Delivery Bots Charge Up
Virtual brand massacre, Domino's profitability, delivery rates steady
Is it the weekend yet? Given that half the country is set to be engulfed in a heat wave - you’ll know the answer is “yes” when you start sweating. Speaking of hot — ghost kitchens seem to be feeling the heat. But Starship isn’t, they’ve got a cool new delivery bot feature to brag about. Read on, and we’ll see you next week!
Today:
Starship’s Delivery Bots Go Wireless
Virtual Brands Take a Body Blow
Chart Time | Domino’s Makes Dough
Rates Likely to Hold Steady
ROBOTICS | Starship Speeds Deliveries with Wireless Charging
Delivery robots come in a variety of form factors - some have six wheels, some have four, one even has three! And then there’s a variety of sizes: about the size of a cooler, and about the size of a small cooler. That is to say, some of the competitors struggle to differentiate themselves, other than falling on either side of the “fully autonomous” or “remotely piloted” divide. In that crowded category, Starship Technologies has long been a leader — they were one of the first to market almost a decade ago, and its robots have now cruised a combined 10 million kilometers.
The Big Picture: Human delivery is low fixed cost, high marginal cost. Robotic delivery is the exact opposite. So anything that can get even more uptime out of a bot is good for the bottom line. That’s why Starship has announced that its robots can now be recharged wirelessly, using an automated docking procedure. (Common enough in the pallet-moving robots in warehouses.) It takes the humans out of the loop for one of the last time consuming tasks in the process they had left.
Ghost Kitchens | Red Robin Pulls the Plug on MrBeast Burger
It’s a tough day for Virtual Dining Concepts, as key restaurant partner Red Robin announced it will cease offering its marquee virtual brand — MrBeast Burger —as well as its in-house brands Chicken Sammy’s, The Wing Dept, and Fresh Set.
The Big Picture: It’s been a rocky few months for ghost kitchens and virtual brands, as consumers seem to find diminishing returns among celebrity brands cooked out of other host site’s commissaries. In May, Red Robin sister-company Maggiano’s shuttered its virtual brand; then Nextbite got sold off for parts, and even MrBeast doesn’t seem too fond of his own burger these days…
CHART TIME | PIZZA PROFITS
With Domino’s big partnership with Uber Eats dominating this week’s news, we thought we’d go under the hood to analyze how the pizza giant makes and spends its dough. The margins are thin, but not as thin as its crust — in Q1 DPZ made about $177M on $1.024 billion in revenue. (Thanks to our friends at Chartr for the inspiration.)
ECONOMICS | Delivery Rates Likely to Stabilize
After delivery rates at the major shippers rose 6.9% last year, companies are worried that this year could see their logistics and delivery rates rise as well. The looming UPS strike weighs heavily on many minds, with the thought being that any wage increases the drivers get will be passed on to end customers.
The Big Picture: Experts say a big hike is unlikely this year. At the macro level, you’ve got inflation rapidly cooling. But in the sector specifically, increasing competition is likely to blunt UPS’ pricing power. You’ve got USPS new offering, beefed up offerings from OnTrac and LSO, plus gig powered players like Veho, and Walmart GoLocal all vying to pick up the slack. Perhaps UPS will instead just have to pay out a small chunk of its record profits.
A Few Good Links
Instant deliverer Getir running out of cash for UK ops. CA looks to slow AV trucking’s roll. Olo adds new payment options. Domino’s driver ad sparks jealousy. Hawaii rolls out federally funded EV charging. Clients revolt against Toast’s 99 cents up-charge.
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