How Much Does it Cost to Build a Food-Delivery App like UberEats or GrubHub?

By Prateek Saxena| Tuesday, December 11, 2018 08:00 AM |12 min read

On-demand food delivery apps like UberEats, GrubHub, and Zomato, blends two things that the world loves on one platform – comfort and food.

By making the whole process of ordering food, not restricted to any one cuisine, come on the tap and flick of millions, on-demand food delivery mobile applications are borne to be an instant hit among a huge pool of mobile app users, no matter what demographic they belong to.

Here are some statistics to prove that –

The fact that food delivery apps have become such an instant App Store and Play Store pleaser have presented them as a business idea that is destined to succeed. A certainty that has left an open question in the app market – How Much Does it Cost to Develop a Food Delivery App Like UberEats (or one around the extended version – How much does it cost to develop an app like Postmates). The answer to which lies later in the article.

But before we move to the food delivery app development cost, let us look into the potential of the market who are going to enter.

Food Delivery App Market Share

The present-day food industry scene is a validation of how the comfort of dining in is bringing a rise in the online food ordering system. An investment firm, Cowen is estimating that in the next five years, there is going to be a massive 79% growth in the online food-delivery market than its present state.

The rate at which the demand for the online food-delivery industry is growing is a sign of how fast the gap between online and offline is closing and how in a matter of few years, online demand will surpass the offline demand.

The graph above is only a minute sign of how big the market is and how bigger it is all set to become in the coming 4 to 5 years time.

But instead of dwelling into the obvious – Food delivery market is huge – let us dig deeper into the concept as a whole, starting with the online food-delivery app types.

Type of Food Delivery Apps:

In the present mobilized restaurant economy, there are two business models that you can think of when entering the on-demand food-delivery market space –

Aggregator

In this model, you can launch an app that will act as a platform where users and restaurants meet. An app following this business model gives options to the users to order food and for the restaurants to view and complete the order without any delivery support from the app’s parent company.

Platform with Logistic Support

Under this business model, you give the restaurants the support to deliver food to the end users in real-time. This is where you handle the complete service offering of the restaurant (except food preparation).
Through your app, you will be giving the end users the option to choose the food item from the menu, make an order and track where the food has reached while giving the restaurants the benefit of tracking the order status and handing over the food to the delivery person coming from your end and get paid for the order, without any efforts but of preparing the food.

Now that we have looked into what the different types of online food-delivery apps are, let us now look into the brands that are leading the space.

Players – The Best Food Delivery Apps

While there are a number of businesses who have entered the food delivery industry over time, the ones that have been able to survive the test of time and still become an unprecedented leader are the following:

• Grubhub
• DoorDash
• UberEats
• Zomato

Even though the market is divided among several players, the market valuation of all the brands are on a high tangent.

We know it must be your dream to join the list of these top players of the on-demand food delivery app industry and why not, after all the revenue that comes their way by being the top-notch is massive!

But for you, as someone who is just starting up and aspiring to be like them, it is very important to know how they earn and grow, aka what monetization plans they follow.

Revenue Model – How to Make Money in the Food-Delivery Business?

There are a number of ways through which you can manage your on-demand restaurant app monetization. But the ones that are most commonly applied the businesses are –

A. Delivery Charges

There are a number of restaurants that do not have the facility of home delivery. When you offer your on-demand home delivery personnel, they are most likely to pay you the delivery charges. 

The business model where you offer to take the responsibility of handling on-demand home delivery is one that got Deliveroo a profit of $164 Million last year. And, it is not just Deliveroo, there are a number of on-demand food delivery restaurant apps that rely on food-delivery revenue as their main source.

B. Peak Pricing

Brands like UberEats set a surge pricing when the demand graph is too high. What they do is limit the menu options and add a surcharge at the time of order placement. Although, the rate of incoming demand might lower, but the per delivery amount increases to a great extent.

Here is what the city wise per delivery income chart looks like for UberEats at time of peak pricing –

Average UberEats income per delivery

C. Commission Charges

Taking commission from the partnered restaurants for every order that the user makes from them is one of the most time-tested modes of generating revenue on restaurant-centric on-demand food delivery apps.

Along with generating high revenues, they also help in creating a long-term partnership between the brand and the associated restaurants.

D. Advertising

Advertising is one of the most sure-shot ways of generating a high amount of revenue. By giving restaurants a place in the Featured section or for running a video for them in the app home screen can be a mode of generating earnings. Also,  apps can earn to a great extent by running Google Adsense on the platform. 

Now that we have looked into the on-demand food delivery system on a holistic level, it is time to look at the factors that will directly impact how your food delivery mobile app is developed and how prepared it is to reap the benefits that the whole industry offers. 

Let us start with the features that should be included in your on-demand food delivery mobile app. 

Features of Food Ordering System – What are the must-have Features of a Food Ordering App? 

When you develop an on-demand food delivery mobile application, whether it’s in the mode of restaurant to user business model or you are working around the way around how to make an app like postmates, you are not making one application but four and then combining them all together in one app.
Since you are working on an app that deals with three different stakeholders – Restaurants, Customers, Delivery Person, and the Admin, the list of features would also vary from one screen to another.

Let us look at the features from the side of all the four stakeholders.  

Customer Side:

Login
Search Menu
Cart
Payment Integration
Order Tracking
Rating and Review
Customer Support 

Restaurant Side:

Login
Menu Management
Push Notification
Checking rating and review 

Delivery Side:

Registration
Order Management
Updating the Order Status 

Admin Side:

Admin Login
Restaurant Management
Application Management
Payment Management
Discount Offers and Coupons
Technical Assistance 

Now that we have looked into the features that should be added in your app, it is now time to look at the technologies that will make it all possible.

[Read: How to Choose the Best Technology Stack for Mobile App] 

Technology Stack of Food Delivery App Development 

For Restaurant Listing – Grubhub API or FourSquare API
For Payment – Square API, Braintree, Stripe, PayPal
To Find user Location – Core Location Framework, Google Places API
To Find Directions – Google Maps, MapKit
For Cloud – AWS, Azure
For Registration – Facebook SDK Login
For Storage – Amazon Cloud Storage
For Analytics – Google Analytics 

Now that you are semi-prepared to enter the destined to be profitable mobile app sector, you should now also get acquainted with the challenges that you might face in the journey and their probable solutions. 

Challenges in Entering the Mobilized Food-Delivery Market (And their Solutions)

1. Competition

The biggest challenge that entrepreneurs who are just starting with the on-demand food delivery app development will have to face is the competition from the already crowded space. The market is already highly crowded by businesses are leaders in their individual domain. In a situation like this, you will have to offer something that the other players don’t, both in terms of features and the app UI/UX.
You, along with your food delivery app making company, will have to find out new ways to attract the restaurants who are already partnered with the others in the market and at the same time, you will have to focus on giving better offerings in terms of discounts or options to the customers ordering food. 

2. Finding Restaurants to Partner With

Since you are just starting up, this might come as a roadblock, even though it has nothing to do with the cost to make food delivery app. What you can do is focus on low-level restaurants who are in need of promotion as opposed to going behind the big brands. At this stage, focus on increasing the partner count instead of having names of restaurants that are famous among the millennials. 

3. Stable UI/UX between All Panels

Although a very crucial part of online food ordering app development services, this can come across as a difficult option as the intent of all the four screens is different and specific to its users’ demand, but this where your partnered mobile app design agency will come to the rescue. They will have to create an experience – a mix of both design and movement – that is constant along all the different screens while answering to completely different intents. 

4. Deciding the MVP Features

Another difficult thing which your restaurant app development agency associate will be able to solve is deciding which MVP features to add in the application and which to leave out. MVPs also have a huge impact on deciding the food delivery app development cost.
Since you are only starting out in the industry, it is very important for you to test the waters before you go in full-fledged and the one way you can do that with minimal cost and effort constraint is through MVP.
Your partnered agency will help you develop an MVP that would raise money for your business. 

5.Finding a Mobile App Development Company that Offers Food Delivery App Development Services

Finding an agency that will convert your idea into a fully functioning app business is difficult, there are so many questions you need to ask before hiring a mobile app development agency. Although a time taking one, finding the right team to convert your dream into reality is what would help you sail through the crowded on-demand food delivery app industry. 

After all said and done, the time has now come to look into the costing, How much is it going to sot you to get a food delivery mobile app developed. 

The wait is over. Here’s the answer. 

How Much Does it Cost to Develop a Food Delivery App?

Although there are a number of factors that together add on to the estimation of mobile app development cost, we will try and give you an idea of how much would it cost to make a food delivery app – the answer to which will be similar to the question ‘How much does it cost to develop an app like Postmates’

Depending on the features you are looking to add in your on-demand food delivery mobile app and the resources that it would require to get your app transformed from its idea stage to the launch phase, the cost of developing a food-delivery app like UberEats or GrubHub would come out to somewhere around $30,000 to $40,000*.
*The cost range which would most likely be charged by the food delivery app development company, comprises of all – Mobile app design, development of both Android and iOS version of the app, app testing, and app launch in the market. 

If there is a need for making a web app for restaurants, the range would extend to $50k to $60k.

With this, we have now attended to everything you need to know in the present day for entering into the on-demand food delivery app market and the probable online food delivery app cost. And now it is now time to prepare you about the future. 

By knowing what lies ahead in the food delivery app market future, you will be in a better position when talking to your preferred on-demand mobile app development company about scaling your app in a way that it is prepared for the food delivery future. 

What is the Future of Online Food Order App in the Mobilized Space?

The future scope of online food ordering system and on-demand food delivery app development is defined by food delivery trends that only made a few minor appearances in the present day, but are all set to modify the industry by the time we hit 2020. 

Let us look at the food delivery trends you will have to focus on to make your 2018’s food delivery app ready for the years to come, today itself. So that you can get in touch with your partnered food delivery app development company and talk about scaling your app. 

A. Expansion of Business Model

The one direction where food delivery apps are now heading at are an advanced version of just food delivery. Businesses like Postmates are now emerging to give a strong competition to brands that solely focused on getting food delivered from restaurant to customers.
The answer to how does postmates work lies in the app being an on-demand solution where the users can order food, food preparation materials, and alcohol on a real-time note.
So, we suggest that you conduct an in-depth understanding of what is postmates, the business model of postmates, and then discuss the development methods for your postmate like app with your partnered on-demand app development company.

B. New Food Ordering Channels

Along with the usual food ordering channels like Websites and Mobile apps, users will now be finding newer platforms to make orders while being connected with the internet.
Channels like – Social Media, Virtual Assistants, Smart Objects – TV, Wearables, etc, and even through your Car dashboard. 

C. New Delivery Options

In addition to the new ordering options, the on-demand food delivery system is also going to look into some new trends in the coming time. The delivery options are moving in a direction where the food will now be delivered through drones, parachutes, and robots. So, you will have to ensure that the food delivery mobile app you are investing in, is in a shape that they can be scaled to be integrated into these modes. 

D. Less Explored Service Diversifications

The business model of apps that is presently focused on making customers meet the restaurants on one platform will expand to newer business types such as:

• Pet food section
• Recycle food space
• Health condition specific food categories 

E. AR/VR

The time is here to make your dumb restaurant app smart and the one technology that will play a crucial role in it is AR/VR. While they will initially focus on the marketing front of the mobile app, they will eventually be used as a major user engagement mode by keeping users hooked on to the screen even when their food order is taking time to be delivered. 

F. Big Data

Big Data in food industry is considered to be a very niche category in the present time, but the future if going to change. The future will see a whole lot of different adaptations of powerful technology in the food industry. 

When employed right, Big Data will soon start giving food delivery apps a number of benefits like better delivery time estimate, greater understanding of consumer sentiment, personalized marketing, and ultimately better demand prediction. 

With this, we have now reached the end of the insightful article on the Food delivery app industry and the online food delivery app cost you would have to shell out to become one of the top names in the domain.

Want to know what’s next? Get in touch with our Mobile App Development experts and get started with your own food delivery app development.

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