How to Make On-Demand Delivery App: Features, Cost, and Monetization

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23 Aug 2020
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Katherine O.
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On-demand services are on the rise these days. Companies like Uber, Airbnb, and Glovo are one of the leading players in this industry. However, a bunch of startups have managed to fit into this niche: Nuro, Deliv, and LogiNext.

44% of consumers in the US order food at least once a month. Quite impressive, isn’t it?

How to build an on-demand delivery app: Stats

On-demand delivery stats: Age of users

However, on-demand delivery app development takes time and money. On-demand delivery service requires an app for customers, another for couriers, and a restaurant solution. Each solution has its own development challenges.

How to avoid all possible pitfalls? In this guide, we’ll discuss various aspects: from idea validation to required features.

Here’s what you’re going to learn:

Table of contents

Types of On-Demand Food Delivery Services

Starting on-demand delivery app development, you need to consider the service’s type. There are two main types: marketplace and platforms with in-house logistics.

Let’s single out the details.

Marketplace

Popular services: Uber Eats, Delivery Hero, Deliveroo

Marketplaces or aggregators stand for on-demand delivery apps that connect users with restaurants. Customers can look through the menu, order food, and pay for it right from the app. As any other marketplace, on-demand delivery apps offer customer support if there are any problems with ordering or delivery.

The most widespread monetization model among aggregators is a fixed fee from each order. For restaurants, aggregators are a great way to keep a constant order flow minimizing idle hours. So the commission is usually worth it.

How to create an on-demand delivery app: Apps by regions

On-demand delivery by regions

Platforms With Logistic Support

Popular services: Domino’s, Jimmy John’s

This business model generally stands for on-demand delivery apps by restaurant chains offering users options from their menu.The restaurant is responsible for the whole delivery process and no commission applied. It’s common to hire full-time couriers to serve the clients.

This business model is perfect for well-known restaurant chains. It lets them keep customers engaged providing personalized offers and not to pay commission to third-parties.

How to Validate Your Idea to Create On-Demand Delivery App

CB Insights say that 42% of startups fail because the market doesn't need their product. To avoid such situations, you need to validate your idea before launching an app.

App idea validation

It’s the process of gathering users’ feedback about the product. Simply saying, you need to look for the customers’ expectations, define a target audience and what problems your product can help them solve.

Let’s take a look at how to validate your idea before starting the development process.

Step #1. Conduct Market Research

How to build an on-demand delivery app? You need to research the market and study your competitors carefully.

Creating a food delivery service, you need to gather information about customer needs and consider industry trends. Research your future competitors to identify their strong and weak sides. It’ll help you to create a better product.

Doing the market research, you need to answer the following questions:

  • What are the goals and mission of your company?
  • Who is the target audience of your on-demand service?
  • What are the users’ needs and pains?
  • What are their expectations from your solution?
  • What features does your service need?
  • How to monetize the platform?
Got lost?
Book a consultation with our Business Analyst to learn the details.

Step #2. Define Your Target Audience

Knowing the target audience and their preferences, you can create more personalized solutions and gain more users. For example, Uber saw the users’ demand for Business services. This solution allows creating a company Uber account. Employees can connect this account to their own accounts to request a ride. In this case, the company pays for the ride.

There are three primary target audiences for a food delivery business — students, parents, and working professionals. Each group has specific needs that you need to follow. For example, the students’ main fuel is fast food. So, it’s better to cooperate with local fast food restaurants to deliver orders faster.

As for parents, they prefer to cook and eat healthy food. They usually order groceries with home delivery. Food freshness and delivery speed are crucial for this target audience.

Working people lack time. However, they want to eat full and healthy meals. So, deliveries from local restaurants are popular among them.

As you can see, each group has specific needs. To define your target audience, you need to consider their age, location, and income level. Depending on these factors, you can create an on-demand delivery app providing a more personalized experience.

Also, it’s good to prepare a schematic portrait of your customer. This portrait consists of essential information like age, location, income, food preferences, and more.

You can find the example below.

How to build an on-demand delivery service: Target audience

Schematic portrait of your customer

Step #3. Create a Customer Journey Map

How does the customer make an order? Are there a lot of steps? You need to answer these questions before starting on-demand delivery app development.

Customer Journey Map stands for the journey through the app from the user’s point of view. Every move, like putting a delivery address or adding a dish to a basket, is noted on the map. Having such a map, you can understand the app’s logic.

How to create an on-demand app: Customer Journey Map

Customer Journey Map

Step #4. Make and Test Prototypes

Understanding the features of your future on-demand solution, you can create a prototype of the service.

Designers can create a working prototype of the platform. Prototypes mean an interactive model that shows particular results depending on the actions.

The prototype allows showing the product owner the final variant of the app or website. It represents the app interface and functionality.

Build an on-demand app: Create prototypes

On-demand delivery app concept (Source: Dribbble)

Step #5. Develop an MVP Version

Minimum Viable Product includes only significant features needed to satisfy the users’ basic needs. MVP allows getting the users’ feedback and updating the product depending on their needs and expectations.

Developing MVP tends to take a short time. However, this solution allows entering the market.

However, you can choose the Flutter app development. Flutter is a promising technology from Google that lets developers create cross-platform apps with a single codebase. Results are impressive — two native-like mobile apps within a smaller budget.

Top KPIs

Key Performance Indicators or KPIs refer to a set of metrics that evaluate different aspects of service. They should answer the following questions:

  • Is the service financially independent?
  • What parts of the platform require improvements?
  • Why do customers choose your solution?
  • How to increase revenue?

Let’s discuss top KPIs that you should consider during on-demand delivery app development.

Total amount of orders

This metric lets you check the business growth. Investors always want to see the company’s progress.

Average profit per delivery

Every service needs to get profit. This metric shows the revenue of the company. You also need to calculate expenses on marketing, payroll, and others.

Conversion rates

This term stands for the number of users that have done the required action, e.g. order food. It’s easy to calculate this metric. Conversion rates = Total number of visitors / Total number of orders * 100. For example, you have 1,000 visitors and 50 orders per month. So, your conversion rate is 5%.

Create an on-demand delivery service: Top KPIs

Top KPIs for an on-demand delivery platform

How to Get Money From On-Demand Delivery App?

Building an on-demand delivery app, you need to consider the monetization strategy. There are several ways to get revenue from a food delivery service.

Restaurant fee

This model is quite widespread in the food delivery industry. The strategy is simple:restaurants pay a fixed price to get listed on the service. Another, and more widespread option, is to charge a fee for each order. For example, UberEats takes 15% from the order subtotal.

Ads

Restaurants can pay to rank higher on the search results. This way, ads will look more natural. .

Peak hours

Delivery can cost more during the peak hours like lunchtime. In this case, the platform gets higher revenue.

Of course, there are a bunch of alternative ways to earn money:

  • Extra fee during bad weather conditions
  • Extra fee for rush delivery
  • User fees

How to Build an On-Demand Delivery App

It’s not enough to create a food delivery app. You should develop an entire ecosystem to make the platform work for all parties.

A common on-demand food delivery solution consists of four parts:

  • Customer app. Users can look through the menu and make orders via iOS or Android apps.
  • Restaurant app. Restaurants can see and manage orders.
  • Courier app. This solution notifies couriers about new orders. They can see the order status and delivery address.
  • Admin panel. The product owner and the team can manage the whole platform. They can add and delete restaurants, handle payments, and more.
Create an on-demand delivery app: Four solutions

Parts of an on-demand delivery service

Of course, each solution should have various features. To give you a hint, we’ve listed the required features.

?

Customer App

The customer app is the most significant part of the project. You need to create a user-friendly UI/UX design to gain more users. Customers are quite spoilt these days. They don’t use the application with an unattractive or unclear design.

Also, the app features affect the users’ conversion. You need to create a clear way to make an order during on-demand delivery app development. Of course, the app’s features can differ for various apps. But there’s a set of MVP features similar to every on-demand delivery app.

  • Registration and login. It’s better to offer several registration options to make this process fast and user-friendly. It’s a good idea to integrate signup via social networks like Facebook or Google. Also, you need to add email and password, phone number and password signups. ‘Forget password’ option is also required. Developers need to use Facebook SDK and Google SDK.
  • Restaurant search. Users should be able to search for nearby restaurants using geolocation. Also, it’s good to add filters to make the search process more convenient.
  • Location tracking. Let customers track the courier’s location in real-time. You can integrate this feature via Google Location API for Android and Location Framework for iOS.
  • Order and payments. After putting food to the card, customers need to pay for their order. For this, your development team will need to integrate such payment methods as Braintree and Stripe.
  • Push notifications. They help customers understand the order status like accepted, delivering, and arrived. To integrate push notifications, your team can use Amazon SNS and Firebase Cloud Messaging.
  • Ratings and reviews. Users need to leave their reviews to improve the service. It’s possible to keep their feedback using Microsoft Azure and AWS.
Create an on-demand delivery app: Customer app

Customer app concept (Source: Dribbble)

Restaurant App

This solution lets restaurants manage incoming orders. It’s common to create a web solution rather than a mobile app. With its help, restaurant workers can accept orders and notify couriers once it’s ready.

On-demand delivery app developers should integrate the following features:

  • Registration and login. To make the service secure, each employee should have an account. It’s possible to implement a signup feature, using Facebook SDK or Google SDK.
  • Menu management. Using the restaurant app, workers can edit the menu to keep it up-to-date.
  • Order management. Workers should have various management options like accepting orders and changing their status.
What features does your app need?
Book a meeting with our Business Analyst to get consulted for free!

Courier App

The courier app should be simple but functional. Couriers use applications on the go, so it’s better to offer a mobile version only.

How to make an on-demand delivery app convenient for couriers? You need to add these features:

  • Registration and login. Couriers need to sign up to use the app. They need to have options similar to the customers’ app: social media, email and password, phone number and password.
  • Navigation. You need to offer couriers convenient maps with the fastest routes. To integrate this feature, your team can use Google Maps Platform for Android and Location Framework for iOS.
  • Order details. Couriers need to see all the information about orders: restaurant address, delivery address, delivery time, and so on.
Build an on-demand delivery app: Courier app

Courier app concept (Source: Dribbble)

Admin Panel

The admin panel is an essential management tool for your business. Here are some must-have features:

  • Login. A secure login makes your data safe and well-protected.
  • Restaurant management. Admin can add restaurants to the service. Also, it’s possible to delete users.
  • Analytics. Using this feature, you can track essential KPIs like the number of orders, delivery time, revenue, and others.
  • Payment management. This feature allows charging fees from restaurants and users. Also, you can change the amount using this feature.

Must-Have Features at a Glance

As you can see, there are a lot of features to integrate. Below you can find a table with the required features and technologies to build an on-demand delivery app.

Must-have features for an on-demand delivery service
Solution Features Technology

Customer app

Registration and login

Facebook SDK, Google SDK

Restaurant search

Elastic Search

Location tracking

Google location API, Location Framework

Order and payments

Braintree, Stripe

Push notifications

Amazon SNS, FCM

Ratings and reviews

Microsoft Azure, AWS

Restaurant app

Registration and login

Facebook SDK, Google SDK

Menu management

-

Order management

-

Courier app

Registration and login

Facebook SDK, Google SDK

Navigation

Google Maps, Location Framework

Order details

-

Admin panel

Login

Facebook SDK, Google SDK

Restaurant management

-

Analytics

-

Payment management

-

On-Demand Delivery App Development: The Final Price

The final cost to create an on-demand delivery app consists of the following aspects:

  • Features
  • Design
  • Quality assurance

The Cost of the Features

The number of features and their complexity are the main cost drivers to create an on-demand delivery app. Developers need more time to implement more complicated features.

Below you can find the time and price to create features we’ve discussed in the previous part.

!

Estimates below are based on the average rate in our region (Eastern Europe, Ukraine) — $50 per hour.

How to create an on-demand delivery app: Cost of features
Solution Time Cost

Customer app for iOS or Android

603 hours

$30,150

Courier app for iOS or Android

457 hours

$22,850

Web app for restaurants

182 hours

$9,100

Web-based admin panel

257 hours

$12,850

Total

1,499 hours

$74,950

Design

The app design can be a struggle since it requires a decent amount of time and money.

To gain more users, you need to create an attractive and intuitive UI/UX design of your app.

Design cost of an on-demand delivery app
Solution Time Cost

Customer app for iOS or Android

100 hours

$5,000

Courier app for iOS or Android

100 hours

$5,000

Web app for restaurants

80 hours

$4,000

Web-based admin panel

50 hours

$2,500

Total time

330 hours

$16,500

On-demand delivery app development: Design

On-demand delivery app concept (Source: Dribbble)

The Final Price to Build an On-Demand DeliveryApp

Considering all the factors below, we can calculate the final price to create an on-demand delivery app. You need at least $167,450 for one platform (iOS or Android) and $202,450 for two platforms (iOS and Android).

Cost to create an on-demand delivery app
Platform Time Cost

Total for one platform (iOS or Android)

3,349 hours

$167,450

Total for two platforms (iOS and Android)

4,409 hours

$202,450

Below you can find the details.

Price to build an on-demand delivery app (iOS or Android)
Type of work Required time Cost

Customer app features (iOS or Android)

603 hours

$30,150

Courier app features (iOS or Android)

457 hours

$22,850

Web app for restaurants

182 hours

$9,100

Web-based admin panel

257 hours

$12,850

Design

330 hours

$16,500

Project management

500 hours

$25,000

Quality assuarance

800 hours

$40,000

DevOps

220 hours

$11,000

Discover your app development cost
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Frequently Asked Questions

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Comments
CM
Christopher Meland
07.09.2020 at 18:37
I find your article useful. Now I know that I need four apps of a delivery product. Also, you added the required technologies to create the features. I like your expertise.
ON
Oscar Nielsen
12.09.2020 at 07:28
Good text.
MA
Mustafa Alnıaçık
24.09.2020 at 19:22
Nice work.
EL
Ellen Lopez
28.10.2020 at 09:32
Liked your article. You discussed a lot of details of on-demand delivery app development. I adore the cost part since it offers a full price to create such all solutions of the service.
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