Hunton Retail Law Resource

Disputes between restaurants and third-party food delivery services—such as Grubhub and Uber Eats—have made headlines over recent years. This tension has only been compounded by the COVID-19 pandemic. 2020 was a particularly tough year for restaurants across the country and even tougher in cities like New York where rents are high and state-mandated business closures resulted in significant cuts to already narrow profit margins. However, the same has not been true for third-party food delivery services. In 2020, food delivery apps saw substantial increases in revenues. Uber Eats, for example, reported revenues of $2.51 billion in 2019; that number jumped to approximately $3.5 billion for the first nine months of 2020.

Ghost kitchens are one of the hottest trends in food. Ghost kitchens (also known as dark kitchens, cloud kitchens, and virtual restaurants, among a slew of other flashy names) are delivery-only restaurants found almost exclusively on food delivery apps like UberEats and Grubhub. Rather than storefronts with dining areas, they usually operate out of existing restaurants, commissary kitchens or food trucks.