FOOD DELIVERY APP BUSINESS MODELS

Selecting a suitable business model is a vital point in the food delivery app
development as it directly impacts the product/market fit and determines whether
the solution will survive the competition. Recently, the emergence of ghost kitchens
has revolutionized the food delivery industry and provides a unique business model
option for entrepreneurs to consider.

If you fly too high and go for an aggregator and fail to get restaurants on board,
your app will not catch on. Be mindful of your abilities and opportunities and start
small as you can always expand later. We will go over two main business models
for a delivery service like Uber and explore the benefits and downsides of each
option.
1. Aggregator Business Model
The central feature of an aggregator business model is allowing multiple
restaurants, stores, and shops to connect to users. This type of food delivery app
like Uber provides access to the platform to many businesses and acts as an
intermediary between users and restaurant owners. Examples include Glovo,
GrubHub, the main Uber Eats competitor DoorDash, and many more. However, the
aggregator business model consists of two further categories that we will dive into.

 Order and Delivery Model

Every app like Uber for food delivery consists of an admin panel, a restaurant side,
customer-side, and a delivery service provider. The order and delivery model
usually collaborates with a third-party delivery service to ensure that the food
reaches the customer. The delivery provider can also set their own fees.
Pros
This food delivery app development model opens doors to a broader pool of
restaurants as it gives them a self-delivery option which saves them money on
third-party delivery services. Additionally, a larger selection of food services
provides a better customer experience.
Cons
Optimizing the delivery operations and providing the right option to restaurants as
per their requirements is a complicated process. The integrated business model
demands a feature-packed delivery service to allow admins to seamlessly assign the
right delivery option to the restaurants.

 Integrated Model
The integrated business model for a food delivery app like Uber allows for external
delivery services and restaurant couriers. Many restaurants provide their own
courier services or hire a few delivery agents to help them out. This type of app
allows restaurants to choose between using the app’s provided delivery services or
delivering the food themselves.
Pros
This food delivery app development model opens doors to a broader pool of
restaurants as it gives them a self-delivery option which saves them money on
third-party delivery services. Additionally, a larger selection of food services
provides a better customer experience.
Cons
Optimizing the delivery operations and providing the right option to restaurants as
per their requirements is a complicated process. The integrated business model
demands a feature-packed delivery service to allow admins to seamlessly assign the
right delivery option to the restaurants.
2. Inventory Business Model
The inventory business model is an alternative to Uber Eats like applications that
connect users to only one business. The platform admin manages and controls the
entire value chain, from operating the app and preparing the orders to completing
the deliveries. This type of food delivery app like Uber does not allow multiple
vendors to offer their services but only focuses on a primary restaurant. Examples
include McDonald’s, Domino’s, and other large restaurant chains.
Pros
The biggest advantages of this food delivery app development model entail full
control over the entire chain of operations as well as lower costs for external
delivery services. Besides, the platform is customizable and caters to the users’
needs.
Cons
The largest drawback is high operational costs and difficulties associated with
serving online and offline clients simultaneously.

MAIN FEATURES
In this article, we will focus on the inventory business model, the Glovo alternative
that involves only one business that runs the app. The main features include four
parts: the client side, courier app, admin panel, and the restaurant owner side.
 1. CLIENT SIDE
 Registration

Registration is a feature that allows users to sign up and create an account. This
process can be led through email, phone, social media platforms like Facebook,
and Gmail accounts. Don’t forget to include email confirmation and password
restoration.
 Map
Using geolocation, your customers must be able to find the desired restaurant,
especially if you have several locations in the area. Allow users to enable their
location to see which vendors are closer to their homes and offices.
  Order and Shopping cart

Apps like Glovo should provide an easy-to-navigate menu and shopping cart with
checkout. Implement filters to help users find what they are looking for with a
product description and price. The shopping cart should entail all the important
information, including the total cost, delivery time, and payment methods.
 Scheduling
Customers should have an opportunity to select the delivery timeframe to receive
the order at the most convenient time.
 Payment

Make sure to integrate several payment options including PayPal, credit and debit
card, Stripe, Apple and Google Pay, etc. Some locations, especially in less
technologically advanced parts of the world, still offer cash on delivery.
  Location tracking

After a user has placed the order, allow them to track the courier’s location in real-
time. This helps customers gauge how long it will take for the order to arrive, as
well as find out about possible delays. Alternatively, companies like Uber Eats and
others offer a pick-up option that allows users to get their order from the
restaurant. Location tracking can also be useful for the self-pick-up feature to help
customers quickly find the restaurant.

 Ratings and Reviews

This option is not vital for an inventory business model but preferable. Reviews will
help users learn about various dishes that your restaurant provides and form an
opinion about the cuisine before ordering.

 Courier’s information
Customers should be able to access courier’s data like name, vehicle, and phone
number to get in touch with them if needed.

 Order history
Order history should be stored on the client and restaurant side as well as the
admin panel to help them recall their previous orders. Maybe a customer ordered
something great and forgot the name of the item, and the history will help them
find the dish.
 2. RESTAURANT SIDE
 Menu management

Restaurant owners and employees in charge should be able to add, remove, and
edit items on the menu. On top of that, enable the uploading of pictures,
descriptions, and prices to complement dishes.

 Order management
New orders should be easily accessible through the application to accept, decline,
or change them. The application should also allow restaurant owners to change the
status of the order if necessary.
When it comes to a significant number of orders, it’s better to process them on one
streamlined platform. For example, if you’re running a pizza house, your delivery
service app can be integrated with your pizza POS system.

3. ADMIN PANEL
 Restaurant management
This feature involves permission management that allows certain users to conduct
various activities.

 Analytics
Analytics is an integral part of every app admin panel as it gives helpful insights
into the app performance metrics. This feature allows administrators to keep track
of orders, inventory, delivery times, revenues, marketing campaigns, etc.

 Payment integrations
Admin panel is where the payment methods are stored and managed to ensure a
high grade of security and accuracy.
  Assigning orders
The app administrator should have access to the delivery personnel to assign or
reassign orders and ensure timely and smooth deliveries.

4. COURIER SIDE
 Registration
Delivery agents also need a signup option to create an account and start working
for the restaurant. The signup methods could include email, phone, and social
media platforms.

 Profile creation and verification

To ensure a high-security level, couriers should be able to create a profile and add
personal information. Afterward, the admin can check the profile and verify it once
all the essential documents and information are in place.

 Maps
Allow delivery agents to find the easiest route to the customers by integrating a
map into the courier side of the app. Check out the Glovo delivery map to make
sure yours looks professional and interactive.

 Order information
Couriers should also be able to access the information about the order such as
delivery address and time, the contents of the order, and the user’s name and
phone number.

 Status updates
The Courier side of the app should also include order status updates. For example,
when a courier arrives at the restaurant, picks up the order, and leaves to deliver
the food, all of these actions should go through the food delivery app like Uber to
update the customer.

ADDITIONAL FEATURES
Additional features are not necessary for a start-up but will come in handy in
future iterations. They improve customer experience and provide a unique value to
users.
 1. CLIENT SIDE
 Two-factor authentication
To provide an additional layer of security, you can implement two-factor
authentication that requires users to use two means of signup methods like a
password and a code sent to their phone number.

 Notifications
Notifications allow users to do their own thing while waiting for a delivery and get
alerts about status changes. You can let customers know about offers, promos,
discounts, etc., through simple notifications. These messages incentivize users to
check out the offer and place an order with a bonus or discount.

 Customer support

In case of any issue or misunderstanding, a customer can contact the restaurant

through the customer support feature to ask a question, file a complaint, or solve
any other problem. You can also use a chatbot to streamline customer support
operations and provide quick services like Glovo does.

 List of locations
If you have several business locations, provide a list of each one with a detailed
address and contact information to allow customers to visit your brick-and-mortar.

 Tipping
The in-built tipping feature helps customers remember to leave a tip and allows
delivery agents to earn some extra income.
  Personalized suggestions
Based on the order history, your app can suggest similar dishes and beverages to
help users make a quick and simple order.

2. ADMIN PANEL
 Notifications
Admins should be able to send out or trigger notifications about discounts and
special offers. Allow the admin to create, store, and manage loyalty and bonus
programs. It will help to incentivize users to continue using the application.

3. COURIER SIDE
 Availability
If you would like to create a solution similar to the Glovo courier app, allow your
couriers to set their custom availability. This way, they can work during the hours
they find the most accommodating for their schedule.

TECH STACK
As you can see from the features list, to create a service like Uber for food delivery,
you need to develop a few mobile applications and an admin panel.
The choice of your tech stack begins with the question of native vs. cross-platform
food delivery app development. Native app development is on average more
expensive than platform-independent but delivers applications with better
performance. Cross-platform development is more cost-effective but usually
provides slightly lower speed. Let’s take a look at the most used technologies for
both options.

1. Delivery App Development for Android

Java and Kotlin are two prominent programming languages for Android food
delivery app development. Java is one of the oldest languages and provides a wide
range of open-source tools and libraries for mobile app development. Kotlin is a
relatively new language that is known for being lightweight, flexible, and fast.
Android Studio is an official integrated development environment (IDE) for Android.
It comes with code editing, debugging, and a flexible coding environment. The IDE
is a favorite choice of Android app developers as it offers more freedom to focus on
creating applications with high speed, great performance, and superior quality.
Android Developer Tools (ADT) is a toolkit that offers a variety of debugging tools,
emulators, UI builders, and automation features.
Android Software Development Kit (SDK) is a suite of development tools such as a
debugger, libraries, emulators, tutorials, and documentation.

2. Delivery App Development for iOS

The two most prominent programming languages for iOS development are
Objective-C and Swift. Objective-C is an older language that enables object-oriented
programming and a dynamic runtime environment. Swift is a newer technology
that offers dynamic libraries that reduce the app size and improve app
performance.
Apple XCode is a toolkit that helps developers create mobile applications. This
toolkit allows for debugging, keeping the documentation, and building UIs.
iOS SDK is a set of development tools that give coders access to different functions
and services of Apple devices to create advanced applications.

3. Cross-Platform Delivery App Development

Flutter is a UI software development kit built by Google for creating cross-platform
applications for Android, iOS and web operating systems. The SDK provides tools
to build native-like apps with increased performance and higher functionality
compared to other cross-platform development tools. Flutter is known for its
extensive documentation and many widgets.

4. Web Development (Admin Panel and API)

React.JS is a highly efficient JS library for building websites with minimal coding.
The advantages of React.JS include virtual DOM and components reusability. This
JS library is open-source and constantly evolving and advancing to allow coders to
create a food delivery website with high performance.
For the backend (API and Admin Panel), Node.JS makes an ideal addition to the
tech stack. Node.JS is a Chrome V8 JavaScript engine based runtime environment
that improves efficiency and developer productivity as well as accelerates the speed
of development.

DELIVERY APP DEVELOPMENT COST

The food delivery app development costs depend on the app complexity, vendor’s
location, and tech stack of your choice. In our example, we will go over a delivery
app like Uber, break down the costs of each development milestone and answer the
question “how much does a food delivery app cost?” Below you may find an
estimate for the food delivery app based on the Inventory Business Model.

1. Discovery phase
The project discovery phase helps you to be prepared for the development of your
app. The aim of it is to reduce risks and minimize costs, as well as ensure that the
product is technologically perfect to fit the market.
The discovery phase for the food delivery app will take about 3-4 weeks and will
have a budget of 8,000-9,000 USD.

Features/Tasks Hours (UI/UX designer, developers,

PM, QA)
Project init 32 - 35
Detailed description of the main 12 - 15
features' logic
Mind map creation 8 - 10
Clickable prototype creation 87 - 100
Solution architecture document 21 - 25
Functional requirements described in a 32 - 35
user-story format
SRS - software requirements 8 - 10
specification
Proto test 4-6
Resources & communication plan 2-4
Accurate estimation 10 - 12
Communication, brainstorming 35 - 38
Total, development team hours 251 - 290

2. App development
Here you can choose between native and cross-platform app development. For API
development the DOIT Software team suggests using Node.js.
 Native app development
Based on our experience, both native iOS and Android development takes up from
560 to 650 development hours total.
 Cross-platform app development
The entire food delivery app development process with Flutter for both iOS and
Android lasts from 470 to 550 development hours.

Features Hours (UI/UX designer, developers,

PM, QA)
Loading Interface 2-3
Location permission 6-9
User registration 23 - 29
User Login 14 - 16
Navigation drawer 7-9
(Menu, Orders, Profile, Support)
Cart view 26 - 30
(Salads list / Empty state)
Menu / Main 48 - 57
(category filtering, Salads list)
 Create a salad 34 - 38
(Image, Ingredients, Total, Add to cart)
Salad interface 28 - 34
(Ingredients management, Total, Extra
ingredients, Add to cart)
Ordering 51 - 61
(Salads list & Total, PickUp or Delivery
Order overview 16 - 19
Checkout 35 - 43
(choose the payment method, Order
confirmation)
Order Tracking 41 - 47
(Stages with Map integration, Push
notifications)
My Orders 26 - 29
User Profile 87 - 104
Support 28 - 35
(Contact block, Map integration, Chat
integration)
Total, development team hours 472 - 563

3. Admin panel
Front-end and backend web development for an admin panel takes about 230 –
280 development hours.

Features Hours (UI/UX designer, developers,

PM, QA)
Authorization 12 - 15
Dashboard / Orders 38 - 45
(Filtering, search, sorting
Order status management 16 - 20
Edit menu 50 - 60
Cafe branches list 56 - 66
Contact data 3-5
Users data 30 - 37
(search, filtering, order history)
Reporting 26 - 35
(registered users report, Orders, qty.
report)
Total, development team hours 231 - 283

Totals
It may take about 4-6 months for an MVP development (a food delivery app based
on the Inventory Business Model). The total costs of food app development:
#1 Native food delivery app development: from $40,250 to $59,800.
#2 Cross-platform food delivery app development: $37,300 to $52,000.
Food delivery app monetization

An application will not be feasible and lucrative without a clear monetization

strategy. The strategy should be agreed upon during the discovery phase and
proven suitable with calculations and financial projections. There are a few ways to
monetize a food delivery app like Uber which we will discuss further.

Delivery Fees
Delivery fees can vary depending on the distance, time of the day, and holidays.
This method is the most frequently used one for monetizing apps for delivery like
Uber. Some of the fees go into the courier’s salary but the rest is a great revenue
stream for any restaurant.

Advertisement
Like for any other application, food delivery services like GrubHub can offer in-app
ads to generate additional income. You can partner up with other restaurants and
publish ads for each other. Another way is by employing Google Adsense to
monetize ads from Google.

Subscription
SaaS applications are becoming more popular every day. You can offer free
membership with standard delivery fees and a subscription-based plan that gives
users some extra perks. Lower delivery fees, discounts, promos, special offers,
bonuses, etc. can be great incentives for a monthly subscription fee for your
customers to sign up for.
Commission
This is a method that many companies with the order and delivery model prefer,
especially with an app similar to Uber Eats and/or Grubhub. If you create an
aggregator app that offers services for various restaurants, you may charge a
commission for every transaction only. Every new partner will bring in money from
orders which will generate a stable source of income for you.