Advantages And Disadvantages Of Food Delivery

The current focus on convenience has been a powerful driver for the growing demand for food delivery applications . Meanwhile, the number of people ordering food online has risen from 1.32 billion in 2014 to 2.05 billion in 2020. More and more customers are moving from traditional phone orders to digital platforms that allow them to choose from a wide range of food from many restaurants in one app or site.

How are things in the food delivery industry?

Startups Domino and Grubhub, DoorDash, Uber Eats and Postmates currently dominate the US market, according to Statista. These companies quickly achieved success. As of 2020, DoorDash was valued at $13 billion, UberEats at $20 billion, and Postmates at $1.85 billion. Together with Domino, they control 90% of the US food delivery market. However, there are 338 food delivery organizations in this country alone, with a total funding of over $5 million.

How do delivery companies take advantage of digital information processing?

Established pizza chains such as Domino’s, Papa John’s, and Pizza Hut have been investing heavily in software for years. These market giants have developed ordering systems for smartwatches, cars, and even game consoles.

What are the food delivery apps?

Pizzerias have dominated the food delivery market for many years, but now we are witnessing the emergence of start-ups. There are two types of food delivery services and, accordingly, two main application models:

1.Delivery from the restaurant to the buyer, which is mainly done by pizzeria chains

2.Platform-to-customer delivery is what ubereats clone and similar on-demand grocery delivery companies offer.

Delivery from the platform to the consumer

The first aggregators simplified the ordering process. They acted as intermediaries between local restaurants and customers, offering the latter access to different cuisines through a single website or smartphone app.Using such services, people could view menus and compare prices, read reviews and ratings of restaurants, and place orders. Previously, the functions of aggregators were limited to this. After confirming the order, the application would transfer it to the restaurant. The actual delivery was carried out by the couriers of the restaurant.

How delivery services work

on-demand food delivery app platforms allow users to compare the menus of different restaurants, and shop at any of them using a single application. But in addition to order aggregation, so-called “new delivery” platforms also handle logistics for partner restaurants.They can offer customers convenient delivery without having to worry about paying drivers, tracking their movements, covering vehicle maintenance costs and providing insurance.

How new delivery services are profitable

To cover shipping costs, new delivery companies charge both restaurants and customers a fixed percentage of the value of each order. You might think, is this amount enough for a business with couriers and vehicles? Your skepticism is quite understandable Major market players companies expand the choice of customers, allowing you to order food not only in large restaurants, but also in local cafes and eateries. This has been a major driver of growth in the number of active users of platform-to-consumer delivery apps in the US. According to experts, by 2024 their number will increase to 62.3 million.

Delivery from restaurant to consumer

Unlike other platforms, full-service food delivery companies do not partner with third parties. They have their own chefs who prepare meals on site. These companies also hire their own couriers to deliver food to customers. Domino’s and Papa John’s are the best examples of such organizations.

Disadvantages of the restaurant-to-consumer delivery model

For starters, a full-service grocery delivery business requires a significant capital investment. You will have to purchase expensive equipment and pay for the labor of many employees. Add to this the various types of insurance and permits that you will need to comply with laws and sanitary standards. Launching a food delivery platform can be more difficult than you might think, primarily due to fierce competition.ubereats like app industry leaders, partnering with 300,000 takeaway restaurants.For a small company that is just entering the market

High Commission

At the moment, this is one of the key disadvantages. Uber Eats, for example, takes about 25% of a restaurant’s bill. DoorDash and Grubhub can charge up to 30%. This amount is significant for small restaurants and cafes. Some owners say they can only stay afloat at 10–12%.

User data

When restaurants rely entirely on delivery services, they don’t really know who their customers are or what kind of food they prefer. Without access to user data, restaurant owners cannot offer modern dishes to customers. What’s more, restaurants don’t have a chance to meet face-to-face and build relationships with their customers. Adding analytics tools would be a good solution to this problem.

Promotion

It becomes much more difficult for restaurants to stand out from the competition when they get into the general list on the delivery service. That’s why they need tools to get attention. Good user reviews and high ratings are the best ways to get even more customers interested.

Market trends and opportunities

Delivery services are more popular than ever. The reason for this success is simple. By partnering with places that haven’t delivered before, Uber’s new services are making delivery more accessible. It is also possible that in the near future, even those restaurants that now control the entire cycle will begin to rely on delivery services. although the company has no plans to move to apps like Uber Eats just yet.

Platform-to-consumer delivery services provide the greatest benefit to all parties — restaurants, customers, and the company itself.