How to Create a Food Delivery App That Will Rock the Market

If you live in a big city, you have definitely seen these guys in bright uniforms on bikes. They have huge insulated bags and they are always in a hurry. They deliver food from restaurants to people now at home or office or at any other place located within the delivery area. But bicycles are not the only vehicle that they use. They may use cars or just walk. They may be employed directly by a restaurant but in the majority of cases, they work for companies that function as aggregators and establish cooperation with many restaurants and cafes at once. Today, the demand for such services is growing, creating perfect conditions for both those considering the idea of starting a food delivery business and those who build food delivery software.

If you also have such plans, we recommend reading this article as we are going to share some tips on how to create an app for ordering food that will make your business succeed.

Is it a good idea to build your own food delivery app today?

Before you decide to launch a custom food delivery app, we advise you to look at the recent data showing the situation in this business domain. The food delivery segment received a huge boost for its development amid the enormous demand that was observed amid the COVID-19 lockdowns. But, of course, it’s obvious that when people can’t even leave their home, they still have to eat something in order to survive. And while cooking on your own can be a rather exhausting thing, food from your favorite restaurant can save the situation.

But to make our arguments sound weightier, let us provide you with some figures. First, the revenue in the online food delivery segment is expected to reach $302,826 million in 2021, indicating a 24.5% growth compared to the previous year.

And it is interesting to note that platform-to-consumer delivery services dominate this market. Their market share is projected to hit a volume of $172,243 million in 2021. This year, the user penetration rate in this segment is said to be at 26.5%.

As for the number of users of these services, it is also steadily growing. By 2025, we could see several 2,897.1 million users.

It will also be rather impressive to note that 60% of people in the US admit that they order food delivery or takeout at least once a week. And over 30% of US consumers do it at least twice a week. Moreover, more than 60% of consumers think it is more comfortable to order food to enjoy a meal with a family at home than to go out for dinner.

Let’s summarize the key factors that can be used as reasons for starting a food delivery business:

• Increasing market value;
• Growing interest from the side of users;
• Possibility for business expansion (if you launch aggregator-like food delivery management software, you will have practically unlimited space for growth);
• Good ROI (the more orders you will get via your app, the higher profit it will bring).

However, you should also remember that there are some pitfalls in launching this type of business. Nevertheless, we do not think they should stop you from turning your idea into an actual product. They should just make you more careful. What are these pitfalls?

• Investments in on-demand food delivery app development and maintenance costs. Yes, newcomers have to face quite severe expenses if they want to create a food delivery app. Final costs always depend on numerous factors, including the type of your app, its features, functionality, etc. On average, the price varies from $50,000 to $80,000. But do not forget that if you have a high-quality solution, it will start to bring revenue quite quickly.
• Tough competition can become a barrier (but not a stop sign). The market already has its leaders, and some smaller players regularly join the game. But with the growing demand, you still have a chance to enter this segment and win your audience’s hearts if you have something unique to offer them.

Types of food delivery software applications

We offer you a deeper look at the main types of this software to better understand the possible options for your business. There can be a little bit different classifications and exact names of the defined categories. We offer you to consider the following one.

Order-only solutions

This is the simplest type of restaurant delivery service software. These aggregators function as an intermediary between customers and restaurants. Such platforms do not offer delivery services and are intended to facilitate interaction between restaurants and their clients. Zomato is an appropriate example of an app of this type.

Order and delivery solutions

These platforms help not only to manage orders but also to organize deliveries. Restaurant staff don't have any possibility to use this software from their side. A typical app of this kind is enriched with functionality for couriers and users who can track the delivery process.

The brightest representatives of this category are Uber Eats, Deliveroo, or GrubHub.

Vertically integrated solutions

These solutions cover all aspects of the food delivery services, uniting ordering, cooking, and delivering. In addition, owners of such platforms can control the quality of all these services to ensure that customer expectations are fully met.

These solutions cover all aspects of the food delivery services, uniting ordering, cooking, and delivering. In addition, owners of such platforms can control the quality of all these services to ensure that customer expectations are fully met.

Suppose we are talking about such a startup from scratch. In that case, we can say that it will be the most expensive option for business owners as it requires expenses not only on software development and delivery logistics but also on restaurant infrastructure. 

But apps launched for existing restaurant businesses (like Domino’s, Papa John’s) can also be referred to this category.

Functionality of food delivery software applications

As you can see, there are different types of food delivery apps, and, consequently, their functionality may seriously differ based on the app’s exact tasks and goals.

There are customer apps, apps for couriers, and merchants apps.  Sometimes apps are targeted at several groups simultaneously, but in that case, applications have separate panels.

What features should be presented in a customer app?

• Menu
• Search for restaurants and food
• Cart
• Payment gateways
• Order management and statistics
• Reviews
• Delivery tracking

What functionality is essential for couriers?

• Order tracking and management
• Navigation
• GPS tracking
• Transaction history
• Online support
• Payment withdrawal

Features for merchant apps (restaurant panel):

• Dashboard
• Order list
• Order management
• Payments
• Sales reports

Each app should also have an admin panel that will provide the necessary features for managing orders, products, customers, and handling payments.

The modern tech stack allows expanding the functionality of your application far beyond the list of features that we’ve provided above.

For example, it is possible to integrate your solution with social media platforms, content management systems (CMS), add in-app messaging tools, and new payment methods (like crypto). You can also enrich your app with VR/AR functionality to take user experience to an entirely new level and ensure high personalization thanks to adding AI/ML-powered features.

How to make money with restaurant delivery service software

For those who want to launch an app for food delivery, it is crucial to understand how it will be possible to monetize it. There are two options for you. You can either charge a delivery fee or offer free delivery (and still get money). Let’s start with the case when you launch an app for your restaurant.

The first option is quite apparent, and there is no need to explain how this model works. But at the same time, it may not look lovely for customers. They will likely prefer to use a platform that doesn’t take a fee on delivery if they have a choice.

As for the second option, it may sound a little bit confusing.

• Variant 1. You can include the cost of delivery in the prices on the menu. Yes, it is possible, but we do not recommend doing this as you may lose your position on the market when your rivals offer better prices.
• Variant 2. You can also choose some options to optimize the delivery. For example, you can make your delivery area narrower and offer only local deliveries. Of course, the delivery costs will still stay with you, but your expenses will be lower with the higher stop density.

But if you want to launch a food delivery platform that functions as an aggregator, there are even more options for you to earn money.

• Fees from restaurants. Restaurants and cafes will pay you for placing their offerings on your platform.
• Share from every order. Usually, 20-30% from an order goes not to a restaurant but a platform.
• Delivery fees. The price can vary based on the distance.
• Paid ad. As a website or app owner, you can raise profit from advertising. If your primary revenue comes from ads, you do not need to charge clients for delivery, making your platform significantly more attractive than those that take delivery fees.

How to make a food ordering app: a step-by-step plan

To make it easier to start your business journey, we’ve prepared a short guide for you.

Step 1. Define your business model

To begin with, you need to have an apparent understanding of the idea of your app. For example, are you going to build a website that will serve as a middleman between restaurants and consumers, or do you want to be responsible for deliveries as well? Or maybe you also want to cook meals? The functionality of the app and the time and money required for its development will seriously differ depending on your business model.

Step 2. Research the market and define your uniqueness

As soon as you understand what product you want to launch, you require analyzing the current market conditions, the competition, the demand, etc. You should also decide what features or processes will make your app stand out from the row of similar apps. For example, it can be an advanced search for restaurants, or AR experience for menus, or maybe you will have an unusual loyalty program.

Step 3. Plan  your logistics and define the food ordering process

Then, you need to understand how consumers will order meals, how you will process their orders, and how you will organize deliveries.

Step 4. Develop your MVP and test your app on a target group

It will be rather feasible to develop an MVP before building a full-scale product. An MVP should include only the basic features of your future app. Based on the feedback received from the first users, you will introduce the necessary changes.

Step 5. Incorporate functionality for different payment options

To make your application convenient for users, do not forget to add several payment options. In the modern world and under the conditions of tough competition, you should stay flexible.

Step 6. Proceed to a full-scale product development

When you are sure that your idea works and have enough budget to cover all costs, you can build a full version of your app with additional functionality.

Step 7. Promote your app and develop your business

This point doesn’t require any comments. That’s where you need to define on your own how you are going to position your app and what directions for expansion you have.

Wrapping up

In this article, we’ve explained to you how to create an app for ordering food on your own, but if you need any assistance from the side of professional developers, we advise you to consider a variant of relying on a third-party team. Here you can read some recommendations on finding the best dedicated development team who will create a product in full accordance with your requirements.

At Geomotiv, we’ve gained rich experience building software solutions of different types, including food delivery software applications. If you choose us as your IT partner, we will help you make even your boldest ideas become actual products. So, please, fill in this online form, and we will contact you as soon as possible.