Things to Learn from Grubhub’s Food Delivery Business
Published on: March 25, 2021
Updated on: August 25, 2021
Introduction:
Entrepreneurs all over the globe are making efficient use of technology to develop on-demand solutions. The evident rise in the trend is disrupting the conventional ways of availing services and products. Here we will talk about the Grubhub food delivery business model.
The on-demand services are providing an efficient platform to connect the service providers and consumers. The advent of industry 4.0 techs is offering furthermore ease to users. Read on this blog till the end to learn how Grubhub connected innovation with the food business.
Overview: Grubhub
Grubhub is an online platform that offers restaurants a platform to reach their consumers. The restaurants receive the order and the delivery executives deliver the respective order at their consumer’s doorstep. They provide their users with convenient and seamless technological solutions. If you compare Grubhub with other on-demand food platforms you’ll observe that it has gained a significant lead as it offers reliable services to larger masses.
Interesting Facts about Grubhub:
- The platform was founded by Matt Maloney and Michael Evans in 2004.
- Grubhub is headquartered in Chicago, Illinois.
- Grubhub was publicly listed as GRUB by the New York stock exchange.
- As per a stat observed in 2017, Grubhub had served 5.6 million active customers.
- The platform has a well-orchestrated system that deals with 267, 800 consumers.
- Grubhub offers its services in 1000 US cities having partnered with 44, 000 food joints.
Unique Value Proposition:
- Convenient and quick ways for consumers to order food online.
- Myriad options to choose from.
- Real-time tracking.
- 24*7 service.
- Saves money and time.
- The Grubhub app allows its restaurant partners to receive orders online.
- Restaurants get unparalleled recognition and a huge consumer base.
- Restaurants don’t have to worry about making deliveries as the platform takes care of the same.
Benefits of Using Grubhub:
- Grubhub is a boon for time-poor families and individuals or for the ones not interested in cooking.
- If you have a party or you want to host a team lunch then the platform offers you plenty of choices and convenience.
- Perfect platform for individuals who don’t like to eat outside and get their food ordered.
- Helps increase their brand awareness and reach for customers.
- The masses residing in your locality can be targeted well.
- All restaurants cannot afford home deliveries. Grubhub is a blessing in disguise for such individuals.
Grubhub’s Monetization Techniques:
Grubhub follows a simple business model. It allows its consumers to order their favorite cuisines from thousands of restaurants. Here are some of the monetization strategies used by the platform.
Commissions:
Grubhub charges a per order commission to the restaurants for using the platform to generate orders. The commission charged by the consumer can range anywhere between 5% – 15%. The standard earning per order is 13.5%.
Advertisements:
There are many ways through which a restaurant can market itself, but what better than a platform that also generates orders while advertising your services or products. Grubhub takes care of both the preceding tasks with ease. Yet in order to rank at the top of the consumer’s search, a restaurant would have to pay accordingly.
Grubhub Business Model in 4 Easy Steps:
Advanced Search:
Consumers can search for their favorite restaurants or cuisines using the advanced search feature of the platform. The search offers filters based on proximity, discounts, special offers, happy hours, and much more. The filters make it very easy for consumers to search for what they want.
Order Processing:
The consumer makes an order to a respective restaurant through the app. The restaurant has the option to either accept or reject the order. Upon accepting it the platform calculates an estimated delivery time and updates the same in the consumer’s app. The consumer will receive the delivery details of the delivery executive and would be able to track its order in real-time.
Online Payment:
Since the advent of fintech apps, it has become a mandatory trend for online applications to offer multiple payment options. This increases the engagement rate of consumers as they are offered the payment options that they use on a regular basis.
Order Delivery:
As the restaurant receives an order the nearby delivery executive would receive an order delivery request. The delivery person would also have the right to either accept or reject the required service. Upon accepting the order the agent would reach the respective restaurant using the real-time location, collect the order, and deliver it at the consumer’s doorsteps.
Grubhub’s Success Mantra:
Mike Evans and Matt Maloney founded the company in the year 2004. What led them to this discovery was the absence of a streamlined service that offered convenient food delivery from your favorite restaurant. To order home-delivery one had to call the restaurant, learn the menu, feed their address, and pay via cash or using debit or credit cards. The process was too tedious and time-consuming.
During that time the duo was working on a real estate rental website, this helped them realize that they can design a similar service for restaurants. Hence, began their venture of collecting menus from different restaurants across Chicago. Mike wrote the initial website code and in no time Grubhub was live (in Chicago).
Conclusion:
Here we learned how the Grubhub food delivery platform goes about running its on-demand food delivery app business. The on-demand apps are generating high revenues for their stakeholders who’ve invested following the right business practices. What are your thoughts on the futuristic scope of the on-demand food delivery market? Please engage with us by sharing your views in the comment section. Thank you for reading!
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