Two major players of Indian food delivery market are Zomato and Swiggy. Both unicorn status earned companies process more than 13 million orders in the month. However, due to low-margin business, poor supply-demand ratio, over-reliance on gig workers and cutthroat competition, they both are losing a heap of money. Thus, they are trying many ways to cut the operation cost and to have enough drivers to satisfy the demand.

In the second month of this year, Zomato tied up with many e-bike manufacturers of India to convert 40% of the fleet to power-assisted bikes. At present, Zomato has a fleet of more than 5000 e-bikes and delivery partners are delivering food on e-bikes in over 12 cities of India. In his official statement, Zomato spokesperson said that e-bikes enable drivers to deliver the food on time and earn more.

Is it feasible for Indian food delivery startups to do food delivery with electric bikes?

 
So, if you are a food delivery startup from India and eager to know whether it is really feasible to introduce e-bikes for food delivery purpose, continue reading this feasible study report. In this FSR, we will discuss all factors affecting conventional food delivery method as well as food delivery with e-bikes method. Using the evaluation criteria such as cost, technology, distribution, legal, and operation, we will evaluate the possible use of e-bikes in food delivery segment and come to a conclusion which will surely change the way you are running food delivery startup.

Problems Indian food delivery startups are facing

 
Following are the top problems Indian food delivery startups are facing while delivering food using the conventional delivery method.

Delivery drivers are earning less amid rising fuel price

 
Though food delivery companies are offering very good employment opportunity to delivery executives, they are claiming that they cannot earn enough money to survive effortlessly. They have to spend a major percentage of their earning on the fuel and since they are independent contractors, food delivery companies cannot pay them the fuel price. This whole situation restricts more delivery executives from joining the company which eventually decreases the order fill rate (percentage of orders satisfied) and so does the user satisfaction rate.

➯ An inefficient driver tracking method

As of now, a user can track the delivery driver who is on his way to deliver the food, in the mobile app. But many users complain that they can’t track delivery drivers properly and it is true. Delivery drivers are tracked using their phone’s location. If they keep GPS on their phones off, there is no other way to track them.

➯ Congested cities causing a delay

Indian cities are among the most congested cities in the world and to deliver food in such cities, delivery drivers require 20-30% more time. Because of this undesirable delay, customers get the food late and delivery drivers earn below average. So, both customer satisfaction and driver satisfaction get affected, very badly.

➯ Possible solutions to problems food delivery startups are facing

After discussing the problems food delivery startups are facing, let’s discover some solutions to decode those problems.

➯ Don’t work with gig workers

The most proposed solution is hiring delivery executives rather than relying on gig workers. They claim that hired delivery drivers get all employee benefits and satisfactory wage which can double their satisfaction rate. Having full control on delivery drivers is another advantage they are quoting as the benefit of hiring delivery drivers. However, this is not a feasible solution at all. If you choose to hire delivery executives and not to rely on gig workers, your company’s internal cost will increase significantly which you really can’t afford.

➯ Filter delivery jobs based on distance and account type

Delivery job filtration based on distance and account type is another proposed solution. Here is how it works.

When a user registers himself to be a delivery driver for your food delivery startup, give him the choice to select an account type from available two options – motorbike account and car account. If he selects motorbike account, you should allocate him deliveries only within 2.5 kilometres and if he selects car account, allocate him deliveries beyond 2.5 kilometres. Car account holder delivery driver who has to drive more distance to deliver the food, gets more per kilometre rate after completing the first 2.5 kilometres which means he does not have the option to complain.

Same way, a motorbike account holder who receives delivery requests to deliver food within 2.5 kilometres does not have the option to complain as he does not need to work hard and spend more time and fuel to deliver food within 2.5 kilometres only!

However, this is just a hack, not an ethical solution (to let drivers earn based on account type).

» Distribute e-bikes to delivery partners

And the last solution is distributing e-bikes like you distribute delivery bags to delivery partners. In case you don’t know, all food delivery companies give delivery bags to the drivers as the welcome kit and deduct the money of the delivery bag from the first week earning of the drivers. And when the delivery driver returns the bag, companies deposit the deducted money back to the driver’s account. Same way, give e-bikes to some selected delivery drivers and deduct the 50% of the price of an e-bike from their earning. When they return it, check the condition of the e-bike and deposit the deducted money back to the drivers’ accounts. This is a very revolutionary, practical and ethical idea which alone can solve all problems of food delivery startups.

We will now evaluate this idea by taking a few important factors into account.

 
➯ Evaluation – why delivering food with e-bikes is the feasible solution?

We haven’t reached the ultimate solution yet. But after this evaluation process, we will firmly say that an e-bike is the guardian angel for food delivery startups!

➯ Cost

To buy an e-bike, you have to spend somewhere between $300 to $500. However, as we have discussed, after giving it to a driver, deduct 50% of the price of an e-bike from his earnings and when he returns it to you, refund him the deducted amount (after checking the bike’s condition) and give that e-bike to some other driver and deduct the 50% of the price of an e-bike from that driver’s earnings. Keep doing this and you will never feel that you have purchased e-bikes by spending huge.

➯ Technology

Generally, the latest generation of e-bikes is coming with inbuilt IoT features. One of the most prominent features is the tracking feature. A driver who delivers the food using e-bike is tracked via his e-bike and not via his phone. Meaning, users can track the location of the driver even when his phone or its GPS is off. But to actualize it, the connection between the mobile app of a driver, admin panel and IoT controller of the e-bike is the fundamental need.

➯ Distribution

You can distribute the e-bikes to those drivers who do not afford fuel and own motorbike to deliver the food. For that, you can allow them to ask for e-bike when they register themselves to be delivery executives.

➯ Legal

In India, there is no strict rule regarding e-bike. In fact, the government is appreciating it as it is environment-friendly.

➯ Operation

Once you give an e-bike to a delivery driver, you are not responsible for day-to-day operation (battery charging) of the e-bike. However, you can offer free maintenance service to those drivers whose rating is high.

Conclusion

 
Buying a fleet of e-bikes is undoubtedly the best investment you can make as the food delivery startup. It helps you to sustain a high user and delivery driver satisfaction rate while spending very less. However, to deliver food using e-bike you should integrate a different module into your food delivery app. This module establishes the connection between the driver app, admin panel and e-bike and enables admin to know the status of the e-bike.

We, being the top e-scooter app development company and on-demand food delivery company, accommodate clever designers and develops who can develop your food delivery app with all necessary features as well as features which need to be integrated if you wish to deliver food using e-bikes. We will not only develop your app, but we will become a business strategic partner to help you throughout the business journey.

With our rapid app development technique, we can develop a food delivery app under $10000 and within 45-55 days.

To know more about the food delivery app features and e-bike’s compatibility with food delivery business, feel free to contact us.

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In 2017, the on-demand food delivery market was valued at $81.56 billion, and according to an estimation, it will hit $161.74 billion by 2023.

Looking at the market opportunities, more and more entrepreneurs are jumping into the on-demand food delivery industry with mobile apps. But it is the deep sea, demands a proper exploration before diving. So, a team of Coruscate Solutions helps you to know all possible ways to start a profitable on-demand food delivery business. We will explore different business models and what are the resources you need for each business model.

4 different business models of on-demand food delivery business you should know while developing on-demand food delivery app(s).

On-demand food delivery industry is the massive industry. Many entrepreneurs and food enthusiasts have gone one extra mile to come up with different self-sustaining business models for on-demand food delivery business. They crafted these business models to reduce resources and to increase revenue.

Following is the 4 different profitable business models for the on-demand food delivery business which you can follow to satisfy the core financial goal from your food delivery startup.

In this type of business model, you let restaurant owners handle the delivery services by themselves. The only responsibility of your on-demand food delivery business is to take the orders from the users and share those orders with the respective restaurants. The restaurant prepares the meal and delivers that meal to the user through its own team of delivery drivers.

Resources

Order only business model for your on-demand food delivery business urges very limited resources. You only need a team which takes care of the value proposition and customer service of your business.

IT infrastructure

IT infrastructure which contains apps for different stakeholders and admin panel holds the same importance in any kind of business model. However, with the different business models, the features an on-demand food delivery app development company integrates into the app may vary. Coruscate Solutions is one of the top mobile app development companies which has earned the expertise to work on any kind of business model and deploy a scalable and reliable IT infrastructure for your on-demand food delivery business.

Talking about order only business model, a user mobile app, restaurant app, and an admin panel together build the whole IT infrastructure. The mobile app lets the users order, restaurant app lets the restaurant owner process the order and admin panel lets the admin get insight into historical and current data of orders.

Following table shows which are the features, you should ask an on-demand food delivery app development company to add.

Limitation

As you are relying on restaurants to provide the delivery services, only those restaurants with the own team of delivery drivers can be listed out on your platform.

Following order only business model means you don’t have control over delivery teams and so, you can’t promise to offer most-excellent delivery service to the users.

An Order and delivery model takes the only delivery model to the next level. If you decide to follow the order and delivery model, you have to handle the logistics for the restaurants. Since restaurants don’t have to invest for delivery service and food delivery companies can create more revenue streams by letting restaurants to utilize its delivery service, order and delivery model is beneficial for both. Top on-demand food delivery service provider companies like Uber, Zomato, DoorDash are following this model. They allow anyone to be the delivery driver by just registering. Now, when a user orders the food, a nearby driver is also notified to pick up and deliver the food. Food delivery companies pay these drivers based on the distance they travel to complete a delivery.

Resources

Unlike order only business model, you will need more resources to operate the order and delivery based food delivery business. You need to be equipped with the team of drivers, customer executives for users, drivers and restaurants, and, of course, three different apps for major three stakeholders. However, it is an undeniable fact that more resources help you to earn more money if you utilize it in a good way!

IT infrastructure

Order and delivery business model is the fully integrated model. You need three different apps for three different major stakeholders – users, restaurant owners, and delivery drivers. If on-demand food delivery app development company puts any of the requirements on the knife-edge and delivers an app with a few missing features, you will not able to dominate the market. So, always be extra conscious when following a fully integrated model.

Limitation:

Arranging an efficient delivery system is the major challenge in the order and delivery model. However, a point to point delivery network can overcome this challenge. In point to point delivery network, an on-demand food delivery app development company writes and implements an algorithm in such a way that system assigns an order to the driver closest to the restaurant.

Order and delivery model is the most common business model on-demand food delivery companies are following to generate more revenue. Coruscate Solutions has entertained 100+ queries related to developing Uber Eats, Zomato and DoorDash like apps.

In the next section of this blog, we will discuss more two business models. These business models are avant-garde and more commercially successful.

Cloud restaurant is the most efficient way of running the on-demand food delivery business. With this model, you can start on-demand food delivery business even from your house as it doesn’t require a proper restaurant to fulfill the need for dining services. When a user orders the food, a central kitchen prepares the food and an own team of delivery drivers delivers the food. It eliminates the need for real-estate. In recent time, many on-demand food delivery companies which are following cloud kitchen model raised a good amount of money in their funding rounds.

Resources

Compared to order only and order and delivery business model, cloud restaurant model needs fewer resources. The major advantage of the cloud kitchen model is that all resources of your on-demand food delivery business will remain only under your control. So, you can utilize it according to business needs.

IT infrastructure

Unlike the other two business models, here admin himself is the owner of the cloud restaurant who owns a team of chefs and delivery drivers. Thus, an on-demand food delivery app development company integrates all admin features into the app of restaurant owner itself.

Limitation

Since you are running an online restaurant without having any kind of physical presence in the market, customers may take time to adapt your services in some locality.

Advantages

You will need very fewer resources. In fact, you can run on-demand delivery business anonymously.

You can personalize all core services according to your need as you own menu, chefs and delivery drivers.

Meal kit delivery model is the very unusual but profitable business model of the on-demand food delivery industry. In this business model, you deliver high-quality ingredients to the customers. Customers can select a veggie plan, family plan, and non-vegetarian plan and number of recipes per week to get delivered the different recipes and ingredients according to their selected plan to prepare those recipes. Top on-demand food delivery companies like HelloFresh and Sunbasket are following this business model.

Resources

You require chefs to prepare different recipes and a team of delivery drivers to deliver the meal kit. Moreover, you also need to have suppliers for different ingredients.

IT infrastructure

Like all other business models of on-demand food delivery business, there are 3 apps you have to ask on-demand food delivery app development company to develop. But the major catch here is related to the features. Since the core business goal of an on-demand food delivery company which is following a meal kit delivery model is different, the developers have to accommodate a few different features in the app.

Limitation

Your user base will remain limited to only those who want to prepare the various types of foods at the home.

Advantage

The revenue per user is very high as the user becomes a subscriber for your service and pays more for weekly service than one-time service.

on-demand food delivery business is a tedious task. So, we, as a leading on-demand food delivery app development company, encourage you to leave the selection of the business model on us. Our dedicated team will understand all your requirements and suggest you the most suitable business model. As if this is not enough, we will develop an on-demand food delivery app which runs parallel with the business model and gives you the sight of always increasing revenue graph. So, feel free to contact us for a free consultation.

The post 4 radical business models of on-demand food delivery business you need to know to triumph the industry with on-demand food delivery app. appeared first on Coruscate Solutions.