The COVID-19 lockdown created a great disruption in the market, making significant changes in the way we work and live. While the negatives of this far outweigh the positives, we have little choice but to live in this unfamiliar world which is very different to what we once knew.
One interesting change that emerged during and post the lockdown is the proliferation of cloud kitchens. The demand for doorstep delivery of prepared food has gained vast popularity in recent months, with most people preferring to dine in rather than risk going out to restaurants or crowded areas.
The online food delivery system is competing with home cooking. While this might prove a welcome relief to homemakers, the biggest change that’s taking place in this arena are cloud kitchens. These kitchens are low investment operations and lucrative for entrepreneurs who do not have to incur real estate costs since there is no need for a prime location. Cloud kitchens allow chefs the opportunity to expand their portfolios, offering multiple food choices under different brands. Anything from Chinese, Indian to Western foods might be on offer from the same kitchen.
Registered vs Unregistered
Some restaurateurs have also seen the advantage of running cloud kitchens. But, unlike these kitchens, the cloud kitchens don’t come under the purview of public health inspectors, most cloud kitchens that have come up recently are not - and they fall into the ‘ghost kitchen’ category.
While commending the entrepreneurship of our home cooks, enterprising housewives, and their enthusiastic husbands who support these endeavours in turning home food into a shared experience for others, the important question of quality control arises. How can the consumer be sure of the food standards and basic hygiene in preparation right up to the point of delivery, when they order from these individuals?
Many of these ghost operators have their own delivery people to handle the distribution of their food, but they could also plug into the app-based delivery services to deliver their products. In doing so, they can create synergies, especially in terms of suppliers maintaining health and hygiene standards. For example, established app operated delivery services like Uber and PickMe cannot wash their hands from the responsibility of ensuring the quality of food they deliver as their brand names are also involved in the process.
While it is a given that these app operators are not expected to police kitchen operations, it would be logical for their customers to expect that they did some checking at the time the supplier registered. Since they are established brands, it is fair to assume that they would register suppliers who maintain a certain standard. This would help create a certain sense of security for customers ordering food online. An established delivery service is a plus factor because they could be held accountable in the event something goes wrong with an order i.e. a simple case of a customer not receiving the item they ordered or an extreme case of food poisoning.
Be that as it may, the nexus between cloud kitchens and delivery services can only work if the app companies are willing to be reasonable. If delivery companies charge exorbitant commissions, it will only defeat the purpose, because customers will have to go direct to the supplier with little assurance that standards are maintained.
If this market is to grow into a vibrant business, it is not enough to create opportunities for the mini entrepreneurs and their kitchens alone, but the vast number of riders that operate in the gig economy also has to benefit. Having said that, who can bring order into this chaotic system, which is still in a nascent state?
Belling the Cat
The powers that be, whether it is the Consumer Affairs Authority or the Ministry of Industry & Commerce, cannot still understand the digital economy and its connection to the actual world. On the other hand, one may ask if it should be the Information & Communication Technology Agency (ICTA) that should take the lead.
Whoever it is, what is important to understand is that digital gig platforms are becoming an important part of our urban economy and therefore they need to be managed sooner rather than later, or there is much to lose.
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