Which Food Delivery App Business Model is Best for Startups?

The market for on-demand services is growing at an alarming rate. Food delivery services have been thriving by providing exceptional ease and convenience for clients. Therefore, if you’ve an idea for a business and want to establish an online food delivery market, now is an ideal time to do so. Let’s learn what food delivery app business model will be best for all startups.

Why a Food Delivery App for your Startup?

If you’ve been paying attention, the majority of food delivery services only provide the mobile application to their customers. Let’s look at the reasons and motives behind it!

User-friendly and Easy: The app is more user-friendly and convenient than other approaches. If a company ensures that the user experience of its application is top-quality then it will have no shortage of loyal users.

Time-saving: Hunger can strike your stomach at any moment. You never realize it. This is why apps are specifically designed to deliver food quickly.

Mobile Penetration: According to Statista, there are more than 6 million smartphone users around the world at present. It’s not difficult to realize that if you do not create an app for your startup, scaling will be impossible.

Rewards: Another reason to consider investing in mobile app business models is the strategy to entice customers. You can add many useful features to your application like payments tracking, location, discounts, rewards, and more.

There are a few important reasons why you should make the investment in mobile app business models. But, it’s not limited to these.

It is equally important to research the market and find out the ideas for app development and features, and models before beginning your project.

The most crucial features to add in your mobile food delivery app include:

  • Payment system
  • Downloadable (not an application on the web)  
  • Rapid performance
  • Engaging User Interface  

Best Online Food Delivery Business Model

There are three kinds of food delivery models available on the market. Let’s go through each of them in detail.  

1. The Order Only Model

With this kind of app business model for food delivery you’ll act in the role of a mediator between customers and local restaurants via the online platforms you have created. Your platform will enable restaurants and the users to communicate with one another to order and deliver food. 

The principal goal of this app business model of food delivery is to allow restaurants to connect with a larger customer base. However, it is also a way to allow customers to easily make orders from their favorite restaurant.

How it Operates:

For Order Allocation:

  • Customers can place an order via the website or applications.  
  • Restaurants will be notified of the order via the mail, fax or mobile notifications.  
  • They will confirm the purchase and then send an email to customers.  
  • In certain cases the orders are printed directly to the kitchen from a POS system.  

For Delivery:

  • A delivery person from the cafe or restaurant will directly deliver the food at the customer’s doorstep. 
  • During any problem, the customer’s mobile number is given to the delivery person.  

Examples – Grubhub, JustEat, FoodPanda

Benefits of Order Only Food Delivery Model: In this type or business model, you, as the business owner, do not need to worry in connection with food delivery. You can charge commissions from the restaurant for each order completed.

2. Order & Delivery Model

This type of food delivery business model includes restaurants, customers, and even delivery. It’s among the most commonly used marketplace solutions utilized by companies. The majority of restaurants join this type of platform because they do not have to worry about the delivery aspect. 

The most well-known food delivery services that work with this kind of service include DoorDash, UberEats, Zomato etc. Running this online food delivery business model requires more resources than the previous one. 

How it Operates:

For Order Allocations:

  • Firstly, restaurants can sign up on your platform online.
  • Thereafter, customers can order directly from the restaurant using your online platform.
  • The restaurant receives orders from the restaurant via its apps or on the website.
  • Customers are able to pay via credit card or pay cash on delivery as according to their preference. You can ask any food delivery mobile app development company or developers to include pay features in your app.

For Delivery:

  • The delivery driver closest near the eatery will receive an order confirming receipt in email. Then it will take it to the customer location.  
  • Delivery charges will be charged to customers dependent upon the travel distance.  
  • Customers can also include instructions regarding delivery, such as not to ring the doorbell, make an order outside, etc.  

Examples – Postmate, Doordash,  UberEat, Zomato

Benefits of Order and Delivery Model: In this business model the success of your business depends on the experience customers receive from restaurants & delivery guys. 

You can offer the flexibility and speed of delivery service to your customers by training delivery men. Besides, this will allow you to achieve higher reviews on your catering company. 

The only thing you have to do is watch the things happening in your business and fix any issues you discover. You can also hire food delivery app developers for more enhanced results.

3. The Fully Integrated Model

The third model for food delivery is based on meals delivery startups that are quite different from the two food delivery models above. Furthermore, the model includes a complete food delivery service business strategy that will allow you to begin your own business. 

The entire process from preparation to for delivery must be handled by the person who owns it. Also, it is possible to cook the meal in your home or hire chefs for the same. Moreover, this kind of meal preparation service typically works with chefs. 

How it Works:

For Order Allocations:

The order allocation in this food delivery model typically occurs in two different ways as described below.

  • The first option has no involvement from the admin. It means that the request will be immediately notified to the driver closest to you.  
  • The second option is that there is a certain involvement by the admin in the assignment of the order. When a client places an order, it’ll first be sent through the administration panel. Thereafter, the admin will distribute the order to the driver closest to it. For this, you can recruit the best food delivery app developers from a reputed company.

For Delivery:

  • Food delivery is provided by the drivers that a company employs.
  • There is the option of a pre-planned delivery or a quick delivery based on the customer’s needs.
  • Additionally, each driver receives an assortment of meals for delivering to their customers.

Benefits of a Fully Integrated Model: The major benefit of this food delivery model is that there is no need to depend on third parties for customer experience. Like in meals delivery startups the entire operation is run by your business. 

If everything is in line with your plan for business meal delivery then it will increase your earnings. This will ultimately grow your business.

Example – Pizza Hut, Dominos

Which Delivery Service Model is Most Suitable for You?

The above-mentioned food delivery models are well-known and are widely used. Each model has its own benefits and drawbacks. It is important to determine your goals for your business and then choose the model that best fits your goals.

It is crucial to work with an experienced and knowledgeable food delivery mobile app development company. A reliable company will not just help you choose the most effective method of business but also offer valuable tips on how to make the best food delivery service apps

Overall, the development of a complete food delivery platform that has unique features is a difficult task. This is why you should choose only a reliable food delivery mobile app development company with extensive experience in this area.

Author’s Bio

Erma Winter is an expert app developer at MobileCoderz, an established Mobile app development company. With more than 16 years of professional expertise, she has worked with innovative startups and leading businesses. Apart from the app industry experience, she is a tech-enthusiast and loves organic fruits.

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