The on-demand food delivery services had exponential growth during the pandemic. Since the outbreak last year, food delivery services have spiked by 300%. Even before the pandemic, around 44% of people in the US were using these delivery services regularly. Pandemic or not, online food delivery is now dominating the market, and one of the popular platforms is Uber Eats.
Uber Eats is one such platform that makes it easier for businesses to deliver great food to customers' doorsteps. Watching the success and market dominance of the application, businesses, and startups are entering the market.
Is it easy for businesses to sustain themselves in such a competitive market? If the application has everything as per the user's expectation, it will be a hit. If you are among those thinking to step into the food delivery business, developing an app like Uber Eats will help you gain a competitive edge.
Keep reading if you have plans to develop such an application and know the business model, monetization strategies, and more!
What is Uber Eats, and how does it capture the food market?
Uber Eats is an American food ordering platform launched in 2014. It is an application that connects restaurant owners and food lovers to enjoy meals at their doorstep. Customers can seamlessly use the platform and place orders for their favorite meals and take-outs.
The platform has experienced massive growth after the launch and has set a benchmark for businesses in the niche.
- UberEats has one of the most robust food delivery markets with a booking of $4.68 billion, and it counts as 52% of the industry.
- Since the pandemic, there was a 20% rise in the restaurant partnership with UberEATS.
- UberEATS captured the France Market and lays hold of 55% food delivery market.
- There is a 53% hike in the market with a GAAP revenue of up to $819 million.
- The graph represents the market share of Uber Eats in the US from 2016 to 2022.
The food delivery market continues to spread its wings, businesses are starting up their venture, no matter small or large!
How does an App like Uber Eats Make Money?
Revenue generation is one of the most crucial goals for these businesses. So, when you develop a food delivery application like Uber Eats, you must ensure an income source. Here are the monetization strategies the app takes into consideration:
1. Commission-based Income
There are plenty of orders restaurants receive in a day. But off of them are not from UberEats. So, the mode is rectified. When the customer places an order using the platform, you can charge a commission to the restaurant. The commission depends on the restaurant's reputation in the market.
2. Delivery fees
It is another source of revenue generation for Uber Eat. The delivery fee may vary depending on the time taken for order delivery. Another important factor is distance.
You can charge a different delivery fee from customers, considering the factors mentioned above.
3. Product/Service Promotion
It is one of the prime strategies for food delivery businesses to generate income. The platform can help other businesses gain more customers by allowing them to advertise on their platforms.
Generally, when the customer clicks on these advertisements, they pay a commission to the app owner. It can increase their sales and also allow the platform provider to earn.
Business Model Canvas of Uber Eats
UberEats is a big name, and customers love to order from these platforms. Talking about the business model canvas, let us discuss them if you are willing to create a replica of UberEats.
1. Order and Delivery Platform
When you use this business model, the user gets the listing of restaurants along with their delivery services. The restaurant manages the complete logistics, support, and other operations. So startups or small businesses that do not have their delivery applications can rely on this model as it offers full support!
How does it work?
- The user chooses the food they want to order.
- The users can select the mode of payment.
- The restaurant receives the order
- As soon as you prepare the meal, the restaurant assigns it to the delivery guy.
- The courier guy picks up the order and delivers it to the respective location.
- After the delivery confirmation, you can make the payment.
2. Order Only Platform
It is a business model followed by Uber Eats and allows restaurants to check for the listed restaurants on their platform. Here the customer chooses the restaurant and food of their choice, and the platform takes the delivery responsibility.
Several other brands like Swiggy and Zomato also follow the same business model. UberEats acts as a delivery agent as well as an aggregator where you can list your restaurants. Whether you are a newbie or an established business, businesses are curious to invest in these models.
The model makes money as they partner with restaurants and earn a commission on the deliveries. It is a less complex model and is quite valuable for businesses to operate their businesses efficiently.
How does it work?
- The user can choose the restaurant themselves.
- The payment is within the system
- The restaurant accepts the customer's orders
- Food is prepared and assigned to the delivery agent
- After delivery confirmation, you can confirm the payment
Pointers for its Value Proposition
1. Pre-existing Customer Base
The brand Uber has a high reputation because of the success of Uber ride-hailing applications. Therefore, the platform has a pre-existing customer base around the world. Uber Eats leverages the fan base they already have.
2. Fast delivery
Faster delivery is one of the vital value propositions. With a faster lifestyle and busy schedules, people want to get their orders delivered faster. Like Domino, Uber Eats promises to deliver the food within 30 minutes after you place the order.
3. No Minimal Value Order
Let it be a snack item or a course meal, customers can order the meal regardless of the value. There is no restriction of minimal order. It makes the user place the order for themselves, and enjoy it without thinking of a bare minimum order value.
4. Global Presence
Since Uber had already established a global name for itself and had a stronghold in the market, Uber Eats had the advantage too. There was high competition, but UberEats could penetrate that and now has a global presence.
5. Resource Utilization
There are already plenty of resources such as cars and drivers, so the brand can fully utilize these resources to deliver on-time food to the customer's doorsteps. It raises the utilization process of Uber in many ways.
The Future of Uber Eats
You must have thoroughly understood the statistics of Uber Eats, its business model, monetization strategies, and more. Want to get help on how can you build an app like Uber Eats and begin to generate income?
Well, developing these applications can be a complicated process and requires you to invest more. So, therefore, it becomes crucial for businesses to choose the right app development partner. The service provider must customize the application and business model as per the client's requirements.
If you are looking for an app development company that offers tailored solutions, we are here to help you. Yes, let’s together give a competitive edge to your business with our app development solutions!