Uber Eats announced plans to remove thousands of online-only brands from its app in a crackdown on restaurants listing their menu under multiple brand names, according to reports.
These virtual “ghost kitchens” took off during the Covid-19 pandemic as restaurants moved to utilize otherwise empty kitchens and make up for lost sales by offering their existing products under revamped brand names.
For example, Denny’s launched The Meltdown and The Burger Den in 2021 to sell products that aren’t available at their physical locations.
The problem is that the abundance of ghost kitchens clogs the Uber Eats menu. Roughly 40,000 virtual brands were on the app last year, up from 10,000 in 2021, according to the Wall Street Journal.
Diners are “effectively seeing 12 versions of the same menu,’ said Uber Eats head John Mullenholz. “It’s fair to say that kind of erodes consumer confidence.”
Starting Tuesday, virtual brands will have to have to include pictures of five items unique to their menu and more than half of the items on each menu will need to be different from the parent restaurant.
DoorDash and Grubhub have similar policies requiring that at least half a virtual brand’s menu differ from that of the physical restaurant, according to reports.
"Communicating — and beginning to enforce — these new quality standards for virtual restaurants on Uber Eats is an important step for our program, designed to benefit both consumers and merchants," Mullenholz told Insider in a statement. "We took care to introduce standards that let our restaurant partners continue to flex their creativity, as we know delivery-only menus are an exciting way for operators to invest in the growth of their businesses."
Shares of Uber fell 1.2% to $30.39 on Monday afternoon.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel