Tech, ExplainedE-commerce, travel and logistics
Product

Food delivery app

A delivery time promised, then kept.

BEFORE ITAFTER ITFood delivery appSwiggyDoorDashDeliverooGoTo GroupPARTRestaurant table booking+PARTDelivery time prediction+COVERSRestaurantlistingsDelivery timeRider assignmentLive trackingCloud kitchenlistsits brandsSuper app↗ ON-DEMAND SERVICESopensfood deliverysends theorder amountPayment gateway↗ ONLINE PAYMENTSsendsthe orderOnline order aggregatorfor restaurantsasks fora riderRoute optimisation software↗ LOGISTICS AND SUPPLY CHAINCONCEPTS IT USESMarketplace vs inventory modelDemand forecastingBEFORE ITAFTER ITFood delivery appSwiggyDoorDashDeliverooGoTo GroupPARTRestauranttable booking+PARTDeliverytime prediction+COVERSRestaurantlistingsDelivery timeRiderassignmentLive trackingCloud kitchenlistsits brandsSuper app↗ ON-DEMANDSERVICESopensfood deliverysends theorder amountPayment gateway↗ ONLINE PAYMENTSsendsthe orderOnline orderaggregatorfor restaurantsasks fora riderRouteoptimisationsoftware↗ LOGISTICS ANDSUPPLY CHAINCONCEPTS IT USESMarketplace vs inventory modelDemand forecastingBEFORE ITCloud kitchen↓ lists its brandsSuper app↗ ON-DEMAND SERVICES↓ opens food deliveryFood delivery appSwiggyDoorDashDeliverooGoTo GroupRestaurant table booking+Delivery time prediction+Restaurant listingsDelivery timeRider assignmentLive trackingAFTER IT↓ sends the order amountPayment gateway↗ ONLINE PAYMENTS↓ sends the orderOnline order aggregator for restaurants↓ asks for a riderRoute optimisation software↗ LOGISTICS AND SUPPLY CHAINCONCEPTS IT USESMarketplace vs inventory modelDemand forecasting
The food delivery app receives restaurant brands from cloud kitchens and food orders opened in a super app, and sends the order amount to the payment gateway, the order to the restaurant's order aggregator and a rider request to route optimisation software.
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A food delivery app is an app that takes your order from one of hundreds of restaurants, assigns a delivery rider and brings the food to your door, usually within 30 to 45 minutes. It is also called a food ordering app, or a food aggregator, because it brings the menus of many restaurants together in one place.

The app does four jobs.

First, it shows you only the restaurants that can deliver to you now. A restaurant 15 km away may cook well, but the food would be cold by the time it arrived. So the app lists restaurants within a set distance that are open and accepting orders.

Second, before you order, it shows a delivery time, such as 26 minutes. Delivery time prediction calculates this from the kitchen's usual cooking time, the position of the nearest riders and the traffic.

Third, after you pay, it sends the order to the restaurant and assigns a rider. Many restaurants receive these orders through an online order aggregator, one screen that collects the orders from every delivery app. Route optimisation software chooses the rider, and may give one rider two orders from the same area.

Fourth, it shows the rider on a map until the food reaches you. It also handles complaints, such as a missing item, and decides on refunds.

Take, for example, a nurse in Hyderabad who finishes a night shift at 7 a.m. She orders two masala dosas and a filter coffee, worth ₹260, from a restaurant 3 km away. The app shows 26 minutes. She pays ₹260, a delivery fee of ₹25 and a platform fee of ₹10 by UPI, through the app's payment gateway. The restaurant accepts the order within a minute. The app sends a rider who is 1 km from the restaurant, so that he arrives just as the dosas are packed. The food reaches her door after 24 minutes.

Who receives the money? The restaurant does not receive the full ₹260. The app deducts its commission, often between 15% and 30% of the food price, and pays the rest to the restaurant every week. Restaurants check these weekly payments with delivery app reconciliation software. The rider is usually a gig worker, paid for each delivery rather than a monthly salary.

The app never cooks or owns the food. It connects customers, restaurants and riders, and earns from each order. This is the marketplace model. Many of the restaurants it lists are cloud kitchens that have no dining room at all. Some apps also offer restaurant table booking for eating out. In South-East Asia, food delivery is often one service inside a super app that also offers rides and payments.

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