A takeout mix-up in San Francisco revealed a dirty secret of the food-delivery business: restaurants listed without their permission.
Happy Khao Thai has an address on San Francisco’s Mission Street, but don’t go there looking for a storefront. A sign on the sidewalk reading “Food pick up here” points, improbably, through the maw of a demolished theater, of which all that’s left is the marquee. Behind it, in what would have been the lobby, is a parking lot, and way in the rear—backstage, perhaps—are a pair of portable toilets and a trailer. That’s the home of Happy Khao Thai, although the logos on the door suggest it could just as well serve tacos and wings.
Happy Khao is a so-called ghost kitchen—part of a network run by a Softbank-funded company that recently expanded from parking technology into parking lot–based food prep. This week, it became a central spoke in a quintessentially San Francisco mystery. How had the menu at this VC-backed, delivery-only kitchen, which includes a short list of Thai staples and—criminally to some—Vietnamese pho, been confused on Grubhub with that of Michelin-starred Kin Khao, a restaurant about two miles north that does not deliver at all?
The answer, it turned out, was bound up in the bizarre dynamics of the low-margin, highly competitive business of food delivery.
The saga began when Pim Techamuanvivit, Kin Khao’s owner, received a call from a patron asking for an update on their delivery. Techamuanvivit was confused, she tweeted on Saturday—after all, her restaurant doesn’t do take-out. But a quick online search revealed that, sure enough, Kin Khao had been listed on Grubhub, with the wrong menu to boot. Her posting went viral, and Twitter sleuths soon noted similarities with a menu for Happy Khao, a restaurant with locations in cities across the country.
Grubhub says the error was theirs, pointing to a glitch in an automated system that scrapes menus from websites and matches them with listings. The error occurred, says Katie Norris, a company spokesperson, when Grubhub tried to set up a new listing for Kin Khao. She added that no orders placed via the listing were linked to Happy Khao.
Reef Technology, the Florida-based company that operates the Happy Khao brand and others, did not respond to a request for comment. The phone number posted on the trailer for the company’s local operations hub was disconnected, and the Mission Street kitchen was closed at dinnertime Monday. In a statement on Twitter, the company said it was investigating “an error made by our delivery partners.”
As for listing Kin Khao for Grubhub delivery without its knowledge? That part was intentional, Grubhub says. The incident exposed a little-known aspect of the food-delivery business, practiced by the company and others. Kin Khao had been conscripted into a program to expand Grubhub’s portfolio by listing restaurants with whom it doesn’t have a contract. The company identifies “trending” restaurants in places where it has staff, and then pulls information and the menu from public sources to a Grubhub ordering page. Orders are sent directly to Grubhub, which sorts out how to get them to your door.
The model is inherently improvisational. Delivering food from restaurants without their knowledge is challenging, it turns out, especially when many of those places aren’t equipped for delivery at all. Grubhub staff need to figure out, case by case, whether it’s possible to call in an order, or whether a driver should, say, go in and order take-out themselves. In the case of Kin Khao, where the only way to take food out is to sit down, order a seated meal, and get the leftovers boxed up, Grubhub was apparently out of luck.
With 20 years experience in the hospitality industry, my achievements range from overseeing multi-unit operations to consulting and operating for several premier restaurant and hotel groups in Texas. Attention to detail and a passion for hospitality is what drives me to create success for the companies I have worked for as well as myself.