Going out for family dinners and socializing together is always fun, but after a long tiring day going out isn’t a good idea. Instant food delivery apps are monetizing the small pleasures of life a lot. In the era of Netflix and Chill, going out seems a little difficult. Better get your food delivered at home and enjoy munching with your favorite show on. The Grubhub business model works basically on this. Before we understand how Grubhub works and how much it costs, let’s have a glimpse at the history of Grubhub.
Grubhub: From Start-up to Industry Giant
Grubhub began as a small American online and food delivery mobile app platform that intended to let people connect with their favorite restaurants without going there physically. The idea was conceived as a result of the hunger pangs of one of the founders Mike Evans. Grubhub was founded by Mark Evans, Roman Gaskill, and Matt Maloney in Chicago in 2004. The basic code for the Grubhub business model was structured the same night when Mike struggled with his hunger pangs and ever since there has been no looking back.
The Grubhub Journey So Far
- The organization has managed to raise a fund of around $284.1M by 2018 in a total of 8 rounds of funding.
- The net revenue generated in the year 2019 is 1.3 billion USD.
- The organization has made 13 successful acquisitions and recently slipped to the number two position in the industry, only after Doordash which has a similar business model.
- For now, it has around 225,000 restaurateurs who have partnered with them.
- In 2019, the gross food sale was worth $5.9 Billion.
- The net worth of the food delivery giant is $7.1 Billion in 2020
As per the records of 2019, the company serves around 22.6 Million users in around 4000 cities in the USA. - Merging with food delivery giant “Just Eat Takeaways” the unit turned out to stand revenue of around $3 Billion a year.
The food delivery giant has a lot to offer to young entrepreneurs who wish to enter the market with a similar mindset. If you are looking forward to having your food delivery startup, then you would surely like to know what is the Grubhub business model.
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What Is the Grubhub Business Model? Secret to Profit-Making Business Revealed
When talking about the Grubhub business model canvas it would look something like this.
This business model is quite simple to understand and follow. Before we move further, let’s explore all the elements that determine how Grubhub works.
The Customer Base
For any business, customers play the most significant part. Food ordering and food delivery systems are developed in a way that they can be navigated and used easily. With some interesting work on the aesthetics, the app is designed to provide maximum information to the user in a glimpse.
The major aspects considered when working on Grubhub’s marketing strategy are:
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- It should showcase the maximum number of menus with the latest offers according to the user’s choice and previous orders.
- The users can track their order at all steps.
- The customer base majorly comprises busy professionals and students, thus fast delivery and easy payment methods to play an important role.
- For AI and ML to work in the right manner it is important that your app offers an easy signup way and you remain logged in all the while.
- Ratings and Reviews by the customers make it easier for people to place orders and also, improve the user experience in the app.
- With various offers and coupons, users can get budget-friendly services with the least effort.
There are a lot of features that are worked upon to make sure that your users do not abandon your app without any action. Mobile app developers around the world understand how important it is to deliver feature-laden app that get popularity in no time.
The Service Providers (Restaurants)
Working for the customers is one thing. Further the developers need to make sure the features on the restaurants’ end are interesting too. If there is any delay from the eateries end, still the app would see a decline. It is important for your Grubhub like app you understand how Grubhub works for restaurants.
- Restaurants get a wider platform to market themselves for free.
- Trusted delivery systems make it easier for the restaurants to offer their services without many disruptions and save delivery man costs.
- Restaurants can easily expand their audience base and improve quality thanks to constant reviews and ratings.
Over the year, Grubhub has helped different restaurants expand and grow their popularity with the minimal joining charges.
The Riders
The most important part of developing an app like Grubhub is working on the driver’s panel. The delivery personnel’s panel needs to be very efficient to make sure the food reaches the customers on the right time. Here’s how Grubhub works for drivers and what elements it considers.
- Work with full-time and part-time job opportunities
- Offer and record flexible timings, number of trips, and other alternatives
- Doesn’t work like traditional job opportunities
Drivers play an important role in making your food ordering and delivery app important.
Related Blog: How Much Does It Cost to Develop Food Delivery Apps like Zomato, Grubhub, Uber Eats?
These elements come together to help you build a highly rewarding strong business that can earn you great revenue. You can always reach out to the android app developers to ask them to develop Grubhub like app.
This is one aspect of developing the mobile application; the other important aspect to cover here is what makes it a profitable business. Well, here’s the Grubhub revenue model that would make it easier for you to monetize your business idea.
Grubhub Revenue Model: Where’s the Cash Coming From?
The Grubhub revenue model is quite interesting and simple. The cash flow takes place from various sources. Thus, you can build your business well with the help of this revenue generating strategy.
Delivery Charges
One way of getting revenue for the business is the delivery charges. A part of the delivery charge fee goes to the rider and the other part goes to the business. Although the amount is minimal, but with the wide customer base the amount becomes quite impressive. The money here simply adds to the revenue of the business.
Restaurant’s Commission
Restaurants have to pay a little for partnering with your business. You can ask for annual, half yearly or quarterly payments from the businesses. They would have to pay a little for the promotion and the business that your business would bring to theirs. If you think earning a heavy amount isn’t possible here, then remember more than the size it is the consistency that matters the most.
Also, Read: DoorDash Pricing Model: Lessons on Making Money as the Food Giant Does
Advertisements and Paid Campaigns
You can ask any new restaurant or eatery to promote themselves over the app for better profits and higher reach. With these advertisements and promotions you can earn a better profit. This would make it easier for you to earn some amount that goes directly to the organization’s account. Fun!
Let new eateries and dine out zones in the city be your clients and earn great money making them popular.
Grub+
Subscriptions are the best way to monetize your business. Your customers can enjoy Grub+ facilities with a minimal payment of $10 per month. Get free food delivered if billed above $12 or get a 10% discount on all your orders. Sounds like an easy idea to let others save and earn for you? Well, if done the right way you surely can make the most of your business strategy.
These are a few simple ways that do not add monetary pressure to any one element. This Grubhub revenue model is quite interesting and can help you be at the top of your business if followed smartly.
Recommended Read: Grocery Delivery App Development Company
How Does Grubhub Work?
Now that we have moved further the next important thing to understand is how Grubhub works. When talking about the working strategy of the app, understanding each element of the app is well taken care of.
For the Users: How Does Grubhub Work for Restaurants?
When working for the restaurants there is one major thing that you need to consider. The process of placing an order is quite simple, let’s further explain the working of the Grubhub user’s panel.
- Install the app from the Play store and sign up with your details like email id and phone number
- Once you have signed in to the application, it would take your location and show you the list of restaurants from the nearby area.
- Find the best restaurant and order your favorite food with the help of the app.
- Once the user has decided what to eat, just open your cart, add the delivery address, and confirm your address and order for the final payment process.
- When it comes to the payment option you can either make it cash on delivery, use a digital wallet application or use another gateway to make the payment.
Now that your payment is processed, all you need to do is sit back and rest. Wait for your order to arrive. You can also track your order on the app and be rest assured that your food is delivered to you quickly.
For the Driver: How does grubhub work for drivers
The food would be delivered to your customer by the rider. When working on an app like Grubhub you need to make sure the delivery team that you have built is strong and large. Here’s how the delivery team at Grubhub works.
- The delivery man would get a notification on his device that there is an order that needs to be picked up nearby. If they can collect the order they need to accept the order and confirm.
- After accepting the order the delivery person would reach the restaurant with the order id quickest.
- He would get the identified, and update the status of the order for the restaurant and the owner. This would let the restaurant owner and the customer know that the order is about to arrive.
- The driving personnel can connect with the customer and ask for directions to the requested location. Most drivers these days reach their destination tracking the house number and area without wasting much time.
The riders are the most important part of the food delivery service as if they delay the services from their end the process would ruin up.
The user and the rider would manage their working only when the restaurant does it part in time. Here’s how restaurants work in such businesses.
For the Business Owner: how does grubhub work for businesses
When talking about the restaurants it is important that they are quick to respond and hand over the orders to the delivery personal quick.
- Once the order is placed and confirmed from the users end, the restaurant gets a notification of an order being placed through their Grubhub app.
- After confirming the order can be delivered by the staff, the restaurant accepts the order that is further and the confirmation notification is shared with the customer.
- Once the order is ready, they pack it well, and the notifications would be sent to the nearest delivery person.
- After the preparations are done, the order is handed over to the delivery person easily.
The restaurants are expected to complete their work really quick to ensure that the food reaches the customer real quick.
The Grubhub business model largely stands on the three pillars and they are the major key-players in each case. It is important that none of these fail in their function to make sure the business runs well and gets you the best ROI in no time.
Features for Your Grubhub Like App That Your Customers Can’t Resist
As we have talked about the Grubhub business model, Grubhub revenue model, and how an app like grubhub works the last point that is left for discussion is, what are the significant features of the app that would make it popular among the three dominant pillars of the app.
Accurate Search Results
There would be times when your customer wants to order their favorite food from their favorite restaurant. Make sure the menu card has the list of all items so that the user is not confused and earns you the maximum profit that she may buy for herself.
Easy Order Process
When you ask your food delivery app developers to make an app like Grubhub, ask them to make the order process as easy as it could be. Do not include a lot of pages, and include various payment gateway to make the process clean and easy.
Add Favorites
It is important that your customers can add some of the elements to the favorites depending on how frequently they order their food. This would make it easy for them to reorder from their favorite joints and earn great profits.
Real-time Tracking
With GPS and navigation system it becomes easier for the customer, restaurant and the driver to track their respective destinations. It would show how long will the driver take to deliver the food and you can even track where he is.
Coupons and Discounts
Let your customers enjoy the discounts and the rewards for better prices and build a strong customer base. Sounds like an idea? Well, along with these you can use a few more customer engagement techniques to be in the favorite lists of your customers.
In-app Chat
Let your app have the in app characteristic that makes it easier to respond for better results. Connect with the restaurant or the driver as and when required to share your needs or share customer reviews.
Schedule Delivery
This is an interesting feature that you must include in your app. Let your users schedule their food delivery time when placing the order. This would make it easier for them to miss the last minute rush to placing the order and avoid tech glitches if any.
Pick-up Your Order
Let your customers pick their orders on their own. When you work on an app like Grubhub, let your customers decide if they want the order to be delivered home or would they like to pick it up from the restaurant. This adds ease to your customers life and saves the delivery charges in many cases.
Book a Table
Many food delivery apps these days let you book a table for your dinner time. With a rise in the need for table booking applications, it has become quite popular for apps like Grubhub, Zomato, Doordash to offer an alternative to book tables as and when they want to.
Also, Read: Everything You Need to Know About Restaurant Table Booking App Development
These are a few features that make it quite interesting for your customers to enjoy their lives easily and make your app popular.
Conclusion!
Building an app like Grubhub is quite an important decision to make. When you are sure you want to continue with something like this, this article would be of great help. We share here Grubhub revenue model, Grubhub business model and features that you can include in your app. To develop an app like Grubhub contact the most popular food delivery app development company Octal today.
