During a global lockdown 2020, Uber Eats couriers dashing around on their bikes, with huge green boxes full of food behind their backs, were the only people on the city streets.
A demand to have your food delivered significantly raised since the governments recommend to stay at home. No offices, no cafes, groceries, or restaurants. But with on-demand delivery services, these several months passed a bit easier. Now, living in big cities, we can order online almost everything, and get it to our doorsteps within minutes. The particular role here belongs to the food delivery app like Uber Eats.
But what about consumers located far from major urban areas? What about small towns or rural regions? Here, we can reveal a considerable Uber Eats' drawback. The service operates in big cities only, targeting highly populated areas while small towns worldwide remain uncovered. There are massive spots on the world map where demand for Uber Eats-like app is giant.
And that's where you can succeed.
Looking for ways to satisfy the needs Uber Eats misses, you have come to the right place. In this article, we will provide the answers to the sharpest questions:
- How to launch an MVP for your food delivery app like Uber Eats?
- What features are a must?
- How to monetize your idea?
- How much does app development cost?
And even more!
Get ready to succeed in the rapidly growing industry in 2020.
Uber Eats business model: how it works and how it makes money
Uber Eats is the product of the Uber world-known unicorn and a game-changer in the transportation industry. Both companies represent the concept of sharing economy and on-demand services. Uber offers ride-sharing opportunities, and Uber Eats allows ordering meals from restaurants and cafes nearby.
Since its opening in 2014, Uber Eats has been demonstrating excellent results. Even during a worldwide crisis, when numerous businesses struggle greatly, it keeps stable positions. In March 2020, the company reported a 30% jump in a number of customers. Uber Eats app finds its place in the top mobile apps in 2020 and slowly wins the attention of users who preferred similar apps.
So how do winning apps like Uber Eats work? Such apps provide services for three groups of users (restaurants, customers, and couriers) and charge fees per each order.
- A restaurant creates an account, provides a description and precise address, publishes menu augmented with prices and high-quality photos, and receives orders from customers;
- Customers, in turn, sign up and create an account, browse available places and menus, choose meals and order them via the app;
- Delivery guys get notifications about orders, accept the ones they can fulfil, pick up the food, and take it to the customer's doorstep.
Uber Eats handles all transactions, calculates approximate distances and arrival times, allows tracking food routes, etc.
Let's pay particular attention to the Uber monetization model. Now, it charges customers and restaurants per each order. The exact amount of fees varies from location to location, so here we present the average numbers.
Uber Eats customers pay delivery and service fees per each order.
|Delivery fee||Service fee|
|Customers fee||Depends on customer's location: you pay less for a nearby restaurant||
up to 15% of the subtotal
(in case of small order, it's $2-3 flat fee)
Restaurants pay the service to make their accounts active and visible to potential customers. Besides, they pay a rather high fee per each order, which stimulates numerous complaints and discussions:
|Activation fee||Order fee|
|Restaurants fee||$350||Up to 30%|
In turn, the platform pays a driver for each successful order. The payment structure is rather complex and consists of base fare, trip supplement, promotions, and tips.
Uber Eats doesn't share the exact algorithm of the courier's payment calculation. For your better awareness, we found the example of the old payment model in LA.
Critical features for your app like Uber Eats
When entering the food delivery industry in 2020, the critical point is to start as fast as possible and roll out a robust application while competitors are distracted with minor tasks.
MVP the Minimum Viable Product is a way to achieve your goals. This is a chance to win a market share in a defined region and lay the foundation for a viable grocery delivery app. Once you have a simple MVP powered with crucial features, you can verify your concept, find out customers' opinions, present your business in a local market, and raise funds to grow your business.
To launch it fast, you need to prioritize essential features first. Now when you are aware of the basic functionality Uber Eats provides, you can easily decide which of them to include in your app.
The features we've collected in a table below are essential. You can bring them to life on a seed stage, with a basic budget only. Check it out!
Standard features for restaurants, customers, and couriers
- Easy login
Let all groups of the users quickly enter your web app. Require basic info like email or cell phone number or allow authorization using third parties (Google account or Facebook).
To grant access to restaurants and couriers, verify ID to minimize potential risks.
- Customizable profile
Here, users can edit their profiles, add additional info, photos, etc.
- Location-based features
Power your app with location-based functionality to provide better UX.
Restaurants define their exact location on an integrated map; customers add the address once completing the order; couriers use maps and navigation to deliver meals etc.
In-app payment functionality is a must. A restaurant defines a price for a meal in its menu, a customer pays for it on checkout, and a courier receives an earning to his or her bank account after delivery.
Send notifications to each group of users:
- Restaurants and couriers receive a notification once an order is placed;
- Customers receive notification about estimated delivery time.
- Ratings and reviews
Let customers share their impressions and rate the experience with a specific restaurant or courier.
Specific features for restaurants
Let restaurants describe their assortment in detail, enhance it with photos, etc.
- Order management
Restaurants receive multiple orders. Show them in a convenient table, let restaurants change order status (preparing an order, fulfilled and passed to a courier), etc.
Specific features for customers
- Search and filters
Customers appreciate easy filtering. Let them find precisely what they're looking for in a defined area.
- Order placement
Once a choice is made, guide a customer to the checkout.
Specific features for couriers
- Order management and status update
Let delivery guys accept or decline orders, as well as update status: "picked from a restaurant," "on its way," "delivered to a customer."
Platform administrator: the trouble solver
Another person that takes part in a platform is an administrator. This person represents the platform and mainly, deals with these tasks:
- Relationship management
As the food delivery platform grows, conflicts may erupt. Customers' concerns, couriers' troubles, transportation incidents, scams, and fraud – you should be ready for potential issues, react correctly, and fix them fast. Thus, creating apps like Uber Eats, make sure to add needed functionality for the platform's admin.
- Cancellation management
Platform's admin is responsible for cancellations. He or she manages conditions for costless cancellation, cancellation fees, etc. Admin should also be responsible for banning users in case of inappropriate behavior or suspicious activity.
- Promotions and advertising
While your platform isn't powered with AI algorithms to track users' preferences and provide relevant advertising, the admin can deal with these tasks. Analyzing previous orders, admins may send unique offers, promo codes, and discounts for different user groups.
- Customer support
Customers appreciate the help and fast response. In case if they need a step by step registration guide, have some recommendations, wishes, or questions, there should be a person always ready to cater to their needs.
Now, let's see how to build a delivery app powered with these features.
Food delivery app like Uber Eats launched fast: everything you need to know about successful MVP development
You've just shortlisted critical features and can't wait to start acting. What's next?
Keep in mind that in fact, you build two different programming solutions:
- A website;
- A mobile app.
Depending on roles users indicate once entering your website or app, they will get access to different features, listed above. This fact is vital once choosing a tech stack and calculating development time. Keep reading. We've got some tried and tested tips for you.
Now, let's follow a step by step plan on how to build a food delivery app with basic functionality:
1. Get your homework done
You've come here with an idea of how your app should look and where it should operate. However, if you miss some pieces in your perfect project puzzle, we'll help with that:
Investigate uncovered markets
Earlier, we've noticed that Uber Eats operates in a limited number of destinations. Rivaling with an influential market leader, your app should either have unique, exceptional features or… serve the needs of particular groups of users.
Take a look at cities, states, and countries where you can meet Uber Eats couriers, and focus on destinations that don't belong to that list.
- Many Australian restaurants have concerns about Uber Eats and its fees;
- Recently, Uber Eats closed for Ukrainian customers;
- The service doesn't operate in Norway, Hungary, and several other European countries;
- You won't find Uber Eats drivers in small towns worldwide as the service mainly targets big cities.
Remember that even if you focus on a market full of similar apps, you still have a chance to succeed. When Uber Eats started operating in Toronto, the app's product manager Chetan Narain noticed that customers were more than happy to try a new solution.
"People are very, very willing to [download a new app]. We've done a great job building out a really solid value proposition for people when they do download this new app, which is a much larger service area, a much larger set of restaurants to choose from, and availability at a much, much larger number of hours. The combination of those things has actually made the transition really easy.", he said.
With this in mind, you can target potentially profitable locations and reach the desired goals!
Draw an app's sketch
Another part of your homework is the app's sketch, a.k.a. app's prototype or mock-up. This is a sample, a graphical representation of how your app will look on a user's screen. In a mock-up, you should highlight relations between screens. Mock-up design may be a tedious task. To save your time and money for business development operations, we recommend delegating this task to skilled UI/UX engineers. These specialists may:
- Recommend the most user-oriented color scheme for your app;
- Draw minimalistic, straightforward design components;
- Suggest optimal UX design etc.
App's prototype is not only about a beautiful picture. It is also about a well-thought logic. To do everything right and make your app attractive for a target group of users, involve a qualified business analyst in a process.
2. Dive into tech tasks
Restaurants may use a website to publish their menus. Couriers and users will stand for the mobile-first experience and enjoy using a mobile version of your app.
So you need to build an app that looks and performs well on any screen, device, or OS.
The crucial thing here is to find out which exactly mobile operating systems most of the users prefer (it may be iOS on iPhone devices or Android OS on other smartphones like Pixel, Samsung, Xiaomi, etc.). But the best thing is to cater to both camps. Thus, your app needs to look attractively and perform flawlessly on both Android and iOS devices.
In this case, two choices are available:
Native app development: two different apps
It means that specialists competent in Java/ Kotlin build a base for your Android app, and Objective-C/ Swift developers create an iOS app. It seems nice, but it is not an option to choose at the beginning. Native development requires much more human, financial, and time resources. It pushes you to the exhausting recruitment process as you need to hire at least two competent developers in a mobile team. It consumes an essential piece of your budget as you need to pay twice for a job that can be done at once. Check out the alternative in the next block.
Cross-platform development: one-fits-all-solution
The tools like React Native allow getting still high-quality solutions without investing too much in an app. Until you validate the app's concept and make sure your idea is viable, this is an optimal solution for your business.
3. Remember that quality matters
Earlier, we've identified the list of must-have features for your app. Now, it's time to check if these features work correctly. MVP is not an excuse to release a bunch of low-quality features. It's about launching only basic functionality that works flawlessly. Investors will never give their money to a product of poor quality; thus, the app's quality should become your priority.
Quality is the key to success. On the MVP stage, you should focus on simple but effective manual quality assurance.
QA engineer makes sure that the product meets the requirements, uses special techniques to make sure it's convenient, finds potential vulnerabilities, etc. With the help of a manual QA expert, the development team may find out about possible security gaps, issues, and inconveniences as well as fix them far before a real user finds the problems.
With the product growth, you may need to employ additional testing methods, work with automation QA or employ A/B testing for users' preferences identification. However, on the initial stage of your product development, a competent manual tester is enough to keep an eye on the app's quality.
Typically, development and testing processes are simultaneous, so you don't need to book extra time for QA.
4. Warm-up your audience
While your engineering team is busy with the app development and testing, you may pay your attention to marketing and advertising.
- Use the initial version of your website as a landing page – a teaser for your future app.
- Create a simple timer and ask potential visitors to subscribe to updates and find out about your delivery app before anyone else will.
- Utilize the potential of social media channels: in a modern world, social networks may spread the word about your app among thousands of potential users.
Take your time to define the best marketing channels and promote your app before it's even launched.
Launching a platform like Uber Eats, you may face the so-called "chicken and egg" problem on the initial stage of your business growth. The problem occurs as users don't hurry to download your app because there are no restaurants on it; at the same time, restaurants don't start cooperation as you don't have a customer base to offer them. There are numerous ways to solve this problem. The most actionable one is to focus on a particular group of users and attract them first.
Want to find out how global leaders, including Uber, conquered the chicken and egg problem? Take a look at our report.
5. Go to the production stage
This is it: your app is ready and well-tested. Your engineering team dives into documentation provided on Play Market and App Store. They polish the app, make it meet the requirements, and publish it. Now, it's available for your target audience.
6. Post-production: what to do?
Production is not a destination; success is.
Thus, after your MVP is up and running, you need to use it with maximum results.
- Collect feedback
That's one of the critical MVP purposes. Ask for users' opinions, listen to their wishes, keep their preferences in mind to make your app better.
- Grow the user base
Imagine the exponential function. Imagine that it describes the way your user base grows. Impressive, isn't it?
Offer your first users to invite friends in exchange for a discount at a specific restaurant. Offer restaurants to attract their customers in exchange for a lower service fee. Brainstorm and generate new ways of user acquisition in your region. Try all of them to get the best numbers.
- Attract investments
Bootstrapped money may be enough for a high-quality MVP. But to keep rising, you need some considerable external investments. Investigate available fundraising methods and focus on your goal.
- Employ several monetization models
In the beginning, you, as well as Uber Eats, charge the service fee. This is the way to monetize an on-demand delivery app. However, as your product grows, you can make a profit using several more channels like:
- promoted listings,
- paid content,
- premium services,
- first-row delivery,
- and even subscriptions!
With enough funds, a vibrant user base, and strong confidence, you can start working on MVP improvement and upgrade it to a full-featured solution.
As a bonus, we've prepared answers for several more questions that may bother you on the initial stage of product development:
- How many specialists do I need in my development team?
To create a food delivery app, you need several specialists in your engineering team:
- Back-end engineer
- Front-end engineer
- Manual QA specialist
- And the project manager.
- How long does it take to build an MVP for an app like Uber Eats?
On average, you need 4-6 months for an MVP production. However, it depends on your requirements.
- How much money do I need to invest in MVP development?
The price depends on your team. In-house development in the USA, Germany or Australia is much more expensive than software development outsourcing to Eastern European countries.
In booming outsourcing destination like Ukraine, the price starts from $25,000.
If you have some concerns about outsourcing, take a look at our in-house vs. outsourcing development comparison.
With all that in mind, start working on your idea right now.