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David Chang Talks About the Delivery Industry’s Uncertain Future

Momofuku entrepreneur David Chang talked to The Ringer about his delivery-only restaurant, Ando, and the uncertainty of food industry startups in 2017

(Getty Images/Ringer illustration)
(Getty Images/Ringer illustration)

This week, The Ringer explores how the “on demand” model has changed the way we consume TV, film, food, products, and, well, almost everything. Consumers have both adjusted to the streaming era and dictated how businesses operate in its wake. Our On-Demand Week stories grapple with how this shift came to be — and what it means for the future of tech, culture, and how we access both. Find all the stories here.

If delivery had been available in pioneer times, there’d be a Little House on the Prairie chapter where Laura seethed with jealousy over rich-girl Nellie lounging on a settee in her petticoats, gorging on mutton brought to her by horse-drawn sled. While the rise of on-demand services didn’t create the human impulse to laze and eat, it has whetted the appetite for piping hot couch food to a startling degree. The popularity of apps like Seamless, Postmates, and Caviar has taken delivery from a casual-Friday slice of the restaurant industry to one of its core components.

The demand for couriered food is so immense that delivery-only restaurants with virtual storefronts rather than actual dining rooms, known as “ghost restaurants,” are growing commonplace. As third-party apps take cuts from deliveries, the already-thin restaurant profit margin has grown thinner, leaving some restaurants to restructure around the idea that their food will be eaten off-site. Meanwhile, investors are throwing money at these “virtual restaurants,” hoping the trend will stick.

It’s a great time to be a person who loves chowing from a couch and a tricky time to work in an industry pinched by homebound customers and the ruthless efficiency of third-party delivery apps. A few startups have tried to adapt to the on-demand culture by launching as apps rather than storefronts. Restaurateur and chef David Chang has resisted delivery for his popular Momofuku Group restaurants, but he has also invested in delivery-only restaurant service Maple and launched his own delivery-only restaurant, Ando, hiring Momofuku veteran chef J.J. Basil to create a menu of food tailored to withstand delivery.

I spoke with Chang this week over the phone, shortly after Ando expanded its delivery area to a broader swath of Manhattan and on the same day that Maple announced it was closing.

How did the [Ando] expansion go? And when are you guys coming to [NYC Ringer office neighborhood] Brooklyn Heights?

I don’t know. Hopefully we’ll get there. Right now, we’re still trying to figure it out. We launched last week downtown, and it’s still going, right? If we ever get to Brooklyn Heights, it’ll be a good problem. There’s a lot to figure out, and lots of mistakes to be made.

Since you’ve launched, have there been moments where you’ve thought, “We’ve gotta start this whole thing over”?

I feel that way all the time. What seems relatively simple on paper is hardly that. It’s a whole new way of doing a business — how you make food, how you deliver food, how you set up a kitchen, how you staff it. For the first year or so, we were just trying to figure out the technology, which is honestly the biggest burner of cash. I feel like we’ve been making the right kinds of mistakes, and doing things differently than most delivery companies, and really learning, and getting some healthy criticism while we’re at it. At the end of the day, it’s really hard. It’s an extraordinarily difficult business that someone is going to win, and it’s something that I’m really fascinated by. It seems like almost every place delivers food that’s not meant for delivery, you know what I mean? Domino’s is a great model, but not everyone can do it.

What do you think the perfect delivery dish is?

Probably pizza, right now.

Why aren’t you guys doing pizza?

There’s a lot of reasons that I won’t get into right now, but I think part of that is that pizza’s been such a long-standing delivered food that there’s been a lot of innovation in pizza, but no one’s tried to do anything else besides that.

Are there any foods that you love but you believe are absolutely impossible to be delivered?

Fish is really hard. A lot of fishes are really hard to deliver. If I had to rank them all, pizza would be no. 1 [easiest to deliver]. Chinese food would be no. 2. And no. 3 would be sandwiches.

What are you most excited about that you’re currently offering on the menu, and what do you hope you can offer in the future?

The menu’s been all over the place, because we’ve been trying to figure out what works and what doesn’t work, to do something within a price range and buy great products, so that it’s not overly expensive. It’s hard. There are invisible ceilings to doing what we’re doing, which forces us to be creative. Right now, J.J. Basil, the chef, has worked on this new veggie cheesesteak thing. It’s hard to describe what it is, other than that it’s very delicious. It’s a tofu sandwich, which sounds not nice, but you just gotta try it. Let me put it this way: If you eat it, you don’t know you’re eating something that’s vegetarian.

I know you’ve been really vocal about paying people who work in restaurants fair wages. [Chang has experimented with no-tipping policies and has advocated for paying living wages.] I’m curious to hear your thoughts about how delivery drivers are tipped. I read a piece from Eater a couple of months ago about how the minimum tip you should give is $5, which made me realize I wasn’t always tipping enough. Do you think restaurants have a moral responsibility to pay delivery drivers a living wage? Do you think people ordering food need to step it up?

That is a chicken-and-an-egg kind of question. I will say this, as a kind of story to give you an understanding: There is a condiment manufacturer that makes organic ketchup. They also offer regular ketchup and, in their studies, they have found that even though people are vocal in their lives about everything being sustainable and organic, they still buy the regular ketchup, which is like 80 cents less expensive than the organic ketchup. For whatever reason, it’s hard for people to pay that extra amount of money, whether it’s a tip or quality of ingredients. Whereas in places like Australia, in their restaurants, shit’s really expensive there. Everything. Chopsticks and a bottle of soda is like 8 bucks.

That does sound like a lot of money. I’ve never been there. And they don’t tip in Australia, right?

They don’t tip, and your reaction right now is still “It’s a lot of money,” right? It is a lot of money, but for most people down there, they understand where that money’s going. They understand that it’s not going straight to the bottom line. It’s paying for the shipping, taxes, employee benefits, it’s paying for all of these things.

Do you think the solution is for restaurants to try to pay delivery drivers more and hope that the customers will get it? Or do you think the onus is on customers?

I don’t have an answer to that, I just don’t.

I don’t either.

I don’t know. We tried a variety of things, but what we learned is that people don’t want to pay. They have a hard time paying for the invisible stuff. That’s all I know. And myself included!

Me too. That piece just made me realize I need to tip a lot more. Are you still using Uber for your delivery?

Yeah, but that’s not our only platform.

What are the other platforms?

We’re going to start using this thing called Homer Logistics.

What’s that?

It’s another kind of delivery-logistics service, but, I mean, our main partner is definitely UberEats right now.

Would you ever bring that in-house? Or is third party the way to go?

Again, I don’t know. We’re going to explore everything.

Today, the delivery app Maple announced that it was closing up shop in New York. Since you invested in Maple, and Ando is also a delivery-only restaurant inside an app, I’m wondering what Ando is doing to avoid a similar outcome? What lessons are you taking from the Maple situation?

I was just an investor in Maple, so I can’t really tell you what happened there. We’re definitely running Ando as a restaurant, and while they’re in a similar field, I think they’re very different in terms of what we’re trying. We’re still trying to figure it out. I think they’re pretty different things, but what is different, I couldn’t really tell you, because I don’t know what the Maple guys did.

Were you surprised by the news or did you get any advanced warning?

I heard something over the weekend, but I didn’t know what was happening until today, just like everyone else.

I was a big fan of Lucky Peach’s [cofounded by Chang] food writing. In the same way you imagined a restaurant for the digital age with Ando, have you thought about launching any digital-first food editorial projects?

Probably not, not that I know of. We’re just focused on restaurants and our core business right now. Anything else extracurricular is great, but right now, we’re trying to focus on the stuff that is Momofuku and restaurant-related.

I know Ando was recently added to Seamless, and I wanted to know what you think about Seamless’s impact on the restaurant industry.

We’re trying everything, collecting some ideas and data, and just trying it out. No one’s really done this before. That sounds like an asinine statement, but the way we’re trying to do it, we’re trying to see what works and to understand what happens and collect the data and make a better decision from there. In terms of what Seamless is, I don’t know. Do people use it a lot? Yeah. Do I still use it sometimes? Yeah. In terms of its impact on business, I couldn’t really tell you. As a whole, Momofuku restaurants don’t use Seamless, so I don’t really know.

Do they not use Seamless for an ideological reason or a pragmatic reason?

We don’t do delivery at our [other] restaurants.

If you were to expand Ando to another city, what are some destinations you have in mind, say, five years out?

I don’t know. We’ll see. We’d love to look at college campuses, for sure. Big college towns would be a great place for us.

If I’d had that kind of thing as an option in college, I probably would’ve gone into more financial debt than I already did!

This conversation has been edited and condensed.