In the last few years, we have seen a huge growth in the on-demand food delivery sector and the number are only growing in this industry. Such a huge attraction in this niche has resulted in the prediction that by 2023 the food delivery market can reach the valuation of $16.61 billion (as per the Allied Market Research).
Currently, GrubHub holds nearly one-third of the complete food delivery app industry. It is one of the most interesting to anyone who wants to enter this industry.
In this article, we will briefly delve into GrubHub app, its working, its cost structure, and a lot more.
What is GrubHub?
GrubHub is an on-demand online food delivery app by which the users can order food from any corner of their city. It has a massive user base of more than 14 million users and collaboration with more than 80,000 restaurants. Currently, it is operating in more than 1,600 cities across the USA and UK. It has got funding of $284.1 million and its current valuation is around $2.7 billion. As per a report, it gets 521 thousand orders per day. It also succeeded in becoming an IPO.
There is no fee for opening a Grubhub account. When you place an order, you will have to pay for the food, sales tax where applicable, and any tips you wish to give to the restaurant or delivery driver. For delivery orders, you may also be charged a delivery fee or service fee.
Founders: Michael Evans, Matt Maloney
Founded in: the Year 2004
GrubHub revenue: 68.3 crores (USD)
Headquarters: Chicago, Illinois, United States
IPO date: 7th April 2014
What makes GrubHub Stand Apart?
To stand apart from a company, it has to offer striking features and exceptional quality of work. GrubHub didn’t lag any of this. Even some other big players start maturing in the market such as Amazon or Uber, it was able to retain a good position in the market.
The mobile application of GrubHub is highly user-friendly which acts as the most important factor for its success. It comes with every necessary feature that a restaurant app must possess. The performance of the app made the delivery process glitch-free.
A few of the GrubHub USPs:
- GrubHub revolutionized ordering takeout food
- GrubHub is so popular that their quarterly profits doubled
- There are more than 15 million diners using Grubhub
- The average grub total is 423,200
- There are more than 95,000 restaurants participating
- GrubHub’s partners are from 1,700 US cities and also London
- If you want to tip your driver definitely you can.
- There are some decent perks for GrubHub delivery drivers
- Grubhub makes its money on commissions
- There are extra perks for participating restaurants
Funding Timeline of GrubHub:
When the founders of GrubHub decided on this startup, they will definitely not knew that one day it will lead to an IPO. Initially, it faced difficulties in getting a “yes” from investors. Generally, the investors took a really long time in saying yes. That’s where the founders realized to take control of the situation.
They went to the restaurants in San Francisco and explain to them the functionality of GrubHub. Eventually, the restaurants agreed and orders started to flood in. After this, the investors got really attracted to it, and soon they started to invest. Here is the successful funding timeline of GrubHub:
- 2004: Founded
- 2006: Won first place at the University of Chicago
- Nov 2007: Series A funding (1.1 Million)
- March 2009: Series B funding (2 Million)
- Nov 2010: Series C funding (11 Million)
- March 2011: Series D funding (20 Million)
- Sep 2011: Acquired ALLMENUS.COM
- Sep 2011: Series E funding (50 Million)
- Aug 2013: Private Equity
- May 2013: Acquired Seamless
- April 2014: Launched IPO
- February 2015: Acquired DINNGIN.COM
- December 2015: Acquired Delivered Cash
GrubHub Value Proposition:
A value proposition is a promise made by a brand to the audiences with whom it wants to build relationships. It is a factor that makes it different and or better than the others out there, making a brand stand out from the rest in a market. There are two segments for GrubHub – Customers and Restaurants. These are the value propositions offered by GrubHub.
For Customers:
- Saves time and energy of customers by the online ordering of food from different restaurants
- Users have choices for the restaurants from where they want to make an order
- Customers can order 24 x 7
- They can also track the delivery after placing an order
For Restaurants:
- GrubHub has its own fleet of delivery workers
- Restaurants will have vast coverage of customers through the GrubHub
- They can serve their regular and online customers simultaneously
- GrubHub will provide them with software for deliveries and orders.
Customers Segments:
GrubHub stays to be simple and hence they have only two customer segments. It may change in the future but currently, they are just focusing on picking food from one location and delivering it to the other location.
Customers:
- People like to dine but they don’t get time to go out
- Users who go to work but they have no option to get home-made food
- People who don’t know how to cook
- People who like to try food from different restaurants but can’t drive or go out
Restaurants:
- Restaurants that are offering good food but don’t have customers.
- Those restaurants that wish to deliver food but don’t have drivers.
- Those who don’t have any marketing or branding strategies.
- Restaurants that want to expand and reach people in every corner.
Business Model of GrubHub:
The main goal in the business model of GrubHub is to order food and delivery services. Basically, they are just connecting the customers and restaurants through the mobile application and delivery boys.
Key Partners:
- Delivery Drivers.
- Restaurants and Caterers.
- GrubHub owns and manages 4 different brands in the same industry (GrubHub, Seamless, MenuPages and AllMenus, Restaurants).
- GrubHub’s partner restaurants are given an Amazon Kindle Fire tablet which is pre-loaded with its “OrderHub” app.
- GrubHub Inc. acquired Dining and Restaurants on the Run (which also provide delivery services).
- Payment Processors.
Key Activities:
- The company now processes close to 220.100 orders daily.
- Web Development.
- Networking (GrubHub has worked to penetrate a much wider range of locations across the United States, paying attention to small towns as well as cities).
- Billing.
- Logistics.
- Legal agreements.
- Operations.
- Customer Support.
Key Resources:
- A giant in the online/mobile food-ordering market.
- GrubHub has 5.6 million active diners.
- GrubHub has its own delivery persons.
- The combined strength of GrubHub and Seamless.
- Its platform features (menus, reviews, restaurant information, coupons, and discounts).
- 45,000 restaurants associated in 1100 locations in America as well as in UK.
- Web Developers.
- Delivery drivers use a “DeliveryHub” app to track their pickups and drop-offs.
- Business strategy change from a subscription model to a transaction model.
Value Propositions:
- To deliver meals from restaurants to customers at their doorstep.
- To increase the level of service to our customers by increasing the delivery speeds.
- Providing value to both restaurants as well as diners.
- Customers (Helps customers save time and money as they can order food online, Users have an option to choose a restaurant from where they want to order, GrubHub offers to order for delivery or pickup from over 30,000 restaurants).
- Restaurants (It provides restaurants with more orders, GrubHub Inc. drove nearly $2 billion in gross food sales to restaurants, the company creates software products that helps restaurants work more efficiently).
Customer Relationships
- Online food ordering company.
- Makes takeout accessible.
- simple and enjoyable.
- Real-time delivery notifications and order mapping
- Discounts.
- Person-to-Person delivery.
- Customer Service.
- Self-service.
- Partnerships and associations.
- Priority in its sorting algorithms.
- Campaigns.
- Recommendations.
- 24 x 7 Customer Service.
- Rating System.
Channels:
- GrubHub orders can be made via the GrubHub.com website.
- Via mobile apps for iOS and Android devices.
- Restaurants.
- Social networks.
Customer Segments:
- Restaurants and Caterers.
- People that prefer takeout.
- Corporates.
Cost Structure:
- GrubHub now has offices in Chicago.
- New York and London.
- Logistic Costs (payment to delivery drivers).
- Salaries for permanent employees.
- Technology Development.
- Platform Maintenance.
- Payment Processing.
Revenue Streams:
- Commission for sales on the platform.
- Though GruHub started out with a freemium subscription model charging $140 for six months of premium placement on the website it changes course after two years and adopted a transactional model taking a commission from each order places via its services.
- GrubHub still allows restaurants to rank themselves higher in its search listings by paying a higher commission rate.
- “Also, Restaurants can choose their level of commission rate”.
Wrapping Up:
The food delivery industry is continuously booming as we are experimenting with their taste buds. Hence, it would be a great idea to invest in this industry. If you are planning to develop an app similar to GrubHub then you can definitely reach us. We, at Amplework, the best mobile application development company in India, are having expertise in developing mobile apps. Let us know your requirements.
