Expert guide for building an on-demand delivery app

May 7, 2025 17 min read

In a world that values instant access and seamless experiences, the way we shop and receive goods is changing fast. As a result, on-demand delivery apps have become the go-to choice in grocery, retail, and logistics essentials, especially in the context of the ease and speed they offer.

An anticipated growth forecast indicates that the on-demand delivery market could reach USD 21.82 billion by 2031, with a CAGR of 4.30%. This figure serves as a key marker for acceleration relative to more traditional industries or market sectors. For example, the global retail industry has seen an average annual growth rate of 1.5% to 3.5% over the past few years. Given that, the 4.30% growth rate in the on-demand delivery market stands out. However, businesses that plan to build on-demand delivery apps should be aware of unforeseen pitfalls and extra costs on this road.

What’s the move? How to make a delivery app that will succeed? Strategy matters. In this article, you’ll find a detailed step-by-step guide on how to start a delivery service app right.

Step 1: Conduct market research

How to make a delivery service app? Actually, that’s not the first question you should be asking. The key question is: “Is there a real demand for your on-demand app in the market?” A lack of understanding of what’s happening on the market will inevitably lead to on-demand delivery app development without clear direction. The result is an app that no one uses, money is wasted, and competitors are rapidly moving forward while your product is stuck in place. How do you make sure your app doesn’t end up as a costly misfire?

First, analyze your competitors. Consider that merely copying existing models, such as Zepto or DoorDash, won’t set your app apart. Ignoring their offerings is worse, however, because it might blind you to their strengths and weaknesses in your competitor’s strategies.

Instead, you should scour the marketplace for opportunities to identify underserved markets or gaps in service quality that can lead to this magic, much desirable UVP, or unique value proposition. A USP is an unmet need or existing offering that needs improvement. Filling this gap will help you stand out and create a space in a saturated market.

Step 2: Decide how you’ll build on-demand delivery app

Once you’ve defined your UVP and are ready to start food delivery mobile app development, the next big question is how you actually build your app? And this question is just an impulse for multiple others. The first ones are:

Hire an in-house team?
Outsource to an agency?
Or combine both approaches?

As I see it, every option has its pros and cons regarding costs, speed, scalability, and long-term flexibility. The concern here is that these choices will affect not just your short-term on-demand courier app development schedule but the app’s lifetime value and success potential. That’s why this gives some food for thought.

Option 1: Hire an in-house team

Building an in-house team sounds great — complete control, long-term vision, and deep product knowledge. But let me be honest, it looks solid on paper. Recruiting top talent, covering salaries, benefits, and operational costs, and managing fluctuating demand can be hard to sustain in the long run.

Even so, this approach works best for companies with complex products, evolving roadmaps, and a need for non-stop improvements. If you are trying to achieve consistent growth with additional feature development, then an in-house team is a well-thought choice.

Pros	Cons
Direct control over product development	Lack of specialized expertise
Faster communication and problem-solving	High fixed costs
Great for continuous development	Time-consuming hiring process

Option 2: Outsource your delivery app development

Outsourcing your delivery app development can save time, minimize costs, and give you access to niche proficiency — especially if you need a logistics-heavy app. Instead of spending months hiring an in-house team, you can work with experienced developers who have already built similar solutions.

A brief checklist for selecting a reliable food delivery app development partner:

Look for a team with a track record in on-demand and logistics-heavy apps. Check their case studies.
Browse platforms like Clutch to see what past clients say about their work.
Ensure they have experience with the technologies you need (native iOS/Android, Flutter, React Native, etc.).
Check that the partner you’re going to choose offers maintenance, updates, and scaling support.
Consider a clear cost breakdown and stick to it.

Keep in mind that pricing can differ based on region. In this article, I’ve broken down the mobile app development costs, including comparing outsourcing rates across different areas.

Pros	Cons
Faster time to market without hiring delays	Limited control
Cost-effective solution with predictable pricing	Quality risks
A dedicated team with relevant experience	Vendor lock-in

“If you’re going in-house, know that you’re signing up for a long hiring process, steady payroll, and the ongoing cost of keeping your team sharp and supported. Start with a lean team that covers the essentials, and bring in external experts for specialized roles like UX design, security, or complex backend development.”

Dmitry Nazarevich

CTO

Step 3: Define your business model

Without a well-thought-out business model, you risk poor margins, operational headaches, and limited growth. Pause and carefully consider the way your app runs, earns money, and scales over time. That’s the winning move.

How would your delivery app work?

Online food delivery app development can be a lucrative venture, but profitability depends on the chosen business model, revenue streams, and operational efficiency.

Model	Advantages	Challenges
Single-store app	Full control over branding, pricing, and customer data No commission fees to third parties Direct relationship with customers	Requires in-house fleet management Higher operational costs Limited customer reach compared to aggregators
Aggregator app	Access to a large customer base No need to manage logistics Faster scalability with multiple partners	High commission fees per order Dependence on third-party platforms Competitive marketplace with less brand control
Hybrid model	Flexibility to handle own deliveries and use third-party services Wider customer reach More control over delivery costs	Complex logistics and fleet coordination Higher operational overhead Need to sync internal and external delivery teams

Pickup and delivery app development costs vary based on app complexity, features like real-time tracking, and integrations with payment and mapping services. To maximize ROI, businesses should balance upfront costs with long-term scalability.

How to choose? To pick the right model, ask yourself these questions. Here’s a final decision framework:

What resources do you have? A single-store model requires managing your own fleet, while an aggregator shifts logistics to third parties.
Do you want full control over branding and customer data? Aggregators bring exposure but limit direct customer relationships.
How large is your target market? If you serve a niche audience, a single-store model might work. For broader reach, an aggregator or hybrid approach is better.
Can you manage a fleet efficiently? If not, outsourcing deliveries through an aggregator or hybrid model might be the way to go.
How fast do you want to scale? Aggregators offer instant access to customers, while single-store models require building demand from scratch.

Knowing your resources, customer expectations, and operational capabilities enables you to choose a model that best uses your time, efforts, and budget.

Types of delivery apps

Diverse business models give rise to app models that cater to the specific needs of different businesses, which goes beyond just getting takeout. The food delivery industry is evolving from aggregating restaurants to B2B supply chains. Let me show the most popular types of delivery applications.

Restaurant aggregator apps connect users with multiple restaurants, making money through a commission for each order placed. This model relies on a vast network of partner restaurants along with enduring marketing and competitively priced services to stay profitable. Best known are Grubhub and Uber Eats.

Dark kitchens, or ghost kitchens, ditch the dining space entirely — they’re built to cook, pack, and deliver food fast, with everything happening behind the scenes. Having overhead costs associated with traditional restaurants cut, this model maximizes efficiency but demands significant investment in kitchen infrastructure and digital marketing to attract customers.

Full-service food delivery apps handle everything from order management to logistics and last-mile delivery. While this approach provides complete control over the business, it also requires substantial investment in fleet management, real-time tracking, and customer service.

B2B food delivery apps focus on wholesale supply, connecting restaurants with suppliers for bulk ingredient purchases. This solution offers high transaction values and recurring revenue streams yet demanding strong supply chain management and logistics coordination.

Grocery delivery apps connect users with supermarkets and convenience stores, allowing them to shop for essentials from home. Platforms like Instacart generate revenue through service fees, markups, or subscription models. Success in this space requires optimized delivery routes and partnerships with major retailers.

How would your delivery app make money?

Every great idea needs a well-defined revenue plan from the start. The delivery apps’ revenue models span from restaurant commissions to delivery and premium subscriptions. Some even offer advertising spots for businesses looking to boost visibility. This table provides a quick overview of each model’s core aspects, helping you assess their potential impact on your business.

Model	Overview	Pros	Cons
Delivery fee	Customers pay a fee based on distance or service level for each delivery order.	Simple and transparent for customers Scalable and easy to implement	Risk losing orders in high-charge regions Relies on frequent orders
Commission-based	Restaurants or stores pay a percentage per order processed through the platform.	Steady revenue stream from restaurant partnerships Low operational costs	Dependent on restaurant partnerships Can lead to low margins in competitive markets
In-app advertising	Restaurants and brands pay for promotional placements within the app.	Additional revenue stream Brands can target specific customer segments	May annoy users if ads are intrusive Relies on high app traffic for profitability
Marketing fees	Businesses pay for premium listing visibility within the app.	Easy for businesses to gain more visibility Provides consistent income	Might lead to pushback from unpaid-tier businesses
Subscription passes	Users pay a monthly fee for free or discounted deliveries.	Predictable revenue Enhances customer loyalty Encourages frequent orders	Hard to attract customers without substantial discounts or incentives Upfront cost

How to choose? When selecting the right revenue model for your delivery app, consider a framework that evaluates key aspects of your business goals, resources, and market conditions. Here’s how to approach the decision:

Who are your customers, and what do they value? Cost-conscious, frequent users or businesses?
What resources and operational costs can you afford? Third-party logistics, infrastructure, marketing spend?
How does the competition and market landscape look? Saturation, gaps, and opportunities in the market?
Is your revenue model based on quick, one-time earnings or long-term subscription-based income?
How will the model affect customer experience? Ease of use vs. impact on satisfaction?

Let’s map out the business model that sets you up for success.

Step 4: Plan for scalability and profitability

Do you know that most food delivery apps fail not because of low-quality coding? Instead, it is a result of a law-quality business strategy. Success here relies on anticipating the challenges that may come up well before the food delivery application development. Build first and troubleshoot later, and you’ll fall into the trap of inflexible, high-risk project approaches — dealing with unsustainable unit economics, rapid churn, compliance nightmares, and scalability roadblocks.

1. Build strong retention strategies for both customers and couriers

If businesses pour budgets only into acquisition, it’s not enough for long-term business success. Over time, they only put themselves at a risk where they can passively watch users slip away. What’s the solution? Invest in retention. Instead of chasing new customers endlessly, create a digital space where those existing customers feel valued. AI-driven personalization turns one-time orders into habits, while subscriptions and loyalty programs keep your brand top-of-mind without aggressive sales tactics.

Think of retention not exclusively in the context of customers, but consider that for couriers, it matters, too. Couriers can be motivated through gamification and other rewards that help them feel appreciated and valued as part of the business. The happier couriers, the happier customers.

2. Scale strategically instead of expanding too fast

Expanding too soon can do more harm than good. A smarter approach? Master one market before expanding; wait until your tech stack and logistics work synergistically to support growth without disruptions. Design your platform with M&A (mergers and acquisitions) readiness to attract buyers, investors, or partners. M&A implies a tech stack that can grow without constant fixes. It includes clear financial records that make it easy for investors to understand your business. Efficient operations that don’t depend on you being involved in every decision. That also matters.

3. Plan your architecture for long-term scalability

A rigid MVP might seem like a fast way to launch, but faster doesn’t mean better when user demand spikes and costly rewrites become inevitable. A monolithic architecture can just as quickly become a bottleneck — slowing development, limiting scalability, and making even minor updates risky. And when demand spikes or features grow complex, migrating to microservices isn’t a flip of a switch. It often leads to downtime, tangled operations, and spiraling costs. What to do instead? Put your money into event-driven architecture to handle real-time updates easily, use modular design principles for long-term flexibility, and bring in an experienced architect from day one to scale without costly surprises.

4. Ensure compliance with regulations from the start

What if you jump right into niche sectors like alcohol and pharma and ignore their particular compliance regulations? Expect penalties, lawsuits, and even having your business operations suspended. What do I recommend? Thoroughly research industry-specific regulations before launch! Work closely with legal experts or outsourcing partners with relevant expertise like Innowise to avoid unpleasant consequences.

5. Focus on unit economics to avoid financial losses

A large number of businesses appear to overlook the order density per square mile, which results in higher delivery costs that eat away at their profit margins. Also, over time, things like refunds, driver incentivization, and unsuccessful deliveries add to the hidden costs that affect profitability in the long run.

Is it possible to stay profitable at scale? Absolutely! Measure Customer acquisition cost (CAC) versus Lifetime value (LTV) to make sure you’re building a sustainable business. Focus on high order density to lower delivery costs per order and account for all operational expenses, including driver incentives, chargebacks, and customer refunds.

6. Optimize logistics and real-time operations

Bad route planning results in extended delivery periods, annoyed clients, and decreased sales — all of which businesses don’t want to experience. Like always, I recommend using a strategic approach to keep costs, customer satisfaction rate, and revenue in balance.

Implementing AI-powered dispatching allocates drivers based on real-time conditions, not just distance. Using predictive analytics to adjust pricing dynamically and enable real-time rerouting and delay predictions to prevent bottlenecks and increase reliability.

“The on-demand delivery business has its ups and downs. When things run smoothly, you may see fast deliveries, loyal customers, and happy couriers. Yet, other factors such as spikes in demand, technology hiccups, and high driver turnover are equally part of the mix. That’s where AI and data are your helping hand. Smarter routes, demand predictions, and personalized experiences keep things efficient and competitive.”

Philip Tikhanovich

Head of Bid Data

Step 5: On-demand delivery app features

With an MVP, there are pitfalls to watch out for. Let’s say you embrace the notion that more is better, and overwhelm your on-demand delivery app with every possible feature for the first version. What’s around the corner? Soaring costs, slipping deadlines, and a clunky product no one enjoys using.

Otherwise, you may swing too far in the opposite direction, cutting critical features to launch faster and cheaper — only to face low adoption rates and frustrated users who abandon the product.

Finally, you can be one of those who don’t plan for growth, building features that work at a small scale but crumble when the user base expands.

Must-have features for an on-demand delivery app

Think of what minimum is needed to test product-market fit. Prioritize those features and leave the extras for later iterations. Remember that every component should work hassle-free for everyone involved: users, couriers, or business operations. This approach keeps development lean, reduces risks, and delivers a functional yet scalable product. At Innowise, we help businesses avoid these hurdles by building MVPs that focus on essential features.

For customers

Customers claim a fast, simple, and reliable process from start to finish. No matter what they do — browsing options, placing an order, or tracking their delivery — convenience is key. Clear communication and flexibility throughout the experience make users satisfied at every stage. Here are the key features that delivery apps could include:

User-friendly onboarding with a simple registration process and profile creation.
Intuitive and hassle-free ordering process.
Real-time order tracking with live updates on delivery progress and estimated arrival time.
Multiple payment methods (credit/debit cards, digital wallets, and cash on delivery).
Order history for quick repeat purchase and reordering.
A rating and feedback system to improve service quality and build trust.

For couriers

For couriers, a successful app means they can deliver more orders in less time and with fewer complications. Easy navigation, real-time updates, and simple order management tools contribute to this much-needed excellent user experience. The following features are a must for making courier’s work productive:

Easy sign-up and verification for drivers.
Real-time navigation and route optimization for faster and more efficient routes.
Order management to enable couriers to accept, reject, and track orders easily.
Real-time updates to keep couriers informed about changes in orders.
Earnings tracker to allow monitoring earnings in real-time.
In-app communication to contact and support customers directly.

For businesses (restaurants, stores, or warehouses)

A delivery app should be more than just an order manager — it should be a reliable partner across the entire process. From order acceptance to final delivery, every step needs to run like clockwork. These are the core features that are critical for businesses.

Order management dashboard to accept, reject, or prioritize orders without a hitch.
Inventory management for real-time tracking of stock levels.
Automated invoicing and reports to track revenue, orders, and service fees.
Analytics to adjust business strategies.
In-app messaging to communicate with customers directly.
Marketing tools to create and manage promotions.

For admins

Admins manage the full operation, optimize performance, and act as a key connector between customers, couriers, and businesses. Admins can maintain control, track performance, and improve service quality if the following features are available:

Centralized analytics dashboard to manage users, view orders, track deliveries, and monitor overall app performance.
User and courier management to verify new sign-ups, handle disputes, and ensure compliance.
Surge pricing management to enable admins to adjust delivery fees dynamically based on demand.
Fraud detection and security tools to protect against fake orders, chargebacks, and data breaches.
A built-in mechanism for resolving customer complaints, courier issues, or disputes.

Scalability considerations for features

Scalability should also be a key focus — building with future growth in mind prevents costly redevelopment down the road. Here are key considerations that can help scale an app effectively:

Modular design, meaning features are developed independently and can be updated or expanded without disrupting the overall system.
API-first approach to guarantee smooth integration with third-party services and external platforms, such as payment gateways, GPS tracking systems, or CRM tools.
Features like auto-dispatching, predictive pricing, and demand forecasting simplify operations, reduce manual workload, and optimize costs, keeping the platform more efficient as it scales.

Our experience

Innowise has successfully delivered on-demand app development projects, including a custom-built food delivery app packed with features outlined above. A popular restaurant chain in Europe faced the following challenge: while foot traffic remained solid, they struggled to grow revenue and retain customers. With more people opting for food delivery over dining out or cooking at home, the client realized they needed more than just a presence on third-party delivery platforms.

They approached us, and we have developed a complete food delivery ecosystem that includes iOS and Android apps, a full-featured website, and a loyalty program implementation.

Key features included:

Two user roles: customers (ordering) and couriers (delivery)
Live order tracking
Real-time GPS tracking with estimated delivery time
AI-based dish recommendations
Multiple payment options: cards, cash, and digital wallets
Updates on orders, promos, and app changes
In-app online chat
Table reservations
Loyalty program

As a result, the client saw a 25% increase in revenue, over 500 loyalty cards issued, and ongoing improvements based on user feedback. The solution continues to evolve with support from the Innowise team.

Step 6. Choose the technology stack

The technology stack determines how well your app performs under pressure, handles a growing user base, and integrates with other systems. A poorly chosen tech stack can hinder scalability, increase costs, and create inefficiencies that complicate future updates and integrations.

For example, choosing a tech stack based solely on familiarity rather than scalability can limit your ability to scale efficiently in the future. Opting for a monolithic backend architecture can lead to slower development cycles and scalability issues as the app grows and adds more features.

Recommended technology stack for an on-demand delivery app

For the frontend, aim for frameworks that enable cross-platform development or consider native solutions if targeting specific platforms. The right choice will depend on your goals for user experience and performance. Frontend: React Native, Flutter, Swift (iOS), Kotlin (Android), .NET MAUI.

When choosing backend technologies, ensure that they can handle real-time requests and scale as your app grows. Opt for technologies that are known for their efficiency and performance in handling large amounts of data or high user activity. Backend: Node.js, Python, Go, C#.

As for databases, pick a system that can manage your data’s needs, whether it’s relational, NoSQL, or requires real-time syncing. Database: PostgreSQL (relational), MongoDB (NoSQL), Firebase (real-time sync).

Select a provider that offers scalable, reliable, and secure services to support your app as it grows. Cloud infrastructure can help make operation smooth as user demand increases. Cloud hosting: AWS, Google Cloud, Microsoft Azure.

Consider using services that provide accurate and real-time data for on-demand delivery tracking and maps. These services will be essential for features such as delivery tracking or geo-based functionalities. Maps & location tracking: Google Maps API, Mapbox.

For payment processing, choose reliable, secure, and widely accepted platforms to facilitate seamless transactions within the app. Payment processing: Stripe, PayPal, Apple Pay, Google Pay.

Think of push notifications integration? Decide on tools that ensure timely, personalized, and non-intrusive messages. Push notifications: Firebase Cloud Messaging, OneSignal.

Finally, for AI-driven analytics, implement tools that help gather insights, optimize user experience, and make data-driven decisions to improve the app’s performance. AI-driven analytics: TensorFlow, ML Kit, AWS SageMaker.

To make sure that your app’s scaling capabilities are optimally designed, avoid a single third-party provider or specific cloud service to limit vendor lock-in, which will improve scaling flexibility down the road. Utilizing containerization with tools like Docker and Kubernetes helps create scalable, consistent deployments across different environments. Using an API-first strategy improves integration capabilities with outside services or platforms, so your app is able to change, grow, and add new functionalities without extensive changes to the architecture.

Every tech stack is covered. Every real-world solution is within reach.

Final thoughts

How to create a food delivery app that will be profitable, scalable, and popular? The restaurant delivery app development takes careful planning, the right tech stack, and a solid focus on scalability. Sounds simple when it’s all laid out in a guide like this, right? But in reality, you’ll hit some roadblocks along the way. That’s where we come in — not as partners in crime, but as your go-to team for building a rock-solid platform that gets the job done. If you’re ready to bring your idea to life, let’s discuss how to make on-demand delivery app just for you.

Evgeny Shapovalov

Head of Mobile

Eugene drives our mobile vision with a sharp eye on performance, usability, and future-proof tech. He helps businesses turn big ideas into fast, intuitive apps that people actually want to use.

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