Amsterdam battles the dark store
Instant delivery startups have clashed with cities as they build out local delivery hubs
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I’ll be in Amsterdam next week for the Micromobility Europe conference. I’m moderating a couple panels, including one on ‘instant’ delivery. We’ll talk about whether the economics of 15-minute delivery can pan out, which promises to be a fun discussion after so many of these startups laid people off earlier this week.
It’s also interesting to be talking about instant delivery in the Netherlands, where cities have been particularly aggressive about limiting the growth of these firms and their ‘dark store’ distribution centers in an effort to minimize disruption to residential life. Ahead of the conference, I thought we’d take a closer look at the state of instant delivery in Amsterdam and other Dutch cities, and why 15-minute convenience may conflict with quiet enjoyment of urban life.
Instant delivery startups operating in Dutch cities include Berlin-based Gorillas, fellow Berlin-based startup Flink, and Turkish firm Getir. To make good on their 10-to-15-minute delivery promises, these companies rely on a network of small distribution centers scattered throughout each city, which they call ‘dark stores.’ These stores look similar to a corner shop but aren’t open to the public. Instead, they’re manned by workers, often called ‘pickers,’ whose job it is to quickly assemble orders as they come in. One picker in a Getir dark store in London told tech reporting site Sifted last fall that he tries to assemble orders in just 7 to 45 seconds.
This is different from how it works when you order groceries from Instacart or Uber Eats. Instacart and Uber tend to use the same model of having gig workers pick items from regular retail stores, but they don’t own any of the stores or inventory. This ‘asset-less’ model was all the rage in the early 2010s, coming off the dot-com crash of the early 2000s. Dot-com startups that attempted same-day delivery, namely Kozmo.com and Webvan, sold products from their own warehouses with disastrous results. When the Ubers and Airbnbs of the world came around, they pitched anxious investors on their assetless-ness—drivers would own their own cars! hosts would rent their own homes!—as their biggest asset.
The new crop of instant delivery firms have swung back to the idea that it’s better to manage your supply chain, but rather than set up a few big warehouses they’ve opted for a larger network of dark stores. The theory is that if you have a lot of little distribution hubs throughout your market, you’re never more than a few minutes away from any delivery point, making 10-15 minute deliveries possible. It’s a good theory, but in practice real life can get in the way, as is the case in the Netherlands.
In January, Amsterdam placed a one-year freeze on the opening of new ‘dark stores.’ It turned out that locals weren’t so keen on having delivery hubs dotted through shopping districts and residential neighborhoods. People complained about noise from the constant delivery of goods, traffic from delivery vehicles, waste scattered in front of stores, and the darkened windows of delivery storefronts. In April, Amsterdam ordered three dark stores in the De Pijp neighborhood to close up shop, citing nuisance and zoning violations. Just the other week, city planning chief Marieke van Doorninck announced that from the end of 2023, Amsterdam can ban dark stores from residential areas, shopping streets, and mixed-use neighborhoods, DutchNews.nl reported.
Other Dutch cities have followed Amsterdam’s lead. In February, Rotterdam implemented its own one-year freeze on dark store openings. Four other Dutch cities—The Hague, Groningen, Arnhem, and Amstelveen—are reportedly considering similar measures. Other major global cities are also souring on dark stores. New York City mayor Eric Adams is contemplating a zoning-based crackdown, prompting companies like Gopuff to start inviting customers to walk in and shop there. In the London borough of Islington, residents complained at a local council meeting in April that a dark store Gorillas set up on a small residential street was causing noise and disruption from the constant pickups and deliveries.
Delivery startups have so far proven unsympathetic to these concerns. “What the residents are saying is that they don’t want Gorillas there, and that’s a problem for them, I’m afraid, that can’t be solved, because we are there, and whether a licence is granted or not, we are going to be there anyway,” an unnamed Gorillas rep said at the Islington council meeting. “They’ve got it and they’re going to have to deal with it.” In Amsterdam, Gorillas denounced restrictions on dark stores as “absurd” and Getir called the rules “very unjust.”
Van Doorninck told the local press that Amsterdam has learned from its dealings with Airbnb, which rapidly overtook the city, with one in 15 homes appearing on the home-rental site at one point. Amsterdam is now a strictly regulated home-rental market, which helps to explain why every Airbnb I looked at there was also insanely expensive. Residents must obtain a permit to rent their home to tourists, which they can do for up to 30 nights per calendar year, to no more than four people at a time. The city’s holiday rental rules also explicitly state that guests “may not cause any inconvenience to other residents.” Residents can be fined €8,700 ($9,320) for listing or renting their home without a permit. In 2020, the city council tried and failed to ban Airbnb and similar sites in the city center entirely.
“When Airbnb became popular, we waited far too long to deal with the nuisance, and things got completely out of hand,” van Doorninck told a local paper. “We will never again disadvantage Amsterdammers in favour of companies.”
I talk a lot in this newsletter about the price of convenience, usually in terms of unit economics or labor costs. But I think it’s also important to keep in mind that there can be other more hidden costs to these services, like the unintentional ways in which they alter the urban fabric. Airbnb was founded to let tourists travel like locals, but in its vast success has also reduced long-term housing supply, driving up rents and making cities less affordable. Dark store hubs might make 10-minute deliveries possible, but they also disrupt residential neighborhoods. Of course there remains the question of whether instant delivery can work financially, but there are also bigger, more existential questions about how much of urban life and the right to the city we are willing to trade for the promise of startup-led convenience. Amsterdam’s answer is clear: not very much.