Grubhub Business Model | How Does Grubhub Make Money?
Q. Can you go without repast?
What will be your answer now?
Hope it will be for sure.
A. Nope! Never!
Yeah! You have given the perfect answer.
See, none can live without food but sometimes, we are too choosy for the same.
So here comes the role of Grubhub to fulfill your regular or periodic meal requirements.
Therefore, without wasting a single minute
What is GrubHub?
Grubhub Inc. is one of the leading well-renowned Chicago based American[food delivery app] online & mobile food ordering and delivery marketplace that connects diners with local takeout restaurants.
The company is having more than 20 million active users and associated with 125, 000 restaurants across 2,400+ cities of the US including London.
In actual, Grubhub brand is the amalgamation of Grubhub, MenuPages, Seamless, LevelUp, AllMenu and Tapingo.
Note: – Formerly, it is known as Grubhub Seamless Inc. (2013-2014)
IPO launched: April 7, 2014.
Traded as: NYSE: GRUB (S & P 400 component)
Headquarters: Chicago, Illinois, United States
It is founded in the year 2004.
Who are the founders of GrubHub?
Founders: Matt Maloney & Mike Evans
- Matthew Maloney (Co-Founder & CEO)
- Brian McAndrews (Chairman of the Board)
- Maria Belousova (CTO)
- Adam DeWitt (President & CFO)
It gained lots of prominence in the food delivery industry sector as it fulfilling your craving pertaining to daily repast requirements at your doorsteps only.
Enlighten the history of Grubhub.
Yeah! It is really astonishing to know about the Grubhub as its idea came into existence in 2014 and brainstormed by Mike Evans and Matt Maloney.
Then later it got its initial funding US$1.1m led by Leo Capital and Origin Ventures. Then because of its gradual success with time, it got many funding that ranged from US$2m to US$50m.
In Sep 2011, it acquired Dotmenu and still continued building its successful timeline, further.
USPs (Unique Selling Points) of GrubHub App that stands out it far away from the crowd:
- On an average, it gets daily about 234, 700 orders.
- In the USA only, it exists in more than 900 cities.
- Combining the US & UK, it presents more than 1600 cities.
- It has partnered with 125,000 restaurants in the United States of America including London.
- It’s expertise in managing four other brands named Grubhub, Seamless, AllMenus & MenuPages.
Value Propositions of GrubHub
Indeed, Grubhub is really a great two-sided network that brings value for both i.e. diners (users) and restaurants.
- Can choose their choice of restaurants while ordering
- 24/7 Hr service availability
- Diners can track the delivery after just placing the order.
- It saves time, money & efforts
- It has its own delivery workforce.
- Can serve only once customers order them online.
- Customer’s base goes higher because of huge online ordering on a daily basis
- A Software is being provided for handling regular basis orders professionally with ease
Grubhub’s Customer Segments
Keep it simple!
Majorly, it just fulfilling the gap the demand and supply and focused on the two sides that are:-
- Those do not get too much time because of hectic schedule but love to dine out.
- Forgetful kind of persons that often let their meal pack behind at home only.
- Those want the food at their doorsteps only.
- Those can’t cook food at all as they do not know how to do so.
- Professionals who want to have repast but having no time to go out, etc.
- That having quality of food but lacking customers, unfortunately
- That having no marketing plans to extend their wings at the marketplace.
- Restaurants that wiling to get the expansion and approach more customer base
- Restaurants that lacking human resource for food delivery purposes, etc.
Grubhub Business Model
The Great business model just split out the whole complex process into the simplest one, indeed.
The Business Model of Grubhub
Let’s take a Glimpse!
The primary objective of Grubhub application plan of action is to make online & mobile food ordering delivery simple.
They are fundamentally interfacing the sustenance joints in the city with the customers to make online food ordering an option for customers.
They are doing this by the assistance of the most recent innovation in mobile applications.
Applications like Grubhub must have a ton of intense highlights to supplement them with food pictures and symbols.
Hence, Android application development companies like Appther are taking food application developments to an unheard of level. Fast communication, message pop-ups, in-application ordering and feedback are a few elements to incorporate into your eatery application development.
Now you may be curious to know below mention query.
How does Grubhub make money?
- Commission Fee:
It is the major source of income for Grubhub that comes directly from restaurants i.e. 5% to 15% that vary from different to different cases. But on an average, it is 12.5% commission (standard rates) per deal.
- Delivery Fee:
This fee is basically taken from customers as delivery charges but big portion for the same is given to the delivery guys which are approximately 80% of it.
- Extra Commission:
It directly belongs to the charges pertaining to the ranking of different restaurants as per hierarchy at similar categories.
Generally, it ranges from 2.5% to 17.5%.
What is the revenue of Grubhub?
So, in 2018, the total revenue of it was US$ 1.01 Bn.
Grubhub App Working
Since we have seen the plan of action and the income model, we should discuss how Grubhub works. Grubhub has an application that associates the eateries, the delivery guys and the users.
These together make it simpler to work. Convenient notice is sent at whatever point an order is put in, an order is ready and packed and when it is out for delivery.
When it has been conveyed, the procedure is finished. All these key components must be dealt with by the restaurant application development compay so the procedure runs easily.
The operation of Grubhub can be explained into three main steps that are as:-
- Browse & Place Order
- Prepare & Pack
How Grubhub become successful?
One of the wealthiest query that how it got success.
Just provide the ways of convenience to others & survive the best.
Initially, when it was harder to find any investor then their founders went to San Francisco and started gathering menus from the nearby restaurants manually and listed all collected ones to their mobile app.
Aside from the devotion of Michael & Matt, these components helped Grubhub assemble more customer base:-
- Occasionally, offered discount coupons for customers.
- Customers were given a choice to rate the restaurants which brought the best quality restaurant at the top search results.
- Both pick-up and delivery services are available.
- The application tells the clients the normal sum they should eat at a specific eatery. This was one of the most helpful highlights.
- When a customer sets the area and the restaurant, the outcome shows what amount Grubhub charges for delivery.
What are the challenges before Grubhub?
Challenges are the hidden opportunities or might be hurdles that need to be tackled properly and Grubhub done so with the best approaches.
- Attracting & retaining restaurants in a cost-effective manner
- Implementing new technologies into the food delivery vertical
- Maintaining, enhancing & protecting its brand image into the marketplace
- Generating & sustaining a positive cash flow & profitability in the long run
- Strengthening the takeout space, etc.
Do you want to know the future of online food delivery sector?
- In 2019, the food delivery sector amounts to US$107,438m.
- The expected growth rate 9.9% (CAGR 2019-2023) that leads this sector to a worth of US$ 156, 819m by 2023
- In 2019, major income has come from food delivery segment that solely amounts to US$53, 786m
Now, you can easily imagine the huge potential of this sector.
Why you should have a business mobile app?
There are about 7.7 Bn people globally and out of which 5+ Bn people carrying smartphones.
If you want to know anything regarding your mobile app development then
Here is the big news for you!
Appther provides 100% free consultation so let all the worries behind and just call to the provided below given details.
Mob. +91 9911432288
Well, thanks for reading the post till the end and hope you got the appropriate solution regarding your query.
If you still have some doubts or questions for the same then you can ask to the below comment box and I will try to answer you at the earliest for sure.
Have a nice day ahead.
[ Also Read: How Does Postmates Make Money, Postmates Business Model ]
About The Author Sumit Chauhan Work at Appther Mobility Technologies Pvt. Ltd, India. He is a technology enthusiast and interested in reading about International Business, Technological Advancement, Marketing tactics, Geographical spatial. Industrial news and more dynamic domain. If you didn’t find him in office then definitely he is on the hill tracks.