The Rise and Fall of Dark Kitchens in the Gig Economy
Dr. Charalampos (Babis) Giousmpasoglou – Dr. Evangelia (Lia) Marinakou – Prof. Adele Ladkin: Bournemouth University Business School.
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The restaurant industry has seen a transformative shift with the emergence of “dark kitchens,” also known as “ghost” or “cloud” kitchens, which exclusively serve online food orders without a dine-in option. While this model has offered convenience for consumers and dramatic cost savings for companies, it has also revealed significant issues, particularly concerning worker exploitation. These kitchens represent the latest evolution in the gig economy, where jobs are typically short-term, flexible, and often devoid of traditional employment benefits.
Dark kitchens initially supported high-street restaurants with offsite food preparation during peak times. However, as the model gained popularity, major delivery platforms such as Deliveroo and Uber Eats have established their own virtual restaurants, creating a fast-expanding and profitable market. But these rapid developments often come at the expense of the workforce, particularly in terms of working conditions and job security. Dark kitchens are typically located in industrial zones or warehouses far from public view, and workspaces can lack adequate ventilation, lighting, and hygiene, making them challenging environments for workers.
One significant issue is that dark kitchens depend on a gig-based workforce classified as independent contractors rather than employees. This setup allows companies to avoid providing standard benefits like sick leave, health insurance, or job security. Workers in dark kitchens, often migrants or those vulnerable to economic pressures, face precarious conditions and limited protections. These workers are often subject to long hours, high output expectations, and minimal breaks, as the business model prioritises efficiency and cost-cutting. Moreover, since they are hired on a gig basis, they are subject to unpredictable work schedules and unstable income, with little control over their working conditions.
The dark kitchen model also brings ethical concerns related to transparency and accountability. As these kitchens operate remotely, consumers ordering through online platforms often have no insight into where or how their food is prepared. This lack of visibility has allowed some establishments to operate in ways that would not meet the standards of traditional restaurants. Hygiene violations, such as inadequate cleaning, lack of pest control, and improper food handling, have been reported, revealing an industry lacking sufficient oversight.
The gig economy’s “flexible” model has often been criticised for creating an exploitative work environment. In dark kitchens, workers operate under strict algorithmic management, where tasks, productivity levels, and shifts are dictated by platforms. This technology-driven model, while efficient, reduces workers to replaceable parts of a machine, stripping them of any sense of agency or stability in their roles. The concept of “flexploitation,” the fusion of flexibility and exploitation, becomes particularly evident here, as companies reap the benefits of a low-cost, on-demand labour force while sidestepping responsibilities toward their workers.
One of the most troubling aspects of dark kitchen operations is the complete absence of meaningful worker protections. Without official employment status, workers lack access to the rights and benefits typically afforded in traditional jobs. This precarious status often translates to low wages that barely cover living expenses, forcing workers into a cycle of dependency on gigs without long-term security. Consequently, dark kitchen workers face conditions akin to those in sweatshops, with limited job mobility and a lack of voice in their work environments.
The current trajectory of dark kitchens suggests a growing need for regulatory oversight to address these labour concerns. While these kitchens have revolutionised food delivery services and offer significant profit potential, it is crucial that industry stakeholders and policymakers work together to establish fair and sustainable employment practices. Without such efforts, the dark kitchen model risks deepening the exploitation of a workforce that remains largely unseen. The UK, for example, has seen cases that underscore the pressing need for regulatory intervention: dark kitchens in London’s Canary Wharf and Battersea have been reported to operate in uncomfortably small, poorly ventilated spaces, with workers enduring high heat and humidity in container-like workspaces. Hygiene breaches have been found, including cramped kitchens with inadequate cleaning standards and unsanitary food preparation practices that failed to meet minimum health requirements. Such conditions are not only a risk to the workers themselves but also to the consumers unknowingly served food from these environments. In response, some cities have begun tightening regulations on dark kitchen operations. For instance, Barcelona’s City Council imposed stricter rules following resident complaints about noise, pollution, and worker conditions. Such moves are a step toward ensuring that the convenience offered by dark kitchens does not come at an unacceptable human cost.
Recent reports suggest that the post-pandemic era signals the decline of dark kitchens as a viable and successful business model. After the lockdowns ended and customers returned to dining in restaurants, the popularity of dark kitchens started to diminish. Large chains that had operated ghost kitchens during the pandemic struggled with overtaxed kitchens and rising customer complaints, prompting many to abandon the strategy altogether. Wendy’s scaled back its plans, and Kroger shut down all its ghost kitchens in 2023. Kbox Global, an operator that helps restaurants utilize spare food production capacity, is on the brink of collapse, highlighting the growing financial strain on the dark kitchens sector. Launched in 2019, the company has reportedly engaged insolvency experts after a critical funding injection fell through, according to Sky News. According to Euromonitor International, consumers are now craving personal connections with brands, something virtual brands failed to establish. Food quality issues further undermined dark kitchens’ reputation; Uber Eats removed 8,000 virtual storefronts from its platform due to complaints about poor quality, inaccurate orders, and duplication of identical restaurants operating from the same location. This erosion of consumers’ trust was exacerbated by high-profile disputes like that of YouTuber Jimmy Donaldson (MrBeast), who sued Virtual Dining Concepts over alleged poor quality and customer complaints about his namesake burgers, leading to a countersuit for breach of contract. Despite industry figures like Robert Earl of Virtual Dining Concepts defending dark kitchens by arguing that delivery challenges are common to both virtual and traditional restaurants, the overall perception of dark kitchens has significantly declined. This shift reflects a growing consumer preference for quality and authentic brand connections over mere convenience.
In conclusion, dark kitchens serve as a microcosm of the broader issues inherent in the gig economy: a reliance on temporary, flexible labour without long-term security or adequate protection for workers. While the sector faces significant challenges and a notable decline in popularity, its survival is bolstered by the enduring demand for delivery services. This “delivery phenomenon” ensures that dark kitchens will remain a part of the food industry landscape, even as the model evolves. However, addressing the ethical and social implications of this business model is crucial. By holding companies accountable and implementing fair labour standards, the industry can strive for a more sustainable and equitable approach that values workers’ rights and well-being alongside profitability.
Source: Giousmpasoglou, C., Ladkin, A. and Marinakou, E., 2024. Worker exploitation in the Gig Economy: the case of Dark Kitchens. Journal of Hospitality and Tourism Insights, 7(1), 414-435. DOI: 10.1108/JHTI-10-2022-0477
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