Food from home has always held a special place close to our hearts. However, foods from restaurants have always fascinated us because of the variety they offer. For a long time, there was no option available for people to enjoy the restaurant food at the comfort of their homes… except for personally, packing and picking them up from the restaurant.
However today, thanks to food delivery applications, it is quite easy to enjoy restaurant food at the convenience of your homes. Food delivery apps bring in convenience and efficiency in food-ordering. With a simple download-and-register, these apps bring the dishes of almost all the restaurants in your vicinity.
How Does It Work?
Let us look at a step-by-step method of how food ordering works. There are 3 entities that are involved in the ecosystem of food delivery, the user, the restaurant, and the delivery partner. Each of these entities has its own application.
- The user opens the application and searches for the restaurant or the dish of their choice.
- They can choose the dishes and add them to the cart.
- The users can check out by making a payment online or by opting to pay cash on delivery.
- As soon as the order is placed, a notification is sent to the restaurant and to the delivery executives in the vicinity. One of the delivery executives accepts the request for the user’s food-delivery.
- The restaurant starts preparing the food for delivery. The delivery executive starts to move towards the restaurant in their vehicle.
- Once the food is ready, the delivery executive can show the code on their mobile app and ensure it matches with the one on the restaurant’s app. The delivery executive picks up the food for delivery. The restaurant can record the activity of the food being handed over to the delivery executive.
- The delivery executive then takes the food and delivers it to the user at their location.
- Once the food is delivered, the executive can record the fulfilment of the order on their app.
The Business Model of UberEats
What UberEats and other food delivery applications have done is nothing more than connecting the huge volumes of demand and supply. They have achieved it by introducing a narrow platform that facilitates a smooth flow between the two. This model of business is called aggregation. We have seen Uber do that with cabs by connecting drivers and passengers.
In all of this, technology has played a major role in the success of this business model. The success of on-demand service lies in its ability to pinpoint the location of the demand. This has been made possible because of the GPS – the once-confined-to-the-military technology becoming an essential feature of today’s smartphones.
There are different types of business models when it comes to food delivery. Some food delivery applications are centered around restaurants. They partner with restaurants to deliver food to the clients. The users directly place the order for the food with restaurants and restaurants take care to execute the delivery.
However, the most common business model for food delivery is the platform-based application, also called the aggregator-model, that is being used by a lot of leading food delivery services like GrubHub, DoorDash, Zomato, Swiggy, and UberEats.
What distinguishes a good business model from a great one is the revenue! UberEats has created multiple funnels of revenue that ensures continuous profit.
The first channel of revenue is the commission it takes from the restaurants for facilitating the order. The delivery service takes a cut from the profit made by the restaurant. Although it might seem small when viewed at a unit level, it does make a great difference when playing the game with volumes.
There are instances when UberEats also takes an extra fee from the customer as a delivery charge. Although the delivery is free in most cases, there can be instances like bad weather and high demand that might prompt UberEats to charge an extra fee from the customer. Other than this, there are also revenues that are collected from the cancellations by customers.
The ‘Uber’ cool Advantages
UberEats brings with it a lot of advantages for both the customer and the restaurants. It is the possibility of advantages from both ends that make UberEats a successful business model.
Every business needs marketing and needless to say, restaurants are struggling for visibility. The UberEats business model brings a lot of restaurants to light. There are instances where customers consider ordering from a restaurant, just because it is present on UberEats.
There is a good chance that people might order using the app and later visit the actual restaurant, with it cannot be denied that this particular visit can only be attributed to UberEats.
– Shared Resources
No restaurant can afford to have their own fleet of delivery executives. More often, it becomes a channel of loss than profit. However, with the UberEats business model, the restaurants do not have to worry about hiring their own resources. At the same time, they can also be assured that there is someone who is always ready to deliver their food to their customers. UberEats has brought in the model of shared-economy when it comes to food consumption.
The Market for Food Delivery Apps
We have already seen that the need for food will never diminish. The tight lifestyle of people, the extended working hours, the frequent movement into new cities, and the general increase in the number of home-parties contribute to the growth of food delivery.
Food delivery applications have shown all signs of a promising growth over the next few years. The CAGR between 2018 and 2020 is expected to be about 15% as estimated by McKinsey. It cannot be denied that food delivery businesses are here to stay and grow. Food delivery presents an interesting and profitable business opportunity for aspiring entrepreneurs.
The Relevance of UberEats Clone
The success of food delivery has already been proven by established players, Therefore, the biggest key to success when it comes to food delivery business is the quickness to reach the market.
There are a lot of processes involved in creating a food delivery business. Although aspects like the legal process and the marketing cannot be substituted, it is always possible for you to use an UberEats clone for launching your food delivery app.
UberEats clones ensure that you do not invest time in recreating a technology that is already present in the market. These clones also contribute to the growth of the food delivery market and also facilitate growth and boom of parallel businesses like cloud kitchens.
There is no doubt that food business will always remain an evergreen market… and these days the market for food has manifested itself in the form of food delivery services. With the availability of UberEats clones, it is relatively easy to create a business. The cost and the time that goes into the development of a food delivery app from scratch will be the least of your concerns.