Food Delivery Apps: Demand, Requirements, and Development Cost

Updated on :June 22, 2024
By :Vladimir Kuzmenko

Food delivery services are modifying the way people get their food. From a customer's perspective, the benefits of using a food delivery service are evident. It's not only fast but requires less human interaction, and allows you to enjoy a meal even in the comfort of your fluffy bed.

Restaurants are more than likely to lose business if they don't collaborate with existing delivery services or build their own. Also, given the industry demand, it's an excellent opportunity to become a key player between restaurants and customers by creating an on-demand food delivery service.

Growing Demand for Food Delivery Application Development

Today we can observe the global explosion of food tech – companies and services use new technologies and new approaches to rethink the process of buying and consuming food. They are doing the same thing as online stores did to shopping, online booking to travel, and Uber to urban mobility. The main trend in food tech is hyperlocal delivery services with on-demand consumer apps, which hire their couriers and bring food from restaurants located near the consumer.

Moreover, it became more affordable for the majority, and ordering food for dinner or lunch is more convenient and quicker than cooking. Low-quality deliveries are no longer welcome – people care more about their health and watch what type of food they eat. That's why it's essential to make sure that the food delivery service is a high-quality product.

Food Delivery Global Market Volume

According to Statista, global revenue is estimated to show an annual growth rate (CAGR 2020-2024) of 7.5%, indicating a market volume of US$164,002m by 2024. Diving deeper, the market's largest share is Platform-to-Consumer Delivery, with a market volume of US$62,798m in 2020.

Food Delivery Market Volume

In a global comparison, China ranks first – the generated revenue is US$45,909m in 2020, then comes the United States with its US$23.991.

Who Can Benefit From Owning A Food Delivery App 

Some people can ask – why do I need to develop my application if there are already aggregators or popular services which I can use? Let's check out three categories of businesses that should consider developing a food delivery service:

  1. Restaurant Chains: Owners of a large food restaurant chain across the city or country that don't want to pay an extra fee to some aggregator app.
  2. Entrepreneurs of a Specific Area: The location they live in is too small or distant for such aggregators like UberEats, or they can't launch due to some legal issues. 
  3. Startups: Those who want to be ahead of direct competitors and by creating a food delivery service – increase the client's loyalty and break new ground. 

Types of Food Delivery Apps

Business models of food ordering platforms can adjust according to business goals and requirements. Food delivery service can be local or even worldwide, giving multiple opportunities to start or extend the existing business.

Let's check out the typical business models of food delivery applications and what they imply.

Food Delivery Revenue Model

Order Only (Grubhub,Zomato, Deliveroo)

This model connects customers with local restaurants and facilitates interactions between them.

Moreover, it helps to increase the food order rate of restaurants using the app. This model implies that the restaurants pay the app owner for every order they get through a particular app. One of the downsides: the application owner can't control delivery speed, service level, or food quality – it's all on the shoulders of food providers.

Order & Delivery (UberEats, DoorDash)

This business model implies that food delivery is managed by the app owner, along with the provision to order food in the app. The owner gets a commission from the restaurant and delivery fee for each order received through an application. 

Also, the delivery speed and management of courier staff is controlled by the app owner.

The Fully Integrated Model (Metabolic Meals, Eat Purely)

It's a fully-loaded model that suggests the application owner manages everything from the app, food preparing, to delivery. Though it's a rather highly cashed intensive model, the owner controls delivery speed, service level, and food quality.

Food Delivery App Requirements

For those who decide to create their food delivery service, it's good to start from analyzing direct competitors and decide how to keep pace with the changing market needs. And what is more important – focusing on the priority features and bearing in mind that a full-fledged delivery service relies not only on a lot of "hot" features but also on reliable service infrastructure.

Let's take a look at user needs and tech requirements that, if combined, will help to bring the app to the next level.

User Requirements

  • Advanced, mobile-first approach (UI and UX): It's necessary to use utilities that collect user metrics: the duration of the interaction with the app, which screens the user visited, when, and how the session was completed, which buttons were pressed, and many more. Moreover, all changes in the interface should be tested on small focus groups, collecting statistics, and process feedback.
  • Quick search by dishes and restaurants: With the ability to access user location to order any meal from the nearest restaurant in a short time.
  • Order status: Get information about the order status in real-time (accepted, prepared, courier on the way).
  • Convenient method of payment: The user should be able to pay for the order in different ways – cash/credit card – it allows to cover more audience and widen the target audience.
  • First-line support: It's important to don't neglect the value of the support that handles orders, complaints, delivery problems. 
  • Promo code system: The promotion code system is an opportunity to make up for disputes with unsatisfied customers by offering gifts/promotions.

Tech Requirements

  • Reliable project infrastructure: A full-fledged delivery service with logistics requires much effort invested in the server-side software. If there is a sudden inflow of users to the service, it will affect everything: the performance of servers and server software, network equipment, traffic, resource quota reserves, the ability of the application to handle competitive requests itself, among others.
  • Administrative interface and utility usability: Properly developed admin part can save time and improve the efficiency of the entire service. Imagine a couple of seconds saved on a frequent operation and multiplied by the number of operators in the call center. It can play a big part in the outcome for the potential client.
  • Application's behavior: Logging everything that happens in the system: incoming and outgoing traffic, algorithm arguments, conditions, and received results. Here can be used a single ID for the series of logs to tie them to the same long-term operation. All this will help to understand the application's behavior and diagnose the problems.
  • Automated tracking business and technical metrics: Tracking and making forecasts is essential to troubleshoot, proactively manage problems, and potentially prevent. As for business – everything, intended for revenue generation, especially long-playing processes, should be reflected in the database.
  • Code review process: Projects tend to grow, and with them, the team grows, which leads to more diverse implementation approaches. Code review allows the exchanging of experience, compiling the approach to solve the problems, as well as the rotation of knowledge, which increases the so-called bus factor – concentration of expertise among individual team members.
  • Maintain and actualize the documentation: Rules and practices gained in the process that will be very useful for developers and will help to avoid inconsistencies.
  • Ongoing product development: Always look for ways to promote, enhance, update the product. It includes gathering data about the user needs and wants, designing and engineering the service, and testing it on the targeted audience.

Challenges of Entering the Food-delivery Market

Creating an on-demand food delivery service, it's not an easy-peasy task. As was mentioned before, the online delivery business processes remain complex since the product should efficiently match and co-ordinate end-users, food providers, technical and client support, and delivery services. 

How to deal with all those factors and develop a successful food delivery app? Let's check out some of the common challenges and ways to overcome them.

Sustainability and Scalability

The system needs to adapt to changes in requirements both within the project and external services, whether it's a payment or a third-party restaurant system. Various APIs that support the service should work accurately together and allow the system to be scalable. The performance of servers, network, traffic, and all essential infrastructure depends on how the processes are configured. 

Moreover, it's essential to make sure that UI/UX is well-built and test it on the different devices collecting the feedback data. Keep in mind, if users don't like the interface – they will leave for one of the direct competitors.

Partnerships with Restaurants

Better to start from choosing the type of restaurants to focus on, and negotiate with smaller restaurants before approaching the big fish.

The owner should focus on developing a knowledge-based engagement and easy-to-use service, formulate clear process instructions, and analyze the received feedback.

Retaining Users

Provide users with exclusive deals, coupons, updates, push notifications with helpful information from featured bars and cafes.

How Much Does it Cost to Develop an On-Demand Delivery App

A comprehensive project requires a holistic business approach that will help to improve the business's performance and profitability by providing full-fledged support. 

The essential team for building an app from scratch includes the product owner, 2–3 mobile developers per platform (Android and iOS), two back-end developers, designer, business analyst, 1-2 QA engineers, and project manager.

If we're talking about the outsourcing companies, they have combined expertise in business domains and tech solutions, which can be a well-suited solution for your app development, considering that it turns out to be less expensive than the in-house team. As for in-house development, it implies a closer connection to the team and a better understanding of corporate culture but requires intensive cash flow that implies recruiting, maintaining an entire department, and bearing the costs associated with it.

If you are outsourcing app development to an eastern European company, they are most likely to charge $30 - 35 per hour. Based on that, let's take a look at the most common priority features of the on-demand food delivery app and how much it costs based on the types discussed above.

Order Only App

An app like Grubhub allows ordering and delivering from restaurants across multiple cities with food catalog, order management, and 24/7 customer support.

Having only customer and app administrator roles with no payment processing and geo-tracking features, the 1st version of the app can be developed within 2.5–3 months. If considering the Eastern European development team, it would roughly cost $50–55,000.  

Order & Delivery App

An app like UberEats that covers various restaurants and allows not only ordering food but also covers delivery with its couriers, usually a good type for startups in case they have competitive features to stand out with the existing players on the market.

Having a full cycle of service providing and management of various restaurants, the 1st version of the app can be developed within 3.5–4 months. If considering the Eastern European offshore development team, it would roughly cost $70–80,000.

Fully Integrated App

An app like EatPurely includes one restaurant chain and covers a whole cycle of cooking, ordering, and delivering for the nearest locations with the support of clients, partners, and couriers. Individual businesses and restaurant owners generally choose this type of app.

Having its own restaurant's chain infrastructure with payment processing and geo-tracking support, the 1st version of the app can be developed within 3–4 months. If considering the Eastern European development team, it would roughly cost $60-65,000.

What’s Next?

The delivery market continues to grow, and there's still much space for entering right now. Start from analyzing the target market and building a prototype of a future app to test your idea. Then you can move to the development considering all the priority features you've underlined. 

For those who are new on the market, it's better to start with the most straightforward business model - order only - and then move ahead once having a solid base of partners. 

For those who already have their restaurant chain and need to straighten it, the solution can be – developing a fully integrated app based on a custom business model.

Developing an on-demand order and delivery service can be challenging unless you're prepared and have an expert marketing and app development team by your side. For such service-seekers, GoodFirms presents a list of top mobile app developers around the world.

Vladimir Kuzmenko
Vladimir Kuzmenko

Vladimir Kuzmenko is SVP of Sales & Business Development at NIX United. He is a visionary, inspirational, and collaborative leader with a passion for Technology and Innovations. Being graduated in Experimental Physics & High Math, and working in IT and Software Development since 2001, he has been a part of Digital Transformation since its early beginning.

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