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The idea of food delivery was first brought to the business in the United States, the first restaurant food delivery launched in 1995 with the World Wide Waiters and still operates today. The North American top 3 giants to date are GrubHub, UberEats, and DoorDash. These companies are responsible for 80 percent of the revenue in this sector. The remaining 20 percent serves as a little share for other little startups. The European major delivery restaurants include Deliveroo, Just Eat Takeaway, Delivery Hero/FoodPanda, and UberEats. These companies are found in almost all countries in the Europe zone thereby sharing 90 percent of the market. The South American food delivery service includes UberEats, Rappi, and many others while the Indian market is been led by Zomato and Swiggy.
The most successful food delivery restaurant is of course UberEats, having as CEO Garrett Camp and Travis Kalanick. The company is known to be a reference in this business. The company was launched in 2009 in San Francisco. It is said to be worth $ 20 B according to Forbes Magazine. The San Francisco Company has been making sky rocking incomes during the COVID-19 pandemic.
Seeing this dazzling success there is a need to ask ourselves how to build a food delivery app. This article shall give you some deep knowledge on all needs to create an app that can compete with most food delivery apps. Analyzing failures and challenges of the principal food delivery apps on the market.
We have prepared for you a detailed step-by-step procedure on how to create and manage a food delivery app. Firstly let’s try to understand why investing in this field could be great. It’s quite obvious because the sphere has been fast-growing and is scaled up to $300 Billion by 2025. As above we could analyze UberEat to be worth $1.4 B annually and $ 20 B as a whole.
Why get into the venture?
Mobile food delivery apps and services have never been in such demand as today. COVID-19 pandemic dictated new realities creating the need for food to be delivered during the respective quarantine periods thereby providing food to those affected, providing jobs to those unemployed, and increasing the income rate of associated restaurants and cafes. This offers the best opportunity for me to jump into the venture.
Principal Elements Of A Success Food Delivery App
Before getting a detailed step-by-step detail on how to create a food delivery app. It will be judicious to analyze each party involved in the app. The principal key elements are the partnerships between our app. and the other entities. This comprises 3 principal elements, as follows:
The Client-side
The client-side takes into account every little aspect of the business that involves the client’s interactions on the platform. This involves the design of the app. That must be easy to use and attractive.
The Restaurant side
The Courier side:
All these components merge and interact together to ensure the information is sent and shared with all relevant parties. Noticing that integrating UberEats API in your food delivery app helps ease the ability for customers to place and pay their orders.
As a result, restaurants are able to get more orders and at the same time effectively manage food preparations. All information is given to the couriers for effective delivery to the customer.
Step-by-step Building of The Platform
Researches and Analyse
The fundamental thing to do before getting into this business is to start by making deep research and analysis of the market. Check on your competitors, understand their debut failures to be able to launch in the most efficient manner on your platform. Analyze their upsides and downsides, make a deep investigation on their mistakes so you may avoid them. The proper research will help you make an app that will be easy to use, reliable, better than competitors, smarter, and quicker. If you don’t have the expertise to carry out this analysis you may need an outsourcing startup that can easily assist you in this.
Set Your business model
In the process of developing a food delivery app like Uber Eats, Postmates or Glovo make sure to choose an appropriate business model for your future startup. For the delivery you must think of three basic models:
Monetization
Apps like Uber Eats or Glovo use 3 main types of monetization system:
Picking a functionality
Before starting a food delivery app development, one of the most important aspects you need to understand is what features you will use and the food delivery API. Start by asking yourself what 3 features you will like to see on Glovo’s, Postmate, or UberEats App?
Principal Challenges While Building And Promoting Your Food Delivery Apps
Since the beginning of this business, so many issues have been sorted. Here are the 4 major challenges of building and promoting a food delivery app.
Researching the appropriate target market
Before getting into this type of business you must first make deep research on the target market and decide the type of delivery service you will offer to your customers. There are two principal business models for online food delivery platforms i.e.
The Restaurant-to-customer model provides food from a particular chain of restaurants, this involves delivery apps from Pizza Hut, KFC, and Domino.
Read also: Real-Time Dynamic Route Optimization for Delivery Business
Platform-to-customer service mainly places the focus on the delivery of food and different restaurant products, pies, cakes, groceries, or bakeries. This model basically involves apps like UberEats, Glovo, Postmates, Grubhub, etc. Nowadays platform-to-customer is the most popular and beneficial model while restaurant-to-customer is basically the representation of the restaurant online.
Some problems encountered by platform-to-consumer delivery that has to be solved
The high commission
This is a major challenging issue nowadays. For instance, UberEats takes about 25 percent of the restaurant’s income: Glovo charges 22-30 percent, GrubHub and DoorDash get 30 percent. Platforms earn a significant amount at the end of the day. This may not impact big chain restaurants but on small ones, it definitely decreases their incomes. Some restaurant owners were asked on the topic, they said 10 to 12 could be reasonable and would let them make a normal income.
One more way to retain restaurants on the platform is by creating loyalty programs. For instance, Grubhub is working on a similar solution i.e. offering subscription plans and reducing to 10 percent cash back for permanent restaurants.
Private Data of Users
For restaurants that fully rely on these platforms, they may encounter many difficulties in maintaining close relationships with the clients. With no access to the data of the clients, it implies making updates difficult to do because the impressions of the clients are not collected to be analyzed and improved. Moreover, there is no way they can personally engage and construct a relationship with the customers from the platform. Offering a customer relationship service management system and analytics services would be a great idea. UberEat for instance has set a Restaurant management service.
Advertisement
Being on the platform for a restaurant is a thing and standing out is another. Restaurants have to make huge advertisements to be able to get reviews on the platforms, because as we know very well the more the positive reviews the more the customers. Some platforms have provided promotional functionalities like UberEat and Doordash.
The next step is to target the audience. Within the platform, you may offer many different types of services to satisfy your clients to the maximum. You can deliver vegan menus, curated menus, groceries, or prepared food. Each of these options meets a diverse audience.
Partnering With Grocery stores and restaurants
New delivery services always want to stand out as the best and provide additional services to the principal one which is restaurants. To get noticed they may get InTouch with an enormous amount of chain restaurants. There is also the need to furnishing restaurants with groceries so as to maintain a close relationship with them and be sure your customers consume the best products. Apps like Farmdrop work with restaurants and farmers thus making sure the products are of high-quality organic ingredients, this platform is found in New York and in London. Partnering with farmers makes Farmdrop not worry about being overstocked with particular products thus appealing to the environmental consciousness of users who support organic farming. Companies like Grubhub and Zomato have built deep partnerships with local establishments i.e. taking a commission for sales from delivery costs. To implement a long-lasting partnership you should offer restaurants valuable benefits.
Decide whether to contact drivers like Uber or to have drivers on your payroll
There are two main models for this scheme either
The first model is the most common among food and grocery delivery services because most people have a car or a transporting system and this is easier for paperwork because the person working can make a delivery a part-time job. Depending on the size and location of the company some delivery services decide to hire their own drivers.
When Hiring a freelancer you must pay attention to these:
To eliminate fraud you should conduct background checks on the people you would like to hire just like Amazon, Postmates, GrubHub and many others do. You may also use third party agencies to trace the background of a potential courier. Check is a startup that focuses on background checks of potential couriers.
Work injuries are unavoidable, the food delivery industry has been marked as one of the riskiest jobs in very big urban cities. You may be partially or fully liable for all injuries suffered by your staff so it is very important to have the best insurance coverage plan and also train your drivers and couriers on the risks encountered while making deliveries. For instance, Postmates provides insurance as well as to conduct training to all their employees, when Postmates couriers are on the road they are covered by Postmates insurance thus covering every bodily injury.
Before getting into this business, it is best to know your rights, make sure all your couriers sign a contract that stipulates all about your services and all they have to do. You should provide your crew with a courier app that permits them to confirm orders, view the location of deliveries on the map, and create the best ways from the restaurant to the customer. This is very important because some countries do not allow such delivery services on high ways because it might be dangerous for the courier. Make sure your company is fully protected with lawyers ready to defend you in all cases you are not faulty.
App development: choosing the appropriate features
The majority of food delivery companies have different apps and platforms for all the parties i.e an app for couriers, an app for restaurants, and another app for customers. These apps are compatible with both Android and IOs devices respectively. For an appropriate explanation of each model, we have drawn a template including the features that must be seen in each case
The version for restaurants must include all the necessary features for placing orders, an admin panel, and the ability to manage notifications:
The process may take a long time to be implemented correctly but the choice of the right audience, building a hard partnership with restaurants and couriers are fundamental. Focusing on the most essential features in your web app will absolutely place your business in an outstanding spot.
The cost
For so many entrepreneurs getting to this business, they can be frightened by all they have to assemble to build such a business, nowadays there are very services that provide you full features for the creation of your delivery app thus reducing the cost. API provides all the necessary building blocks to effectively create a food delivery app. API comes as a set of blocks that must be assembled to come up with a functional app similar to UberEats for instance. Additional time may be needed to optimize the app users. Nevertheless, APIs play a huge role in reducing the time and cost of producing the app. Some very popular API shall be listed and described below, it is well worth to learn about each of them because they are very specific and offer a diverse amount of properties.
Google Places API
This is a Google service that plays a role in the answering of quarries about the location through HTTP requests. It includes points of interest over certain targeted regions, business establishments, and the most important tool which is geographical locations. To access Google Places API you may require a billing account of the Google cloud platform and a valid key.
During the publication of this article users of Maps API Google are charged $2 – $14 for every thousand queries up to a maximum of a hundred thousand queries per day, they have additional pricing for the use of places API and Routes. Approximately $200 credit is needed per month that makes Places API free for small and medium-sized food delivery businesses. You only get charged if you exceed the threshold amount of credit. By the time you exceed this amount, you would have got a considerable added expense.
Foursquare API
Foursquare is a social network that provides information on research and discoveries of places based on recommendations of its users. Foursquare API is a kit that developers use to communicate with foursquare. Getting permanent access to the Foursquare API starts at $599 for small and medium-sized businesses. For new members, it would be necessary to provide credentials (secret key and client ID) to start sending queries to API. As a beginner, this amount might seem high but with time users of this API will see the real benefits.
UberEats API
Indeed the easiest path for restaurants to get into the mobile food delivery business is by UberEats API. The latter can be implemented with your establishment’s POS system deriving ease of managing handle orders and menus from mobile customers. UberEats in addition has got a network of loyal couriers that means business managers won’t worry about logistics.
The only disadvantage of using UberEats API is the policy of revenue – sharing with vendors which can be as high as 15 to 45 percent per order. But this is worth it because UberEats has got a bigger reach than the other competing APIs.
GrubHub API
More than 120,00 restaurants in the United States use this developer API. They provide programmatic access to vendors and update business information which is the operating hours, business address, and the menu.
GrubHub is quite similar to UberEats API so similarly, they use the revenue-sharing model which can vary from 10 to 35 percent. An important disadvantage is that GrubHub doesn’t provide logistic facilities meaning your business will need to work with a third-party courier business.
Mapbox API: MapBox Geocoding API and MapBox Navigation API
MapBox is an online service that provides custom maps for use in sites and apps. MapBox Api is a kit that permits developers to use MapBox on their app.
The Mapbox toolset is an open-source API used by many social media pages like Snapchat, Facebook, Twitter, and websites like news, forecast channels and even financial sites use this API. Using this API doesn’t cost anything for the first free 25.000 monthly users. Beyond that, your business will need to pay depending on the amount of use, for instance, $5 for up to 130 000 monthly active users.
Google Matrix
Google Matrix is an API that permits developers to accurately estimate the traveling distances and time from one point to the other i.e. from the moment the courier gets the delivery to the endpoint thereby estimating the fee according to the distance for some apps. It works as a conjugate to Google Maps API thus feeding the recommended routes. Similar to Google Places API, the pricing for Google Matrix tier-based depends on the app activity. Users get free monthly access for $200, this is very generous for small and medium-sized businesses.
Freshchat API
This is a toolkit that developers can use to add live chat as an additional feature to the website or the app. Coded javascript this feature is powered by Freshchat. Freshchat is a live messaging service designed by Freshworks which is a software as a service customer engagement company for small and medium companies.
Live chat products are incredibly helpful tools for businesses looking to create more interactivity and convert more of their visitors to paying customers. The Freshchat API is a 21-day trial API. The starter account is free for up to ten members and ten thousand website visitors. Furthermore, the business will be required to upgrade to a premium membership account. The premium plan starts at $15 per month with unlimited contacts with clients.
Onesignal API
This API is a toolkit used by developers to push notifications on Apps. These notifications are alerts on the app, they will help notify the client of everything that happens to his delivery. The premium access to Onesignal API costs $99 per month, there is a free version that is limited in support and limited in the number of subscriber count (till 30,000). Still, that is enough for all businesses considering to add push notifications to their food delivery app.
So many other API exists to facilitate your development of Apps and businesses it is up to you to choose what you really want.
Conclusion
With the pandemic of COVID-19, the food delivery industry has been earning a maximum leading to the explosion of this industry. The food delivery industry is a venture that is really worth it.
Written by:
Filonenko Vyacheslav
I've been leading a tech department specializing in eLearning applications and Business Intelligence for 10 years
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