CloudKitchens, the ghost kitchen company led by Uber founder Travis Kalanick, is in legal trouble on multiple fronts.
A pair of lawsuits filed on consecutive days last month accuse the company of discriminating against a female employee and of misleading customers with its online-only virtual restaurants.
The lawsuits are the latest strikes against the company, which has faced a cascade of complaints from restaurant operators who said they were misled and mistreated after leasing space in one of its food delivery hubs. And yet CloudKitchens has continued to quietly expand behind a series of nine-digit funding rounds. It now has more than 90 ghost kitchens across the U.S. and was valued at $15 billion as of late 2021.
The company had not responded to a request for comment on the lawsuits by publication time.
The first lawsuit was filed Aug. 21 in California Superior Court by Isabella Vincenza, a former salesperson at the company from 2017 to 2023.
According to the suit, Vincenza was one of CloudKitchens’ top salespeople, consistently breaking records for deals closed. She was also one of the only female employees in a workplace the suit describes as a “boys’ club” led by Kalanick.
The suit alleges that despite her strong performance, Vincenza was regularly harassed and discriminated against because she’s a woman; was paid less and given a smaller equity stake in the company than her male colleagues; and was retaliated against when she stood up for herself.
In particular, the suit claims that higher-ups at the company began treating Vincenza differently when she told them she was pregnant in March 2022. Her boss made inappropriate comments and insinuated that she could lose her job if she went on maternity leave, and Kalanick stopped engaging with her and acted rudely toward her.
The suit alleges that during a quarterly dinner at Kalanick’s house in August 2022, Kalanick asked Vincenza to sit somewhere else after she sat down across from him. He then refused to make eye contact with her and demeaned her during the dinner. Vincenza was nine months pregnant at the time and was the only woman at the event.
After Vincenza returned from maternity leave in early 2023, the atmosphere at CloudKitchens turned more and more hostile, the lawsuit claims. Management was condescending and expected employees to work outside of their normal hours. In the second quarter, Vincenza went to human resources with her concerns. In July, she was fired without warning.
Vincenza’s accusations are similar to those that plagued Uber while Kalanick was CEO. He resigned in 2017 amid a series of sexual harassment scandals and allegations of a toxic culture. He became CEO of CloudKitchens parent City Storage Systems several months later.
The Vincenza lawsuit was first reported by TechCrunch.
The second lawsuit is a proposed class action filed Aug. 22 in New York Eastern District Court by Stefani Nasser, a Queens resident who ordered food on multiple occasions from some of CloudKitchens’ virtual restaurants. These are restaurant brands that are listed on third-party delivery apps as stand-alone storefronts but are produced in the kitchens of other restaurants.
The lawsuit claims that these virtual brands lead customers to believe they’re real brick-and-mortars rather than simply online menus. It argues that the deception puts customers’ health and dietary restrictions at risk and allows the virtual restaurants to sidestep health department regulations.
According to the lawsuit, in August 2022, Nasser ordered from a CloudKitchens concept called Phuket I’m Vegan. Nasser, who follows a strict vegan diet, was under the impression that Phuket was an actual restaurant with a vegan kitchen. In reality, it was a virtual brand operated by a Queens restaurant called UThai, which also serves non-vegan Thai dishes including chicken and beef.
Had Nasser known this was the case, the lawsuit says, she would not have ordered vegan pad Thai from Phuket I’m Vegan.
Phuket I’m Vegan and two-dozen other brands named in the suit, such as Send Noods and Pimp My Pasta, are products of CloudKitchens’ Future Foods division, which creates virtual brands for local restaurants to use as additional revenue streams. This strategy became popular during the pandemic, when many restaurant dining rooms were closed and consumers were ordering more online delivery.
The lawsuit characterizes these brands as “a mirage” that allows brick-and-mortars to make money without putting their own reputation on the line. And it argues that the risk of cross-contamination with virtual brands is high because the food is made in kitchens that are preparing other things.
The suit’s proposed class includes anyone in the U.S. who has ordered food from a CloudKitchens virtual restaurant.
It highlights many of the issues surrounding virtual brands, including low-quality food and a lack of transparency. These problems led delivery apps such as DoorDash and Uber Eats to start cracking down on virtual brand listings, including by requiring them to be labeled as such.
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