Insight of Grubhub business model & Revenue

The on-demand food delivery sector is growing by day by day with it are the number of businesses that are making an entry in the industry.

There are many food delivery apps that make billions of revenue with online businesses in the food industry. Grubhub is one of the best examples of this.

Grubhub, who presently holds 32.7% of the complete food delivery app industry had been the most interesting case study of the food industry.

Let’s know about more Grbhub to go into the online food business.

What is GrubHub?

GrubHub is an online food ordering platform that offers people to order food online from any place in the city.

GrubHub has 19.9 billion active users and 115,000 associated restaurants across 3,200 cities in all 50 states in the United States.

GrubHub Founders, Salient features & Facts:

Founders: Michael Evans & Matt Maloney.

Founded in: the Year 2004

Headquarters: Chicago, IL

Number of Employees: 2,773

GrubHub IPO Date: 7 April, 2014.

Publicly Listed: At New York Stock Exchange (NYSE) as GRUB

• GrubHub has 5.6 million active diners in the last 12 months.
• GrubHub processes an average of 234,700 orders on a daily basis.
• Present in more than 3,200 locations across the USA.
• It has partnerships with more than 115,000 restaurants.

Also, GrubHub owns and manages 9 different brands in the same(food) industry. They are – Seamless, Dinning, AllMenu, Delivered dish, LAbite, Eat24, OrderUp, Tapingo, and LevelUp.

Grubhub Success Funding Timelines

When the founder Matt and Michael decided to run the Grubhub they don’t know about one day they can run the IPO. The first, they can face the difficulties from the investors but in the last their dreams became true.

The funding timeline below shows when and how much did Grubhub receive throughout the past years and became the best success in the food industry.

How App like Grubhub Works?

Browse: Users browse many restaurants for their food requirements.

Place Order: Users can place their food orders online and pay through selected payment options.

A restaurant prepares and packs the order: The restaurant confirms the food order and prepares the food and pack it for the delivery.

Food Delivered by GrubHub Person: Order picks up by Grubhub delivery person from the respective restaurant and delivers it to the user.

Let’s know about the Grubhub business model.

GrubHub Business Model:

Here’s the complete canvas of Grubhub business with information about a business proposition, key, partners, key resources, channels, cost structure, revenue streams, etc.

Revenue Model: How Does Grubhub Make Money?

The GrubHub app revenue model divided into three parts: Delivery fee, Commission fee, and Extra commission.

Delivery Fee:

The delivery fee is taken from the customers and it’s charges 20-40%. The customers are willing to pay for the delivery fee because of the quality of services is stand out.

Also, this fee user pays to get the food at the doorstep without stepping out.

Commission Fee:

Grubhub takes a basic commission of 12.5% on each food delivery request. The commission fee is the major source of the Grubhub revenue.

Also, the percentage of commission fee can between 5% to 15% from the standard and 12.5% it’s not out. This commission fee share between Grubhab and restaurants.

Extra Commission:

This extra commission is charged for ranking of the restaurants its the same category. The percentage of extra commission can range from 2.5%, 7.5%, 17.5% depending on the hierarchy of restaurant raking.

The extra commission is only taken for larger restaurants on-demand and the customers have to do nothing with this.

Conclusion:

GrubHub offers the best food delivery services for all customers using the online platforms and it’s a successful business. If you are interested to develop your on-demand food delivery app like Grubhub give us a shout and we will happy to help you.

Frequently Ask Questions

What is Grubhub's business model?

Grubhub operates on a commission-based business model, where it charges restaurants a percentage of each order placed through its platform. It also earns through delivery fees and subscription services for customers and restaurants.

How does Grubhub make money?

Grubhub generates revenue primarily through commissions from restaurants, delivery fees, advertising services, and a subscription model called Grubhub+ for customers who want free delivery on orders.

What are the key factors driving Grubhub's success?

Grubhub’s large restaurant network, user-friendly app interface, reliable delivery service, and customer loyalty programs have played crucial roles in its success.

How does Grubhub manage delivery logistics?

Grubhub partners with both in-house and independent delivery drivers (called Grubhub drivers) to handle deliveries. The app optimizes routes and provides real-time updates for both restaurants and customers.

What is Grubhub’s revenue breakdown?

Grubhub's revenue is split between restaurant commission fees (typically 10-30% per order), delivery fees from customers, subscription fees from Grubhub+, and advertising from restaurants featured on the platform.

What are Grubhub's partnerships and how do they influence revenue?

Grubhub has partnerships with major restaurant chains, independent restaurants, and payment providers. These partnerships increase the volume of orders and help generate additional revenue streams through promotional services.

How does Grubhub’s subscription service work?

Grubhub+ offers customers a monthly subscription for free delivery on orders over a specific amount. It creates a steady revenue stream while offering users value in exchange for their membership.

What impact has the Covid-19 pandemic had on Grubhub's business model?

The pandemic accelerated demand for food delivery services, leading to increased order volume and more restaurants joining the platform. Grubhub adjusted by offering contactless delivery and prioritizing safety.

How does Grubhub compete with other food delivery apps?

Grubhub competes with companies like Uber Eats, DoorDash, and Postmates by offering competitive pricing, a broad selection of restaurants, and special features like Grubhub+ for loyal customers.

What are Grubhub’s future revenue opportunities?

Grubhub's future revenue growth lies in expanding its restaurant partnerships, increasing customer loyalty through services like Grubhub+, leveraging data for targeted advertising, and exploring new delivery models.