It is natural to experience a sense of overwhelmedness when life gets incredulously busy. To counter such overwhelmedness, we rely on service providers to make our lives easy. So, one can rightly construe that the on-demand food delivery service has become paramount in our everyday lives. Grubhub is one such business that has been around since 2004.
Here, we will look deeper into how Grubhub works, its revenue model, and notable features of the Gruhub app.
Growth And Market Value of GrubHub
Grubhub, founded in 2004, currently enjoys a market share of 10% in the US food delivery market. It has a market capitalization of $7.38 billion, calculated as of October 2024. Seamless, based in New York, is another food delivery service provider that started in the early 2000s. At a time when food ordering was a hassle and ordering online was unheard of, Grubhub and Seamless came across as a solution to make it convenient and easy.
Both Grubhub and Seamless were successful and grew in their respective regions. It was in 2013 that both these on-demand services merged. Other subsidiaries of Grubhub are Eat24 and Tapingo. As of last year, Grubhub had 28.3 million users using the app once a month. Also, according to data, its gross transaction volume reached $10.1 billion. Grubhub partners with over 300,000 restaurants and is expanding its services to many cities.
How does Grubhub work?
Grubhub functions as a website and a mobile application. Grubhub works to deliver food from restaurants to its customers through its delivery guys. So there are three groups- customers, restaurants, and delivery partners, actively involved in keeping Grubhub’s business going (and growing!).
Customers
Customers place orders on the Grubhub app after going through the restaurants and menus enlisted on the app. Grubhub allows users to pay online or in cash.
Restaurants
Restaurants get notified when customers order food. They then confirm the order placed by the customer. Delivery partners come to collect the order once it is ready for delivery.
Delivery Partners
Delivery partners working for Grubhub near the restaurant get notified when a restaurant confirms the order and makes the food ready for delivery. It is then collected and delivered to the customer.
How does Grubhub work for customers?
Users are required to create an account using the Grubhub app or website so that they can start placing orders. Let us look into how Grubhub works for customers:
Step 1: Browsing
The app lists restaurants and menus provided by them for users to browse and select food items.
Step 2: Order placement
After deciding on the item, the customer places an order. The app adds the item to the cart, after which the user has to confirm the order.
Step 3: Payment
Once the order is confirmed, the customer has to make a payment. Grubhub provides various modes of payment. Users can use credit cards, debit cards, PayPal, or Gpay to pay for their orders. Grubhub also makes cash-on-delivery options available for the customer.
Step 4: The wait
The restaurant confirms the order. Then the application assigns a delivery partner to take the food to the user.
How does Grubhub work for restaurants?
Restaurants partner with Grubhub to offer delivery services. For this, the restaurants register with Grubhub. Let us look into how Grubhub works for restaurants:
Step 1: Receiving the order
When the user confirms the order, the restaurant receives a notification. It contains order details, and then they start with the order preparation.
Step 2: The Order Confirmation
The restaurant confirms the order that it received, depending on the availability. After the confirmation from the restaurant, the user gets notified, and the nearby delivery personnel also gets notified.
Step 3: Preparation
The restaurant then begins to prepare food and pack it in full swing. The food is ready for the delivery partner to pick up the order.
How does Grubhub work for delivery partners?
The job of the delivery personnel to collect the order from a restaurant and deliver it to the customer is the most crucial step in the whole food delivery platform like Grubhub.
Step 1: Receiving notification
When a restaurant confirms an order, the delivery partner nearby gets notified. It contains details like restaurant name, address, delivery address, etc. The delivery partner/courier accepts depending upon their availability.
Step 2: Pick up
The delivery partner heads out to the restaurant to pick up the order so that they can deliver it to the user’s location. Grubhub allows the customer to track the order.
Step 3: Delivery
The customer can contact the delivery partner to inquire about any delay. Similarly, the delivery partner can contact the customer for address directions. The customer, if they opt for cash-on-delivery, pays cash.
Grubhub Pick-Up Service
Another unique feature that Grubhub has introduced is the Grubhub pickup service. It allows customers who order through Grubhub to pick the order up from the restaurant without involving the delivery partner. Once they reach the restaurant, by contacting them, customers can let them know their location so that the restaurant staff can take the order to them.
Salient features of Grubhub
Grubhub provides a good user experience for customers, making it one of the best on-demand online business models. Looking more into the features will help us understand how Grubhub works.
Customer App
- Account Creation
- Listings
- Search Option
- Payment Option
- Tracking Option
- Ratings and Reviews
Account creation
Users can create accounts on the Grubhub app or website, after which they can start ordering from the app. When signing up, they enter details like name, address, contact number, email ID, etc.
Listing
Grubhub allows the user access to the page containing the list of restaurants. The restaurants enlist the food items.
Search option
This option enables users to search and look up restaurants and items. Applying filters can also help users narrow down their search and make a decision.
Payment option
The Grubhub app comes integrated with many payment gateways. Users can choose any of the options to pay for their order. Online payment options include credit cards, debit cards, and GPay.
Tracking option
The navigation tools in the app let users track their orders. The customers can learn the approximate arrival time or when to expect their order.
Ratings and Reviews
Grubhub allows customers to rate and leave reviews based on their experience and satisfaction with the delivery service platform. This way, other users can make decisions with the available information.
Delivery Partner App
Like how the Grubhub application facilitates the user to perform functions, the app also allows the courier to perform certain other functions. Looking into the features of the delivery partner app will help us understand more about how Grubhub works for delivery partners.
Account Creation
Delivery partners have to register with the Grubhub app to start delivering food. They are required to submit the necessary documents and can update their profile anytime.
Accept/ Reject Orders
Delivery partners can accept requests and delivery when users place orders on the Grubhub app. However, if they are unavailable, they can decline the requests.
In-app call/ chat
The in-app call and chat feature facilitates seamless communication between customers and delivery partners. If, when delivering, delivery partners cannot locate the address, they can call the corresponding customer to clarify the address.
In-built Navigation
The Grubhub app has navigation tools that enable delivery partners to track down the delivery address. This way, they can locate the addresses of customers without any hassle.
Taking orders
The courier can accept to have an order taken on receiving notifications from the restaurant.
GPS Service
With the help of GPS service, couriers can find the exact delivery address. It makes it easy for them to deliver orders in unfamiliar areas.
Contact Information
The courier has access to the contact numbers of the user and the restaurant. If it becomes difficult for the courier to find the address, the courier can now directly contact the customer for directions.
Order completion
When the order gets completed, the courier updates the delivery status on the Grubhub app.
Restaurant Partner App
Grubhub provides a restaurant dashboard for restaurants to operate. Let us look into some of the features of this dashboard to understand more about how Grubhub works for restaurants.
Profile Update
Restaurants, like customers and delivery partners, maintain profiles on the Grubhub app. They can add restaurant details, including name, contact number, and delivery address.
Menu Management
Grubhub allows restaurant partners to list menus on the app. They can update the changes in the price of food. The app also has features that categorize food items, enabling customers to select easily.
View Feedback
It is one of the crucial features, for it lets the restaurant know how customers feel about ordering from the restaurant. It helps in making improvements and offers better services.
Point-of-Sale Solution
To calculate the total of the food items purchased by a user and to help restaurants make transactions, Grubhub provides a platform to help with the performance.
Requesting couriers
After confirming a customer’s order, the courier closer to the restaurant receives a notification from the restaurant.
Bill generation and reports
Grubhub’s restaurant dashboard generates bills for the orders. The order data is also stored. So this enables the restaurants to view the history of orders.
Customer support
The restaurant dashboard of Grubhub extends customer support services. It helps customers to make inquiries for orders or updates.
Grubhub’s Revenue Model
Online food delivery platforms like Grubhub make money mainly from three sources. Let us look into detail how Grubhub makes money:
Advertising and listing
Grubhub promotes some restaurants on the app and website. In return, Grubhub charges them. It helps restaurants get more visibility than the rest. Restaurants benefit from this as getting advertised by Grubhub attracts the audience.
Delivery charges
Grubhub charges the customer for each delivery as delivery charges. It is one of the sources of income for online food delivery systems like Grubhub. Delivery charges vary depending on a lot of factors. For instance, the distance plays a role in determining the delivery fee.
Commission from restaurants
Another way by which Grubhub profits is by charging commissions from restaurants. Grubhub charges a certain amount from restaurants for each order made.
There’s no denying how much of a household name Grubhub has become since its initiation. The on-demand food delivery service has predominantly become a part of our lives, benefitting a large sector of people. So, there will only be growth for other food delivery platforms trying to venture into the market.
How to start a business like GrubHub?
You can use our FoodStar or RebuEats product to get started. Our product helps build a business like Grubhub. If you wish to carve a niche in the on-demand food delivery service market, our product will help you make a solid online presence.
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