Food is one of the most basic needs of humans and it has remained a universal truth, defying time, civilization and cultures. However, the way in which food was consumed kept changing from time to time. There was a time when the produce of a particular area was used in that particular region alone. It was the time when food was cooked at home.
Restaurants started providing food as services. The restaurants were essentially meant to people who do not have access to home food. However, restaurants started to evolve, becoming hangout places with food being an excuse. Restaurants have made food democratic. It is not quite surprising to see authentic Italian pizza available in Australia.
As time passed, people wanted to have the variety offered by restaurant food but in the confines and comfort of their homes. Some restaurants were able to provide food delivery to people living around their physical location. There were a lot of inadvertent delays and it did not seem to be a sustainable model for the restaurants.
The Entry of Food Delivery:
The growing business for restaurant food at home has given rise to a new segment of business called on-demand food delivery. These food delivery companies operate outside the restaurant as a separate entity. They deliver food from the restaurant to the customer.
There are a lot of food delivery service brands globally. UberEats, GrubHub, Go-Jek, Zomato, and Swiggy are some of them. There are a lot of local brands as well. UberEats is a brand that operates in multiple countries across the globe.
How Do Food Delivery Services Work
To understand the working of the food delivery ecosystem, we will need to understand the entities that are involved.
- The customer downloads the application and orders the food. This application will need to incorporate a few technologies like geolocation and payment gateways that will enable the smooth functioning of the process and payments.
- The delivery partners are almost like the actual employees of the food delivery company. They take care of the process to deliver the food prepared in a restaurant to the specific address of a user as requested on the app.
- The restaurant does not have to do anything new. All that they are expected to do is to simply prepare the food and have it packed and ready for delivery.
Now that we are aware of the three entities, let us look at the step by step process of how the entire ordering works.
- The user is expected to download the app and give some basic information like the contact number and email address. In addition to that, the user should also specify the address to which the food should be delivered.
- Based on the address, the app shows a list of restaurants that are available for delivery to that location. This list of restaurants is created by a geofence to ensure that there are no deliveries that seem too distant.
- When a user selects the restaurant, they are shown the list of items available on the menu. They can add specific items to the cart and also specify the quantity.
- After confirming the dishes, the users can place the order. After the order is placed, they can choose to either pay online or pay by cash on delivery.
- As soon as the order is placed, a notification is sent to the restaurant and to delivery partners. The restaurant accepts the order and they start to prepare the items.
- The delivery partner who is in the vicinity of the restaurant will start moving towards the restaurant. It is expected that by the time the delivery partner reaches the restaurant, the food would be ready.
- Once the food items are ready, the delivery partner picks them up and delivers it to the user. The GPS system assists them in reaching a precise location.
- After the food is delivered, the delivery partner and the customer can confirm the receipt of the food.
- Food delivery applications have a rating system that helps in choosing the right restaurants.
The Revenue Stream
No business would be complete without a revenue model. The revenue for food delivery applications comes from three different sources.
Revenue sharing from restaurants - it has to be agreed that these food delivery applications facilitate quite a lot of orders for the restaurants. These orders might not have been possible without the existence of these food delivery services. For facilitating this business, these services take a percentage of the total revenue of the restaurant.
Delivery fees from customers - in most cases, food delivery is free of charge. However, in certain situations where the order does not cross a certain threshold, the food delivery application charges a certain amount from the customer for the delivery.
Sponsored content charges - some restaurants might be relatively new and they might not have had the rich ratings that are required to gain customers. In such cases, these new restaurants can pay the service provider to place their brand in a place of better visibility.
The Cost of Creating an UberEats Clone
If multiple service providers can co-exist, it only means that there is space for more. It would be a good idea for a business person to consider creating an app like UberEats. There are a lot of aspects and features that go into creating an UberEats Clone. The factors to be considered are the technology, the database, the promotion, and the operational costs. In addition to this, there are one time expenses like company registration and legal compliances.
It is estimated that the cost of creating an app would be in the tune of about $30000 to $80000.
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