
“If you need help launching a virtual restaurant, you're not comfortable coming up with your own concept, and you're not comfortable marketing it yourself, we have high-quality, certified partners that we can connect you with,” Mullenholz said. “[…] We're trying to find those restaurants that want some support and hand holding, and then match them up with some of the best folks in the industry […] to make sure that they're successful over time.”
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