COVID-19 Impact: Uber Eats Demand Soars Amid Pandemic
Uber CEO Dara Khosrowshahi revealed in an interview that Uber Eats saw a 10% increase in the number of self-serve signups by the US restaurants in the first week of March.
As per the recent reports by Statista, Uber Eats came first in France with a 55% market share during the first two weeks of March.
Uber Eats has reportedly seen a 30% increase in the number of people signing up for their food delivery service since lockdown.
According to a spokesperson at Uber Eats, the company saw a 20% increase in the number of restaurant contracts in Japan in April as compared to the previous month.
This dramatic upsurge has developed a keen interest among restaurateurs to build a food delivery app like Uber Eats. If you have a plan to start an online food delivery service amid the COVID-19 crisis, then this guide will give you an in-depth insight into how to create a food ordering app as successful as Uber Eats.
Business Model of Uber Eats
Since its inception, the technology-driven business model of Uber Eats has inspired budding entrepreneurs to start their online food delivery business. The Uber Eats app plays dual roles: it’s a restaurant aggregator as well as a delivery agent.
Uber Eats uses an aggregator model that lists the partner restaurants in the app. This traditional food delivery model enables customers to ask for a food delivery request which is viewed by the restaurants to complete the order. The order delivery is fulfilled by the restaurants itself.
The company supports partnering restaurants with complete logistics support. The food ordering giant uses its logistic network to deliver orders from restaurants that don’t have resources or bandwidth to provide food delivery to their customers.
How Does Uber Eats Work?
Uber Eats is a three-way marketplace that connects restaurants, customers and delivery agents. Multiple restaurants list their brand and menu on the app. The customers search for the restaurants located in their area and place the order. The delivery boy picks up the order from the restaurant and delivers it at the customer’s doorstep.
Uber Eats Key Players
Restaurants: Restaurants manage food orders and update menus on the app by marking food items available/unavailable. They can change the restaurant name, contact information and opening & closing hours as per their availability. They can also decide the price of each item displayed on the menu.
Customers: Uber Eats provides the following ordering options to its customers:
Real-Time Ordering: The customers choose the food items of their choice from the list of restaurants available in the locality. It is a very useful feature for those who wish to receive their food immediately after placing an order.
Custom Ordering: The customers schedule their orders in advance as per their convenience. They can customize their orders with respect to the delivery date, destination address and time.
Delivery Agents: Uber Eats delivery boys are independent individuals who pick up food from the restaurants and deliver it to the customers’ address. They can accept or reject the order request and manage multiple deliveries at a single time. They get the delivery tasks on the basis of their location and proximity to the customer as well as the restaurant.
- Revenue Model of Uber Eats
- Delivery Fees from Customers
- The delivery charges are divided into three categories:
Delivery Fee: The customers pay a small amount of delivery fee that depends on location and the availability of couriers. The total charge may vary from 1$ to 5$ depending on the market in which the company is operating.
Service Fee: Uber Eats charges service fees of 15% of the order’s subtotal.
Order Fee: A small order fee of $2 which is charged if the order amount is less than $10.
Optional Subscription Fees from Customers
The company has an optional subscription model to earn money. Customers have the option to pay a monthly subscription fee of $9.99 to avail the “Eats Pass”. It allows subscribers to get 5% off on the orders over 15%, with no delivery fee.
Commission Fees from Restaurants
Uber Eats cuts 15 to 40% of the total value on each order fulfilled from the restaurant partners. The cutoff percentage is decided based on maturity and hold of the restaurant in the market.
Advertising Fees from Restaurants
The restaurant pays an advertisement fee to the company to come up at top searches on the app and to get more traction & sales. The company earns money by giving restaurants a place in the featured section of the app.
Now that you’ve got a deep understanding of Uber Eats’ statistics, business model, and how does the food delivery company generate revenue. Let’s gain insights into how you can develop a food delivery app that can surpass Uber Eats.
A Step-by-Step Guide to Develop a Food Delivery App
Building a food delivery app like Uber Eats is a challenging task that involves putting together a lot of components. Therefore, having a clear roadmap on coming up with your food delivery app is necessary to make a mark in the online food industry. Taking Uber Eats as an example, we have explained some vital steps that restaurateurs must follow to start similar online ventures.
Step 1: Conduct Market Research
The first step when creating a food delivery app is to research deeply about your competitors, target audience and the latest food industry trends. To get a solid grasp of the current market situation, you must find answers to the following questions:
- Who are your competitors and what kind of services they are offering to their customers?
- Who are your target customers?
- Which features you must include in your food delivery app to steal the spotlight?
- What are the hot trends in the online food industry?
Step 2: Select Food Delivery Model
After conducting thorough market research, the next step is to choose a food delivery model that can meet your business goals as well as customer’s demands. There are two types of food delivery model:
- Order-Only model
- Order & Delivery Model
- Order-Only model vs Order & Delivery Model: Key Differences
