How to Develop an On-Demand Delivery App and Achieve Product-Market Fit

On-demand services are shaping the way people consume. This model has disrupted numerous industries: hospitality (Airbnb), entertainment (Netflix), transportation (Uber).

Food delivery isn’t an exception. According to Statista, 44% of US consumers order food delivery at least once a month. This makes food delivery a vast market with fierce competition.

Rough competition means you need to be ready to invest a lot of time and money into a project to make it valuable for consumers. For example, the on-demand delivery business requires four solutions:

• App for users
• App for couriers
• Solution for partnering restaurants
• Admin panel

In this post, you’ll learn about relevant features for on-demand delivery services, monetization models, and development tips.

Types of Food Delivery Services

First off, you should be aware of what types of on-demand food delivery services are there on the market. They may require different product development approaches.

Marketplaces

On-demand food delivery marketplaces are services like Deliveroo, Delivery Hero, and Uber Eats. They’re also known as aggregators.

These services connect users with restaurants they partner with to provide food ordering opportunities. Like any traditional marketplace, on-demand food delivery apps take care of customer support and solve any problems connected with users’ orders. Aggregators typically charge a fee from users or restaurants.

This is how they work:

1. A user launches an app
2. They look for a preferred restaurant\dish
3. Make an order
4. A restaurant accepts or declines the order
5. Once the order is cooked, the courier is informed
6. The courier picks the order from the restaurant and delivers it to the user

Due to rough competition, the food delivery market is pretty diverse. Various companies that take dominating positions in different regions of the world. You can see them in the picture below.

Direct Delivery

It stands for a delivery process without third-parties. This model is popular among big food chains like Domino’s Pizza or Jimmy John’s.

In this case, the food chain is responsible for the whole process of delivery and customer support. So there’s no need to pay a 15% fee from each order.

Monetization Models

The fee is not the only monetization model available for on-demand delivery apps. There are several more ways to build a monetization strategy.

Fees

Let’s take a closer look at this model. There are a couple of ways to implement it:

1. Restaurants pay a fixed fee to get listed on the marketplace.
2. Restaurants get charged for each order (Uber Eats takes up to 15% from the order subtotal).

Ads

Another viable monetization model is to let restaurants get promoted via ads in the marketplace. Restaurants can pay to get higher positions on the search results when users look for something specific: “Chinese restaurant”, “burger”.

Additional fees

Many food delivery apps charge additional fees for delivery during peak hours or bad weather conditions like rain or snow. In some apps, there’s also an extra fee for rush delivery to ensure

Building an On-Demand Delivery Platform

Most on-demand platforms have an ecosystem out of several solutions working with different parties of the platform. In the case of food delivery, those solutions are:

• User-Facing App: Users can see the list of restaurants or dishes and make an order via a mobile app for Android and iOS.
• App for Couriers: The app notifies couriers about incoming orders nearby and tells them when the order is ready. It also builds the route to restaurants and users.
• App for Restaurants: Partnering restaurants can see incoming orders and tell couriers the time when the order will be ready to pick it up. It’s possible to build a web app for this purpose to cut costs.
• Admin Panel: It’s the admin panel for your app. With its help, your team will be able to add new partners to the platform and remove the ones violating your policies.

The development of several solutions affects the total app development cost, so it’s better to analyze everything precisely to ensure your investments will pay off.

User-Facing App

To keep a budget relatively low, you should consider adding MVP features to your product’s first version. This will also help you collect user feedback and analytics to improve your app.

• Signup: The simpler the registration process is, the more users will make it to the main page. Consider adding fast signup options like Facebook, Google, or Apple using corresponding SDKs. Still, some users may prefer email and password or phone number and password registration.
• Search: It’s probably the most crucial feature. Users should be able to search for restaurants of their interest or look for their favorite meals. It’s a good idea to add some filters to make searching faster.
• Location Tracking: Users should only see those restaurants on the main screen situated within a certain distance to them. For example, this distance equals to approximately 3 km in Deliveroo. It’s needed because couriers have to deliver the order traveling by bike or other vehicles until it’s too cold.
• Payments: Users pay for their orders through the app. Don’t forget to include courier tips to encourage their work. To implement this functionality, your development team can use payment gateways like Braintree, Stripe, or PayPal.
• Push Notifications: Keep users informed about the status of their orders through push notifications. It’s also an excellent channel for promoting discounts or limited offers. Amazon SNS and Firebase Cloud Messaging are one of the best tools to develop push notifications.
• Reviews: Let users leave reviews about couriers’ work or ordered food. It’ll help you improve customer service and work with partnering restaurants.

App for Couriers

The courier app should be simple yet functional. Mobile app for Android and iOS would be the best option for couriers that are always on the go.

• Signup: Just like users, couriers should have signup options. You can use the same options used in the user-facing app.
• Order details: To make the work done, couriers need to see the order details: time and address of pick up, time, and address of delivery.
• Navigation: It’s evident that couriers that have built-in navigation to pick up and deliver orders. Besides, customers should also see how far their courier is on a map. To implement these features, your developers can use the Location Framework for iOS and Google Maps Platform for Android.

App for Restaurants

Partnering restaurants need to see incoming orders and notify couriers about its readiness. It’s often the case that the solution for restaurants is web-based.

• Registration: Restaurants are often approved and onboarded by the food ordering marketplace. That’s why the only options worth adding here is email\password and phone number\password registration.
• Menu: Restaurants should be able to add new meals to their menu or edit the existing ones.
• Orders: Restaurant managers should have an opportunity to manage orders (accept, decline) and change their status for couriers.

Admin Panel

The admin panel is required to manage your platform.

• Restaurants: Add new partners to your marketplace and remove the ones violating your policies.
• Analytics & payments: Keep track of essential KPI to improve decision making. Besides, you can see the profit for a selected period and define your ROI.

Summing Up

On-demand apps are complex solutions with an IT ecosystem. Its development may cost you from $160,000 to $210,000 and over. Everything depends on your feature set and team. Mobile App Developers from different regions of the world have different salary expectations.