How to Start an Online Food Delivery Platform ? Business Model,Revenue Model & Key Features.

How to Start an Online Food Delivery Platform ? Business Model,Revenue Model & Key Features.

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Last Updated: 20th September 2022

The online food delivery marketplace provides customers with the choice and convenience of getting food with a few taps on their mobile phones. Earlier the restaurants used to deliver the food themselves but the process has undergone a rapid change in the past few years.

Online food delivery platforms allow restaurants to make the most of both digital and traditional marketing mediums. online food ordering apps allow customers to browse their favourite restaurant’s food with ease. According to Statista, the revenue of the online food delivery industry is expected to reach an annual growth rate of 9.9% from 2019 to 2023 with a market volume of US $53,786m in dollars.

Grubhub, Deliveroo, and Uber Eats are a few examples of these online food delivery services that promise to deliver healthy & delicious meals right at your doorsteps. It’s no surprise that this business model has quickly become popular.

FATbit Technologies conducted an in-depth analysis of various mobile apps and websites that are popular in the online food delivery business. Entrepreneurs looking to launch an online food ordering and delivery business can choose an existing platform like Yo!Yumm or can hire developers to build a custom website for them. Let’s take a look at the business and revenue models of these online food delivery platforms, to understand market dynamics.

Business Model of Online Food Delivery Platform

An online food delivery marketplace offers a platform for restaurants, delivery agents, and those who want their food to be delivered at their doorstep, to connect with each other. 

Online Food Delivery Platform business model

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With mobile phones becoming an important part of our everyday lives, online food ordering and delivery industry has observed that the majority of customers prefer food ordering using mobile apps. Your food delivery solution must include mobile apps for admin, merchants, delivery staff, and customers along with the website. A standard business model of any online food delivery system can be explained considering the four main entities of the platform: admin, restaurant owners or merchants, delivery agents, and customers. Some of their basic roles are: 

The Admin

The admin has complete ownership of the product. Using the admin panel or dashboard, the admin can easily manage the UI of the food delivery website and keep track of various activities like placed orders, deliveries, newly registered users, and customer reviews. The food delivery mobile app for admin enables the platform owner to manage various verticals of the marketplace from his/her mobile phone enabling ease of management.  


The merchants register on the platform with an account by adding specific information on their restaurant and offerings. The account is created after the admin grants approval. The merchants can either register a single restaurant or multiple restaurants depending upon the subscription package selected by them. The restaurant owners can also operate with a merchant app. Using the merchant dashboard, the restaurant owners can manage and customize the menus, accept or reject orders, create offers and discounts for the customers, and keep track of their sales and profit.

Delivery Staff

The delivery agents can register on the food delivery platform by creating their accounts on the website or mobile app. The order delivery can be managed either by the admin or restaurant. Once the order is accepted, it is broadcasted to the delivery agents present near the restaurant location on the delivery staff app. The delivery agents can accept or reject the order as per their availability. If the order is not accepted by any delivery agent, the admin can assign the order delivery to the particular delivery staff.


The customers can either create their accounts on the food delivery marketplace or place orders as guest users using the food delivery website or customer app. The customers can choose to place an order from the number of restaurants delivering to their location. Once the customers select the food items to be ordered, they can place their orders with a few clicks on their mobile phones. 

After placing the order, the customers select one of the many payment options available to make payment. The payment is directly transferred to the admin’s account which is later on credited to the merchant’s wallet or transferred to the delivery agent by admin after deducting the commission amount. Customers can track their orders and delivery. Once the order is delivered and marked completed, the customers can give their reviews and ratings for the restaurant. 

Revenue Channels For Online Food Delivery Platforms

One of the most important factors to consider before starting an online food delivery business is the possible revenue streams. As an entrepreneur, you must set up efficient revenue channels into your food delivery system.

Online Food Delivery Platform revenue model

The four major ways of revenue generation for the admin of the food delivery platform can be:

  • Commission From  Restaurants
    The admin sets a specified %age of commission on every order placed through the marketplace. The payment made by the customer is received by the admin. The admin credits the amount to the restaurants’ wallet after deducting the commission.
  • On-site Restaurant Promotions
    The admin can charge additional fees from registered merchants who wish to run on-site advertisements/promotions on the website for their restaurant promotion.
  • Subscription model for the merchants
    The admin may set up various subscription packages (individual & corporate) for merchants to register their restaurants on the platform. When a merchant creates an account on the food delivery platform, he/she can choose the subscription package as per his requirement. If the merchant wants to register a single restaurant on the portal, he can select the individual package whereas to register multiple restaurants, the merchant can subscribe to the corporate package. To subscribe to these packages, merchants would pay pre-decided fees to the admin. 
  • Third-Party Advertisements
    Another effective way for the admin to generate revenue from the food ordering and delivery app is to run third-party advertisements on the website and mobile app. The admin can charge from the third party for displaying their ads on the food delivery marketplace.
  • Delivery Fee
    The admin can also generate additional revenue from the orders whose delivery is managed by him/her. The platform owner can charge the delivery fee from the customers. The amount charged as the delivery fee is decided by the admin, therefore, he/she can charge an added fee to generate revenue from it.

Must-Have Features To Build A Market-Leading Food Delivery Platform

To drive exponential business growth and provide exceptional user-experience, your online food delivery platform must be equipped with advanced UI features. We have discussed the must-have features for the food delivery marketplace to scale.

Aesthetically Designed Homepage/ Intuitive UX/UI

Intuitive UX/UI plays a significant role in driving deeper user engagement. The homepage of your food delivery website must-have UX centric design to engage users and improve the overall user experience. Some of the key factors that must be considered while designing the homepage of your food delivery website are as follows:

  • The top banner housing all the main components like log-in/register.
  • A strategically designed banner image showing exquisite culinary food dishes. This is essential in enticing users to order food online.
  • A compelling tagline like ‘order home-like food‘ that makes your service more welcoming.
  • As most of these services are location-based, you must incorporate a search bar along with the location tracker on the homepage itself.

homepage- yo!yumm

A ‘How It Works’ Section

One of the major goals of any new platform catering to a niche market is to make its novice users aware of how the platform works. This is why your food ordering and delivery portal ought to have a dedicated section, which guides users to perform various operations on the marketplace. This section could cover areas such as:

  • How food ordering works
  • Food delivery Process
  • Payments 

It’s vital to lay major emphasis on the design of this page. Our analysis of several online food delivery platforms has shown that the UI of a website is of utmost importance.

how it works- yo!yumm

Reviews & Ratings

Your food delivery marketplace must enable the customers to give reviews and ratings to the restaurants they order food from. This helps admin and restaurants evaluate their services.  Also, businesses are beginning to realize the importance of customer reviews to enhance their brand identity as reviews highly influence the decision-making process of new customers on the food delivery app.

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When it comes to login/signup process on online food delivery platform, it needs to be as simple, intuitive and should take the least amount of time possible to complete. This is due to the fact that these platforms have come into existence to streamline the food ordering process. Rather than using a dedicated login page, your website can use a popup. Users can either use one-click login via Facebook/Google/Twitter or go for traditional way of log-in with username and password.

login- yo!yumm

Multilingual Functionality

To expand your reach to a wider audience and deliver a personalized experience to the customers, your online food delivery platform should be incorporated with multilingual functionality. Enabling customers to search and operate in their language helps you enhance customer engagement. Also, if you plan to launch your food delivery website in multiple regions across the globe, this feature becomes essential.

Account Activation

In order to eliminate spam accounts and build a strong user base, you can also have a pre-activation verification system in place, where you require users to confirm their email to activate their accounts. Alternatively, you can also add OTP service in place to verify via mobile number.

Customer Dashboard

A comprehensive user dashboard helps customers easily manage their account details and keep track of their activities on the food delivery app. The customer dashboard should be designed in a way that the customers can easily access the information and manage their account on the food ordering and delivery platform. The dashboard must include:

  • Wallet

This section incorporates all the details related to payment history and available balance in the wallet. Customers can easily add money to their wallets before placing an order. Users can also view the complete payment history in this section, along with details of the payment, total amount, and remaining balance in the wallet after making a payment.

wallet- yo!yumm

  • Delivery Address

For online food ordering and delivery platforms, the delivery address is crucial. Users generally tend to order food from their homes as well as offices on a regular basis. This is why an option where users can add default addresses surely comes in handy. This makes it easier for users to order food quickly, eliminating the hassle of filling the same addresses again and again.

  • A “Your Orders” Section

For a better user experience, your online food ordering and delivery platform must have a dedicated section for customers to view their current and past orders. The section must include information about:

  • Order details
  • Delivery date
  • Total amount
  • Status of the order

We found this approach to be highly user-friendly and recommend it as a must-have feature for your online food delivery platform.

Order Placement

The process of placing an order needs to be seamless and quick. Users should only have to provide their contact details to verify their purchase. After that, they need to add the delivery address or select the default address. The next step obviously involves confirming the order and choosing payment mode, by either credit/debit card or cash on delivery.

Advanced Search

The search bar is one of the most important components of any eCommerce platform. As we discussed earlier, a food delivery startup must have a search bar on its homepage, where users can search for the location, cuisine, restaurant or dish. Also, you can provide meal options based on the time of order delivery such as:

  • Breakfast: Morning time slot
  • Lunch: Afternoon time slot
  • Dinner: Night time slot

Users can select either of the options to place the order.

Easy To Customize Menus

Your online food delivery marketplace must include features that allow restaurant owners to easily customize the menus. The food delivery marketplace should offer exclusive features for various sets of users i.e, admin, restaurants, and customers. With an easy to customize menu option, the restaurant owners can create discount offers, highlight best selling items, mark the availability of the food item, and remove items from the menu as per their requirements.

Launch an online food delivery platform with our robust solution

Features to Include in Your Food Ordering App to Curb the Spread of COVID-19

Food ordering apps have gained enormous popularity amid the COVID-19 crisis. Lockdown restrictions imposed by the governments are keeping people away from retail stores and food courts to reduce the virus spread. As a result, millions of people have started using online food delivery apps for ordering food. That’s why food delivery companies are witnessing a massive surge in the number of daily downloads of their food ordering apps. If you’re planning to build an online food ordering app in these unprecedented times, here are some essential features you must include in your food ordering platform to reduce the spread of Coronavirus:

Geofencing for Seamless User Experience

Features like Geofencing could play a crucial role in providing superior customer experiences and increase your restaurant’s sales. With geofencing, restaurant owners can set virtual boundaries marking locations where they deliver and notify the customers when they enter that predefined location. This location-based service can ensure safer deliveries during the pandemic.

Contactless Deliveries for Customer’s Safety

This feature will safeguard your customer and delivery agents from getting affected by the COVID-19 virus. Contactless delivery options in your food ordering app will limit customer interaction with delivery boys. The customer can opt for a contactless delivery option while placing orders and instruct the delivery boy about the drop-off location.

Curbside Pickup to Reduce Physical Contact

Providing a self pick up option to your customers is the best method to limit their exposure to the outside world. This feature will facilitate customers with contactless pickups and reduce their interaction with the restaurant staff. Customers will grab the food without entering the restaurant by selecting the take-out option from the app.

Online Payments to Limit Transmission

To reduce the physical contact and the spread of coronavirus, it is advised to avoid the exchange of cash. That’s why many food delivery applications are providing cashless deliveries for customers’ safety. Encouraging customers to make online payments through debit cards, credit cards, or e-wallets, etc. will help you mitigate the virus exposure.

COVID-19 Notifications for Customers’ Awareness

Notifying your customers about the safety measures and educating them about the safer delivery options will help you maintain a consistent relationship with them.  This feature will gain customer trust and improve customer engagement as they will receive constant notifications regarding the precautionary measures being taken by the restaurant to reduce the Coronavirus spread.

Suggested Read: COVID-19 Crisis: Online Food Delivery Challenges and Their Potential Solutions

The increasing relevance of Mobile Apps in Food Industry

Businesses are changing their approach and becoming increasingly mobile-driven. Due to the increasing rate of mobile usage by the customers and ease of use most companies have launched their mobile apps. These mobile apps allow customers to order from a wide array of restaurants on-the-go and track delivery. With easy access, fast ordering, and secure online payments the online food ordering mobile apps offer many advantages and are definitely worth an investment.

Ready to launch an online food delivery platform ?

Final Thoughts

In recent years, the food ordering market has grown rapidly. Rather than going to an eatery, people prefer to order food online. This has resulted in huge demand for online food delivery and the outcome is the rise of platforms like Grubhub, Deliveroo, and Uber Eats. Although there are many startups that have launched in different markets, most of them are making decent progress. That’s because this niche relies on locality, which makes it easy for a new startup to generate income from an untapped area.

If you want accelerated growth for your online food delivering business, your solution should be equipped with exclusive functionalities and impressive features. This would surely help you in capturing the bulk of the market share and driving exponential business growth.

Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date. We advise - the readers should not take decisions completely based on the information and views shared by FATbit on its blog, readers should do their own research to further assure themselves before taking any commercial decision. The 3rd party trademarks, logos and screenshots of the websites and mobile applications are property of their respective owners, we are not directly associated with most of them.

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I am decided to start own pick and delivery business, let us know, what I needs to be prepare and how much cost required, kindly explain in details?