After a long tiring day at work who does not want to have a scrumptious meal and get into a tight sleep. With the busy lifestyle of the working community across the globe, the need for on-demand food ordering and delivery services come into being a lot helpful and satisfying. This scenario was limited to the metropolitan cities during the initial days but has now substantially extended to even the rural regions with the onset of technological advancements and the access to the web.
The world was introduced to the on-demand services with the home delivery systems used at supermarkets, some restaurants and food centres, and even local grocery stores. All you had to do was to call up the place, order the items you need and they will be delivered at your doorstep. Inspired from such services, the online on-demand marketplace has grown with a lot more features making it a competitive business idea with a huge scope for creating successful profit margins.
Working of an Online Food Delivery Marketplace
Mostly, such business models are based on the “aggregator business model” where the business owner earns revenue via service commissions. You might have definitely used one online uber for food application at least. So let us just have a quick recap on how the system works, step by step.
1. Users log into the website/ application used for ordering the food and explore the cuisine and restaurants based on the user’s current location.
2. The customer adds the items to the cart and checks out by adding his/ her payment option to pay and the delivery address.
3. Once the order is placed and the user has paid for the order, the marketplace owner cuts his commission and transfers the order for the restaurant for cooking and delivery.
4. A third party delivery service or the restaurant delivery employee hands over the order to the customer to the address provided while placing the order.
Reasons for the Upsurge in Uber for Food Applications
1. Easier for customers to find the cuisine they want and search through the menus of different restaurants using a single online marketplace website or mobile app.
2. The application will cover all major restaurants in the locality and is easier for the user to forage.
3. The customers can effortlessly compare the prices of cuisines from different restaurants and order from the best post collating the price, reviews and ratings for the restaurant.
Now that we have covered the basic working of an Uber for Food application and the reasons for its increasing demand across the globe, its time to jump into some technicalities on the business model. When running a business one must make sure that it is placed in such a way that it can easily reach its potential customers or the targeted audience. Looking into the charts of the history of such on-demand services, they were limited to the urban areas or the metro cities in different parts of the world. But with the rapid adoption of the internet and smartphones, things are looked to in a wider angle. On-demand services now are not only compromised in cities but have greatly extended its services to the rural regions as well.
Having a look at the most talked names in the industry such as GrubHub, Doordash, Uber Eats, Zomato and Swiggy, all follow a different perspective of approach in the food order and delivery business. Let us have a closer peek into what are they.
Uber for Food Business Model Explained
The on-demand food industry has brought in a wave of new inventions in the traditional market through a full cycle business approach based on the three major components of the food order and delivery process. Order placement, Cooking process and efficient Delivery are those three key elements that constitute the full cycle approach.
Based on these three above-mentioned key elements the business model has been designed into three different kinds.
Food Order Only Model
This is the most highly scalable business model amongst the three. Being the first-of-its-kind this model acts like a pure software layer that accepts orders for independent restaurants and manages their own fleet of delivery servicemen. The orders come in via emails or calls and are also acknowledged via email or call on receiving the orders. This model is used of the commonly heard names in the industry such as Just Eat and GrubHub.
The model has its limitations in their offered cuisines and price points and is relatively associated with low-end takeaway food items. This also has a drawback with its inability to control and optimize the speed and quality of delivery.
Food Order and Delivery Model
With a contradiction to the order only model, this model utilizes an uber or on-demand application for orders that will furbish the menu of different restaurants signed up with the business. When the orders are received, the commission from the order’s payment is divided proportionately and the nearest courier official is contacted for the delivery. This creates a lot of chaos in managing the software and can lead to delayed deliveries. Such services like the Doordash can be highly beneficial for locally based deliveries. For example, a chef can cook food at home and get them delivered to customers locally.
Fully Integrated Uber-for-Food Model
This model is the much-loved one in the industry today. Business owners develop their own online food order and delivery app. Customers can order a limited range of meals using the mobile or web application and they will be delivered as fast as possible using the independent courier fleet. You can find different options for food delivery such as:
- Scheduled Delivery: schedule the delivery to your preferred time.
- Instant Delivery: the food gets delivered warm and fresh with a shorter time span.
From all these details, we can easily come down to the conclusion that online food order and delivery platforms can help in attracting more customers to your business. This will, in turn, convert into a greater profit margin for your business. As for startups, you can start locally discovering the tastes and preferences of the local audiences. This will help you in expanding your business venture to more and more areas.
As per economic studies and research, the online food order and delivery industry are about to reach about and more $76 billion dollars by 2022 that makes up in about 79% growth in the industry just in the US. So, the numbers can get even bigger considering all the other regions as well. If you feel its time for you to begin your dream of being your own boss and an Uber for Food business is in your book. Guess this is the right time to fish in for some great returns. All you have to do is to invest in a well maintained online food order and delivery software, pitch in some great clients and offer the best services in town and viola you’re sorted!