The no-sharing culture: Why Uber-style food-sharing services just can’t succeed

Sirena Bergman November 29, 2016

If there’s one phrase likely to polarise investors, it’s a young business claiming to be “the Uber of X”. For some, it’s conducive to an eye-roll; to others, it conjures up images of high ROIs and game-changing innovations.

The no-sharing culture: Why Uber-style food-sharing services just can’t succeed

Peer-to-peer marketplaces are a staple of this generation of tech startups. Providing a platform that allows users to buy and sell their product or service can be highly profitable and easily scalable, without requiring the overheads of a company manufacturing and stocking a product themselves. They also garner easy publicity – no-one would feature a new minicab service, but as soon as it involves an app and the words “sharing economy”, a decent PR will get you coverage on every business site in the country.

After Uber disrupted the taxi industry and Airbnb shook up hospitality, the food industry seems like the next obvious area set for change. Consumers are obsessed with food-based content; there’s an ever-increasing demand for homemade, organic, healthy food; and a new generation of home cooks can serve up dishes to restaurant standards. Combine our fascination for the sharing economy with our passion about food, and it would seem a peer-to-peer marketplace for home cooking is the startup every investor would be jumping at the chance to be involved in.

uber_of_food_sharing_culture_-_gousto

It’s clear to see that we’re interested in finding innovative ways to handle our mealtimes. Just look to COOK, the frozen-food company that charges a premium for using natural ingredients and minimal processes in their meals, as an example for potential success. They’re primarily stocked in their standalone stores, but despite being less convenient and pricier than your standard supermarket microwave dinner, there’s a huge demand for a healthier – yet equally hassle-free – product. In a similar vein, companies such as HelloFresh and Gousto are succeeding with a model based on the opposite idea – that we want to spend time in the kitchen cooking, rather than in a supermarket shopping – and both charge a weekly price for delivering ingredients and recipe cards to customers who want more variety in their meals and to improve their cooking skills.

“We had this idea of neighbours cooking for each other – it seemed like a good idea.”

In 2012, three London entrepreneurs spotted the trend for innovation in food and created Eatro, a peer-to-peer marketplace where home cooks could advertise their dishes. Hungry, health-conscious users can select their favourite item on the menu and agree with the seller on when to pick up or have the meal delivered.

Bar Segal was one of the original founders of Eatro. “When we started the business, we were idealistic. We were students without much money and we couldn’t cook. We lived in a council block with people of different nationalities and we could smell their food cooking every evening. We had this idea of neighbours cooking for each other – it seemed like a good idea,” he said.

Katie, a 28-year-old teacher based in south London, used the service in its early days. “I think I heard about it from an article someone posted to Facebook. It seemed like a really cool idea so I downloaded the app. The problem was that I had to order a few hours in advance, and I needed someone who lived on my journey home from work to be selling a meal that sounded appealing – and they had to be free for me to collect it at the perfect time. Even in London that’s quite a stretch, and it seemed crazy to detour on a bus for an extra half hour when I could just order in,” she said.

Sellers were in a similar conundrum. After having members of Eatro staff coming to their house to sample their food, check health-and-safety standards and take pictures, the pressure was on to sell some meals. But without being able to anticipate demand, it was impossible for sellers to know how much they should cook – too little and they could miss out on sales, too much and they’d be out of pocket. It’s this delicate understanding of the balance between supply and demand, and learning how to take calculated risks, that marks the difference between a business’ failure and its success. However, in this case you’re talking about people with other full-time jobs who are simply trying to make a bit of pocket money on the side. With a perishable product that needed to be sold within a time slot of a few hours, it just wasn’t worth it.

Image: Evening Standard

But the Eatro team soon realised there was a problem. To satisfy safety concerns, they had to go to every chef’s house to sample the food and ensure quality, which wasn’t a scalable model. “If I could go back and do it again, I’d focus less on the selling side and more on the demand,” said Segal. “But I don’t really think peer-to-peer marketplaces will ever work for food. People are too close-minded to buy food from complete strangers. It only takes one thing to go wrong with one meal and it could be a disaster.”

“It only takes one thing to go wrong with one meal and it could be a disaster.”

In April 2014 Eatro gave in to the pitfalls of the model and rebranded to become One Fine Meal, a premium dinner delivery service, which employed in-house chefs to create a daily menu from fresh ingredients, which customers could order via the app and have delivered in a prearranged time slot. While it gained some traction initially, the likes of Deliveroo and JustEat were offering affordable food delivery from a huge range of restaurants across the city, and customers flocked to the big names and variety of choice. Without a substantial investment to focus on marketing One Fine Meal became unsustainable and eventually closed its doors.

Not long after the demise of Eatro, four Stoke Newington dwellers decided to give the model another try. Eatro had tried to scale too quickly, they thought. Dish Next Door was born to give the community within one specific postcode, N16, the platform to sell home-cooked meals to hungry, time-starved professionals.

The founders were not available for comment at the time of writing, but I met with one of them a year ago, just as they were about to launch, and asked why they thought they’d succeed where Eatro had failed, despite much smaller investment. Turns out, Dish Next Door believed that less was more, and that Katie’s problem of not being able to find someone near enough offering the right product could be easily solved by focussing on a small area, pouring marketing and publicity budgets into getting enough people on board in N16 to sustain expansion. But the media coverage and local interest wasn’t enough, and Dish Next Door was live for under a year before shutting down the site due to a lack of funding.

Despite the unique obstacles that food as a product presents, entrepreneurs aren’t giving up on finding the winning formula to make the food sharing economy work. Startups being billed as the Uber-for-food currently include Homemade in New York, Neighbour Flavour in Australia, Josephine in San Francisco and Foodie Shares in LA.

Paddy Willis, co-founder of Grocery Accelerator – a programme which provides support to startups in the food and drinks industry – doesn’t see this being the future of food innovation. “We’ve been conditioned to expect certain standards when it comes to food preparation,” he said of the idea behind peer-to-peer food marketplaces. “We like our food to come from a regulated factory or restaurant kitchen rather than the home of someone we’ve never met. This requires a high degree of adventure in the consumer that many are just not prepared to adopt. Why risk it when Deliveroo could bring you dinner from any number of local eateries?”