Business Models for On-demand Food Delivery Apps - Choose Wisely

Mar 20


Jessica Bennett124

Jessica Bennett124

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Order. And food is waiting at your doorstep! What else can make us happier! This is how on-demand food delivery apps are making things easier for the app users. But what is the underlying business model of such successful apps? Find out here.


The Uber app model is creating a lot of buzz in the app industry from the last couple of years. Based on this model,Business Models for On-demand Food Delivery Apps - Choose Wisely Articles industry-specific businesses are becoming mobile and investing in on-demand mobile app development to enjoy higher business ROI. In the same way, we all have got plenty of food delivery apps like GrubHub, UberEats, etc. today. 

Good food is enough to make us happy. But when it is delivered right at our doorstep, what can be more loving! Thanks to the concept of on-demand food delivery applications that just by tapping a few times on our smartphone, we can enjoy finger-licking good foods without even moving an inch! 

So, how are these food delivery apps gaining immense popularity worldwide? What are the underlying business models that these apps are following? 

Which business model will be the best choice for your food delivery app? 

Read on and find out the most popular business models for on-demand food delivery apps and choose accordingly. 

The Convenience Offered By Food Delivery Apps

One of the basic objectives of creating a mobile app is to make things easier for its users. And these apps to deliver food is no exception. By adding unique and engaging food delivery app features, you can grab the attention of more customers. Here is the list of some probable reasons why consumers are loving this uber concept for foods! 

Easier decision making - Food delivery apps bring you the opportunity to choose from a lot! Depending on the reviews and ratings of a particular restaurant, we can decide what we want to have.

Easy access - Continuing from the above point, now that decision making has become so easy, by simply ordering the food, we can get access to it easily which means we can have it whenever and wherever we want. 

Easy payment options - It is not necessary to have physical cash with you to enjoy the food you want. You can easily make payments using cards or wallets. 

Convenience to reorder - Suppose you have bought some food using such a food-delivery app. Now, the next time when you use this app again, the entire food ordering process becomes even more seamless. 

You do not have to enter your delivery address again (Only if you want it to be delivered at the same place). You can keep your card details saved safely to make the payment process faster.

On-demand Food Delivery App Business Models

The three main components of running an on-demand food delivery app business successfully are:

  • Food ordering
  • Cooking the food
  • Delivering the cooked food to customers’ doorstep

Now, based on these three components, the food delivery app industry gets the following defined business models. Businesses can integrate these models as per their respective business genre and can earn money. 

The First Business Model: Order Only

Delivery Hero, JustEat - initially, these food delivery services used to follow this business model. 

Back then, the main selling point of such a business model was to grab the attention of new customers and deliver them a seamless platform to order their favorite foods. Also, by integrating the optimized mobile and web platform, individual restaurants could enjoy a great number of orders in a headache-free way. 

How Does This Model Work?

Ordering Food

  • First, users place an order either using mobile app or web
  • Either by email or by fax different restaurants receive that order
  • Now, it's time for the restaurants to notify the users that the order has been received. And this notifying can be done either via automated phone call or email

Delivering Food

  • Either the restaurant has to employ someone to deliver the food
  • Or, restaurant delivery services can be hired

Now, this model has some limitations like as follows. 

  • In terms of cuisines and price, the service offering is limited
  • Consumers think only low-key takeaway foods like Sushi, Burger, Pizza, etc. can be ordered and delivered by such a model
  • Optimizing the speed and quality of the food delivery services cannot be controlled here

However, the benefit of this model is the low charge. 

The Next Model: Order and Delivery 

Food delivery applications like Deliveroo or Caviar follow this business model.

So, How Does This Model Work? 

Ordering Food

  • Users can order food by exploring the uploaded menu on the website or mobile app
  • Once the order is received by the restaurant, the concerned courier provider is notified about the time to pick up the ordered food and the address, where the food is to be delivered.

Now, the delivery service has a commission fee. And restaurants need to pay that. To help restaurants doing so, such apps markup the item prices. The consumers are charged with a pre-defined fee as well depending on the restaurants from which they are ordering the food. 

Delivering Food 

The on-duty delivery employees are logged in the mobile app that can track their location. Whenever an order is received, it depends on the couriers to take the job or not. If one courier decides not to do the job, it will be sent out to other courier options. The first one to accept it will get it.

Once such food delivery app owners can grasp the entire process of optimizing the restaurants and the couriers, this business model is a surefire way to bring remarkable growth. 

Wrapping Up

Research made on the food delivery industry in the United States depicted that at least once a week, 20% of people use such on-demand food delivery services. So, “how to make a food delivery app” has become a common interest of many app investors globally. 

If you are planning to craft such an on-demand food delivery app and unsure about which business model you should opt for, you can reach an expert app development firm to consult. Having prior experience in making such apps, they can guide you the best as per your business requirements.