How To Create An App Like DoorDash- Business & Revenue Model Explained
Are you planning to create your own food delivery app like Doordash? Investing in USD 63.6 Billion industry will surely be the next, big move for your business. But just before you launch your Doordash clone, it is essential to dive deep into its business and revenue model. Right?
Remember the times when foot traffic was the prime contributor to restaurant visits? Now times have changed, and for good. A few clicks on your smartphone, and you get served delicious food from a local restaurant of your choice within minutes. The food delivery market has grown manifold over the past few years. There was a time when it was branded as a luxury and a convenient medium to get food for people with busy lifestyles. However, with COVID-19 restrictions, it has now become a necessity.
In the United States alone, the online food delivery market reached is estimated to grow with a 10.5% CAGR by 2026. Certainly, on-demand food delivery apps like DoorDash have been instrumental in this growth. It is one of the most popular food delivery app in the United States and Canada. The success of this on-demand delivery platform inspires million other entrepreneurs to level up their food business game.
DoorDash is an on-demand food delivery app that integrates hungry customers with their local restaurants and delivers food on time. The company was launched under the name paloaltodelivery.com in 2013. The four founders were the only employees who not only built the app but also received and delivered orders. In its first year of operation, the company received USD 2.4 million in funding and grew at a rate of 20% every week.
And today, in the US and Canada markets, DoorDash now beats the food delivery global leaders like Uber Eats and GrubHub. In 2020, DoorDash delivered almost 45% of the food delivery orders made in the country. Last year, the platform generated nearly $2.9 billion.
DoorDash is similar to any other on-demand business platform like UberEats, Zomato, Deliveroo, etc. With branded and feature-loaded mobile or website application, it works towards creating profits for itself, its restaurant and the driver-partners. It integrates the latest technology to provide smart services and ensure on-time food delivery.
For merchants( restaurant owners), DoorDash is the perfect place to expand their customer base.
For customers(those who order food), the app is a convenient medium to explore and relish the best food from nearby restaurants.
For the delivery partners, called Dashers, who deliver the food, DoorDash provides a platform for earning a living.
When it comes to the work process, it is quite simple.
Unique Features of DoorDash
Here’s a sneak peek into some of the most amazing features that Doordash offer:
Pre-delivery: Customers can easily schedule their orders during checkout. Before placing the order, a “schedule” option is available, that allows customers to add the date and time, to indicate when they want their food to be delivered.
Real-time Feedback: To ensure that the food quality is not compromised, DoorDash allows customers to rate the food delivery services after they receive the order.
AI for Better Service: AI uses data from customer’s previous orders and creates a suggestion list, which makes food browsing a lot easier for the customers.
Live Order Tracking: DoorDash allows the customers to track their orders and get updates about the status of the delivery. They can also contact Dashers to clear their queries.
These are few to name. Why not just checkout this complete feature book that has all you need to build your app like DoorDash?
Suggested Read: 9 Must-Have Features to Scale Your Online Food Business Post-Pandemic
DoorDash — Business Model — Decoded
Now let’s get to know its business model. As already mentioned, the company partners with restaurants to provide a third partner food delivery system. It delivers the food to the customers who order through their mobile and website application. The DoorDash Value propositions are threefold:
For users, the main motive is to deliver the right order on time and make the app interface easy to use and browse. It integrates technologies like artificial intelligence to create updated suggestions on their homepage. This way, the users can easily find the food they are looking for.
Also, with the live tracking and customer service that works round the clock, DoorDash offers a highly transparent service.
Merchants are the restaurant owners who enlist their services on DoorDash. They can either choose to deliver the food themselves or use Dashers to get the order delivered. It gives them an online platform and broadens their exposure.
DoorDash integrates with the merchants and provides advanced data which they can use to understand their customer behavior and improve their services. It allows restaurants to receive orders from DoorDash, and in the meanwhile, they can access the live order updates, customer feedback, and localized delivery options.
The Dashers are the ones who bridge the gap between the merchants and the users. They are responsible for picking up the order from the restaurants and delivering them to the users at the specified location.
DoorDash indicates an estimated minimum amount a dasher can earn before they accept the order. Their payout depends on the number of deliveries and the location. DoorDash also gives them extra pay if the delivery involves long travel.
DoorDash allows the users to tip the dashers for their sincere and on-time services. It directly adds to their income. It has an application dedicated to dashers where they receive orders, get real-time feedback from customers, and connect with the users if they face any difficulties while delivering the order. The on-demand delivery platform aims to thrive by the core values, which are:
Customer satisfaction- The interests of all the three key players are taken care of.
Focus on improvement- DoorDash has evolved gradually and steadily towards growth.
Maintain the Startup mindset- Start Small, Dream Big
Sense of ownership among each employee
Since its conception in 2013, the company has witnessed skyrocketing results. Their fundamental is to focus on quality.
1. They focus on creating more opportunities for the local restaurants to gain exposure among the public-
More merchants join the platform.
More selection on the Marketplace
More customers engage and order from the platform
2. Focus on delivering food as fast as possible
Higher-income source for Dashers
More customers for restaurants
3. Developing DoorDash as a Brand
More users, restaurants and dashers join in due to the power of the brand.
How DoorDash Makes Money- Revenue Model explained.
DoorDash has a simple and understandable revenue model. Here are the three main ways DoorDash has become a billion-dollar company:
Commission from restaurants
After every successful order, DoorDash charges a commission percentage from the restaurants. It is usually 20% of the total order value.
Advertising not only helps DoorDash to add some money into its account, but it also opens doors for many local entrepreneurs to showcase their services to a broader audience. DoorDash smartly leverages the high traffic and charges restaurants if they advertise their services on the app. It includes being promoted in the top searches, pop-ups for the advanced search.
DoorDash charges a sum from the users as the delivery fees. Usually, the average fee is in the range of $5 to 8$ per order. The price depends on the location as well.
Suggested Read: How To Boost Revenue For Your Food Business?
Here’s Why To Build An App Like DoorDash?
If you are figuring out an online business model that requires minimum investment and high returns, you must consider building an app like DoorDash. By now, you must have understood DoorDash’s secret sauce of success- creating an effective and targeted marketing strategy.
The future for the food delivery market does look promising as more customers prefer food to be delivered at their place of convenience. Around 60% of US consumers take food orders once a week.
To build a food delivery app like DoorDash is easy. What stands out is how you implement its customer-focused business and revenue model. Talk to us at CodeBrew, a premium food delivery app development company to know build your DoorDash clone. Let’s connect!
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