Travis Kalanick's digital food court Picnic is now serving San Francisco and Mountain View

Earlier this year, City Storage Systems, owner of CloudKitchens, and led by Uber co-founder Travis Kalanick, launched Picnic, which brings people their favourite meals from 100+ restaurants straight to their office with no delivery fees and no tips.

“It’s just like using a food delivery app, but we bring everyone’s order together at the same time,” according to a Picnic spokesperson.

The LA-based venture is now serving San Francisco and Mountain View. It’s the next big thing, according to Brittain Ladd, a supply chain consultant and former Amazon executive.

Picnic’s business model aligns with City Storage Systems’ stated goal to make food delivery “more affordable, higher quality and convenient for everyone.” The wide selection and low prices are driving business to CloudKitchens and Otter - also part of City Storage Systems (CSS), he noted in a LinkedIn post.

“I can state with 100% confidence that Picnic is seeing massive growth - in excess of 40% annually - using their model. I can also state that CSS is going to lean into this new business unit with a ton of investment and focus moving forward. Kalanick knows that he has the “next big thing” with Picnic,” Ladd commented.

“I am a huge fan of Picnic because the unit economics for CloudKitchens restaurant licensees who rent kitchen space inside a CK facility, are far better in this model than the economics of standard on-demand delivery orders via DoorDash and Uber Eats from stand-alone restaurants.”

“Orders are being placed directly through Picnic (i.e., CloudKitchens). Orders are not being transacted through DoorDash or UberEats. They are out of the middle of it. Note to DoorDash and Uber Eats: I warned you two years ago to create your own Picnic. Big mistake.”

Ladd added: “Picnic’s “secret sauce” is that they ‘batch’ orders. Food delivery companies love the idea of batching orders because the higher value helps offset the high costs of food delivery. But for batching to work, the various restaurants and customers involved all need to be located close together.”

“Picnic has done this - they have connected multi-brand ghost kitchens with clusters of customers because the restaurants use CK facilities. The result? Delivery costs are significantly lower because one driver delivers many orders to one location vs. many drivers (think DoorDash, Uber Eats) making one delivery to many locations.”

Ladd believes that CK will disintermediate DoorDash and Uber Eats by using Amazon drivers to make their deliveries. “CK can also use their own drivers. I remain convinced Amazon is going to acquire or invest in CSS.”

He concluded: “There are no delivery fees - ever - when using Picnic. Margins are high for the CK food hall model so restaurants don’t charge fees, and DoorDash and Uber Eats aren’t involved so they aren’t charging fees. Delivery is free!”

2024 RTIH INNOVATION AWARDS

Food delivery is a key focus area for the sixth edition of the RTIH Innovation Awards, which is now open for entries.

The awards, sponsored by CADS, 3D Cloud, Retail Technology Show 2025, and Business France, celebrate global tech innovation in a fast moving omnichannel world.

It’s free to enter and you can do so across multiple categories.

Key 2024 dates

Friday, 25th October: Award entry deadline 

Tuesday, 29th October: 2024 shortlist revealed

30th October-6th November: Judging days

Thursday, 21st November: Winners announced at the 2024 RTIH Innovation Awards ceremony, to be held at RIBA’s 66 Portland Place HQ in Central London.