Introducing Food Delivery Apps – Everything You Need to Know

In the current scenario, home deliveries have been precious. Food delivery apps have seen a surge in their use. Several safety issues have been debated. Still, food delivery companies will always remain on the positive side of any situation because of the value the industry has added to its consumers. Food delivery apps have changed the way people enjoy eating out experience. The sector has merged the pleasure of eating out with the comfort of being at home, which has been appreciated by the consumers throughout. Having a food delivery business will not only bring in revenue but will also help you build customer loyalty.

Here are some facts and processes which are essential to understanding how does a food delivery app work and how do they make money. Some examples are also discussed to get a better understanding of the food delivery industry.

How Do Food Delivery Apps Work?

Before delving into the details of the functioning of any food delivery app, it is essential to understand the various stakeholders involved in the transactions. For any food delivery app, there are three familiar stakeholders. These are the consumers, the restaurants, and the delivery people.

The functioning for all three stakeholders, hence it is essential to understand how does a food delivery app function for them separately.

How Does Food Delivery App Work for Consumers?

The consumers are the main revenue stream for the company, so it is imperative how the food delivery app works for them. The company needs to look into the technicalities of the application along with the variety they are providing to their consumers. The food delivery apps need to be easy to download, use, and navigate through for the consumers. Here are some of the simple steps depicting the consumer’s journey of a single transaction:

Step 1: Register & Make an account

Any food delivery app requires you to make your account. This is important to have a record of your contact details, address book, previous orders, and several other information.

Step 2: Browse through Restaurants

The food delivery app has several restaurant options for consumers. One can browse through the several options and choose the dishes and the restaurants they want to order food from.

Step 3: Check Out!

Once the cart is ready, the consumer can pay via several options available these days. All food delivery app allows consumers to pay either via online mode of payment or cash on delivery.

Step 4: Track your order

Once the order is placed, the consumers can track their orders from the food delivery app. The tracking system is available in most of the food delivery applications. These are the few steps consumers go through while placing an order from any food delivery app.

Additional Features for Consumers

Most food delivery apps offer their consumers with additional features other than the usual food ordering processes. Some of the most common features in food delivery apps are:

1. Premium Subscriptions: one of the most common features these days is the premium subscriptions that apps offer. These subscriptions allow consumers to unlock discount offers and other exclusive features.
2. Address Book: Most food delivery apps will enable you to manage several addresses for delivery in one account. This makes it easier for you to save several addresses like ‘work,’ ‘home,’ ‘mom’s place,’ and more.
3. Reviews: Food delivery apps allow consumers to rate and review the dishes and the restaurants they have tried from the app. This adds to the credibility of the food delivery app since all consumers have access to authentic feedback from the consumers.
4. Notes: food delivery apps ask for special considerations which, if any, need to be made while delivering one’s food. This helps the consumers to mention if they have any allergies or prefer an alternative ingredient.
5. Approximate Cost for two: most apps provide the consumers with an approximate cost for two while ordering from any restaurant. This is usually the average Cost of the dishes from the restaurant. It makes it easier for consumers to choose from the options based on their budget.

Several other features enhance the entire ordering experience for the consumers—these features help the food delivery app stand out among its competitors.

How Does a Food Delivery App Work for Restaurants?

Another significant stakeholder in the food delivery business is the restaurants. As a business, it is also essential for you to make sure that the restaurants have less experience with the app. The experience mainly impacts the long-term relationships of the restaurant with the company, and the likelihood of them providing discount offers to the app’s consumers. Here is the detailed process of how does a food delivery app work for restaurants.

This is how the ordering process looks like for the restaurants. The food delivery apps provide restaurants with a broader consumer base. There are several advantages of marketing one’s restaurant on food delivery apps. Some of the advantages of offering food delivery services for restaurants are:

1. Increased Check Sizes: According to several surveys, it has been seen that providing food delivery services increases individual check sizes. This can be a significant advantage for the restaurant business
2. More Exposure: One of the most common advantages is that collaborating with food delivery services increase the exposure for any business and gives it a greater chance to expand its services in a market.
3. Less space Needed: Once any restaurant has gained bigger space on the food delivery matrix they can function from a smaller space without having dine-in options for the business

These advantages need to be sold to restaurants while expanding your food delivery app. It is essential to get the best restaurants on board so that you can use their existing customer base for the expansion.

How Do Food Delivery Apps Work for Drivers?

Drivers are another essential stakeholder of the food delivery business. They bridge the gap between the restaurant and the customers. The food delivery apps help drivers to have a job, and they help strengthen the foundation of the businesses. It is essential to make the user interface very easy to navigate for the drivers so that they do not need any specific knowledge in advance to join the business.

The registration process for the drivers is fairly simple. They just need to register with the food delivery app with their personal information and driving eligibility. Once their profile is live, they will start getting riding orders and can start working with the company. The pay-out for the drivers varies from business to business.

How Do Food Delivery Apps Make Money?

There are several food delivery services in the market, but there are some expected revenue streams through which they make money. While planning a food delivery business, it is essential to review the revenue streams of the business. Here are some of the revenue streams that have been common in several food delivery businesses

Premium Promotion Services

All food delivery services provide restaurants with premium promotion services, which can be availed to increase the visibility of the businesses on the food delivery application. Several small businesses and restaurants can opt for this service to expand their businesses online.

Third-Party Advertisements

Most online applications and websites are opt-in for third-party advertisements. Food delivery apps also opt-in for this option. Third-party advertisements can bring in massive revenue for the companies. This is done with the help of several ad-hosting services

Commissioned Business Model

All food delivery businesses are commission-based business models. They survive on commissions both from the restaurants and the consumers. This is the primary revenue stream for any food delivery business.

User Subscription

All food delivery applications give their consumers to opt for an exclusive user subscription. These premium subscriptions help the consumers to get exclusive services while the businesses can earn more with the subscriptions.

Dynamic Delivery Charges

Every order on the food delivery application has a different delivery charge. These charges are determined by various factors such as the availability of riders, distance to be covered by the riders, the total check of the bill, and several others. These dynamic delivery charges gain profits for the company

These are several revenue streams that help food delivery applications earn profits in the market. While designing a food delivery business, it is essential to understand these revenue streams and create a revenue model similar to it to have a plan before launching the same in the market.

Understanding Uber Eats

Keeping all the information in mind, let’s look at Uber Eats and understand how does it work and make money. Uber Eats has the same functioning as any food delivery business mentioned above. However, it is imperative to note that Uber Eats has also introduced scheduled ordering, which allows consumers to schedule their orders on the app. Consumers can order their meals hours in advance.

UberEats revenue model includes the commission revenue model, premium promotional services, and delivery charges from the consumers. All of these features are discussed in detail above. To build an Uber Eats clone, one needs to understand all of these factors in detail. A food delivery like UberEats can help business owners earn well, keeping in mind the various business expansion techniques adopted by Uber Eats.

Key Takeaways

The major takeaways from this article are how a food delivery app like Uber Eats works for its different stakeholders, namely consumers, restaurant owners, and riders. It also talks about the several features that the consumer gets in the app to enhance their experience. The advantages of promoting one’s restaurant are also discussed in detail. The revenue model and several income streams have also been talked about at length in the article. The article is concluded by understanding the technicalities of an Uber Eats clone.

Food Delivery Business Model Canvas

Along with ‘How does Food Delivery Business Make money?’, let’s have an overview of its cost structure through its business model canvas.

Starting Your Food Delivery App?

If you’re willing to start your own Food Delivery app, you should go with Food Delivery App Development services from NCrypted. Get advice from our experienced team building award-winning Fintech products and scaling successful startups for over 20 years. Contact us today for a free quote on your Fintech software development project.