Dive Brief:

• Uber Eats is reportedly leasing real estate in Paris to build its own kitchens, according to Bloomberg.
• The company is renting these kitchens, which are equipped with ovens, refrigerators, sinks and stoves, to restaurateurs planning delivery-only concepts.
• Former Uber CEO Travis Kalanick is developing his own virtual kitchen concept in Los Angeles, called CloudKitchens, with plans to bring this concept to additional markets in the coming years.

Dive Insight:

Delivery companies are dipping their toes into food preparation of late, and Uber Eats has been one of the top companies driving the virtual kitchen trend. Last year, Uber Eats revealed plans to roll out 400 "virtual kitchens" in the U.K. by the end of 2018, which would bring its count globally to 2,000. One of the company's strategies is to use the data it already gathers to see what consumers are asking for, but can't get in their markets and leverage its virtual kitchens to fill in the gaps. Competitor Deliveroo has been providing its own kitchens as well. 

Third-party companies aren't the only ones in the game. Famous Dave's is launching a ghost restaurant where it will serve fried chicken and burgers for delivery only and has plans to open virtual kitchens that focus on catering and delivery. Chick-fil-A is also working on its own to-go and delivery-only prototypes.

Virtual kitchen concepts allow startups and existing restaurants to test new menu items without a significant investment or building a new restaurant in an area with high rent. On the other hand, criticism is growing over the lack of oversight, and delivery companies haven't been very clear online that consumers are ordering from a ghost or virtual restaurant.

Despite this pushback, kitchen rental companies are expanding rapidly. Kalanick is testing the concept in Los Angeles and plans to bring his CloudKitchens concept to Chicago and San Francisco as well as China, according to Bloomberg. Kitchen United will add new virtual kitchen sites in Atlanta later this month as well as Columbus, Ohio, in April and Scottsdale, Arizona, in May, according to Nation's Restaurant News. Another concept, 2ndKitchen is quickly gaining prominence, recently raising $1.35 million in funding in February. The company will deliver food from restaurants to kitchenless businesses, like bars and breweries, and has plans to bring its concept to hotels, which offers another area of potential.