The Current Situation
Uberisation is a recent phenomenon that consists of putting clients of a service in direct contact with producers, without intermediaries (or at least in appearances, which are, as French people say, often misleading). It is being deployed in more and more economic sectors. It began with UBER taxi©, which gave it its name. But we can consider that companies like Air B & B are quite in the same approach. We are in the era of disintermediation. And despite the numerous and legitimate criticisms that the phenomenon is facing, Uberisation is predicted, predicted to multiply and spread in all areas of the economy. One of the areas of the economy that is already affected and that will be increasingly affected (by what is called the Kitchen Ghost) is the delivery of dishes and meals. All the more so since the COVID-19 crisis of 2020 has, unfortunately, passed through here. With UBER Eats©, which is the counterpart for food of the UBER concept for taxis, we find this basic trend towards Uberisation. The sector, which at one time was very competitive, at least in France, now really has only three or four players with the presence of Deliveroo, Just Eat in alliance with Takeaway. But what is important to us is not so much the number of players in this sector of the economy at a given moment in time as the constant progression in terms of products delivered. And above all, what will be developed in this article is the ongoing transformation (the Kitchen Ghost) on the market for on-site delivery (home, office) of these ready meals and foods in the broadest sense.
The situation in progress
Let’s quickly summarize the principle of Uber Eats services. The company plays the pivotal and central role of an e-commerce platform linking, via a website and mobile phone applications of (hungry) customers. What is proposed with the Kitchen Ghost is to go a step further in the control, already important, of the companies that act as intermediaries between the customer and the producer. For these companies, the operation consists in creating and owning production equipment (hence the name kitchen and ovens) for meals, food, and ready-made meals. This equipment, kitchen facilities, can be used by several restaurants at the same time, each with its own dedicated space. These facilities are thus rented, on a very temporary basis, to “entrepreneurs” in the broadest sense who, in return for a rent or a rent plus commissions on sales, use these facilities and see their productions highlighted on the intermediary’s application.
The advantages for the company are: – Ensuring a minimum amount of variety of meal types and ready meals – Know their tenants’ business model perfectly. Because by knowing the cost of raw materials (grouped purchases), the rent and the number of people used by the “restaurants”, the selling price (available on the applications), their commission rate, it is very easy to calculate, to the nearest cent, the gross and net margin of the tenant. And thus to get closer, little by little, to the optimization of the rent price and the commission rate taken to leave only the bare minimum. – Increased control over these producers by the fact that they are entirely dependent on their presence in the application of the intermediary. This leads to the possibility of pressure commercial discussion to impose to offer “restaurants” discounts, rebates, broken prices to customers at more or less special events. The reduction in income during these commercial operations being, of course, entirely borne by the restaurant owners and not by the intermediary, it goes without saying. – To be able to force the “restaurants” to negotiate increases in rent or commission charges (see above).
The benefits for entrepreneurs are: – Access to equipment, which is supposed to be, at the top of technology and therefore performance and quality. – Sharing of equipment that can be used collectively such as a freezer room or massive refrigerators. – Possibility to have lower prices on raw materials due to the possible grouping of purchases with the other restaurants present on the site. – No investment costs for the purchase of a sophisticated restaurant or what is called in French a piano. (furnace and space work) – No advertising costs to make yourself known, everything goes through the application. – No hypothetical search for the best possible physical location. – No overly heavy charges that could lead to default on payments for the activity or risks of personal bankruptcy (deposit, etc.).
The underlying problem
Is this then a background phenomenon? Or a fashion phenomenon? Most likely we’re in both! There is a strong confusion between one of the basic trends in our current societies, immediacy, where we want everything, immediately and anywhere, and the current economic form of the response to this demand.
The real underlying trend is the demand for IMMEDIATE service. The current form of quasi-monopolistic private service is transitory.
Causes and impacts of the underlying problem
The causes of the problem
The change that is taking place needs to be analyzed on a deeper level than the economic part. This type of activity responds to causes and needs coming from the users. What are they?
- Immediate service. The waiting time, tolerance, patience, for delivery, delivery of the order is around 30 minutes.
- Deleting the customer move. The customer remains on the site (home, office) to receive his order.
- Have the supplier come to your home. This is the counterpart to the previous requirement. It has already been demonstrated by the exponential take-off of home delivery platforms such as Amazon.
- Reduction, compression, of the customer’s time of action. The entire ordering process, via mobile applications, takes place in a few minutes, sometimes in just one or even less. The customer’s “mobilization” is reduced to a minimum. It takes less time to order a meal for five than it does to be greeted in a classic restaurant and placed!
- Minimal interruption is the consequence of the previous point, of the customer’s activities. Whether it is just after his order, or even while eating, he can continue to do what he wants (work, video games, streaming …).
- Increased choice. The customer can order very different styles of kitchens (pizza, French, Chinese, Italian, vegetarian, etc.). He has a much greater offer than he could have in a single restaurant.
- Control of time spent eating. The customer, compared to a restaurant, can either reduce his time to a minimum, or on the contrary spread it out as much as possible and finish his meal after midnight.
In metropolises and densely populated areas, the phenomenon of home delivery, whether currently or through Kitchen Ghost (see developments below), will bring about profound changes in the restaurant business. The impacts will be strong, as the restaurant industry will have to face the following facts:
- Almost unlimited choice (especially in large cities) of dishes and foods on offer.
- Price being perceived by the customer as cheaper to really very very cheaper.
- A quality that can sometimes be very correct (or even more), with an excellent price-quality ratio.
- Conviviality is always possible by inviting or sharing food with friends and, this phenomenon will increase, with the family.
- Possibility to “enjoy” the meal without moving
- Time saved on travel
- More Ecologically respectful
- No hassle finding a parking space or waiting for the right bus or subway.
- Waiting time between order and delivery is kept to a minimum(see the famous 30-minute rule at Domino’s pizza).
- Enjoy the comfort of your own home or a meeting room with decent or good or excellent seating. This is to counterbalance problems that can occur during a meal in a restaurant.
- Being close to other customers
- To be badly placed (draught, view …)
- Noisy restaurant
- Having seats with comfort as unlikely as its (modern?) design
- Minimal disruption to the client’s activities
- Impossibility of smoking, including prohibited therapeutic substances.
All the points listed above were listed before the (first?) COVID-19 crisis that took place from March to May 2020.
However, if we add the impacts that have been suffered by traditional restaurants, and those that are still in progress at the time this article is finalized, we realize that we have, in addition to those in the previous list, other disadvantages that are :
- The total ban on restaurant business makes it impossible for customers to use their services in the dining room.
- An authorization of activity possible only on terraces (what will happen if a crisis occurs in the middle of winter or places where eating outside is not recommended…)
- An activity authorization subject to facilities that increase operating costs and reduce service capacity by a factor of 2 or 3.
- An increased perception of possible risks (contamination) for consumers to go to restaurants.
- A notion of less pleasure for these same customers by the restricted user-friendliness (separation distance) and by the obligation or recommendation to wear specific equipment.
- Conversely, delivery operations for both Kitchen Ghosts and traditional restaurants have been authorized. This, on the one hand, if we go through traditional restaurants for these orders, implies that these same restaurants manage to organize themselves correctly, efficiently and with a correct margin. And that the customer does not develop this type of consumption habit and eventually only uses it. And as the professionals of the Hidden Cookers will be the most organized, in terms of marketing (Web application, targeting, promotional offers …), logistics and diversity of offers, in the midterm traditional restaurants will not be able to follow in this field which is not their natively.
So what will be left for the traditional restaurants? Could it be that, in the long run, there will only be the two extreme ends of the economic chain? Fast-food restaurants and Michelin-starred gourmet restaurants? The impact on our lifestyles is therefore potentially very strong. They are due to this underlying trend. And they will also affect the economic and social fabric of the Community. Some jobs will appear, others will disappear. Restaurants will close and new forms of restaurants will replace them. So if we cannot really hinder the strength and power of these changes, can we at least steer them in the right direction? And if so how and where?
The additional disadvantages of non-collective Kitchen Ghosts
For Deliverymen, blocked income of the salaried type and no contractor.
In addition to all the points listed above, we must add the disadvantage of the status of the food deliverymen, which is completely identical in form and content to that of the UBER© & Co. drivers. A study of the situation of the private passenger car’s drivers has already been made and can be found here.
Without wishing to go into this study in detail, we can only emphasize the importance of the subordination link that exists between the so-called self-employed drivers and the principal. With the controls on earnings and the constraints imposed on operations.
But a particular tragedy for food delivery people is their inability to maximize their income. Indeed, the tasks entrusted and imposed upon them are to deliver food to private homes. They are remunerated according to several modalities, the composition of which depends on each delivery platform. These operating constraints on the income of the deliverymen make them inherently and by design (in the sense of construction) restricted. Limiting, blocking or even lowering delivery costs is the first step towards making a profit in food delivery intermediation firms. For with the exception of marketing expenses and executive salaries, this is their only defense. These companies do not produce and do not stock. They are relays of the demand that they organize precisely through their marketing actions and their online shops.
The Monopoly’s ambition is a closed future for both producers and consumers.
The second profit maximizing lever for food delivery companies is the cost of delivery. Their plan, secret or obvious, is then, by obtaining [the big moves@preview started one day after the article appeared 🙂 ] a monopoly (there will only be one left), to impose, on pain of deregistration, low, constrained and hurried prices on restaurant owners. What a great future!? And yet in the current world of 2020, it is the functioning that is tolerated by several countries. And on the economic level, who says tolerated says supported says encouraged. So in the long run we have an economic GAME with absolutely uninteresting and sterile results for the Community.
It should therefore come as no surprise that there have been, and no doubt there will be, several protests about this economic organization. Including strikes with sometimes a desire to group together delivery people from different companies. Unfortunately, unless there is strong support or regulation from the public authorities in each country, these types of struggles are very difficult for the deliverers to win, because of the deep asymmetry in the relations between the actors. But this precise point is beyond the scope of this article.
An ambition based on an uncertain economic model
As mentioned above, the secret plan of every society is to be the sole survivor of this game and to find itself in a monopolistic situation. But there is a long way to go before reaching this situation. And it’s not even sure that any of the participants will make it to the end of the road. Because if we have seen the main cost structure of these home delivery platforms with the two focuses that are marketing and logistics costs paid to the deliverers, the fact remains that these companies are not yet profitable. Every delivery costs them money. And this even during the COVID-19 crisis of 2020, where paradoxically, while we could have expected an increase in remote ordering of dishes, there was no boom in orders. This can also be understood by the reluctance to welcome, in times of contagion, someone on the doorstep, even wearing a mask. And to handle cardboard boxes and consume food that we don’t know exactly under what conditions of absolute hygiene they were made. Thus these platforms are structurally loss-making, which reinforces the desire for pressure from them on the actors in the chain that they can economically influence (restaurant owners and deliverymen).
Social operating conditions
As we have seen above, the activity of a self-employed deliveryman is already complicated to make a living from, to this must be added that it favors (despite the responsible control of certain platforms such as Deliveroo, Uber Eats [at least currently in France] or Foodora, a non-exhaustive list) and encourages situations of employment contracts with illegal immigrants. For several reasons, this is very harmful from an economic and social point of view. Especially in terms of income (no wages for reminders) which, due to the illegal situation of the person, is even more pressing with sometimes, unfortunately, one can imagine, blackmail, denunciation of the situation and expulsion.
The Ultimate Game: IPO and Stock Options
We will therefore remain on the additional disadvantages of private Kitchen Ghosts by recalling that they too are subject to the whims of their founders. And that the ultimate Holy Grail is the IPO with the highest possible quotation to enhance the value of the co-founders’ shares and especially the founder’s … it is true that this point is common now, not only to all disintermediation companies, but to practically all Start-Up companies where the founder(s) have only this objective in mind. And dreams of being billionaires among some founders and some senior “executives”. What is the interest for a Civilization?
Nevertheless, as seen above, there is a basic trend in the consumption of home-delivered ready meals that must be supported in its deployment in order to preserve the fabric of traditional restaurants and carry out this activity in the spirit of the COMMONS and COOPERACTIVE ASSETS.
Still in the spirit of the Commons seen from the point of view of COOPERACTIVE ASSETS, it is proposed the creation of a collective equipment, modes of cooperation and functioning for the creators – users of the Commons and digital and marketing tools.
- The collective equipment will be named “Cantina” (or any other name decided by the local authority, the name Cantina being the reference name used only for this article) and will include, on the same site, all the equipment (pianos, cold cabinets, storage space, catering tools, vehicles, etc.) necessary for the preparation of the dishes sold.
- The furnaces of the Cantina Collective will be controlled and supervised by the Community.
- The financing of this equipment can be done by direct purchase, loan repayment, leasing or even simple rental.
- The lease of the place may be temporarily assigned to the community (including the public legal form suitable for the control and establishment of the Commons: association, town, city, conurbation, public institute …) or be a building belonging to the collective structure and used, adapted and rehabilitated for the exercise of the common Cantina.
- The local authority must offer community facilities that comply with the health standards in force in its area of activity.
- It must also, in a conventional way, ensure the security of the premises, in the sense of fire or evacuation standards as well as in the sense of protection against theft or damage.
Operating modes and rules
Responsibility of the creative actors
The teams or the person carrying out a Restaurant activity in the Cantina will be morally and financially responsible for the common goods of which they will have the temporary and shared use. They will also have, according to the rules of culinary art and hygiene, an obligation of good maintenance and good cleaning. The purpose of this article is not to list the possible modalities of responsibility, control and supervision of the actors in their use of the common good, it is up to each collectivity to set its own rules of operation. The only clarification that can be given in the article is the notion of accountability of the actors (possibly including sanctions and/or exclusions if necessary) which is appropriate for any use of the Commons.
Support to creators
Finally, in order to best support creators, it is proposed that leases should be granted on a quarterly basis (once again, this is to shed light on the possible implementation of this type of Commons, under no circumstances should absolute rules be imposed on each Community to make its own choices). A quarterly assessment of the activity of each “team” will be carried out by the local authority, according to analysis grids based on its own choices and priorities. The local authority may thus decide to support a particular team more, because it incorporates a particular person or profile compared to another team that makes more turnover and margins, but which has less social impact in terms of retraining its employees. Similarly, the community may decide to support, through a lower rent, a team that offers different dishes, but cheaper than its colleagues, in order to allow a greater number of consumers to use these services. Also to make it easier to start up a business, the local authority may also decide to set up a progressive rent scale based on the number of quarters already worked by the team. It can also set up team rotations in the Cantina, where one and such team prowls around its concept for 3 months before coming back 3 months later with new concepts or organizations. Some teams, for different reasons, will be interested in working only one quarter per year. Or even only on one or two days (Friday-Saturday) during the week. So there are many possibilities for support that go far beyond those listed in the paragraphs above. The important thing is to recognize that the ways and forms by the community are innumerable and can adapt to any strategic management (support for creators, choice of profiles of creators, diversity of offers for customers, average price, etc …) of each community. Which can itself change its strategic management choices over time, depending on the economic and social support needs of its territory.
The value of pooling resources becomes even more apparent when setting up an iOS or Android-type application or a website, unique to each city or community. Under a single banner, all the offers from the teams working in the Cantina will be offered to the public. The Kitchen Ghost teams will be relieved of the animation/update part of the site/application which will be done by the COOPERACTIVE ASSET which will subcontract this task, or not. The animation on social networks can be shared between the Commons and the collective Kitchen Ghosts. Or left to the Kitchen Ghost alone. Because through the social networks, they can carry out promotional or communication actions on their own “dishes” and benefit directly from the orders of the customers who will select their dishes in the application rather than those of the other stoves present in the Commons.
The advantages for “teams” of working with shared tools, whether equipment or digital tools, have already been mentioned earlier in the article. As a reminder, the simple act of buying basic ingredients or products (in the culinary sense) together allows economies of scale (which, by nature, are logarithmic) on purchases and access to promotions or discounts that a simple “restaurant” cannot have. We have also seen, above in the impacts of traditional platforms, that by going beyond the framework of the Start-Up with the aim of going public, we can avoid several pitfalls. First of all, the risk of creating a monopoly at the end of the “there’s only one left” game, with all the repercussions of “pressure” that this would potentially imply for Suppliers (restaurant owners) and collaborators (delivery personnel). In the absence of competition, this would also ultimately lead to higher prices for the end consumer. Secondly, by emerging from a frantic race to get listed on the stock market, we are giving way to more local and more humane structures. Thirdly, it prevents “late” shareholders (often small holders buying shares in the platforms when they go public) from having major setbacks in terms of the profitability of their economies. Unfortunately, media start-up crashes are legion. And as seen above, since there is still no profitability in 2020 for these types of platforms, the risks are not negligible.
Ethical and social aspects of the Collective Kitchen Ghost
Firstly, as the activity of the Collective Kitchen Ghost is carried out in a local area under the responsibility or property of the Community, the application of the health standards in force will be facilitated by formal on-site checks carried out by the representatives of the Community. Or informally, simply during visits carried out at different times for different reasons. It is the responsibility of the Community to encourage, train and monitor compliance with these standards. And, depending on the legal possibilities included in the “lease” granted to the Furnace, sanction them with temporary closures, permanent exclusions or even filing a complaint or transferring the file to other public or legal bodies.
It will also make it easier for the Community to see whether the Kitcvhen Ghost teams are in compliance with current social, economic and political norms. This will make it possible to check, among other things, whether the persons carrying out an activity are properly declared to the competent social services, whether they are not officially under another social status (retirement, unemployment, illness, etc.) or whether they are entitled to carry out an activity.
Also, fiscal transparency of the Kitchen Ghost’s activities can be achieved by comparing the “Kitchen”‘s declarations of activity to the various social and fiscal bodies of its State with the records of orders placed through the application and the website. The consistency is then facilitated by the possibilities of reconciliation between the different sources of information.
Another possible aspect of the social piloting of the Collective Kitchen Ghost is to be able to receive orders from the Community for this or that activity of the latter or from organizations under its responsibility such as school canteens or associative events of various kinds, whether recurrent or exceptional.
The Collective Kitchen Ghost = a higher remuneration lever for the deliverers
Another point in favor of the implementation of the Collective Kitchen Ghost mode is the possibility for delivery personnel to be better remunerated. While such an activity will never reach the income levels of other professions, if carried out in a private Kitchen Ghost, it will potentially be more profitable for the person carrying it out and for the community.
The first option is to have this activity carried out in the form of an employee. This is already done by many Pizzeria chains such as the most famous (at least in France) or other less known chains. The advantages for delivery personnel are the protections associated with this status plus the possibility to “move up” in the company. The second benefit is the opportunity to truly operate as a self-entrepreneur. Since there are several “restaurants” in the collective Kitchen Ghost where delivery orders are placed, this is a framework that perfectly meets the constraints and spirit of the auto-entrepreneur status. Another point is that, as the delivery man will be attached to a group of Cookers, he will be in a better position to potentially organize his shopping than if he were attached to a platform which would require him to collect the dishes from a place A and take them to the customer at a place B. The delivery person attached to a Commons of Cookers will be able to wait a few moments for an order placed at another Cooker to take it on his round. Or simply benefit from the result of customers’ interest in ordering from Kitchen Ghost grouped together at the same place by delivering for the same customer (representing several people) dishes from different Furnaces. Another advantage of this organizational capacity is that it means fewer trips in town or on the road, thus creating less traffic and pollution. Add to this the possibility of receiving tips (which also exists with the platforms) and you can achieve an income closer to a remuneration corresponding to the efforts made by the deliverymen (who are certainly not all on bicycles).
The main thing is to have a new form of activity, more cooperative, flexible, enabling different types of people to achieve different objectives.
- For those who want to become restaurateurs but do not have the financial capacity to rent and/or renovate a space and start a business.
- For those who want to train to become restaurateurs with a first experience of “production”, organization, communication and economic activity.
- For those who want to test “marketing” concepts of food types (fruit pizzas 🙂 ) before launching their own restaurants or chains.
- For those who want to work on particular periods alternating with other activities
- To enable the sustainable existence of people earning a decent living on the territory
- To get people back in the business where they can be well supervised in their first steps.
The organization in COOPERACTIVE ASSETS is the most adapted to achieve its objectives and potential. Thus, far from lagging behind purely capitalist initiatives, Commons are fully appropriate to meet the needs of modernity of our time while correcting and avoiding the excesses, excesses and weaknesses of Neo-Liberalism. For the notion of “Liberalism” in the sense of an economic organization allowing the initiative of individuals is fully integrated in the new so-called new COMMONS or COOPERACTIVE ASSETS , which is, in part, what makes their strengths and relevance.
And the application of this type of organization in the collective Kitchen Ghost is, once again, the triple demonstration of its modern structure, its economic relevance and its social advantages!
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Cooperactive Assets are a new form of social and economic organization. ALPHARIS is dedicated to the imagination, assistance, design, implementation and dissemination of this new form of economic and social organization for the creation of products, services and inventions
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Last updated: December 02, 2019
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