While these online listings drive business revenue through exposure and often bring in new customers, experts warn that unoriginal listings can crowd the dining landscape.
The prevalence of virtual restaurants varied among the cities analyzed, ranging from 1 in every 10 in Cleveland to nearly 1 in every 3 restaurants in Nashville, Tennessee.
This data comes from a sample of restaurant listings on Uber Eats’ platform, drawing from listings shown under each of the platform’s cuisine categories — fast food, ice cream, barbecue — for a given city.
Uber declined to comment when asked if the numbers in NBC News’ analysis align with Uber’s internal metrics.
According to one restaurant owner, the motivation for opening virtual restaurants whittles down to economics.
Rich, the owner of Spinners Pizza on Bleecker Street in Manhattan, operates more than 60 virtual brands across Uber Eats, DoorDash, Grubhub, Menufy, Seamless, Slice and Too Good to Go. Rich asked that his last name not be published, citing threats from customers and competitors about his virtual kitchens, and said that the multiple listings are what keeps his business afloat.
“It’s supposed to be the best street in the world for pizza,” Rich said. But that’s only on Friday and Saturday nights, and, he said, “the rest of the week isn’t enough to support the rent, the workers, the electric.”
During a reporter’s visit on a Thursday night in March, fewer than five customers set foot inside Spinners.
As a restaurant owner, Rich is part of an industry with 5% profit margins and where nearly 9 in 10 operators say they are less profitable than they were pre-pandemic, according to the National Restaurant Association.
For restaurants, how visible these online listings are can lead to a 5% increase in revenue, said Abhishek Nagaraj, an associate professor in the Haas Business School at the University of California, Berkeley, who specializes in the digital economy.
Rich’s virtual brands…
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