Build app like Grubhub
4,000 cities, over 22 million customers, and annual revenue of $3 billion… Do you dream of triumphing like GrubHub? Keep on reading then! GrubHub is a food delivery platform that enables ordering via a web app or a downloadable mobile app.
How do you build your own app like GrubHub? We prepared the most helpful tips, checklists, and success stories.
Table of contents
Background of GrubhubHow an app like Grubhub makes moneyHow does Grubhub app workCore features of the Grubhub appSuccess factors of Grubhub's business modelTop KPIs for GrubhubHow to start an app like GrubhubGrubhub's target audienceTechnology stack for an app like GrubhubOther apps like apps like GrubhubLatest industry trendsHow to build custom app like GrubhubCost to build app like GrubhubLet's discuss your idea
Background of Grubhub
GrubHub was created in 2004 in Chicago, Illinois. Co-founders Matt Maloney and Mike Evans were working on a real estate website when suddenly they realized that the same concept could be for searching and ordering meals from takeaway restaurants. The idea caused a dramatic breakthrough in the food delivery industry. Previously, people ordered dishes via phones and paid by reading out the card numbers. GrubHub began storing users’ card data, making the process more comfortable and significantly faster. The app uploaded up-to-date menus, so people now could choose their favorite dishes from the nearby eateries and order online. The innovation also helped local takeaways broaden their audience.
In 2013, GrubHub merged with Seamless, and the combined company controlled over 70% of online takeaway orders in the US. A year later, GrubHub followed the trends and launched its own delivery system for restaurants. This new app also enabled each restaurant to edit and update information, confirm and complete orders, etc. The app now covers over 50 US cities. In June 2020, GrubHub combined with Just-Eat Takeaway, making it the world’s largest food delivery platform.
Main statistics on Grubhub:
- 4,000 USA cities;
- over 300 partner restaurants;
- over 22 million active users;
- around 500 orders per day;
- $3 billion of the annual revenue;
- $7.1 billion of business valuation.
How an app like Grubhub makes money
GrubHub uses a commission-based model, which means that restaurants pay a commission on each order. Owners can choose between a base rate and a higher one. The latter allows a restaurant more options for taking orders from users on the platform.
Another money-making strategy is providing delivery services on the app. There is an additional commission for restaurants that use the Grubhub delivery, and users also pay fees when they order something.
Lets’ some up monetization strategies to use:
- Delivery fees from customers.
- Commission from partner restaurants.
- Advertising on the app.
- Raising prices for popular dishes.
How does Grubhub app work
There are three different models of how a food delivery app works. At the beginning, Grubhub was an aggregator – it provided software for connecting restaurants with customers. As the market changed, the brand started offering delivery support as well.
There is also a restaurant model – it’s perfect for promoting one brand’s goods, delivery, and other services.
Core features of the Grubhub app
Let’s discover what functional features Grubhub’s customers love the most. You can consider some of them to be in your future app.
- Vast geography and presence everywhere.
- A wide range of places, from small local restaurants to popular chains.
- Various payment methods.
- Well-developed search filters – by the type of cuisine, the nearest location, the rate, the price, etc.
- A quick and convenient ordering from a menu.
- A smooth re-ordering based on the previous order history, user’s preferences, and payment information.
- In-app tracking opportunity – a customer knows where their order is at every moment.
- Option to order dishes for takeout or delivery at any address.
- Special deals for the app’s users.
- Excellent customer support – if an order isn’t confirmed within 5 min or isn’t out for delivery in 20 min, a manager monitors a problem and fixes it.
Grubhub ensuring the payment and delivery safety. Images: https://www.grubhub.com
Study some more examples of functionality that you should apply in an app like Grubhub:
- sign-in and log-in systems, including social media log-in;
- list of restaurants and a menu for each;
- reviews and ratings;
- order history;
- delivery address;
- scheduled order;
- push notifications;
- customer support system.
Also, consider the main features for restaurant stuff:
- order and payment management tools;
- special offers managing system;
- customer support system.
Couriers will also use your Grubhub-like app. Core features for them include:
- registration and verification;
- order management;
- order status updates;
- order history;
- chat or call with customers;
- online support.
Success factors of Grubhub's business model
Grubhub was invented at a time when traditional ordering was a long and tiring process. The creators of this food-delivery platform kept in mind the idea of a rewarding, obstacle-free, and time-saving experience for every user. Therefore, Grubhub’s success factors included:
- making an app easy-to-use with an intuitive interface and personalized features;
- focusing on both local places and chain restaurants;
- fixing all problems of a typical takeout experience;
- transparency of order information, tracking, etc;
- clever algorithms to collect data for re-orders and special offers.
Grubhub's variety of restaurants and quick ordering process. Images: https://www.grubhub.com
Top KPIs for Grubhub
You need to study the business metrics if you wish to succeed like Grubhub. Let’s look at the main KPIs that this company uses:
- active diners – the number of unique user accounts placing an order on the app once a year at least;
- daily average grubs – the total number of revenue-generating orders placed on the platform during a certain period divided by the number of days;
- gross food sales – the total value of food, drinks, prepaid gratuities, delivery fees, and everything else going through the app.
These key metrics have significantly grown for Grubhub since the increased brand awareness. How did it work? The primary resources are:
- effective marketing strategy (advertisements and referral programs);
- partnerships with good-quality restaurants;
- technological improvements of the app;
- merging with other brands and broadening the audience.
How to start an app like Grubhub
- Determine what unique approach or valuable features you can implement. What will distinguish your app from many similar ones? If you wish to create a food-delivery app like Grubhub, don’t make it a clone; think of its value for potential users.
- Make a list of the most needed features, including the unique ones which only your app will have.
- Think of your app’s design, consider the most popular colors – blue, grey, purple, or green. Use the bright ones like red, orange, or yellow for highlights. Remember that you can use a layout similar to Grubhub but creatively altered.
- Decide on your budget.
- Hire a skillful team of developers who will create a well-working app with basic functions to attract your first users. Having a good template, you can always add new features later.
- Choose a CMS to use; it will help you add and edit all content on your app.
- Talk with developers and business analysts and make a plan on how you’re going to promote and monetize your app as soon as it’s ready. Decide what channels will help you make a profit and when you expect your investments to return.
Grubhub's target audience
It’s crucial to find out who will most likely download and use your app. Let’s look at Grubhub. One of its primary demographics are college students – how does the app work with them? For instance, the company has used Snapchat in many ways, such as geofilters, shared-space filters, and in-app ads. This strategy proved to be extremely successful during college exams.
You also must learn as much as possible about your app’s potential users – age, location, lifestyles, interests, social media they use, influencers they follow, etc.
Why you need to know the target audience for an app like Grubhub:
- finding your niche to compete with big players in the food delivery industry;
- finding channels to attract potential users and communicate with them;
- creating your best proposition (what’s unique about your app);
- developing a marketing strategy.
The general idea of the audience for a Grubhub-like app is people who are too busy to cook. Then determine whether your application would be for fast-food lovers, healthy eaters, vegans, those who like tasting different cultures’ cuisine, etc.
Technology stack for an app like Grubhub
You can choose various functions for your Grubhub-like app, and developers will build them with cutting-edge technologies.
Here are some examples of tech stacks we use at Exceed Team:
- Registration and log-in: Auth0, Gmail SDK, Facebook SDK;
- Payments: PayPal, ApplePay, Stripe;
- Push notifications: Push.IO, Amazon SNS, Urban Airship;
- Geolocation: Google Maps, Core Location Framework;
- Directions: Routific, Google Maps;
- Cloud storages: AWS, Microsoft Azure, Google Storage;
- Databases: MySQL, MongoDB;
- Analytics: FireBase, Google Analytics.
Other apps like apps like Grubhub
Latest industry trends
- Using benefits of virtual assistants and chatbots. Grubhub and similar apps make the best of Alexa to provide the most convenient ordering process. It’s also beneficial for a company to integrate various chatbots into a food delivery app. Users find it easier to order meals via messengers. Chatbots are also perfect when you want to inform clients about updates or send special offers.
- Making integrations with social media. Today, an average user has too many apps installed and might not be interested in getting more notifications. Let people use their favorite social media to order from your app.
- Applying VR (Virtual Reality) and AR (Augmented Reality). An app with these features can carry out the most successful marketing campaign. If customers see delicious meals floating in front of their faces, they’ll not only be more eager to order but also will share this VR content on their social media.
- Receiving payments in cryptocurrency. This option may soon appear in apps like Grubhub, changing the future of the food delivery industry. The use of highly secured technology (blockchain) makes financial transactions safe and fast.
How to build custom app like Grubhub
Building a “clone” or “whitelabel” app may be a tempting idea as it helps to save expenses at first. But as your business grows, you will get more and more dissappointed as you won’t easily apply more features to this clone solution. On the other hand, a custom app that takes the best from Grubhub is the most rational way to develop your food delivery business.
Cost to build app like Grubhub
You need to budget $30,000 to $50,000 if you want to create an app like Grubhub with all necessary panels (Customer, Restaurant, Admin, Driver). One of the best ways to lower the price is hiring a team of developers from Eastern European countries.