Update: SpoonRocket confirms it has shut down

Sweet potato and black bean chili from SpoonRocket. Photo: SpoonRocket

Sweet potato and black bean chili from SpoonRocket, which has not been in operation for several days. Photo: SpoonRocket

Update: 3.15.16, 9:30 a.m.: SpoonRocket has confirmed it is ceasing operations. Tuesday morning it informed its investors it was shutting down its meal delivery service after failing to raise the necessary capital to continue. Co-founder Steven Hsiao confirmed the decision to TechCrunch. The company also sent out an email to its drivers letting them know it was closing down. It suggested drivers apply to jobs at San Francisco-based Sprig, another food delivery service where, it said, SpoonRocket drivers would be “an awesome fit.” The alert to drivers reads in part:

Admin Bay Area wrote:
3/15/16      URGENT UPDATE FOR ALL DRIVERS
GOODBYE…
SpoonRocket will cease all our operations effective immediately. We set out to build the next generation of food delivery network and we are proud of what we were able to achieve in a short period of time. However, as competition for on-demand food delivery has grown, it became clear that we could not continue to compete. Over the last few months, we’ve been exploring our next options and unfortunately came up short.

Update, 8:37 p.m. VentureBeat published a story at 7:05 p.m. in which it said it had spoken to SpoonRocket cofounder Anson Tsui who said it was not true that the company was shutting down. “We’re just resetting,” Tsui said, adding that the site should be back to normal “within a couple of days.” Tsui said the company had not made any layoffs.

Original story, March 14, 5:24 p.m. SpoonRocket, the food delivery service headquartered on Ninth St. in West Berkeley, has halted operations. A former employee and a contracted driver were both told by the company over the weekend that the business has closed down for good. No meals have been delivered since Friday, and SpoonRocket’s commercial kitchen, at 1725 University Ave., appears to be shuttered.

Anyone trying to order food for delivery over the weekend or on Monday was met with a notice on the SpoonRocket website that the site was “undergoing maintenance.”

On Sunday, Berkeleyside received an email from a tipster who said a friend, a SpoonRocket employee, had been let go. She was told that by management that SpoonRocket had gone under. Berkeleyside has not been able to confirm this. Several emails sent to SpoonRocket and to its PR representative, beginning on Sunday morning, have not been answered. The company is not answering phone calls.

SpoonRocket website notice 3.14.16

The SpoonRocket website is showing a notice that it is undergoing maintenance. The food delivery service has not operated for an estimated three days. Image: SpoonRocket

A man who asked not to be named and who has worked as a delivery driver for SpoonRocket on and off since May 2014, was expecting to work this weekend. He said a manager at SpoonRocket told him on a phone call that the company was closing and that he should look for other work. Shortly afterwards, however, he received a text from the same manager saying things had changed and that they might not be closing. The driver said he wondered if the company was preparing an official statement and did not want the news to leak out prematurely.

SpoonRocket was launched in 2013 by UC Berkeley graduates Anson Tsui and Steven Hsiao with a mission to deliver cheap meals to customers rapidly via their smartphones. A typical entrée might cost $6 and be in the customer’s hands in under 10 minutes. Food is delivered by a fleet of contracted drivers whose cars often sport the company’s signature red flag. Drivers keep the food warm in special packaging and then respond to orders via an app and deliver until their supply runs out.

Tsui and Hsiao already had two startups to their names when they started SpoonRocket — Phở Me Now and Munchy Munchy Hippos, both of which came under umbrella company LateNightOption.com.

The Y Combinator-backed SpoonRocket raised $2.5 million in seed money in September 2013, and $11 million in venture capital in May 2014, according to CrunchBase.

In 2014, SpoonRocket expanded from the East Bay to SOMA in San Francisco. It launched in Seattle in February 2015 but shut that service down just four months later in June of that year. (Update: the service was subsequently resumed in downtown Seattle and on the University of Washington campus.) It also launched and closed a San Diego operation in 2015.

The food delivery market has bloomed in recent years, making for a highly competitive field. Other companies in the same broad market that operate in the Bay Area include: PostMates, Eat24, Blue Apron, Caviar, Munchery, DoorDash, Instacart, Amazon Fresh, Good Eggs and UberEATS. All deliver prepared food, whether from kitchens, restaurants or grocery stores.

According to the driver, SpoonRocket operates different pay structures for its drivers — who are all independent contractors — depending on the time of day. The breakfast shift pays $11/hour not including tips, with a guaranteed minimum of $15, he said. Lunch and dinner on weekdays pays $2/delivery not including tips. And, on the weekend, drivers earn $6 an hour plus $2.25 per delivery, not including tips.

On Monday, speculation was beginning to be voiced on Twitter, with SpoonRocket fans bemoaning the lack of service and wondering what was going on:

Not least because of its competitive pricing, SpoonRocket has proved popular among the local student population. But SpoonRocket was keen to stress that it had expanded its market beyond its core student market. In 2014, it contacted Berkeleyside Nosh to say it had “come a long way since serving pho and burritos to Cal students at 4 a.m.” It introduced organic and paleo dishes, and other demographics did indeed appreciate the service. Road-testing food delivery services last October on Berkeleyside, Heather Flett, co-founder of parents and kids website 510Families, reported that her “favorite service for the fastest food in town” was SpoonRocket.

This developing story was updated as Berkeleyside sourced new information.

Related:
Trying out food delivery services in the East Bay (10.08.15)

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  • Nick G

    Phew – no more near misses in crosswalks with their frantic drivers (I’ve had 3).

  • Anybody But Jesse

    Consolidation in this space was inevitable.

  • FuzzmanX

    What exacly is so uncertain.

  • dwss5

    Article quote:

    SpoonRocket was launched in 2013 by UC Berkeley graduates Anson Tsui and Steven Hsiao with a mission to deliver cheap meals to customers rapidly via their smartphones. A typical entrée might cost $6 and be in the customer’s hands in under 10 minutes. Food is delivered by a fleet of contracted drivers whose cars often sport the company’s signature red flag. Drivers keep the food warm in special packaging and then respond to orders via an app and deliver until their supply runs out.

    This basically describes your TYPICAL food delivery business, e.g., Domino’s Pizza, Chinese takeout & delivery, Thai takeout & delivery, Grubhub.com restaurant food delivery, …etcetera. Nearly ALL these food delivery businesses have the ability of ordering thru smartphone by now, and probably MOST of these businesses can guarantee their customers a reasonably short delivery time.

    Although very few of these food delivery businesses would be able to stay afloat for long by consistently offering $6 meals, so maybe SpoonRocket would’ve closed anyway…

  • dsd510

    Completely agree. I’ve been ordering from SpoonRocket on and off for awhile, and the quality has been getting worse and worse every time now, to the point where I completely stopped ordering. The prices going up at the same time made it even less appealing. $12 for a meal that tastes like airplane food? Definitely not worth it, even delivered.

  • Daniel

    I’m surprised SR made it this far, as it often tastes like warm, wet cardboard.

  • southwestberkeley

    I ordered from them on an off over the years, including the day they launched in Berkeley. When it was $6 a box, the food was too low quality for me to want it very often. Later it got better, and more expensive, but with their $50 a month for $65 of food, plus free delivery plan, it was still a pretty good deal to get it once or twice a week.

    Then in January they started selling slices of stauffers lasagna, and I knew it was soon to be over. Good try guys. I loved that salad with ginger in it.

    The drivers were insanely reckless though, and for awhile I wouldn’t order because I simply did not want to encourage them to drive around my family oriented neighborhood.

  • Adrian Reynolds

    It’s well known in the bay area pedestrian community how many bicyclists are aggressive towards pedestrians.

  • guest

    Hey dude, I hear you, and it sounds like they were indeed jerks. But there is something you mentioned in there that I can not let slide that points out you are a pretty damn big jerk yourself. You need your wages garnished to pay your damn child support? WTF. You can’t pay what you owe on time without someone taking you to court and demanding it happen?

  • scarlet

    I stopped supporting spoon rocket when they moved to SOMA and jacked up the price. Greedy greedy, now you see where greed takes you.

  • Big Brother’s Big Brother

    .

    it’s well known in the bay area wheelchair community that if you point your chair downhill, you’ll pick up some serious speed

    .

  • Eden Feil

    HR person here. Just thought I’d chime in and say that when someone is employed and has a court-ordered child support agreement, the employer is automatically issued a withholding order/garnishment. it has nothing to do with not paying child support on a timely basis. If you’re self-employed, you’re expected to pay through an online portal on your own each month (or whatever frequency you agreed upon), but as soon as you get a job, your employer gets notified and they are legally required to make the child support payments on your behalf. Bottom line is, if you pay a court-ordered child support amount and you are employed, your employer sends that child support off for you regardless of your payment history.

  • rube510

    Thank you , I tried to explain that to the dude .

    [This comment has been moderated. -Eds.]

  • Gracie

    Scarlet,

    how could they be “greedy” when they’re trying to run a business? You mean raising prices, trying to be competitive? If they had kept it low, they would not have been able to pick up volume based on price alone. They would have just gone out of business sooner

    Your comment disturbs me because it reflects such miseducation about sustainable ways of running a business…

  • Jay Rooney

    Do any of these other food delivery services operate in the East Bay? Sprig is only for SF. Bummer, SpoonRocket was quicker, cheaper and more convenient than ordering delivery :(

  • Fourthgirl63

    Work on Fourth Street and do not like paying the prices for the eateries nearby. Spoonrocket could’ve been a welcome relief, except the food was terrible.

  • dwss5

    Lucky Luke wrote:

    …And if you add anything like the cost of getting all the ingredients, or
    even your time investment in the prep, what spoon rocket charged would be a steal. True they do have economies of scale to bring down the unit cost to what it was, but that was a bottom.

    Right.
    I’d guess that maybe Spoon Rocket’s charging too little (their “steal”) ended up being a poor ROI for ’em, hence their closing down.
    Otherwise, maybe they were gearing up for some type of Bait-and-Switch type deal whereby they offer extremely lowball “bottom” teaser prices, and then when customers order the teaser deals, these somehow become “out-of-stock” and customers are essentially forced to choose SIGNIFICANTLY higher-co$t meals.

  • David Landers

    no it isn’t.

  • Sad Panda

    Yeah, really — SpoonRocket loved to bill itself as “gourmet”, but Berkeley’s standards are very high in that department. At best, SpoonRocket tasted like a microwave meal; at worst, it was inedible.

  • Intoleratus

    Stay on topic, Polly.

  • clodulator

    Well, I’ll miss them forever. It’ll be like losing a friend who was also a chef who’d bring you food at a moments notice. I ordered from them since they began and they were there for me when I was moving and too busy to cook or shop and then again when I moved. I could count on a hot or cold (salad) meal without the stress and high prices of traditional takeout. Sigh…what is life going to be like now?