Apart from raising the ethical question, it could put Kalanick’s place on the board of Uber in doubt.

Uber former CEO Travis Kalanick in conflict of interest over food delivery business
Atom Controversy Thursday, March 14, 2019 - 15:57

City Storage Systems and CloudKitchens are two companies to watch out for. As of now the one common link between the two is Travis Kalanick, the former CEO of Uber and still a member of the Board of the rideshare cum food delivery major, as a co-founder. But more importantly, some of the activities that that these companies are engaged in could come in direct conflict with Uber’s own operations. Apart from raising the ethical question, it could put Kalanick’s place on the board of the company in doubt.

From Uber’s perspective, it is planning an IPO and the Uber Eats arm engaged in the food order delivery business is an important part of its overall business plans. At one level, the CloudKitchens model is useful to Uber Eats as it adds to the choices the customers can be offered on its food delivery app. The other factor to be considered is that Uber itself has been trying to get into the business of managing kitchens by renting out fully outfitted kitchens which Uber may eventually take over later. But Uber has so far tried to keep this on a low key. It is only a pilot scale operation right now and the company may wait till the IPO is done and dusted, before sharing the details with the public.

To that extent, the businesses of Travis Kalanick and that of Uber do clash with each other. But the soundbites from both sides have so far been quite complimentary to each other. CSS says the kitchens it is associated with are all delivering their food to customers through the Uber Eats app and is therefore helping the cause of the parent ride share company co-founded by Kalanick. Uber too has responded with the ‘more the merrier’ type remarks, indicating they don’t see any conflict of interest here.

All said and done, the model adopted by CloudKitchens is definitely being welcomed by all stakeholders. In large metropolises like Los Angeles, a food or ice cream brand that just has a one-off outlet cannot serve all sections of the city. CloudKitchens steps in, stocks the products and makes the delivery through Uber Eats and there is a technology-based model in place to let the brand owner know how much of their products got sold and they are paid the value after CloudKitchens retains a portion as its commission and reimbursement for expenses. This works as a win-win formula for everyone in the ecosystem, mainly the consuming public.

But there is still one sticking point between Uber and Kalanick. It is reported that a number of Uber employees are being poached by Kalanick for his venture and though he has been issued a warning on this, he continues to recruit Uber employees in the US and in other countries as well.

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