Updated: November 30, 2022 
The current food delivery market is seeing exponential growth and is projected to reach $320 billion by the end of 2029. Platforms like DoorDash and UberEats are leading the industry with their extensive customer base and a list of features that make doorstep food delivery less hectic for customers.
DoorDash’s successful business model is the biggest inspiration for many food delivery startups emerging in the industry. In 2020, when the entire world was getting used to a global pandemic, DoorDash was responsible for 45 percent of all online food orders. In short, DoorDash had secured half of the online food delivery market in the US while its competitors were struggling to manage regular logistics. Let that sink in for a while!
So, how did DoorDash manage to become a successful business? More importantly, how can you develop an app like DoorDash? Which business model DoorDash has followed to become a billion-dollar company? What features can you integrate into your DoorDash clone to make it reach the masses? Should you partner with a reputed food delivery app development company or hire in-house developers for the job?
In this comprehensive guide, we’ll answer all these questions so that you can launch a feature-packed food delivery platform like DoorDash and step into the multi-billion dollar market with a solid product.
What Makes DoorDash Unique and Successful?
Call it destiny or the “right place at the right time” kind of situation, but the COVID-19 pandemic played a significant role in DoorDash’s success.
Of course, the company was encountering gradual growth before 2020, but the sudden lockdown in the US pushed its customer acquisition drastically. Considering online food delivery was the only option for people to enjoy fine dining, they turned to platforms like Uber Eats and DoorDash. The latter’s myriad of features and excellent customer service, however, automatically made it everyone’s favorite.
For DoorDash, customer satisfaction has the utmost importance. Moreover, DoorDash has an expert customer segmentation strategy that clearly separates its target customers into dedicated categories. This allows the company to devise personalized marketing campaigns and retain its potential customers easily.
Here are a few additional factors that have given DoorDash a competitive advantage and helped it surpass its competitors.
- DoorDash has successfully found and seeped into a market gap that other companies did not capitalize on. For instance, instead of starting with large metropolitan cities, DoorDash primarily focused on Suburbs and gradually climbed its way to the top of the ladder.
- Simplicity is the biggest USP of DoorDash. Instead of having a complex user interface, DoorDash offers an easy-to-navigate panel where customers can access different services without any hassle.
- Finally, as we mentioned earlier, DoorDash grabbed the COVID-19 pandemic as an opportunity and rose to success when other companies were struggling to manage their logistics.
A Quick Look at DoorDash’s Success Rate and Statistics
Now, before we dive into the technical aspects of developing a food delivery app like DoorDash, let’s analyze a few market statistics that make it the best in the game.
- In 2021, DoorDash increased its revenue to $4.88 billion in 2021, encountering a year-on-year growth rate of 67%.
- As of 2022, DoorDash controls nearly 48% of the US food delivery market
- In 2021, DoorDash had 25 million active users, making it the biggest food delivery platform in the world.
- DoorDash has joined hands with nearly 400,000 restaurants across the globe
Understanding DoorDash’s Business Model – How Does DoorDash Work
At its core, DoorDash is an on-demand food delivery platform that follows the aggregated business model. For readers who don’t know what that means, an aggregator platform is where multiple restaurants can list their businesses, allowing customers to choose between different available options and order food from their preferred place.
Here’s a quick overview of how DoorDash works.
As you can see that DoorDash has three different stakeholders.
1. Merchant (Restaurant Owner)
2. Dasher (Food Delivery Partner)
3. Consumer
DoorDash has curated a business model that allows it to cater to all three stakeholders equally. Customers have a dedicated user panel where they can manage their orders, filter through a list of restaurants, and place orders hassle-free. There aren’t any unnecessary elements that would damage the user experience in any manner.
Dashers, as the company likes to call its delivery partners, have a separate panel where they can set up their profiles, select the availability, and find nearby busy areas to earn better incentives. They can also manage their daily payouts, link their bank accounts, and accumulate tips in an easy-to-navigate panel.
Finally, the restaurant owners have a dedicated panel where they can list their business, manage the overall inventory, chat with customers and Dashers, update product availability, etc.
Thanks to a well-thought user segmentation, DoorDash has managed to streamline its operations more effectively.
Top Key Features of DoorDash Food Delivery Platform
If you want to replicate a food delivery platform like DoorDash, it’d be necessary to integrate all the necessary features to keep different user segments engaged. Here are a few features of DoorDash that have made it the most reliable food delivery platform in the market.
1. Real-Time Order Tracking
For any on-demand food delivery platform, it’s crucial that the customers can track their orders’ real-time progress.
Right from the moment the restaurant accepts the order to when it’s delivered to the customer’s doorstep, your DoorDash-like clone must allow users to track the whereabouts of their food all the time. Location tracking is made possible with third-party GPS integration.
Tech giants like Google and API have designed their own maps APIs that developers can integrate into their projects and configure real-time GPS tracking more conveniently.
2. Personalized Food Suggestions
One of the key USPs of DoorDash that made it a huge success in the food delivery segment is its user segmentation. With proper segmentation, DoorDash managed to categorize customers into different groups and deliver a personalized user experience accordingly.
The AI at the backend runs various algorithms to evaluate a person’s food preferences and automatically filters the food suggestions with the most suitable results.
This ensures better customer retention for DoorDash. It means if you want to replicate the same results for your DoorDash-like app, it would be crucial to provide customers with personalized food suggestions.
3. Multi-Payment Support
A food delivery app like DoorDash must be equipped with multi-payment support so that customers can place orders using their preferred payment methods.
It’s worth understanding that not all customers use conventional credit & debit cards to make online payments. So, it’s important that your food delivery platform caters to all customer preferences and supports a variety of payment options.
DoorDash has also partnered with third-party platforms such as AfterPay where customers can choose to pay later for their orders. In fact, the Pay Later model has become so popular that 60% of customers prefer using the Buy Now, Pay Later option whenever available.
4. Chatbots and Customer Assistance
In an online food delivery ecosystem, mistakes are always bound to happen. In some cases, the delivery partner may fail to deliver the order on time due to rush-hour traffic whereas, in other situations, there might be spillage issues with the package.
In any case, you should provide excellent customer support so that users can raise package queries and get them resolved without any hassle. In addition to hiring a customer support team, you can also invest in chatbot integration to address some of the most common user queries instantly.
With chatbots, you’ll be able to assist customers, even when all the chat executives are busy, without putting them on hold for a longer period of time.
5. Push Notifications
As a food delivery platform, you’ll be running regular discounts and exclusive deals to keep your users engaged and compete with industry giants. However, how will customers know about these discounts? The answer is Push Notifications!
Push Notifications is an integral feature of any mobile application including food delivery applications like DoorDash.
With Push Notifications, you can send real-time alerts regarding new deals, exclusive customer offers, and the latest restaurant discounts. This will equip your app with the required engagement factor and you’ll be able to acquire long-term customers easily.
6. Dasher’s Availability
Dashers – the delivery partners in the DoorDash ecosystem – can choose when to go online and accept order requests. With a simple toggle, they can switch between the online and offline modes.
This gives Dashers the liberty to choose their working hours as per their preferences. They don’t have to deal with any goals or fixed work hours, which is the reason why DoorDash has managed to retain millions of dashers across the globe.
If you want to build a successful DoorDash-like app, your guidelines for the delivery partners must be flexible so that they don’t feel bound at all.
7. In-App Navigation Support
On-time food delivery is a common goal all online food delivery businesses strive to achieve including DoorDash.
To do this, the driver’s app must have in-app navigation support with a turn-by-turn navigation feature. This will allow the delivery partners to navigate the streets and find the shortest possible route to the restaurant and customers’ doorstep.
8. Tips and Daily Payout Management
The delivery partners need a transparent payout process where they can easily manage their payouts and daily tips.
You can further optimize the payment methods for the delivery partners by letting them link their bank accounts to the app. This way they can configure auto-transfer and directly transfer all their payouts to their personal accounts.
How to Develop a Food Delivery App Like DoorDash?
Now, coming to the real question – how can you build an app like DoorDash? Well, of course, you can’t develop such an extensive application on your own. You need a full-scale food delivery app development team to construct different modules and build a DoorDash-like platform.
Now, when it comes to choosing development partners, the biggest struggle would be to decide between in-house and third-party app developers.
Both these development models have their own benefits and drawbacks, which mainly depend on the specific business requirements.
Startups with an extensive budget and no specific deployment-time restrictions usually prefer hiring on-premises developers as it provides them with better control over their projects. They can physically oversee the entire development process and keep it streamlined with better control.
Hiring an offshore food delivery development partner, on the other hand, is a more cost-effective approach. Mobile app development companies working in a distant location usually charge comparatively less than local development firms and that’s why many startups choose to partner with these offshore agencies.
With the offshore development model, you get a dedicated team of skilled developers to work on your project. This will save you from the strenuous task of interviewing multiple candidates to hire an entire development team.
Here are a few factors that make hiring an offshore food delivery development company a better choice for food delivery startups like DoorDash.
- Working with an offshore development company gives you access to a pool of great talent. These development firms follow a rigorous recruitment process to hire the most skilled developers, designers, and QA experts. It means you’ll be working with highly talented experts who’ll put in their expertise to turn your vision into reality.
- People working in a professional food delivery app development agency are always on top of the latest development technologies. They utilize these technologies and implement the best development practices to develop modern digital solutions for their clients.
- With an offshore development team, you’ll be working with dedicated project managers and team leads who’ll overlook the entire development process. Consequently, you’ll be able to shift your focus on your company’s growth and fully indulge in other business operations.
- For a DoorDash clone, the offshore development team will thoroughly analyze your business requirements, conduct in-depth market research, and devise a personalized development roadmap to build a standalone application.
How Does DoorDash Earns Money – An Insight into Different Revenue Models for a Food Delivery Platform Like DoorDash
After your food delivery application is up and ready, the next step would be to choose a revenue model to make money.
Your bread and butter will depend on the revenue model(s) you choose – so it’s important to be extra cautious with your decisions. Of course, you have the liberty to replicate all the revenue models DoorDash uses in its business model.
But, this approach may not work all the time as your business propositions may differ from DoorDash. So, run your due diligence, discuss with the board, and consult professionals before choosing a set of revenue models for your DoorDash clone app.
In general, however, here are a few monetization models DoorDash uses to make money.
1. Direct Commission from the Restaurant
The majority of food delivery platforms including DoorDash, UberEats, and Zomato charge commission from the restaurant for each order placed from their app. As of 2022, DoorDash charges 20% on each order placed from one of its partner restaurants. Similarly, Zomato charges anywhere between 20-25% on all orders placed from its app.
2. Advertisements
With DoorDash, restaurants can also run paid ads to get listed at the top positions within the app. This provides restaurants with better visibility and they can reach customers more effectively. Based on the restaurant size and the duration a business wants to run its ads, the advertisement charges vary in each case.
3. DashPass Subscriptions
DoorDash also has a premium model where users can pay a monthly subscription fee and get instant discounts on all their orders. This can be an extremely lucrative revenue model for all food delivery startups. In return for special discounts, you can charge customers a minimal fee and skyrocket your overall revenue.
4. Delivery Fee
All food delivery startups – be it DoorDash or UberEats – charge a delivery fee based on the customer’s distance proximity from the restaurant. This delivery fee is different for each order and mainly depends on the distance between the two points. However, it’s a potential revenue model for DoorDash as it goes directly into the company’s account.
If you want to build a strong revenue stream for your DoorDash-like app, you can combine all these revenue models and establish multiple revenue streams. However, your revenue-generation practices should not interfere with the user experience to ensure you don’t lose any valuable customers.
DoorDash Clone App Development – FAQs
If you’ve read this far, you already know DoorDash’s business model, the development process, and the revenue streams the food delivery giant uses to make money. So, let’s address some of the most commonly asked questions about DoorDash like food delivery app development.
1. How Much Does it Cost to Develop a Food Delivery Platform Like DoorDash?
The cost to build a DoorDash-like app is different in every situation. Since your product requirements will differ from DoorDash, the cost to develop the app can range anywhere from $30,000 to $100,000.
You can share your project requirements with the development team to get a better understanding of how much you’d have to spend to build a DoorDash-like app.
2. Is Starting an Online Food Delivery Business Like DoorDash a Profitable Business?
Yes, the online food delivery market is encountering exceptional growth. As we mentioned earlier, the market is projected to surpass $329 billion by the end of 2029. With daily schedules getting more hectic, people hardly have time to go out and eat.
They are always in search of food delivery platforms that make doorstep food delivery less hectic. So, yes, starting an online food delivery business like DoorDash will be a profitable venture, considering you provide excellent customer service.
3. How Much Does it Cost to Develop an App Like DoorDash?
The development cost of a food delivery app like DoorDash depends on an array of factors, starting from the development model you choose to the preferred features you want to integrate. However, in general, it can cost anywhere between $30,000 to $100,000 to build a feature-packed food delivery platform like DoorDash.
4. How to Hire Food Delivery App Development Experts?
If you are planning to outsource the development process to third-party developers, it would be crucial to follow a dedicated recruitment process to make the right decision.
While screening multiple development firms, make sure to check their portfolio to know if the company has developed similar projects in the past or not. Having a team who has expertise in a similar on-demand delivery landscape will give you a competitive advantage and launch a feature-packed food delivery solution, resulting in maximum user retention.
Conclusion
DoorDash is at the pinnacle of the food delivery industry. Its unique business model and customer-centric approach have resulted in great customer acquisition for the brand. If you want to step into this multi-billion dollar market as well and replicate DoorDash’s success, hire food delivery app development experts such as RV Technologies.
We have extensive expertise in food delivery development and have built platforms like Grigora and Artisanal Food Delivery for our global clients. So, share your app requirements with our experts and we’ll get back to you with custom food delivery app development experts.
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