For CloudKitchens, absolutely. For tenants, not yet. Let me explain from each side... 1/ https://twitter.com/marshal/status/1250252778624163840

From CK's perspective, they have enviable cap rates on their real estate (I'm seeing ~19% cap rates in a tier one city). So they've done very well from a RE investment perspective, but more importantly it has given them the ability to drive down the cost of delivery. 2/

Once they have enough cities launched, they will announce their own marketplace that does its own delivery. This will allow its tenants to charge less for food delivery as it won't have to pay 20-30% of each transaction, which to this day has been highly unprofitable. 3/

However, the story today is quite different from the tenant side. 'Internet Food Court' @ 615 N Western in LA does ~800 orders/day across 30 tenants. At a $25 AOV that's a run rate of <$250k/yr per tenant. To breakeven in a ghost kitchen requires ~$650k in gross sales. 4/

It doesn't help that CloudKitchens and other providers pipe into third party marketplaces that charge those 20-30% take rates I mentioned. If you exclude those, you get breakeven @ $500k. So now you see why it makes sense that CK replicates the Rebel Foods model in India 5/

The only way to make this a sustainable business is to aggregate the supply (foodservice tenants), integrate your own delivery service, and own the real estate. It's aggregation theory but for food. CK is to foodservice labor as Uber is to drivers. https://stratechery.com/2015/aggregation-theory/ 6/

So just as aggregation theory explains how OTA's created $100bn+ of value off the backs of the hotel industry without serving a single guest, CK will do the same for a $3+ trillion global foodservice market by leasing kitchens to the restauranteurs of the future. 7/7