Uber Eats Is Wiping Out 5,000 Vendors Known As 'Ghost Kitchens'. Here's Why Your Favorite Delivery Joint Could Be Axed Next. Uber Eats currently has an estimated 40,000 ghost kitchens listed on its app.

By Emily Rella

Opinions expressed by Entrepreneur contributors are their own.

If you've ever perused Uber Eats late on a lazy afternoon, you've most likely come across establishments that you've never seen in real life — and that's because many don't actually exist. These businesses operate out of "ghost kitchens." (On the flip side, seeing a place in real life that you've mysteriously ordered from on a food delivery app can feel like watching a dog walk on its hind legs.)

Ghost kitchens are virtual restaurants that don't actually have a physical storefront and can be run out of anywhere. Or, sometimes, it's a chain that you're already familiar with operating a delivery service under a different name and making a profit through separate branding through food delivery services. For example, you might be ordering dinner from "Joe's Wing Shop" on Uber Eats but in reality, you're ordering from Applebee's down the block.

Now, Uber Eats is trying to crack down on these operations. The Wall Street Journal reported on Monday that the company is trying to clean up overcrowded "virtual" restaurants from its database.

The delivery service platform is set to remove 5,000 "ghost kitchens," which account for roughly 13% of the app's businesses in North America, per WSJ.

WSJ reported that Uber Eats currently has an estimated 40,000 ghost kitchens on its app (about 8% of total Uber eats restaurants in the U.S.). In 2021, before the pandemic limited in-person dining and ordering out became the norm, roughly 10,000 were registered.

Many have taken to social media to talk about the influx of ghost kitchens that have crept up on the platform. One TikToker, for example, pointed out how she discovered she had "catfished" by virtual restaurants by searching their locations on a map.

@katiemarble Did anyone else not know this was a thing?? #ghostkitchens #grandrapids #restaurants #catfish #ubereats #convictionchicken #michigan #falseadvertising #greenscreen ♬ original sound - Katie Marble

"If you're craving a sandwich, there's the Meltdown," she says, pointing to the restaurant name indicated by the Uber eats listing, before switching the screen to show the address provided on Apple Maps. "Which is actually Denny's."

John Mullenholz, Head of Dark Kitchens (aka virtual restaurants) at Uber Eats, told WSJ that the landscape for ghost kitchens on food delivery apps has become similar to the "Wild West," and it's difficult to regulate online storefronts and duplicate kitchens on the backend.

"It's fair to say that kind of erodes consumer confidence," he told the outlet.

Uber Eats plans to tighten its guidelines this week. Virtual restaurants working in the same kitchen must have a menu at least 50% different from others to stay on the app, including showing five photos to users.

Ghost kitchens that drop below 4.3 out of 5 stars, as rated by customers, will also be on the chopping block.

"Communicating — and beginning to enforce — these new quality standards for Virtual Restaurants on Uber Eats is an important step for our program, designed to benefit both consumers and merchants," Mullenholz told The Verge in a statement.

Uber, which owns Uber Eats, was down just over 12.7% in a one-year period as of Tuesday afternoon.

Emily Rella

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Leadership

7 Telltale Signs of a Weak Leader

Whether a bully or a people pleaser who can't tell hard truths, poor leadership takes many forms.

Business News

'Everyone Can Profit From It': What Is DeepSeek? China's 'Cheap' to Make AI Chatbot Climbs to the Top of Apple, Google U.S. App Stores

DeepSeek researchers claim it was developed for less than $6 million, a contrast to the $100 million it takes U.S. tech startups to create AI.

Business News

Elon Musk's DOGE Is Hiring People Eager to 'Work Long Hours' to Eliminate 'Waste, Fraud and Abuse' in the Government. Here's How to Apply.

The Department of Government Efficiency is hiring U.S. citizens to help cut spending and headcounts in the federal government.

Business News

Uber's CEO Says Drivers Have About 10 Years Left Before They Will Be Replaced

Uber CEO Dara Khosrowshahi says the jobs of human drivers are safe for the next decade, but after that, another type of driver will take over.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Business News

'I Love Doing Product Reviews': Bill Gates Stepped Down from Microsoft in 2020, But Admits He Still Spends 15% of His Time Working at the Company

In a new interview with the Wall Street Journal, Gates also said he is still close with Microsoft's CEO Satya Nadella.