How Much Does It Cost to Create a Food Delivery App Like UberEats or Deliveroo?

The online food delivery industry is one of the fastest growing in the world, which is evidenced by both polls (one in five Americans regularly orders food on the Internet and their number is constantly growing), as well as predictive models by Morgan Stanley, Statisa and other companies. Therefore, if you plan to create an application for online food delivery, now is the best time to do it.

The cost of creating such an application depends on three factors:

• business models (aggregators, logistics platforms, cloud kitchens);
• functionality (registration, applications, payment, courier tracking, etc.);
• and developers' hourly rates (dollars per hour).

Putting it all together, the estimated cost of developing a food delivery application like UberEats or Deliveroo is as follows:

Next, we will analyze in detail all these things and indicate the estimated cost of creating all the elements of the application for online food delivery.

# 1. Food Delivery Business Models

According to McKinsey consulting firm, all modern online food delivery apps can be divided into three categories:

Aggregator applications. Business model based on the principle of market place: the web platform provides a platform where restaurants can specify menus and prices, and users can compare them and immediately place an order. The restaurant prepares food and delivers it. The application acts as a bulletin board and financial intermediary (not always), which accepts payment from the user and transfers it to the restaurant.

Such applications account for a large part of the market. The most popular aggregators are GrubHub, Eat24 and Just Eat. Their development requires the creation of functionality for two user roles: the buyer and the restaurant. Two other business models (logistics services and cloud kitchens) require the creation of functionality for three roles: buyer, restaurant, courier.

New delivery services, or applications with logistic support. Similarly, aggregator applications allow customers to order food at various pizzerias, restaurants, cafes and other establishments where they cook food, but at the same time they also help with food delivery according to the Uber scheme. For restaurants, this is a real find, because new services allow any restaurant, pizzeria, cafe, and even your grandmother, who prepares the best apple pies on this side of the Mississippi, to enter the market.

Scheme of the courier in the UberEATS application

New services work according to a simple scheme: 1) the client makes an order using the application; 2) the order is sent to the restaurant; 3) the restaurant prepares food and passes it into the hands of a freelance courier; 4) the courier takes the order to the doorstep of the client. UberEATS, Foodpanda, Postmates and Caviar use this business model.

Launching such an application requires the same efforts as developing an aggregator application, plus the creation of functionality for couriers and their interactions with restaurants and customers: receiving an order, real-time chat, location tracking, financial calculations, etc.

Full delivery service on request. This scheme involves working with kitchens that work exclusively on online delivery. Such cuisines are usually called cloudy or ghostly. Cloud kitchens do not have lounges, bar counters, or windows to serve customers locally. They take orders on the Internet, prepare food and send it to the delivery address. Couriers at these web services also have their own.

Creating such an application, you need to develop not only an online service, but also open (buy) a kitchen and hire the appropriate staff. The mobile application in this case works as an online menu, cash desk and map to track the status of the order and / or the location of the courier. Sometimes such services are also responsible for the workflow and accounting of the company (it’s more convenient).

The largest network of cloud kitchens is Indian Rebel Foods (called Faasos until 2018), which recently received $ 170 million in investments from McKinsey, Goldman Sachs, Coatue Management, and Gojek. In America, the cloud kitchen market plans to conquer startup Deliveroo, which has raised $ 575 million in investment under Amazon’s leadership.

# 2. US Web Developers Hourly Rate

The cost of hiring application developers usually depends on three factors:

Region, country. Most of all affect the hourly rate of developers, since the location largely determines the cost of training, competition, social and legislative guarantees, and more. Specific figures for countries vary depending on who considers what. So according to Codementor the distribution is as follows:

Qubit-labs gives slightly different numbers:

As can be seen from the tables, the most expensive developers are in Israel, Germany and the USA, the cheapest are in the countries of the former USSR and Africa.

It is important to understand here that the difference in the hourly rate does not always indicate professionalism and experience. Often people from the countries of the former USSR and Asia working for $ 50 per hour show better results than American programmers at a rate of $ 150 per hour.

Specialist expertise. According to Stackoverflow, developers with up to 5 years of experience can earn about $ 40,000 in France and the UK, about $ 50,000 in Germany and Canada, and $ 75,000 in the United States. With 5 to 10 years of experience behind them, developers can ask for 100 - 112 thousand dollars in the USA, 55 - 70 thousand dollars in Canada and 50 thousand in France. American developers with experience of more than 15 years earn from 125 thousand per year.

Mobile platform. An entry-level American iOS developer (up to 5 years of experience) can count on 80 thousand dollars a year, 5-10 years of experience will bring another 20-40 thousand dollars in annual income. IOS developers with more than 20 years of experience get $ 120,000 or more per year. In other countries, the hourly rate is as follows:

Moving from iOS to Android, we will see a similar picture: the highest rates in North America - $ 168 per hour, Australia - 110 and the UK - $ 70 per hour. South America and Eastern Europe operate at a rate of 34 and 35 dollars per hour, respectively.

Given the above, the cost of developing a mobile application for online food delivery, like UberEats or Deliveroo, should be calculated based on hourly rates of $ 150, $ 100, and $ 50 per hour - average figures for North America, Western and Eastern Europe, respectively.

For what money to hire people, you decide, but remember that these numbers do not always determine the quality of work. So, many modern IT giants are founded by students with little or no experience (Microsoft, Facebook, Google). At the same time, everyone knows that a significant part of the code of the products of these companies was written by programmers from India and Eastern Europe.

Focus on a specific developer - a company and / or specialist.

# 3. Functions and cost of their development

UI / UX application design

The development of an UberEats or Deliveroo-style food delivery application should begin with design, because it is the design that most affects the user experience. At the same time, depending on the type of service (aggregator, logistics, cloud kitchen), you need to create several design variations for different user roles.

The design development process can be divided into three stages:

1. Development of the layout. Visualization of how your application will look.
2. Design implementation (coding, work with images, photos, videos and texts).
3. Design testing at the technical and conceptual levels (user perception and usability).

The separation is conditional, because during development the design is constantly improving due to new ideas, error detection, feedback and AB testing.

Registration and work with the profile

Registration is an integral part of applications where there are payment gateways and work with personal data. Modern applications, as a rule, have several registration options:

• via email;
• via telephone and SMS verification;
• through integration with social networks (Facebook, Instagram, Twitter).

In addition, almost all applications have the ability to register through integration with Google Play and / or the App Store. Which is very convenient for users who are used to making payments using Google Pay and / or Apple Pay.

Geolocation and service coverage

All modern applications for online food delivery are closely related to navigation. They track the user's position and display the nearest restaurants in the search, help track the location of the courier, help the courier make a route from the restaurant to the place of delivery, etc.

These features require interaction with users' GPS chips and online maps. In this case, tools for geolocation vary depending on the platform. So, iOS usually uses MapKit, Android - Google Maps, so development hours for these platforms may vary.

Financial instruments

If the application will accept payment for orders or be an intermediary in this process, you will need integration with payment gateways. The selection of suitable services and their connection is a very serious task, as payment should be convenient and at the same time secure.

To achieve this, it is recommended to use reliable payment gateways - services that connect the web service to several payment systems at once (Apple Pay, Google Pay, PayPal, bank cards, etc.). This way you can save hundreds of hours of development, which reduces the cost of application development.

There are two types of payment gateways:

1. They require a trading account with a bank. Suitable for enterprises working with large volumes of transactions, so you can get more favorable conditions with banks and payment services (the larger the volume, the lower the commission). Examples of classic gateways are 2Checkout, WorldPay, and Authorize.Net.
2. We need a regular bank account to accept payments, which simplifies the integration process, but involves higher commissions. Examples: PayPal and Stripe. Modern gateways are usually used by companies that want to save money on startup.

To ensure transaction security, application development requires compliance with data security standards (depending on jurisdiction) and compatibility with PCI DSS.

Analytical Tools Integration

This stage includes the integration of analytical tools, designing the structure of events and their arrangement inside the application. Event - any action that the user performs (opening and closing the Swype application, clicking on a button, adding a comment, spending or buying, opening a specific screen, etc).

Thanks to these tools, you will be able to track user behavior, which can be used to identify problems with usability and improve the service. Most often they use Google Analytics or Yandex (in the Russian-language part of the Internet). In addition to them, you can also use Flurry, Mixpanel or Localytics.

Communication and notifications

Notifications help users to track important events: payment of an order, delivery of food to a courier, approaching a courier to a delivery place, arrival of a courier and more. Thanks to this, you can improve your user experience and thus increase user loyalty.

Usually, two types of notifications are used for this:

1. Push notifications. Messages that pop up on the smartphone screen, even if the application initiating this notification is closed.
2. Sending a short text message to a phone number.

In order not to duplicate messages and not annoy users in this way, developers usually use a simple rule: first a push notification is triggered, and only if it has passed, an SMS is sent. Push notifications may not work if the phone does not have an Internet connection.

How Much Does It Cost to Create a Food Delivery App Like UberEats or Deliveroo? key takeaways:

1. # 1. Food Delivery Business Models
2. # 2. US Web Developers Hourly Rate
3. # 3. Functions and cost of their development