During the first quarter of 2020, the combined fortunes of Jeff Bezos and Mark Zuckerberg increased by $60 billion due to the influence of the COVID-19 pandemic.

The lion's share of Amazon's growth can be explained by their well-established delivery business. Their web and app courier services added to this expansion.

At the same time, millions of smaller companies now see the need for on-demand courier delivery app development. A relatively small investment in a delivery app can have a tremendous pay-off: improved services, streamlined procedures, and a boost in income.
If you are one of these smaller companies, with this article, you can get the essential tips and tricks on how to build a delivery app.

Here’s what you will learn:

  • on-demand delivery apps: the principles of functionality
  • important tips to make an app like Postmates and avoid pitfalls
  • functionality to choose when creating your own delivery app
  • secret to hiring a reliable vendor to develop an on-demand delivery app

Let’s dive right into the insight!

How do Delivery Apps like DoorDash & Gopuff Work?

When speaking about on-demand delivery apps, like DoorDash, Gopuff, UberEats, or Amazon Flex, the first thing to come to mind is “how do they work, and what makes them so successful?”

By the way, delivery apps work pretty similarly to Uber functioning; you can also check out additional details on the process, features, and cost inside the guide: How to make an app like Uber.

How Do On-demand Delivery Apps Work?
How Do On-demand Delivery Apps Work?

An on-demand delivery app is software that allows a client to order goods and services.

By the way, most people think of on-demand apps only in terms of food delivery app development. The range of on-demand delivery services can be broad and include services like clothing, shopping, drugs, etc.

Besides a client interface, where you can choose a product to order, the service consists of an interface that allows the retailer to see the product order and a courier to pick up a request for delivery.

The success of on-demand delivery apps is connected to responsibility in business relations and high-quality services. These apps are an example of how a company caters to the tastes of customers.

Firstly, they are intuitive.

Secondly, they are user-friendly.

Even more critical, they solve customers’ problems.

On-Demand Economy Industry Characteristics
On-Demand Economy Industry Characteristics

On demand delivery apps can be divided into several groups depending on the type of consumer involved in the business.

There are several categories, namely:

Business-to-Consumer (B2C, also called Enterprise-to-Person, or E2P) - these apps take care of product deliveries from a business to the consumer.

Examples include companies like McDelivery and Starbucks.

Business-to-Business (B2B, also Enterprise-to-Enterprise, or E2E) - B2B apps facilitate deliveries between businesses.

An example is the shipment app Cargomatic, also called “Uber for truckers,” that allows enterprises to find reliable carriers.

Consumer-to-Consumer (C2C, also Person-to-Person, or P2P)

C2C apps like Etsy and eBay allow users to buy products and services from each other.

As well, people thinking about how to build a delivery app should keep in mind the variety of business domains to which the app could be applied.

On-demand car rental apps like Turo and easyCar allow the full range of options for car rental, like reserving by the hour of the day, round-the-clock roadside assistance, and pick-up or drop-off on-demand.

Home services like Handy and Task Rabbit offer cleaning help and other sorts of assistance on demand.

Transportation and logistics apps like Uber Freight and UberDeliver allow for the organization of on-demand transportation and real-time tracking.

Thus, if you think that on-demand courier delivery app development is not right for your business, you may be surprised by how it can boost a separate business and the entire business domain.

Unique Selling Points of Well-Known On-Demand Delivery Services

What features make courier apps really successful, and mainly – what makes them different from peers’? This is a very important question when you start contemplating how to build a delivery app.

To answer these questions, our team, as part of business analysis services, has provided an analysis of the unique selling points of the most famous on-demand delivery apps.

Amazon Flex (grocery, food, tech stuff, stationery, apparel)voice search, Alexa integration, wish list, one-click ordering, automatic shipment notifications, ability to compare prices
DoorDash Deliverooimproved filters (dietary needs, fastest delivery time, top rated), order scheduling, tracking of meal preparation and deliveries, share info on preparation
goPuffmultiple payment options, reward options, up to 30-minute delivery, scheduling, membership program for free delivery, flat delivery rate, intuitive interface
Grubhubimproved search (by cuisine, by food), saved locations, geo-targeting (shows restaurants in the area), automatic check-out (check-out details are pre-filled)
Instacartin-app chat, saved lists based on purchase history, improved filters (by gluten-free, organic, or vegan diets), item tagging for fast shopping, group cart purchases
UberDelivery/ UberFreightLive Map to see real-life locations, in-app calls to drivers, order scheduling, real-time order tracking
Taskrabbit (home service)tracking, multi-channel contact support, in-app chat
Handy (home service)progress tracking, simple scheduling
Gyfte-gift cards, multiple payment options, back-up real-life cards, integration with multiple retailers
Doctor on Demand (healthcare)in-app video chats, scheduling, insurance billing, doctor qualification profiles

As well, if you are thinking about how to make an app like DoorDash for food delivery, the first thing to come to mind should be a friendly user interface.

DoorDash customers like the following features:

  • order tracking
  • featured restaurant list
  • free offers and deliveries that come via a separate listing
  • scoring system for delivery speed, food quality, and overall restaurant popularity

Mobile App Interface of DoorDash Delivery Service
Mobile App Interface of DoorDash Delivery Service

Grubhub is one of the biggest delivery services in the United States today. The number of users worldwide is 22.62 M. They are a great example to use for on-demand courier delivery app development.

The interesting features of the app include:

  • multiple address options for a delivery: you can save a couple of your addresses and switch between them as you travel, go to work, etc.
  • flexible delivery rates (according to the service policy, restaurants are allowed to set individual delivery rates)
  • perks and rewards
  • takeout option
  • 24/7 customer support
  • pre-order option
  • detailed ratings and reviews

Interface of On-Demand Delivery App: Grubhub
Interface of On-Demand Delivery App: Grubhub

The MLSDev team has a colossal amount of knowledge regarding how to build a delivery app.

Next, we’ll brief you on how we managed to succeed with courier app development with a real-life example. goPuff is a project that has grown into a complex consumer technology platform.

Gopuff On-Demand Delivery Service
Gopuff On-Demand Delivery Service

In 2014, we started an on-demand courier delivery app development project for a local hookah delivery start-up, goPuff. As of 2020, it delivers everyday essentials like home cleaning products, personal care items, baby and pet products, OTC medications, food, drinks & more. The platform has over 200 facilities and operates in 500+ cities in the USA.

These days, goPuff app has over 2M downloads from app stores. We continue to provide ongoing development and support services for the project.

If you want to learn how to build a delivery app step by step, check out the goPuff on-demand courier delivery app development case study in greater detail.

The goPuff courier service app is successful, but why exactly do customers love it?

The reasons are simple:

  1. Intuitive interface (you proceed from choosing a favorite dish to checking out within seconds)
  2. Reward system (a customer gets points with each delivery; a newbie receives 6,000 points for the first session)
  3. Multiple payment options (Visa, American Express, MasterCard, and Discover, as well as Apple Pay, and Google Pay)
  4. Quick delivery in as few as 30 minutes

Here’s what goPuff users say:

“This is a great app for when you need a midnight snack and also for when you are in a pinch and need something quickly… They usually have hand sanitizer, toilet paper, and paper towels, which is rare during the COVID-19 pandemic” – Alejandra C.

When thinking about how to build a delivery app that will win you a vast audience, we recommend paying close attention to user feedback. It is worth checking reviews from competitive services, excluding the flaws that irritate customers, and outperforming the competition with a more appealing offer.

For more recommendations on how to build a delivery app, check out the next section.

Want to create an on-demand delivery app that wins the market?

Don’t hesitate to contact our team for a free consultation. We can discuss your app idea in detail, and provide you with recommendations, as well as a project timeline, and cost estimations.

Get a free consultation & app quotation

How to Start with Courier App Development Wisely

Do you want to know how to build a delivery app that will make a potential client tap the install button? The steps to create this kind of project include: find USPs and target audience, choose the right monetization model, hire a reliable software vendor to build an outstanding product, and start with marketing in advance.

Here we explain all the aspects of on-demand courier delivery app development in greater detail.

Steps to Build an App for On-Demand Delivery
Steps to Build an App for On-Demand Delivery

Step 1- Start with market analysis

A proper market analysis is half the job done for successful courier app development.

The analysis will include: market size, level of competition, defined target audience, and potential blockers. If you want to know how to build a delivery app to earn money, learning more about what the market offers is the most essential step. We like to say that this is an inescapable point in any on-demand courier delivery app development project.

1. Market size

Market size depends on the type of on-demand business. In general, as of June 2020, on-demand delivery services are growing worldwide.

For example, in Great Britain, 60% of people aged 18-34 caused an increase in the number of online deliveries. 52% of online orders go to the British service Just Eat, which is twice as much as Uber Eats (26%) or Deliveroo (25%).

It seems that with this buzz of choices, many apps have fallen into oblivion. However, the success of local apps proves the opposite. In Poland, the number of users of the local delivery service, Pyszne.pl, grew by 50%, which surpasses Uber Eats.

Our team has also worked on the reliable and secure courier and delivery service in Malta- Mela. We built the admin panel and driver app for the project.

Akram R., Mela’s founder, gave great feedback on our work and the business now has ongoing success in Malta. This is a great example of how you can successfully start on-demand delivery app development and launch your service in the local market.

Feedback from the Mela.biz Fouder
Feedback from the Mela.biz Fouder

So, when thinking about how to build a delivery app for a local business, you have to focus attention on your region. This is how Postmates and Uber Eats started. An important stage of on-demand courier delivery app development is estimating the potential number of customers and market value.

Tip: To successfully create and market an on-demand delivery app, learn the number of citizens of different age groups, the number of companies in similar domains, mobile users, contractor drivers, etc. This data is often publicly available.

You can also search for the value of your market. You may calculate it yourself, as well:

Multiply the number of potential customers by the average transaction cost (e.g. an average restaurant order for a food delivery app).

Note: You can calculate market value by dividing the value of the on-demand delivery market (usually available in official reports) by the number of potential clients (e.g., office workers). Thus, you will know the spending per client. Then, multiply this number by the number of office workers in your locale.

2. Target audience

When thinking about how to build a delivery app, focus on the type of customer you want to attract. If this is a stationery delivery service, your target audience will likely be office managers. If it’s a hot lunch delivery service, then it will be general office workers or busy people in an area that lacks available high-quality eateries. Proper targeting is one of the most important points in on-demand courier delivery app development.

3. Market demand

Why do customers order deliveries?

The factors driving this demand may be cost, speed, size, time-savings, group orders, etc. Learn if your customers prefer costlier 1-day shipments or cheaper options that take longer.

Note: there is a general notion that courier app development is centered around attracting customers by novelty and exclusivity. Yet, in everyday life, more people prefer consistency to novelty.

For example, a small local coffee shop can serve home-brewed coffee of superb quality. However, most of the clients that are new to this location will order Starbucks. This is essential to keep in mind when thinking about how to build a delivery app that will succeed.

4. Competition

It is recommended that you benchmark your competitors against each of the market demands to have a comprehensive and clear view of their strengths and weaknesses.

Tip: This will be easier to do if you compile the following table:

Competitor/DemandCompetitor 1Competitor 2Competitor 3Your Service
Speed24h-delivery2-day delivery24h-delivery2-day delivery
Sizesmall packages onlynot limitedsmall and mediumsmall packages

5. Blockers and risks

On-demand courier delivery app development requires solid planning and risk analysis. Some of the most common blockers include investment, access to resources (e.g. partnership with grocery stores, pool of drivers), distribution channels, and location (delivery to distant spots will take more risks).

As you complete your market research, use the findings to build a SWOT analysis for your future business and courier app development. This will also help you find out how much it costs to start an on-demand delivery business.
Below, you can check out a sample SWOT analysis for an on-demand delivery app:

Business: big size package, group order, same-day delivery, quick deliveries
App: package size checkbox, neighborhood delivery option, delivery schedule
Business: fast growth of on-demand deliveries (include market size and value), expanding to new territories, and product categories
Apps: winning loyalty among new customer groups
Business: high cost of deliveries, delays caused by a lack of drivers, overcoming peak load periods
App: the high cost of development and marketing, scarce advertising possibilities
Business: high competition level, invalid monetization strategy, operational issues, lack of resources and partners
App: competition, software malfunctioning

The analysis should help determine your choice of the unique selling points and features of your future app: in other words, it will help you find an answer to the question of how to build a delivery app.

To sum up this point, you have to find the target audience, check out your competitors, collect data, and analyze whether your audience will prefer you over the competitors.

Although courier app development is more about technical stuff, consider the quality of your off-line services in the selected niche as well. Make sure your deliveries are fast, streamlined, and safe. These are also points to put extra focus on during on-demand courier delivery app development.

Step 2- Choose a business model and monetization strategy

How to make money with your delivery app.

The choices are broad. Here’s how the on-demand economy leaders do it:

AmazonOnline retailA fee of $0.99 per item sold or a monthly plan for $39.9 + additional selling fees (15% of a purchase value on the average)
goPuffConsumer technology platform$2 per delivery or $6/month membership
UberTaxi services, rideshare25% on all rides
LyftTaxi services, rideshare20% on all rides + service fees
AirbnbRental6-12% fee from guests + 3% fee from owners
Uber EatsFood delivery30% on food orders
Credit card companiesFinancial transactions2% of interchange fees (on the average)
GrubHubFood deliveryGrubHub+ plan requires $10/month subscription + individual delivery fees from restaurants
DoorDashFood deliveryDoorPass plan requires $10/month subscription
PostmatesOn-demand delivery$10/month for subscribers or extra fees on every order
InstacartGrocery delivery$4-$35 delivery fee based on the order size
BugcrowdCybersecurityPay-per-result fees for every bug found

As you see, there are different ways to monetize in the on-demand industry, namely:

  • subscription plans
  • service fees (% from the order cost covers the delivery expenses)
  • advertisement (via banner, video, native ad, interstitial ad, incentivized ad)
  • eCommerce and merchandising

One thing is clear, when thinking about how to build a delivery app the choice of monetization strategy shapes the design and functionality of an app, and the whole process of courier app development.

There is also some division about the scope of services you can provide with an on-demand delivery app. Generally, there are three scenarios for how an on-demand delivery app can work:

1) Aggregator: a customer orders a product via an app. As the product is ready, a provider of service (let’s say, a restaurant) arranges the delivery outside of the app (with a staff driver, a third-party driver).

Examples: JustEat, Grubhub, Delivery Hero, Doctor on Demand.

2) Order and delivery: a customer can place an order inside the app. A courier on duty logs into the same app (interface for drivers) to accept the request for delivery. The first courier who claims the order, takes the order. This type is more profound than the previous one. The on-demand courier delivery app development includes an interface for customers, businesses, and couriers.

Examples: DoorDash, Deliveroo, Caviar, Uber Freight.

3) Complete service: a company combines preparation and delivery services. A customer places an order inside the app. The order is executed and delivered by the staff of the same company without third parties. During courier app development, the team creates admin functionality that allows orders to be distributed either automatically or manually.

Examples: Munhery, SpoonRocket, Maple, goPuff.

Complete Guide of App Monetization Strategies
Complete Guide of App Monetization Strategies

Have an idea for an on-demand delivery app, but don’t know how to monetize it?

Our team has prepared a comprehensive guide on all the possible ways a mobile app can make a fortune in the article: How do Free Apps Make Money?

Step 3- Find a reliable software development company

Choosing a reliable vendor is an important thing when deciding how to build a delivery app. The choice determines the complete on-demand courier delivery app development process.

For a successful project, we recommend centering attention on IT vendors from Eastern Europe.

Here you have the best of two worlds: low risk of failure and low cost.

So, how to hire a mobile app developer this way? This is simply explained up next.

Quality: Eastern Europe combines the unique conditions of well-established technical universities and institutions, and a quickly growing online sector. For example, Ukraine is home to about 150K developers and is ranked 11th worldwide, according to HackerRank.

Price: Due to certain economic policies, rates for courier app development here are lower compared to other regions. This is due in part to a taxation subvention that is directed to boost IT growth.

Regions to Outsource On-Demand Delivery App Development
Regions to Outsource On-Demand Delivery App Development

How to build a delivery app from a practical standpoint.

Your collaboration with a software development team will run through several stages. For instance, at MLSDev the courier app development process is split into two core stages - Discovery and Development.

Discovery stage - corresponds to the elicitation of business and technical requirements, as well as the creation of the product prototype.

As a result of the work completed by the Business Analyst, Software Architect, andUX/UI Designer, you will receive a product backlog, architecture plan, and the UX/UI design for a future on-demand delivery project.

Example of a Workflow Scheme of Developing an On-Demand App
Example of a Workflow Scheme of Developing an On-Demand App

Development phase - corresponds to the actual coding of the application.

The on-demand delivery app development process is organized according to Agile methodologies (e.g. Scrum) and divided into sprints (usually lasting 2-3 weeks). Generally, there is also an Early Planning sprint, which is called the zero development sprint, to get the whole process well-prepared.

You can receive the following services from an experienced IT vendor to implement an on-demand delivery project:

  • conducting market analysis (on demand)
  • creating product backlog and functional specification
  • planning the digital service architecture
  • designing user experience and user interface (UX/UI design)
  • performing software development
  • conducting software testing
  • providing ongoing support & development (on demand)

Nurturing an idea for an on-demand delivery service, but not sure where to start?

If you are looking for a mix of available costs and consistent collaboration, seeking a company that can both develop a high-quality product and give advice on its marketing as well as ongoing support and product evolution, feel free to contact MLSDev.

Drop us a line for a free consultation and estimate

Step 4- Plan and prioritize the on-delivery app functionality

You have to think through the most important functionality and predict how it will be perceived by customers. On the one hand, the service should cover all user demands; on the other, it should not be cluttered with excessive functionality.

Continue reading the article, as we dedicate the whole next session to how to build a delivery app with an optimal number of features.

Step 5- Test and launch the product

Successful on-demand courier delivery app development is hard to imagine without multiple sessions of testing different stages of the project: UX/UI design, app code, synchronization of front-end and back-end of the system, etc.

The typical courier app development project employs at least two QA engineers catering to the flawless operation of a product.

Together, they provide the following kinds of testing: functional, sanity, UAT (user acceptance testing), and so on.

For example, regression testing guarantees that any new feature doesn’t interfere with the whole app, so the system doesn’t crash after updates.

Step 6- Plan the ongoing app support and development

Once you finish the courier service app development for the first version, you should think about how to scale the system further and include the necessary updates based on market changes and real user feedback.

On-Demand Delivery Service Scheme
On-Demand Delivery Service Scheme

Therefore, you will need a development team to keep your app up and running with post-launch support, like with the goPuff example. After the project’s implementation, the MLSDev software development team continued to support the project and helped expand the service from a local delivery system to a chain present in 500+ US cities.

Step 7- Work on the offline side of the project

When thinking about how to build a courier app, you also have to consider how to arrange the real-life side of your business. This is about setting partnerships with suppliers and couriers, coverage of legal aspects, as well as the involvement of early marketing efforts.

You have to go outside to sign agreements with retailers, providers, and drivers, build service logistics, and more.

Article on How to Create a Successful Digital Product
Article on How to Create a Successful Digital Product

If you are interested in why some apps shine where others fail, and what makes an ordinary app successful, check out our article: How to Make Your App Successful: A Detailed Step-by-Step Guide

Functionality of On-Demand Courier Delivery App Development

The app functionality is one of the first points to consider when thinking about how to build a delivery app. Here, we describe the most common functionality for courier app development.

Functionality for On-Demand Delivery App Development
Functionality for On-Demand Delivery App Development

Delivery App: Features for Client App

We recommend starting on-demand courier delivery app development with basic features, namely:

RegistrationThe options should include registration via e-mail, social sign-in, guest log-in.
Profile managementA customer should be able to create, update, and delete an account with ease.
SearchA customer should be able to search for product categories, preferred suppliers, etc. It is recommended that you include filters by price, delivery time, etc.
Order placementThis feature should include order placement, updates, cancellation, and tracking.
Payment processingInclude multiple payment options (via credit card, GooglePay, ApplePay, PayPal, etc.).
ReceiptsSend receipts to a customer via email, via a message.
Rates & ReviewsBesides an option to leave reviews and ratings, include an option to sort products or suppliers by reviews.
NotificationsCustomers will love notifications of order status, delivery status, special offers, bonus program, etc.

After you cover the question of how to build a delivery app with basic features, with the consequent project versions, you may consider including more advanced ones:

BookmarksThe functionality should help keep favorite restaurants, dishes, couriers (if the case) at hand.
Order historyAside from a natural ability to generate an order, a customer will love to create a report on money spent on dishes or a calorie count.
Loyalty programsA loyalty program can include discounts based on order history, special offers, birthday discounts, holiday offers.
Social networks integrationYou can also boost your product's virality by encouraging sharing, likes, and inviting friends to like your social media page.
Delivery time estimationDelivery time estimation, and also a timer, may come in very handy. If a driver gets into a traffic jam, it would be great to adjust the delivery time.

Functionality for a Courier App

The convenience of a courier app is a must for a successful courier app development project. Some basic features for an app are as follows:

RegistrationA courier should register with ease, at the same time, there should be a way to prove the authenticity of a courier.
Profile managementA driver should be able to create, update, and delete a profile.
Order managementA driver should be able to pick up an order, mark it as ‘in progress,’ and status “delivered.”
Status updateThis functionality should allow a driver to leave updated availability (check-in/out, time to pick up next order).

An advanced courier app could include the following functionality:

NavigationA system generates an in-app mapping of the trip with the best routing option.
Delivery historyA courier should be able to check the delivery history.
EarningsA driver should be able to see a report on earnings, payment schedule, and similar stats.

Admin Features for Courier App Development

An admin is a person that cares about proper order execution and delivery. An effective admin panel for a courier app will help streamline operations and eliminate failed or belated deliveries. Want to know how to build a delivery app with state-of-the-art admin functionality? Here’s a list of features to include:

Profile managementAn admin has access to the customer's profile for troubleshooting, can create, delete customer profiles, and update info, if necessary.
Content managementAn admin uploads/updates product or service offers, pictures of goods and services, schedules discount campaigns, sets loyalty programs, etc.
Order management/ trackingAn order can be automatically or manually generated, updated, deleted.
PaymentsAn admin has access to payments for processing, checking payment status, fraud detection, canceling erroneous orders.

Technologies Used for On-Demand Delivery App Development

A properly chosen technical stack equals a fast and effective development process and moderate expenses.

The on-demand app development process consists of a few tech parts. These include the front-end, back-end, and API (Application Programming Interface).

1. Client-side (or, front-end of a service) - composed from the elements with which the end-user interacts. Basically, this corresponds to the interface you can observe with any software.

The following table explains how to build a delivery app technically. Here, you can check out tech stacks used to build the front-end side of a custom app on iOS, Android, or Web platform.

Web platformiOS platformAndroid platform
Markup languages: HTML5, CSS3
Programming languages: JavaScript, TypeScript
JavaScript frameworks: Angular (recommended), React, Vue, etc.

Programming language: Swift 5 (preferred), Objective C
Development OS: Latest Mac OS X
IDE: Xcode 11, AppCode
Platform SDK: iOS SDK, Cocoa Touch

Programming language: Kotlin (preferred), Java
Development OS: Ubuntu, Mac OS
IDE: Latest Android Studio
Platform SDK: Latest Android SDK

2. Server-side (or back-end of a service) - corresponds to the place where all the app functions are performed. The back-end works with service information and provides the necessary results to the client-side.

The common technologies applied in back-end development include:

  • programming languages: Ruby (recommended), Elixir, Python, PHP, Java, etc.
  • web frameworks: Ruby On Rails (recommended), Phoenix
  • database servers: PostgreSQL (preferred), MySQL
  • web servers: nginx (preferred), Apache
  • cloud server platforms: Amazon Web Services (AWS, EC2, S3, etc.)

3. API (Application Programming Interface) - protocol description of how system back-end and front-end interact. API also relates to the integration of third-party services used in the service.

Payment gatewaysBraintree, Stripe, PayPal etc.
Social media integrationFacebook, Instagram, Twitter, etc.
Analytical toolsFlurry or Google Analytics; Firebase or MixPanel, etc.
Maps & NavigationGoogle Maps, Google Places
Email marketing integrationMailChimp, Twilio
PhotosFotolia Print on Demand API, Images API
Human ResourcesSterling On Demand API
StorageStorm On Demand API, Bluebox Blocks API
RecommendationsBaynote API

To continue the topic of how to build a delivery app technically, we can offer you a high level overview of the on-demand delivery project architecture.

High-Level Architecture for On-Demand Delivery App Development
High-Level Architecture for On-Demand Delivery App Development

KPIs in Building an On-Demand Delivery Apps

How does one create a successful delivery company?

Even with a stellar app, you need to invest a considerable amount of money, time, and effort. Here is the list of actions and metrics you should follow to turn a courier app development project into a successful business.

1. Grow the user base

As your on-demand courier delivery app development project continues, think about growing the user base gradually. A wise strategy is to start small:

  • Start with the local market

Transform your selected location into a playground for checking your strategies, marketing approaches, and probing the product with early adopters. A start like this will test your hypothesis of the service demand, help to analyze service and app performance, proceed with important updates, as well as gain the first users.

  • Pre-launch advertising

Rahul Varshneya from Enterpreneur.com suggests that the success of an app lies in its early marketing. As Uber launched the UberEats app, everybody was spreading the word about the taxi company’s novelty.

If an app has nothing to inherit initial success from, it is essential to promote the service way before it goes to market. You may:

  • launch a blog and a landing page
  • post demos and teasers
  • speak to the early adopters about the first version
  • work on SMM
  • participate in local events
  • reach out to industry influencers

  • Involve local retailers

Product providers (restaurants, food and grocery stores, stationery suppliers, etc. ) may be short on reliable couriers. Your services may me a sought-after helping hand that they are ready to take.

2. Increase user retention

When thinking about how to build a delivery app, pay special attention to the following points:

  • Customer support

Customer service is the first point about which users tend to complain about issues. They will typically complain about via reviews on platforms like Google Play. Usually, it looks something like this:

"In general, the app works pretty, with well only minor glitches now and then. But the customer service has to be the absolute worst thing in the world." - Mark J.

As a business owner, you should be sure that the customer support team has the proper hardware and software, as well as the proper training and a relevant level of motivation to keep users satisfied.

  • Rating and reviews

Customers love leaving reviews.

Consider this fact during courier app development. If the reviews happen to be negative, make sure you make up for the bad experience with an additional service, extra bonus, or a special gift.

However, even the market leaders have flaws. We’ve analyzed the reviews that customers leave on platforms like Google Play and the Apple App Store and found some common complaints about delivery apps like Uber, DoorDash, and Postmates:

  • too few pictures of products
  • crashes or freezes
  • delivery tracking inaccuracies
  • no refund policy
  • issues with removing items from the list
  • chat

You may use these points in your strategy for building an on-demand delivery service.

  • Loyalty programs

Every smart business owner is building client loyalty with things like bonuses, discounts, gifts, and free deliveries. You have to decide which of these will best fit your target market during the initial steps of on-demand courier delivery app development.

  • Partner screening

If a restaurant you work with or a driver doesn't live up to the promise, you should be aware of that before hiring them as on-demand delivery vendors.

When it comes to deliveries, a background check of a driver and their vehicle is very important.

A company like Amazon pays their drivers $18/hr and offers flexible working hours. To become one of these employees, a driver goes through a two-stage background check: a comprehensive criminal background check and a vehicle background check.

If you can't conduct a comprehensive candidate background check yourself, you may use a third-party vendor. For example, after a candidate shares their driver's license and social security number, Amazon sends this data to Accurate Background, who then provides compliant checks of criminal records and other data about candidates.

It is also recommended that you ask for references from previous employers and pay close attention to agreements.

3. Keep contractors, drivers satisfied

Good drivers are worth a lot.

When starting a delivery service business, think about a strategy to keep couriers. They will love flexible working hours, better rates, bonuses, and coverage for travel expenses.

In general, delivery services do not provide insurance for their workers. The same goes for free medical services and savings. You may use any of these as special perks to attract high-value couriers. Education and training programs can also be a great benefit.

Many people want to know how to make an app like Postmates, but few pay attention to Postmates’ offline efforts with regard to keeping their loyal couriers. For example, their employees receive training and coaching.

4. Track digital service metrics

Generally, any project can be analyzed by four categories of metrics: user engagement, customer satisfaction, customer acquisition, and app performance.

You can check out and calculate the most common metrics to track the on-demand development app KPIs.

Retention Ratemeasures the number of users who return to the app after the first visitnum. of users during the current period of time / num. of users in a previous period of time
E.g. 400 people from the March new user group continued using your app in April / 2,000 users in April = 0.2- 20% is your retention rate
Churn Rateopposite of app retention; measures how many users dropped the app after the first visit1 - Retention rate = Churn Rate
Daily Active Usersmeasures daily activity referring to each individual usercan be defined by a specific day or averaged over time
DAU = num. of individual users who used an app in a day
Monthly Active Userssimilar to DAU; measures the unique num. of people, but within a specific timeline (month)MAU = num. of users who opened the app in a given month
Daily Sessions per DAUmeasures everyday user activity; shows if users are returning to the app regularlyDS = num. of sessions per day (or averaged daily sessions over timeline) / num. of new active users (or DAU averaged within a timeline)
Stickinessmeasures the percentage of times users return to the app. The higher the %, the better the app stickinessStickiness = DAU / MAU
Cost per Acquisition (CPA)measures how much it costs to acquire new app users (connected with your marketing campaigns)CPA = costs of the campaign / num. of acquisitions or conversions
Lifetime Value (LTV)measures the match between the app value and what it brings back to you. It is directed to show the expected revenue from your average customerFor the equation you need to understand
- how often users make transactions
- monetary value of these transactions
- how long your customers stay loyal
Projected LTV = average value of conversions x average num. of conversions in a specific timeline x average customer lifetime
E.g. An average in-app purchase is $15 and, in general, a user makes 10 such transactions; the average user stays with your product for 5 years ---> $750 is the LTV

Average Revenue per User & per Paying Usermeasures the current LTV of the app achieved starting from its launchCurrent LTV = total revenue from the app / num. of total users in the app
Return on Investment (ROI)measures the return on the efforts of your marketing or other campaign. For this, you should specifically define the cost associated with the app campaignROI = (profit from investment - cost of investment) / cost of investment

How Much Does it Cost to Start a Delivery Business?

The cost to develop a delivery app depends on features (their number and complexity - basic or advanced), the number of platforms you target (Android/iOS/Web), hourly rates of the software vendor, included service, and many other factors. This approach is similar to building any other software as well as defining social media app development cost.

The price to build a MDP (minimum delight product) for an on-demand delivery app starts from $60,000 per platform (iOS or Android or Web) for one user app (a courier or client app). Thus, the first working version of an on-demand service may cost you a minimum of $300,000.

Please note that these costs are based on an average hourly rate of $40 for mobile app development services in Ukraine.

The following table will give you a general overview of the components and services making up the total price to create a delivery project at the $40/hour rate.

Basic version (core feature set, 1 platform)Medium app (more features and design of a larger complexity, 1 platform)Large app (complex app design, development, and support, 2 platforms)
UX/UI Design$5,000+$15,000+$25,000+
Custom Development$40,000+$95,000+$200,000+
Quality Assurance$5,000+$15,000+$25,000+
Project Management$7,500+$15,000+$35,000+
Business Analysis$2,500+$10,000+$15,000+
Total setup$60,000+$150,000+$300,000+
Time~3-6 months~4-9 months~9+ months (ongoing)

Thanks to moderate prices paired with the high level of expertise, it makes a lot of sense to outsource software development to Ukraine.

If you want to learn more about how to outsource software development successfully, find a detailed guide on outsourcing destination, leading technologies, pricing, and a lot of useful tips in our article: Offshore & Nearshore Software Development: Practical Guide to Choose Your Best IT Vendor

All in all, the on-demand economy industry has a lot of potential for investment. As of 2020, the influence of COVID-19, as well as insight from statistics supports the fact that users demand the quick provision of services and delivery of goods.

Consumer behavior will continue to shift and the total spending of $57.6 billion per year will continue to increase.

Statistics of the On-Demand Economy Market
Statistics of the On-Demand Economy Market

To put a final point on the topic of how to build a delivery app, here is a list of steps you need to accomplish to develop an on-demand delivery service.

  • study the market and potential users and their behavior
  • define your target audience and service niche
  • finalize your strategy and value proposition
  • work on the offline part of the on-demand delivery business (set up legal aspects, think of loyalty programs, etc.)
  • partner with service providers, couriers
  • select and hire a professional IT vendor (consider IT outsourcing to Ukraine due to great price-quality ratio)
  • focus on marketing activities as early as possible
  • design and develop a flawless and intuitive digital service with the help of IT vendor
  • listen to your customers, read their reviews, and improve the product correspondingly
  • update and improve the quality of the on-demand delivery app regularly

Thinking about how to build a delivery app and how to start a courier business in general?

Have a great idea for an on-demand economy service, but have little knowledge of how to implement it? Contact MLSDev, the development team specialized in on-demand delivery app development. You will receive professional advice from our Business Analyst and Software Architect, who each correspond to the business and tech sides of the project.

Contact us for a technical consultation

Frequently Asked Questions:

What are some examples of on-demand delivery apps?
There is a wide range of services in the on-demand economy industry ranging from clothing, shopping, drug delivery and healthcare services, pet and laundry services, etc. Some examples of on-demand delivery players are Amazon Flex, Gyft, Instacart, Handy, Doctor on Demand, and, of course, food delivery apps like DoorDash, goPuff, and Uber Eats.
How does a delivery app work?
The on-demand delivery service can work one of three ways. The service can serve as just an aggregator, where clients select the good or service among the listed providers. Alternatively, it is possible to take care of the order processing and its delivery. The third option is a complete service where your company both prepares and delivers the order.
What are the key performance indicators for on-demand apps?
A good performance indicator for on-demand apps is a growing user base, as well as a high retention rate. Aside from these points, it is necessary to track the following metrics for an app like churn rate, daily and monthly active users, CPA, LVT, average revenue per user, and, of course, ROI.
What are the first steps to start with on-demand business?
The first steps in starting with on-demand delivery app development are market and competitor analysis. Based on the research, it is necessary to define your UPS, target audience and their needs, determine correct revenue streams, as well as to find and hire capable software developers for app implementation.