- UberEats Business Model
- How does UberEats make money
- How to make a food delivery app: a step-by-step guide
- Step 1. Watch the Food Delivery Industry for Hot Trends
- Step 2. Choose Food Delivery Model
- Step 3. Research your target market
- Step 4. Choose the Main features of UberEats-like food delivery services
- Step 5. Select the Technology Stack of Food Delivery App Development
- How Much Does It Cost to Develop a Food Delivery App?
- In a nutshell
Food ordering isn't something new. On-delivery mobile apps have made ordering food even more seamless, faster, and convenient. Thus, the food delivery app industry is well established. By 2020, the industry is estimated to reach $32 billion. And, if you plan to develop an app similar to UberEats, this article is right for you.
Below, we share UberEats business model and a guide on how to create an app like UberEats.
So, let's begin.
Uber Eats is one of the 20 most-used apps. Its business model has inspired millions of food delivery startups to join the game. The UberEats app is both a restaurant aggregator and a delivery agent. Thus, a food delivery app like Uber performs two different features:
- UberEats uses a traditional food delivery model, listing partners-restaurants in a single app.
- At the same time, UberEats handles order delivery. The company uses its own logistics network to deliver orders from restaurants that don't have a delivery option.
Besides, the food delivery application provides users with many functions, making food ordering even more convenient. The most notable food delivery app features are:
- Tailored restaurant recommendations
- Advanced search filters
- Order tracking
- Customizable delivery details
Now, let us take a look at UberEats monetization strategies.
To raise profit, the company applies three main monetization strategies, including:
- Delivery Fee. Before 2018, UberEats has had a flat rate $4.99 delivery fee. Now the company uses a pricing calculator. It estimates a delivery order fee based on the distance between customers and restaurants. Thus, the delivery fee varies from $2 to $8 per order.
- Revenue Sharing from Restaurants. The platform charge restaurants from 15% to 40% fee from each order received via UberEats.
- Advertising. Another source of UberEats revenue is a marketing fee. Restaurant partners pay for promotion via the app search and come up as the first search result. This popular monetization strategy among restaurants increases their visibility on the app.
Since you know about UberEats business model, check how to develop a food delivery app.
To make apps like UberEats popular among users, you need something more than copying UberEats feature list and monetization model. In this section, we have gathered handy insights on how to develop a unique food ordering app that can surpass UberEats.
To be ahead of competitors, you need to be aware of the most current food delivery industry trends, including new delivery channels. In order to achieve this, consider the following food ordering trends:
To make your app unique in your niche, think about ordering via social media accounts. The first company that used this ordering option were Domino's Pizza. Domino's Pizza customers can use their Twitter account to order pizzas. In order to achieve this, app users need to tweet a pizza emoji to the Domino's Pizza Twitter account.
[Image source: Domino's Pizza]
But how does Domino's Pizza know what type of pizza you want and your delivery address? Here's how:
- Before taking advantage of this service, Domino's Pizza customers need to create a "pizza profile" on Domino's online delivery service.
- The customers save their default orders, also known as Easy Orders.
- Then, app users link this pizza profile with their Twitter account.
Chabot has become a handy assistant in many areas, including food ordering. This technology allows ordering via messengers and requests food by a single word. Let's check some examples:
- Domino's pizza is at the top of the technological wave again. The company has developed Dom, a chatbot for ordering food via Twitter and Facebook messengers. Dom also informs customers about the latest deals and vouchers.
- Grubhub is another example of the successful use of modern technologies. The delivery marketplace has integrated its system with Alexa, Amazon's virtual assistant. Now, Grubhub customers can reorder any of their last three purchases made via the platform. Besides placing orders, Alexa also tells the estimated delivery time.
- Just Eat has decided to keep up with the current trends and integrate Alexa to their ordering system as well. Thanks to new Amazon hardware, Echo Show, Just Eat can place orders by voice and check the courier's location.
Wearable devices have quickly become an integral segment of the consumer electronics industry. And, by August 2019, there have been over 38 million smartwatches sold globally. Some businesses use Android and Apple smart devices. Some examples are:
- Domino's was a pioneer who launched a food ordering app for Android watches which simplifies ordering.
[Image source: Domino's Pizza]
- OrderUp is another brand that has decided to enter the wearable devices market. The company introduced its latest app for the Apple Watch. Now, OrderUp customers can place orders, track delivery statuses, and see the estimated time of arrival.
Now that you're familiar with the top trends in the food ordering industry, let's continue.
During this stage, you need to select a food delivery model that will work for your business and meet your goals. There are two main models currently presented on the food delivery market. They are:
Order and Delivery Model
Companies are responsible only for ordering and managing orders.
Food startups are responsible for both managing orders and delivery. In some cases, such businesses cooperate with courier services, connected by an app.
Order only businesses charge restaurants 10 - 30% of order value, made via the platform.
The monetization strategy includes a commission from restaurants (25-30%) and the delivery fee. You can set a flat-rate delivery fee, or charge a fee based on the distance between customer and restaurant, as UberEats does.
This business model has a low barrier for entry. Thus, this niche is quite crowded with competitors.
You need to hire and train carriers, etc. The increased amount of management works may impact business scaling.
By using this business model, you don't have to worry about cooking and delivery.
Once such a food delivery is in place, you will develop your company and receive a profit.
[Statistics for on-delivery services income by Statista]
Now you know about the main business models for food delivery startups, let's move on.
To develop an outstanding food delivery app, you need to know your customers or your target audience. Why? Simply because once you understand who will be using your products, it is easy to build an app that ideally meets your target audiences' needs.
Your target audience could be narrow, such as gluten-free raw vegans, or broad, like pizza lovers.
To draw a clear picture of your target audience, use demographic criteria and create a target customer profile. In order to achieve this, you need to clarify the following points:
- Social characteristics, including income, gender, nationality, age, and so on.
- How do your target customers spend their free time?
- What potential customer problem your product may solve?
- What feeling will your product provoke from your customers?
- Why your customers should use your product, rather than competitors?
By clarifying all of these points, you will have a good idea of your target customers.
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When developing a mobile app like Uber for food delivery, consider the following features:
- Registration and Login. Think about log in via email and social media profiles, such as Facebook and Twitter.
- Search. Empower your food delivery app with search by meal, filters, as well as the food category. This section should include pictures of dishes, the process, and a description of the meal.
- Order placing. Once users select the meal they want they can add it to the shopping cart.
- Order checkout. After users select their food, they can place their orders. This section of the food delivery app like Uber should include all selected dishes, and the total price the user should pay.
- Payment. When the order is ready, allow your users to pay for it via the built-in payment gateway. Our advice is to integrate several payment systems, such as PayPal, Stripe, MangoPay. We applied this strategy to custom marketplace development. You can find the full case study on the link. Besides these payment options, let your customer have a Cash on Delivery option.
- Notifications. You can notify your customers about the order status via push notifications and SMS.
Find out more in the article 10 WAYS TO BUILD A BULLETPROOF PUSH NOTIFICATION STRATEGY.
- Order Tracking. Empower your food delivery app like UberEats with real-time order tracking by using CoreLocation framework for iOS apps and Google Location API for Android apps. Besides, Mapkits and Google Maps will help your couriers to find the best route to the customer's location.
- Reviews and ratings. Let your app users share their experience via reviews, and rate restaurants in your platform. User reviews will add dynamic content to your app and social proof.
Depending on the business model of your food delivery startup, you might need different technologies. Still, we have gathered an essential tech stack for Uber-like apps in the table below:
- Grubhub API
- FourSquare API
- Square API
Find user Location
- Core Location Framework
- Google Places API
- Google Maps
- Amazon SNS
- Urban Airship
- Firebase Cloud Messaging
The cost of the mobile app consists of many elements, including the number of platforms, feature list, the number of integrations, and so on.
Your mobile development team will come up with a precise app estimation only after the discovery (inception) phase.
What does this mean?
The discovery (inception) phase is the first step you and your development team take to build a solid foundation for app development. This stage includes several components, such as:
- Functional specification
- UX/UI design
- Visual prototypes
After this stage, you will have a clear vision of the end solution. In our experience, this phase takes 4-6 weeks.
The product discovery phase can help you:
- Define the scope of work
- Develop the project roadmap
- Set a realistic MVP budget
- Plan your resources
- Test the app MVP with a target audience
- Develop a solid investment pitch
So, how much will the food delivery app cost?
We need from 50 hours to create UI/UX design, from 66 hours to build the app's back-end, while the development stage may take from120 hours per each platform.
The popularity of food ordering services makes on-demand food apps a prospective niche for investments. Still, to stand out from the crowd, you should adopt current food ordering industry trends. For your future food delivery app, you can apply either an Order-Only or Order and Delivery Model. With the app MVP, you can gather insights from your target audience and add other features during the second development stage.
Now, you know almost everything to start your food delivery mobile app.
The last thing remaining is to hire a food delivery app development team.
Estimate your app cost now