A US lobbying group with ties to Travis Kalanick’s “dark kitchen” start-up has set itself up to battle food delivery apps, including the entrepreneur’s former company Uber, over fees and customer data.
The Digital Restaurant Association’s stated goals — to challenge fees and gain access to customer data fiercely protected by food delivery apps — pits it against Uber, from which Kalanick was ousted as chief executive in 2017 following a string of scandals, as well as DoorDash and Grubhub.
The association was formed in March by executives at Tusk Holdings, a lobbying firm recently hired by Kalanick’s City Storage Systems (CSS) — the parent company of CloudKitchens — to help it fight regulatory battles around so-called dark kitchens, which buy property to use as space to cook food to be sold via delivery apps.
Senior CSS executive Guido Gabrielli, who heads up the group’s payment platform Otter, was listed as being on the DRA’s board but was removed this week following the FT’s inquiries into the association’s formation and leadership. A promotion for Otter remains on the DRA website, where it is described as a “partner”.
Kalanick has become a significant player in the digital restaurant business through his CloudKitchens venture, a market that grew rapidly during the pandemic as households unable to dine out ordered in. At its most recent funding round, CSS was valued at $15bn. It has more than 4,000 employees across the US, Latin America, the UK and Middle East.
But growing demand has caused friction between digital restaurants and food delivery apps over who has access to customers’ personal data.
The DRA’s website said it aims to support city and state laws that benefited restaurants and will “fight to ensure restaurants have access” to customer information. Delivery apps have long resisted such calls, citing privacy concerns.
The association also says it will push for permanent caps on delivery fees charged by third-party apps. Some markets have already taken this step, such as San Francisco and Philadelphia, where delivery fees cannot exceed 15 per cent of each order.
A greater amount of customer data about orders and consumer habits could be lucrative for CSS for advertising purposes. Its payment platform Otter, which helps restaurants manage orders from several food apps at once, already requires restaurants that use its service to share with it significant information about transactions.
A senior leader at Tusk Holdings, who spoke only on the condition of not being named, disputed the characterisation that there are links between the DRA and Kalanick’s CSS, saying the lobby group was currently “fully operated and funded” by Tusk Holdings.
Tusk Holdings is a lobbying firm founded by Bradley Tusk, an early Uber investor and former adviser who spearheaded efforts by the ride-hailing app founded by Kalanick to bat away regulation in New York City.
More recently, the lobby group has worked for CSS. In Chicago, a Tusk Holdings managing director helped organise a protest opposing local legislation that put tighter restrictions on suitable locations for dark kitchens.
It comes as the growth of dark kitchens in the US and around the world has caused controversy in certain cities, raising the prospect of regulatory battles that could affect CSS’s ambitions.
Though currently in its early stages, the DRA will be “looking at all major cities” for its lobbying efforts, the person at Tusk Holdings said, aiming to position itself as “the national organisation focused on the future of restaurants”. The website currently lists six restaurant companies as members, including Hooters and diner chain IHOP. None of the member restaurants would comment on their affiliation.
In August, the DRA attended a committee hearing held in the Georgia state senate. According to a transcript of the session obtained by the FT, DRA president Joe Reinstein described the DRA as a “coalition of restaurants”, arguing “allergy concerns” was one reason for providing restaurants with more customer data.
Reinstein declined to comment. CSS referred inquiries to Tusk Holdings, which had no further comment on behalf of the company.
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