The demand for utility applications has greatly increased over the last few years as the world has become more mobile. On-demand meal delivery service is one such industry that has undergone a complete transformation. Millions of people’s desires are satisfied by food delivery services like Zomato, Food Panda, and Uber Eats at their convenience. Customers are no longer restricted to a small selection of restaurants that offer meals; whether it’s a late-night need or early-morning hunger pangs, individuals can now get their food delivered whenever and from wherever they want.
On-demand food delivery, facilitated by Food Delivery App Development, is not a recent development; in the past, customers had to place their orders over the phone with the restaurants, who would then deliver them. However, with the advent of modern technology and the introduction of mobile phones, the food delivery sector has undergone a significant transformation. Today, easy access to high-speed internet and on-demand meal delivery via apps have revolutionised the way we order food. According to studies, the online meal delivery market in the USA is predicted to generate USD 66.56 billion in sales by 2022. This exponential growth can be attributed to the convenience and efficiency offered by Food Delivery App Development Company. In fact, the shift from phone orders to online orders occurred in 2015, marking a significant milestone in the industry’s evolution.
How does the food delivery app work
Social media marketing has revolutionised the way food delivery applications operate, making it incredibly convenient for customers to order meals from nearby eateries. With the help of these online meal delivery applications, customers can now place orders from a wide range of businesses with just a single tap on their mobile phones. Thanks to the integration of social media marketing strategies, users can easily browse through their favourite restaurants and explore various food options available to them.
Why build a food delivery app
Statista estimates that the online meal delivery industry produced $107.44 billion in revenue in 2019 and will expand at a 9.9% annual rate to reach $156.82 billion by 2023. The largest share belongs to the platform-to-customer distribution segment, which had a market volume of $53.8 billion in 2019 and is anticipated to reach $82.2 billion by 2023. More and more business owners are recognizing the potential of the on-demand food delivery sector and leveraging Food Delivery App Development to enter this lucrative market. By considering the market prospects and consumer preferences, these entrepreneurs are capitalising on the growing trend of meal delivery services that will always stay in style.
Steps To Build A Food Delivery App
Step 1: Choosing the business model
1.1 The Order Only Model
First-generation restaurant delivery services like JustEat, Grubhub, and Delivery Hero debuted the order-only concept. In this paradigm, the service providers take on the role of a pure software layer, aggregating the menu options of independent restaurants to help them reach a wider audience. These aggregators should have substantiated their delivery services. The main selling point of this strategy was that it would increase restaurant orders and replace their outdated phone ordering system with a mobile and web platform. The contact between clients and nearby restaurants is facilitated through food ordering apps. Platforms for ordering food offer customers simple search and order features. Order-only websites make money by charging restaurants a commission of 7% to 15%.
How it Works:
- A customer places an order on the website or the app.
- The order is delivered to the eatery.
- The eatery informs the customer that the request has been made.
- A restaurant driver or a driver working for a restaurant delivery service makes the deliveries.
Benefits: Since these delivery services don’t handle food preparation, they are scalable and need a few resources.
Limitations: Because the restaurants depend on them to accomplish deliveries, they have little influence over the process as a whole. They need help to regulate and improve the delivery service.
1.2 The Order and Delivery Model
Companies like Uber, Zomato, and DoorDash use the order and delivery model, an upgraded variation of the first concept. According to this approach, the service providers bring extra orders and requests to the restaurants and offer their own logistics system to deliver orders using a fleet of independent couriers.
Platforms for orders and deliveries handle logistics for eateries, fast food outlets, and home delivery services. The order-and-delivery business model is advantageous for restaurants because it spares them the expense of paying messengers, maintaining vehicles, and investing resources in food delivery. The distance travelled to fulfil a delivery determines how much the drivers are paid. Nowadays, businesses tack on surge pricing during busy times and charge more than the regular delivery rate. Order and delivery businesses may take 20 to 30 percent off the cost of each order and impose a fixed delivery fee on their clients.
Order Allocation:
Ordering takes place on the app where a restaurant’s menu is uploaded. Customers choose and pay for the foods they want (some vendors also accept cash on delivery). The restaurant receives notice of the request once the payment has been processed, and they can accept or decline the order.
Delivery:
A delivery guy is logged into their courier app while they are working. The couriers nearest the pickup location are notified when a request is received. When couriers get an order, they determine whether to accept or reject it. The order will be given to the first courier to pick up the package. If there isn’t a local courier, it will be distributed among drivers farther away until one accepts it. Deliveries give the service provider vital information that aids route optimization and pickup/drop-off schedules.
Benefits: Since the service provider manages the delivery process, they typically charge a larger c5–30%. Commission They profit from scale advantage and high entry barriers. Their key advantage is that they can provide a variety of restaurants and pricing points that marketplaces that exclusively sell software cannot.
Limitation
Contrary to order-only business models, the efficient operation of the food delivery industry requires a substantial amount of resources, including a team of drivers, customer executives, technology support, and several apps for each stakeholder.
It is challenging for software firms to scale in the early stages without investment because they must invest substantial money in operational tasks like hiring and training drivers, equipment maintenance, shift planning, etc.
1.3 Cloud restaurant model
The restaurants in this concept only function as delivery services, with no in-house eating options. The cloud kitchen prepares food when users order through the app or website. There is no requirement for a sizable real estate area because it is delivered using either its delivery services or the assistance of delivery companies. Kitopi is a well-known cloud kitchen delivery app.
To help current restaurants open cloud kitchens, many order and delivery service providers are also experimenting with the cloud restaurant business model. They may provide meals at a reduced cost while maintaining solid margins because it requires less investment.
Limitation
Brand recall is challenging because the restaurant exclusively serves online subscribers and has no physical presence in the marketplace. Additionally, they rely on delivery services for smooth operations; otherwise, they would have to spend a lot of money developing the last mile of the food chain.
1.4 Meal kit delivery model
The meal kit delivery concept caters to consumers who like to cook according to suggestions but only have time to find some ingredients, which is an atypical business. Still, it is gaining traction in the food delivery industry. In this business model, restaurants send consumers their recipes and hand-selected ingredients. Customers can choose vegetarian, non-vegetarian, or family options, and based on their selection, they will receive recipes and the items needed to make the food. In-house chefs make different dishes, and a group of delivery drivers offers the meal kit. This market is a niche one.
Advantage
The income per user is quite high since the meal kit delivery model generates ongoing revenue instead of a one-time service because it operates on a subscription basis. Customers can order from their favourite restaurant or cuisine using food delivery applications. The meal delivery app notifies the restaurant of the order, which it then prepares and delivers to the customer’s specified address.
Step 2: Choosing the revenue model
The way that meal delivery apps make money
Delivery Fees: Meal delivery services make money by bringing food from restaurants to the customer’s address. The distance travelled, or a set price determines the delivery fees.
Before 2018, UberEATS imposed a fixed $4.99 delivery cost. The pricing is now determined by the distance between the consumer and the restaurant, according to the firm. The delivery charge for each order ranges from $2 to $8. Customers pay Deliveroo approximately £2.50 per order.
Shared revenue: Most meal delivery services work with restaurants following set commission rates for each order. Every order has a commission rate that ranges from 15% to 40%, or it might be fixed based on the value of the order.
Advertising and Promotional Services: The meal delivery app also makes money by displaying restaurant profiles with advertisements on the top banner of the search listings for a predetermined time. Restaurants can boost their visibility on the app listings by paying a fixed fee to display their promotional banner or adverts. Due to the intense competition in the restaurant industry, businesses strive to increase their visibility and clientele. The restaurant and the app both benefit from this idea.
Surge Pricing: In this monetization strategy, delivery fees are increased during busy hours, such as lunch or dinner. When demand is strong, such as during lunch, dinnertime, or festivals, some of the largest food delivery startups, including UberEats, DoorDash, Grubhub, and Zomato, charge higher delivery amounts – surge prices — from the clients.
Daily deals: Food delivery services work with eateries to provide discounts on certain menu items. Food delivery apps offer a specific meal from a restaurant at predetermined costs, frequently with a very small markup.
Restaurants employ these specials to upsell other dishes in addition to the already discounted ones. On the other hand, as the quantity of orders rises, so do the commission and delivery fees that the companies who provide food earn.
White labelling is a concept in which meal delivery services buy food from restaurants and resell it under their name. This strategy makes food aggregators make money while eateries are spared the trouble. This layout is ideal, in particular for home-run or less well-known restaurants.
Step 3: Watch out for Latest Trends
The market for online meal delivery is extremely competitive, so staying ahead requires keeping up with both emerging market trends and new technological developments.
Ordering via social media: Domino’s Pizza was the first business to offer this service. Domino’s Pizza customers can place pizza orders using their Twitter accounts thanks to this functionality. To tweet a pizza emoji to Domino’s official Twitter account, the user must follow them. Customers of Domino’s must first register on Domino’s platform to order pizza using Twitter. They can choose their easy orders or default orders. The user’s Twitter account can then be linked to the pizza profile.
Virtual assistants, or chatbots, are quickly gaining popularity in various industries, and food delivery is no different. Customers can place food orders through chatbots by saying what they want. Dom, a virtual assistant for Domino’s Pizza, can take orders through Facebook and Twitter messaging. Customers can also learn about the newest discounts and promotions from the chatbot. Grubhub, a different food delivery service, has integrated Alexa, Amazon’s virtual personal assistant, into its system. Customers of Grubhub have the option to reorder any of their previous three online transactions. Alexa not only places orders but also tells you when they will arrive. Just Eat, a different delivery service, also includes Alexa in its ordering process. Can use Alexa to place voice orders and track the whereabouts of the courier.
Step 4: Deciding the Features
Features to Include in the Application for Food Delivery
If you choose the order-only business model, you must manage three apps: the Admin, restaurant, and customer apps. However, if you consider the order and delivery model, it will include an additional driver panel.
- Useful Panel
Sign-up and Profile Management: The consumer and the app connect for the first time on the sign-up page. Users must sign up for an account on the app and build a profile by providing pertinent information such as their address, phone number, etc. The registration procedure should go smoothly. You can include a choice to register using social media.
Geo-location: With the help of this crucial function, users may follow a delivery boy’s current location. Users can also utilise this function to locate the restaurant’s location on a map.
Restaurant List: The user can examine a list of restaurants, reviews, and ratings and place orders from these establishments based on their preferences.
If the user is not at their regular address, the delivery address feature allows the app to determine their current location. Multiple addresses should be able to be saved by users for delivery.
Also Read: How to Build a Food Delivery Mobile App
Food Cart: Since customers frequently can only get what they want from a single restaurant, this option enables them to place orders from multiple restaurants. Before making a purchase, users can also add or delete food items.
Payment Methods: To simplify payments, integrate various payment methods such as cash on delivery and online payments (eWallets, Debit/Credit Cards, and Rewards Points). Online payments ought to be secure and safe.
Order Scheduling: This function enables customers to place orders at predetermined times to avoid unforeseen problems like food shortages, delayed deliveries, and higher costs.
User reviews and ratings are available for various restaurants and foods users have ordered. Reviews increase procedure transparency and serve as a template for other customers doing online food orders.
Order History: With the help of this tool, consumers may view their previous food orders. Customers who frequently place orders benefit from this function because it relieves them of looking up restaurants and foods.
Push Notifications: With this feature, you may use push notifications to show customers information about the best deals, special seasonal discounts, and coupons.
Multiple filters and search options simplify the customer’s ordering procedure. They can filter restaurants by location, cost, review, and rating. Users can also search for similar food items by cuisine, type, category, amount, price, etc.
This feature allows tracking an order’s status in real-time.
Promos & Coupons: With the help of this function, you can provide users with promotional offers that increase order volume and client retention.
Customers should be able to contact the support team for assistance if they experience any problems with order delivery, including delays, incorrect items being delivered, contacting the delivery person, and unavailability at the delivery address.
- Admin Panel
One-click Dashboard: The Admin manages every aspect of the back-end operation through the dashboard, which is a centralized system. The Admin may oversee inventory updates and manage customer orders and other business operations through the panel.
Registration & Profile Management: The admin panel should contain a registration & profile management tool allowing it to enter information about clients, drivers, & eateries. The various restaurants can sign up for your service and provide you with information about them, like their name and address, menus, prices, offers, etc. Once they have registered, they can begin accepting orders from clients.
Manage Customers: The Admin can add, delete, or modify the active status of users. Thanks to this feature, the Admin can examine full information on users, including their contact information, address, etc.
Payment Management: Using this feature, the Administrator can view and control every transaction that has ever occurred in the app, including refunds. The Admin can also handle data linked to taxes and commissions in the app. Administrators may keep tabs on all approved online payments and decide on the commission percentages for each partner.
Order management: After receiving a customer request, managers may assign orders using this option. The Administrator can keep an eye on the status of the orders and the overall profit per order and make important business decisions.
Driver Management: With the help of this function, an administrator may keep track of all the data required to manage drivers, including their contact information, trip information, the total commission earned, availability, and login time. The Admin can add and remove drivers, change their information, and view their current status.
Change App Elements: The Administrator should be able to control every step of the process, from editing user and product information to altering the look and feel of the application.
Password change: Since the app manages the driver and customer databases, the user should be able to request that the Admin change their passwords.
Campaign Management: The app should be able to create and manage SMS, email, and social media marketing campaigns to draw in and retain users.
Plan Discounts & Promotions: Using this app feature, an administrator can add or run discounts or promotional offers on the app.
Manage Restaurants: The Admin can add or remove restaurants from the app using this function.
Comments Management: With the help of this function, the Admin can view customer ratings and reviews and inquire about their comments.
Push Notifications:
- The Admin can receive notifications when an email is sent.
- An order is delivered.
- A driver accepts a request.
Reporting and Analytics: The Admin can get practical information to manage the company well by utilising real-time analytics.
The information helps the Administrator develop ways to increase sales and user satisfaction. Admin may track which promotions are gaining momentum and which goods are selling swiftly and adjust their product offerings accordingly.
- Restaurant Panel Features
Order Management: This feature enables restaurants to manage the orders that they receive and their delivery. They can manage and update the order’s status and inform the user when their order will be delivered.
Accounts & Management: The registered restaurants should be able to manage and amend the financial and payment accounts from the admin interface.
Dashboard: The restaurant panel’s dashboard displays the status of new orders, orders that are being prepared, cancelled, and finished orders, as well as the total amount received for each order, allowing you to take appropriate action.
Restaurant Profile: Restaurant owners can add and modify their menu items, prices, and ordering options based on stock levels.
Add Products: The store manager can use this app to send new products to the restaurant, and the app will display the changes in real-time.
Order acceptance and rejection are options available to restaurant operators.
Payment: The restaurant can accept or send money using a variety of payment gateways.
Brand management: If a restaurant uses the app to run several locations, these stores should be managed smoothly.
Store owners can plan and add new deals, discounts, coupons, and offers to increase sales and customer loyalty. Special Offers/Coupon Code Management.
Order Alerts: Store owners are immediately informed of new orders and can act accordingly.
Store owners can add account information and check successful and pending payment settlements in the Track Payments section.
Order Reports: Store owners should receive real-time information regarding the performance of their businesses so they can take appropriate action.
Customer Support – The Store Manager can handle order- or restaurant-related concerns using the customer support feature.
Reject Order – The store manager can refuse an order if a food item on the menu is out of stock or delivery is not feasible for various reasons.
- Delivery Personnel Panel
Registration: Using the app, the delivery person can register. To guarantee the process is safe and secure, they must first be confirmed by the app. Drivers can begin accepting orders and delivering packages as soon as the verification process is finished.
In this case, orders from surrounding restaurants are automatically assigned to the delivery boy.
Delivery History: This function allows the delivery person to keep track of their deliveries and the money received for each one.
Option to call or chat—This feature enables the delivery boy to contact the client if they encounter problems locating the client’s address.
Consider including an online support function in your app to let the delivery agent contact the app support staff.
Managing Orders: The delivery person can use this feature to see if they have received order requests and to accept or reject orders.
Status Update: The delivery person can update the delivery’s status using this capability.
Step 5: Choosing Technological Stack
The delivery business model would determine the technology stack. The following list includes some of the whole tech stacks:
- Payment Gateway: Square API, Braintree, Stripe, and PayPal
- User location: Core Location Framework, Google Maps, and Google Places API
- Finding directions with MapKit, Google Maps, and Routific
- Facebook SDK, Gmail SDK, and Autho registrations
- AWS, Google Cloud Storage, Azure, and Digital Ocean all offer storage.
- Analytics: Google Analytics and FireBase
- Amazon SNS, Urban Airship, and Firebase Cloud Messaging offer push notifications.
- Python, NGINX, CloudFlare, Ruby, Amazon EC2, Redis, Amazon S3, Go, Amazon RDS, Scala, Kotlin, Linux, Amazon SQS, Snowflake, and Amazon Aurora are among the application and data technologies used.
- Examples of DevOps tools are GitHub, Webpack, Docker, Sentry, Kubernetes, Terraform, Amazon Cloudwatch, CircleCi, Datadog, TrackerJS, and PagerDuty.
Bonus Tip – Zero-in on Food Delivery Model
The most common models currently available on the market are the Order-Only Model, where the app handles restaurant orders, and the Order and Delivery Model, where the app controls the entire process. Or a hybrid, as previously mentioned.
Order-only businesses charge between 7 and 20% of the total order value placed through the platform as a fee for their services. On the other hand, the order and delivery approach levies a commission on the entire order. Additionally, they charge delivery costs that may be flat-rate or determined by the distance between clients and restaurants.
Also Read: How To Build An App Like Menulog?
Cost to develop a food delivery app
So far, we’ve covered every step required for developing an effective on-demand food delivery app. But do you know how much a food delivery service will cost you? Various variables, like the number of platforms (iOS or Android), the feature set, the number of integrations, third-party APIs, etc., affect the price of designing a meal delivery app. Costs for more features can increase. The region and development company where the app is being created also affect the development cost.
The discovery (inception) phase, which includes the functional specification, UX/UI design, and visual prototypes, is the foundation for the app’s construction. You can set a reasonable MVP budget, arrange your resources, define the project’s scope of work, develop the project roadmap, test the app’s MVP with a target audience, and more with the product discovery phase.
After completing this phase, you can see the outcome. About 50 work hours are required for the first technical documentation and designing phase. The process of producing UI/UX design takes about 50 hours. The back end of the food delivery app will take 60 to 70 hours to build, while the platform-specific development phase could take up to 120 hours. Nearly 100 hours of effort may be required for testing and bug fixes. This indicates that between 300 and 400 hours of effort are needed.
Location-based fees may affect the hourly rates charged by app development companies. For instance, European developers charge between $100 and $200, whereas US developers charge between $200 and $300. The fees for developers based in India range from $20 to $100. A meal delivery app will cost $15,000 to $30,000, assuming a median development cost of $50 to $100 per hour. A meal delivery service with the features and technology of Uber Eats would cost about $35,000 to create. A meal delivery app can be created for anywhere between $15,000 and $40,000 in total costs.
