China effectively bans "ghost kitchens" following food safety concerns
Food delivery apps have been making use of restaurants that don't really exist to drive up profit.
China is tackling "ghost kitchens," following concerns of food safety as orders are outsourced to cheaper vendors. If you're not aware, a "ghost kitchen" is effectively a restaurant that doesn't really exist or doesn't have a real location. Food delivery apps will get an order through and outsource it to one of potentially hundreds of locations, leading to dissatisfied customers.
Complaints have been ongoing since last year, following a man in Beijing ordering a cake that was topped with inedible flowers. Further investigations found the chain he'd ordered from had almost 400 locations on e-commerce platforms, but didn't have a single physical store. The chain's orders were transferred to a different platform, where they were outsourced to vendors offering the lowest bid.
From this week, as per the BBC, China's government is enforcing a new rule that means apps have to verify restaurants' licenses and addresses. Merchants also have to verify that the listing matches the physical business, specifying if they do online service. Since last year, there have been warnings about food delivery apps undergoing a "race to the bottom," where the lowest price trumps all, no matter the quality of the food. This new legislation hopes to combat this.
