Posted on: | Posted by: Ajay Sudhakar

How Much Does it Cost to Develop On-Demand Food Delivery Apps Like UberEats, Grubhub, or Zomato?

Food Delivery Apps

The latest surge in the revenue of on-demand food delivery apps has never been seen before. Revenues have been at record levels since the inception of these apps. The current market revenue volume is $270.3 billion and is expected to almost double to $470 billion by 2025, with a CAGR of 10.39%. With a user penetration rate of 23.1%, millions began food ordering for the first time during the pandemic.

 

It is interesting to note that in the Q3 of 2021, DoorDash’s revenue is estimated at $1.28 billion, down compared to last year’s peak, but this remains well above their 5-year average revenue. 

 

The data above proves that the on-demand apps market will prosper even if things are back to normal. Needless to say that starting one of your own can create wealth like anything.

 

Although UberEats leads in the international markets, homegrown apps like iFood in Brazil, Jumia Food in Africa, and Zomato in India were popular choices among the natives.

 

This business idea of an on-demand food delivery app captives young entrepreneurs nowadays. This blog is where the picture gets refined and provides insights about the same. Here, we start with the recent market developments and proceed to costs to develop, and other insights, definite of your interest.   


Summary

The surge in the food delivery market has been like never before, with market revenue growing to $270.3 billion in 2021. However, the Chinese food delivery market takes a maximum stake in it.  With a user penetration rate of around 23.1%, this becomes the perfect time to get started with your on-demand food delivery app. You can opt from two types of business models- aggregator and platform with logistic support.  Your app acts as a restaurant browser in the aggregator model, chooses the menu, and makes payments. Whereas in others you perform delivery services through its logistic networks.  It is estimated that the development cost of a mobile app like Ubereats or Zomato varies from $30,000 to $40,000. And restaurant web apps can extend the price to $60,000. This includes app testing across Android and iOS, app design, and launch. A food delivery app generates revenue either through delivery fees or revenue share or through promotion and advertisements. It involves up to four stakeholders- customers, restaurants, delivery riders, and administrators.

Food Delivery App Market 

Food-Delivery-App-Market

As in-dining with friends and family was shut to an uncertain time last year, the growth of the online delivery app market zoomed a few years into the future. Instacart, a US-based grocery delivery service, said that it achieved its 2022 targets within three weeks of the lockdown.

 

According to Statista, in the food delivery market, revenue surged to $270.3 billion. At the same time, the platform to customer segment took the majority of the stake, with a market volume of US$148,358m in 2021. However, the Chinese Food delivery market dominated the segment with revenue generation of over $158.9 billion. Although DoorDash, Grubhub, Uber Eats, or Just Eat Takeaway did very well during the period. Nevertheless, the major players in the food delivery app sector are:

 
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  1. Meituan Dianping and Alibaba’s Eleme, Chinese apps each generate revenue of $7 billion and control over 90% of the food deliveries in the country.
  2. DoorDash revenue generation increased by 241%, thus growing from $850 million to $2.9 billion. It controls 57% of the food delivery market in the US.
  3. Deliveroo revenue increased by 54%, thus generating $1.61 billion in revenue in 2020. It controls 27% of the UK food delivery market share and 23% of the EU market share. It had a value of $10.2 billion, which declined at its debut stock launch.
  4. Grubhub generated a revenue of $1.8 billion in FY20 and controls 16% of the US food delivery market.
  5. Just Eat Takeaway generated $2.82 billion in revenue in 2020, combined with Grubhub; this amounts to $4.65 billion largest in the west food delivery market.
  6. Uber Eats, the most preferred international food delivery app, generated revenue of $4.8 billion the previous year. And has a value of $20 billion as per WSJ.
  7. Homegrown app Zomato doubled its revenue in the same period.

Food Delivery App Business Model



Food-Delivery-App-Business-Model

On-Demand Food Delivery Apps Like UberEats, Grubhub, or Zomato, may perform two services simultaneously. They act as a window to browse restaurants, order, make payments, and provide logistic support to the restaurants. Previously through these apps, one could only order food online. Still, the companies have now started providing delivery services through their logistics network. While developing your app, you can choose from the following –

Aggregator model

Your app acts as a window to choose restaurants, menus and make payments in this business model. And leave the delivery to the restaurants. This model is prominent in the European food delivery market. However, many companies started to provide logistical support as well.

Platform with logistics service

A widely adopted model here is your app; in addition to choosing restaurants, menus, and payment, users can track the order. The company provides delivery service with real-time tracking by restaurants and customers. UberEats, DoorDash, or Zomato fall in this business model. Some restaurants started to deliver food through their network of riders like Dominos or McDonalds.

 

In an app with a logistics service business model, you need more than app development. You have to hire riders and take responsibility for the contamination or freshness of delivered food or even in case of ill-conduct by your delivery personnel. These, however, raise the app’s revenue and employment, and part-time delivery riders are easily available

How do Food Delivery Apps generate revenue?

How-do-Food-Delivery-Apps-generate-revenue

Your on-demand food delivery app is a potential unicorn and can operate on single or multiple fronts. But this might not be very easy due to the competing nature of the business; leading companies generally keep a razor-thin profit margin to engage customers and restaurants. Though your food delivery app can earn on these fonts-

Surcharge

This is used by most logistics service providers. Your app can charge its customers a delivery fee in addition to the food price.

Revenue Share

Food delivery apps earn recurring revenue by sharing it from completed orders with restaurants. 

Promotion and Advertisements

Food delivery apps act like restaurant browsers and earn money by tying up with them. These platforms promote some specific cuisine by some restaurants or restaurants themselves in exchange for revenue.

 

For a restaurant that chooses your app service depends on the margins that you keep. The logistics service companies usually have a very narrow profit margin as for the competing business nature. 

 

Moreover, acquisitions, investments, or mergers can be highly profitable. As in the case of Just Eat, Takeaway, and Grubhub, which generated more than $4.6 billion combined. In India, UberEats discontinued its services to cut its global losses and was acquired by Zomato for $206 million.

What features to include in your Food Delivery app?

 Features

Generally, an on-demand service app involves multiple stakeholders concurrently. For example, if you opt for an aggregator business model, your app will have three stakeholders – customers, restaurants, and administrators. Whereas if you include logistic support in your on-demand food delivery app, then it will involve delivery riders in addition to customers, restaurants, and administrators. Thus four screens with varying features in a single application. 

 

The must include features of the four screens for different stakeholders are listed below-

Customer Screen

  1. Registration and Login (via social media accounts or phone number)
  2. Address book 
  3. Notifications 
  4. Search bar (restaurants and food items/dishes)
  5. Cart and order details
  6. Payment(integrated payment gateway, accept cards and COD)
  7. Order status and real-time tracking
  8. Promo code, referrals, offers, and coupons
  9. Rate and review (restaurants/dishes)

Restaurant Screen

  1. Registration and authentication
  2. Profile and log in
  3. Menu management and list pricing
  4. Pop up notification or push notification(when an order is placed by a customer)
  5. Rating and review check

Delivery Rider Screen

  1. Registration 
  2. Order management( include pick up time from the restaurant)
  3. Update order status
  4. Route optimization

Admin Screen

  1. Log in(via credentials generated by the company)
  2. Restaurant management
  3. Live dashboard (monitor delivery and order status)
  4. Payment settings
  5. Generate promo codes, referrals, coupons, etc.
  6. Analytics and report
  7. Ratings and review monitoring
 

Whether your app includes a delivery rider screen or not, the features mentioned above provide your mobile food delivery service functionality. We proceed to the next section: how much does it cost to develop one.

 

How much does it cost to develop a Food Delivery App? 

How-much-does-it-cost-to-develop-a-Food-Delivery-App

Propositions of developing cost vary based on various factors that depend on your requirements and choices. Apps like UberEats, Zomato, or DoorDash are mobile apps and web apps that increase the development charges. Additionally, a delivery rider screen further increases the cost. So it is estimated that the developing cost of a mobile app like Ubereats, Grubhub, or Zomato varies from $30,000 to $40,000. These include app testing across Android and iOS, app design, and launch. 

 

Whereas an additional web app for restaurants can stretch the cost to $60,000.The mentioned costs include license fees of around $300 (including developer license fees for Apple App Store $99/year and Google play store $25 one time fees), app hosting-$70 to $350/month, developer fee around $150 to $200/hour and other miscellaneous costs.

 

Conclusion

 

After listing all the know-how to develop an on-demand food delivery app and its market share, we arrive at our concluding thoughts. The user base of the food delivery apps is expected to reach 2,638 million by 2025. Though apps like Uber Eats, Grubhub, DoorDash, or Zomato enjoy control over most market share. However, there is still a lot of space for newer businesses to operate and lure new users. With markets growing faster than ever before, you can even take your homegrown app to the international arena.

We at Appsrhino can help you in doing so, we have expertise in developing on-demand service apps. Our dedicated team of experts will help you develop a fully customised,high quality app and launch it in no time.