The food delivery industry is booming providing a brand new side hustle idea to make money. Gone are the days when food delivery was limited to pizza and Chinese takeout. Although the traditional model (phone orders) still accounts for over 90% of the market share (source), digital technology is reshaping the market. As more customers become accustomed to online shopping through apps, they expect the same level of convenience when it comes to ordering food. The move has created new avenues for people to earn income through food delivery apps like Uber Eats, Deliveroo, Door Dash and many more.
Can you earn money through food delivery apps? You can make money from food delivery apps. Depending on your number of deliveries, customer location, time, tips and a number of other factors, food delivery apps generally pay drivers the equivalent of the minimum wage to around $20 per hour. Every platform has different payment processes and policies. You also need to consider expenses.
In this guide, we uncover the online food delivery market and the way you can leverage it to make money. We will focus on three major apps (Uber Eats, Deliveroo, and Door Dash), how each app works, what you need to do to get started and help you determine the best app that can help you earn some income. Let’s get started.
This is more of a side hustle idea than a passive income idea since it is hard to delegate, automate or outsource. Check out these money-making ideas that can be made passive here.
Quick Comparison of Uber Eats, DoorDash & Deliveroo
This information may not be entirely up to date depending on changes on each platform. Be sure to carry out due diligence before signing up to any of these platforms.
|US, Canada, South America, Asia, the Middle East, Africa, and Australia.||North America (US and Canada)||UK, Europe, Asia Pacific, the Middle East, and Australia.|
|App Platforms||Android and iOS.||Android and iOS.||Android (V.5+) iOS (V.10+).|
|Must be above 19 years old, own a valid driver’s license. Have no major driving violations.Have less than three incidents in the last 3 years etc. Must pass vehicle inspection. Fully insured in your name|
It cannot be a full-size van etc.
|Must be above 18 years old. Own a valid driver’s license. Have no major driving violations. Have less than three incidents in the last 3 years etc.||Be at least 18 years old. Own a smartphone|
Have proof of the right to work in your country. Have automobile and food delivery insurance.
Have safety equipment e.g. helmet, reflective jacket etc.
|Driver Earnings||Payment For Picking Up Order|
Cash for Dropping Off An Order. Distance Travelled x Local Area Rates. Duration of Time it took to Deliver. Inclusive tips
|Guaranteed minimum per hour in some areas. Standard model that pays drivers $1 for each trip plus the estimated profits generated for that order. DoorDash only takes a 20% commission. Offers a referral program and promo codes which allows drivers to earn extra cash|
100% of tips earned
|The amount per delivery is indicated on the app. It usually about $6 to $10 ($3 pick-up fee, $2 delivery fee, $X variable distance fee, plus incentives during peak times)|
Drivers can earn $1 to $2 more during peak hours between 11am to 2pm and 5pm to 9pm, and in certain locations. 1% of the total tips earned
|Payments||Weekly payments via Instapay.||Pays out on a weekly basis or at any time via ‘Fast Pay.’||Weekly payments every Tuesday.|
|Delivery Hours||Drivers can accept pickups any time of the day.||Because of the many peak periods during the day, DoorDash schedules Dashers to ensure drivers are available.||There are no minimum requirements on how many hours you need to work|
|Income||Flat pickup fee, flat dropoff fee, distance and time fee that vary. Uber provides an example where you can make $8 for an order here.||Varies based on minimum fee, customer tips, and extra earnings. They provide an example for $10 here (USA & Canada).||No example on their site. Varies depending on time, surcharge fees, number of orders etc. No example provided on their site.|
This driver explains how he makes $500 per week with DoorDash.
So a driver who carries out the work effectively and regularly a couple days per week could expect to make at least $500 per month after deducting expenses.
Food Delivery Models
Currently, there are two online food delivery solutions, namely:
- Restaurant-to-Consumer Delivery – delivery of meals is done directly by restaurants to their customers who make an order via platforms or through the restaurant website.
- Platform-to-Consumer Delivery – this model provides customers with meals from other/partner restaurants that don’t necessarily have to do the delivery themselves. Instead, they outsource delivery services through apps/platforms like Deliveroo.
Food Delivery Market Stats & Projections
According to mckinsey.com, the food delivery market is currently valued at €83 billion (or about 91B USD). As online shopping becomes more popular (source), customers are also becoming accustomed to shopping for their food online. Many restaurants and food businesses are leveraging on this to enable their customers to benefit from the convenience these apps offer.
Global revenue from food delivery stands at $107M in 2019 (source). With an annual growth rate of 9.9%, it is expected to reach $156,8M by 2023. Platform-to-consumer delivery is the largest segment with a market volume of $53,7M and is expected to serve over 800 million customers worldwide by 2023 (source).
According to the Financial Times, DoorDash became the most popular food delivery platform in the US followed by Uber Eats. Deliveroo is also assuming a significant position in the market, especially after tech giant Amazon, invested in its operations (source). You can sign up on two or more apps. For example, you can sign up on Uber, Uber Eats, and Door Dash to boost your income so long as they are supported in your location. In this guide, however, we will focus on Uber Eats, DoorDash, and Deliveroo. Let’s have a look at each platform and how it works.
Let’s have a look at making money using Uber Eats.
What is Uber Eats?
Uber Eats is a subsidiary company of Uber that was launched in 2014, based in San Francisco. The online food delivery platform operates separately from Uber, delivering food in over 200 cities in 20 countries as of November 2018.
According to Forbes, the Uber Eats service had passed over 46,000 restaurants in 2017, more than double the number served in October 2016. The company’s largest market share (over 60%) is in the US but it has expanded her operations to major cities in Europe, Africa, S. America, Asia, and Australia & New Zealand (source). The company also started testing deliveries by drones in Summer 2019 (source).
How Does Uber Eats Work?
The platform uses an app (for both Android and iOS) for all its operations. Using the app, customers can browse menus, make orders, and pay for meals from listed restaurants (e.g. McDonalds) that do not offer delivery services of their own.
Once you place your order, the driver picks your meal from the restaurant and delivers it to your designated location (source). You can add special delivery instructions before you confirm your order and tip your delivery partner after delivery. Delivery is made by couriers using cars, bikes, or by foot (source).
Becoming an Uber Eats Driver
The process of becoming an Uber Eats river varies greatly from one city to another, so make sure to view your local Uber guidelines. The most basic requirements for potential drivers are a qualification to drive and setting up a driver account. Make sure Uber Eats is available in your city before getting started. You should also be at least 19 years old (21 in Canada), with a clean driving history and at least 1-year driving experience. (source). Depending on the vehicle you choose, there are various requirements it should meet including:
- The year of make should be 1999 and above
- Fully insured in your name
- Have proof of work eligibility in your country
You will need to sign up on the Uber Eats website and go through the entire application process. Upon completion, you need to wait for your application to be verified. The verification depends on your location but it usually takes about 24 hours.
How Much Money Can You Make as an UberEats Driver?
Like most ridesharing ideas, earnings from Uber Eats vary from person to person. Like Uber, you get paid weekly via InstantPay. In the UK, for example, the company offers different rates e.g. pick-up (£1.40), drop off (£1.10), and per mile (£1.50) (source).
Your income also depends on the vehicle/mode of transport you use. A service fee is applied to bicycles (30%), scooter (25%), and car (25%) (source). On top of your income, you also earn and keep 100% of the tips you receive from customers. On average, you earn $8-$12 per hour as a driver after factoring vehicle expenses (source).
Let’s have a look at making money using DoorDash.
What is DoorDash?
DoorDash is an on-demand food delivery service based in the US and founded in 2013 by Stanford buddies Stanley Tang, Evan Moore, Andy Fang, and Tony Xu. Like Uber Eats, DoorDash uses an app or online platform to pick up meals and deliver them to clients’ doorsteps. As of 2019, DoorDash had expanded its services to 56 markets and over 600 cities in the US and Canada (source). As of June 2019, DoorDash overtook Grubhub to top the list of the leading food delivery service in the US (source).
How Does DoorDash Work?
Through the app, customers place an order from many restaurants listed on the platform and have it delivered at a designated location. Once an order is placed, a driver/ ‘dasher’ picks it from the restaurant and delivers it to the customer. Clients can pay and tip via the app, making it more convenient and secure.
Becoming a ‘Dasher’ DoorDash Driver
To become a dasher, you have to meet certain criteria including:
- Must be above 18 years old
- Have a smartphone
- Own a valid driver’s license
- Have no major driving violations
- Have less than three incidents in the last 3 years
If you meet the above criteria, among others, you can go ahead and sign up as a driver on the platform. Ensure that DoorDash is available in your city before signing up. Here’s a list of the cities where DoorDash currently operates.
A background check will be done on you before your application is approved. If you pass the application process and background check, your application will be approved. On the app, you will get notifications of requested deliveries that you can pick and deliver to the desired location using a car, bike, scooter or even on foot (source).
How Much Money Can You Make as a Dasher?
Dashers make a base pay of $1 for every delivery plus 100% of the tips given by customers (source). However, the base pay may be more than $1 for large deliveries. Your total earning must never be less than your guaranteed amount and if they are, DoorDash will make up the difference (source). Your guaranteed minimum is the amount including tips indicated when you are offered a delivery. It is based on various factors like order size, driving distance, wait time at the store, parking, etc.
Let’s have a look at making money using Deliveroo.
What is Deliveroo?
Deliveroo is an on-demand food delivery service founded in 2013 by partners Will Shu and Greg Orlowski. It is headquartered in London, UK and runs operations across 200 cities in Europe (UK, Netherlands, Belgium, France, Italy, Spain, Ireland) Middle East (Kuwait, UAE), Asia (Hong Kong, Taiwan, Singapore), and Australia (source).
According to the Financial Times, Deliveroo collaborated with tech-giant Amazon for $575 million in May 2019. The company stated that the funds would be used to invest in tech, grow its portfolio, and offer more choices to customers making it a popular food delivery service in the region.
How Does Deliveroo Work?
Customers place orders from restaurants using the company app or website and have them delivered to a designated location by self-employed bicycle/motorcycle couriers. Thousands of independent restaurants and popup kitchens are listed on the app and website with menus that customers can choose from (source). In November 2016, Deliveroo closed a deal with beer-giant, Heineken, to deliver beers and ciders across 15 sites in London, Cardiff, and Bath (source).
Becoming a Deliveroo Rider
Deliveroo riders primarily use bicycles, motorcycles, or scooters to make deliveries. To become a Deliveroo rider, you need to:
- Be at least 18 years old
- Own a scooter, motorcycle, or bicycle
- Own a smartphone
- Have proof of the right to work in your country
- Have automobile and food delivery insurance
- Have safety equipment e.g. helmet, reflective jacket etc.
If you meet the above criteria, among others, you can go ahead and sign up as a rider on the platform. Ensure that the service is available in your city before signing up. A background check will be done on you before your application is approved. If you pass the application process and background check, your application will be approved. On the app, you will get notifications of requested deliveries that you can pick and deliver to the desired location.
How Much Money Can You Make With Deliveroo?
Like most delivery services, working with Deliveroo can earn you between $8 and $20/hour depending on how busy your schedule is (source). The delivery fee ranges between $3 and $4 but depends on factors like distance, time, size of the order, and time of the day (source).
The company offers a minimum order guarantee for certain areas, which means that you are guaranteed to receive a certain number of orders per hour from the designated area. If the orders are less than the guaranteed minimum, the company tops up the deficit.
Deciding Whether This Business Works For You
Compared to other passive income ideas like Laundromat, Food Truck, Self Service Store etc., food delivery apps/side-hustles do not require a huge financial investment to start. For the three food delivery services, all you require is capital to buy or maintain a delivery vehicle (car, scooter, motorcycle, or bicycle), smartphone, safety equipment, and to pass the application process.
One important thing you should consider is whether the service is available in your city before you get started. For example, Uber Eats is available in most cities across the globe, DoorDash is predominantly found in cities around the US and Canada whereas Deliveroo mainly serves Europe, the Middle East, Australia, and parts of Asia Pacific. If the service is available in your city and you match the criteria required, you can go ahead, sign up, and become a delivery rider/driver.
Boosting Your Revenue
Like any other idea, identifying a niche in your food delivery service goes a long way in boosting your income. The companies have already dealt with most niches like exceptional customer service, timely delivery of orders, and fair pricing but you can cash in by improving on these niches and optimizing your workflow.
If you are an Uber Eat driver, for example, you can capitalize on cheaper deliveries by ditching your car and using a scooter or bicycle for short-distance deliveries. This helps you deliver your orders faster by beating traffic and is cheaper because it eliminates gas and parking fees – the main factors that determine the final fee paid by your customer.
As a Dasher or Deliveroo rider, you can capitalize on customer service by investing in equipment that keeps food hot for longer (since you use a bike or motorcycle) to deliver your orders. You can also capitalize on customer service by being extra polite to customers and offering different communication channels for your customers to reach you.
Another way you can create a niche is by signing up on two or more food delivery services available in your area (e.g. UberEats and DoorDash). Some restaurants may be unavailable on one app and listed on another. If a regular customer wants a meal from an unlisted restaurant, you can ask them to find you on the other app, order, and wait for you to deliver it. That way, you improve customer service, grow & maintain your loyal clients, and earn more income in the process.
Budgeting For a Successful Delivery Service
The initial investment you need to get started depends on the food delivery service you choose but it is equal across the three services. Our ideas in this guide are general, but the answers to your questions will vary depending on your location. Here are some general expenses associated with this business.
You must own a delivery vehicle and equipment if you want to work for any of the three food delivery services. Although some services will offer you delivery equipment once your application is approved, it is important to invest in other equipment that can help you work better.
Regardless of the food delivery service, your delivery vehicle will be a car, scooter, either motorcycle or bicycle. All companies require you to fully own a vehicle that is not too old (preferably 8 years or less) and a permit to drive it in your country, state, or city. Choose a vehicle that is within your budget and efficient depending on your location.
For example, if you are located in a major city, a scooter, motorbike, or bicycle is a better option to help you beat traffic and save on gas. If you are in the suburbs, a small, fuel-efficient car can work well for you. Better yet, if you can afford to own a car and a (bicycle, scooter, or motorbike) it is prudent to have two vehicles to improve efficiency. A car can cost upward $5,000+, an electric kick scooter $600+, an electric a motorcycle $1,000+, a motorcycle $3,000+, and a bicycle $100+. The final cost will depend on the brand, the year, the make, and if it is used or new etc.
Most companies will ship delivery and safety equipment to you once your application is approved. Some may have you pay for it so be attentive to this. Some of the delivery equipment includes hotpots to keep food warm, freezers for cooling, and a packed bag to carry your orders. Safety equipment may include helmets & reflective jackets for riders, biker’s uniform, and knee & elbow protective pads etc. You can invest in any other equipment that you deem essential to boost your efficiency, for example, a phone holder and a mic which can help you communicate with your clients while on the road.
Making money with delivery apps require you to have a smartphone. You receive and respond to client orders using a smartphone (either android or iOS). It will cost you between $50 and $1,000+ to own a good phone to get started. Make sure your phone is compatible with the food delivery service app. For example, if you intend to work with Deliveroo, your android smartphone should be version 5 & above and iOS version 10 & above for an iPhone (source).
You need to take an insurance policy for your vehicle as well as a food delivery insurance in some cities. It helps you stay covered against any risks that would attach while on duty. Insurance premiums vary with the location so it is best to consult a qualified insurance agent for more details.
Like every business, you will need to file tax returns from your food delivery earnings. Tax obligations differ with location and can be complicated so it is best to consult your certified accountant to find out the taxes you are liable to pay. Check with them before signing up to be sure to have peace of mind before getting started.
Promoting Your Delivery Services
Like most ridesharing side hustles, your reputation depends on customer reviews. You can promote your service by offering exceptional services to clients like timely delivery, fair pricing, or offering deliveries from two or more services. So long as your services are 5-star rated, you can be sure to grow your clientele with time. You can also promote your services through family, friends, colleagues, or through your social media accounts.
Enjoying Your Income
Food delivery apps are more of a side hustle than a passive income idea since it is a very active endeavor demanding you physically deliver goods to others. However, it is a very flexible side hustle and you don’t have to quit your day job to work as a food deliverer. In fact, many people use food delivery apps to supplement their income (source). You can boost your income by signing up on different food delivery apps operating in your location. If you have a day job, you can earn more by delivering meals at night when clients generally place larger (more expensive) orders. Make this more passive by optimizing your routes and reducing your costs will offering quality customer service.
How Passive is Working for Food Delivery Apps?
This is a side hustle since it is a more active income. However, it is very flexible and you can work during your free time or on weekends depending on your schedule. You don’t have to quit your day job to earn passive income with food delivery apps. So long as you enjoy it and have the necessary equipment to get started, it can be a lucrative way of earning some extra income.
Food delivery apps are scalable by location, orders, and customer base. If you are located in a densely populated area with many restaurant options, you can cash in on a variety of customers. The more orders you deliver, the more income you make. Since this is a side hustle, you will still be limited by the number of deliveries you can physically make. Check out these ideas that can eventually be made more passive.
Compared to ideas like food-truck, Laundromat or self-service stores, starting food delivery service with apps is a cheap or even free idea. You only need to have a reliable vehicle, basic equipment, and a couple of accessories that are usually provided by the delivery companies to get started. Take note that some companies may charge you for their equipment. Be sure to read up on this before getting started.
This side-hustle idea is extremely easy to start and run. So long as you pass the application process and maintain company policies, it requires almost no experience.
Once your application is approved, you start earning income when you deliver orders. With time, you can optimize your routes and earn more money.
Compared to ideas like food-truck, Laundromat or self-service stores, starting food delivery service with apps is a cheap, and is sometimes a free idea. You only need to have a reliable vehicle, basic equipment, and a couple of accessories that are usually provided by the delivery companies to get started. Take note that some companies may charge you for their equipment. Be sure to read up on this before getting started.
People will always eat so this idea is not affected by seasons. As the world population grows, the demand for food will rise. This makes it a viable idea for a person looking to earn income all year round. You may have to be aware of seasons for yourself depending on how you like to travel. For example, if you are in Toronto and like to deliver by bike, this may be more difficult in the middle of Winter. Be aware of these seasonal factors that may slow down your ability to deliver quickly and efficiently.
Return on Investment
Depending on your number of deliveries, customer location, time, tips and a number of other factors, food delivery apps generally pay drivers the minimum wage to around $20 per hour. Since this is a very active idea that most often does not have a minimum wage, your income depends on your effort. The more you do the more you make. However, this is active, not passive income. If you want to make passive income, check out these ideas.
Which is the best food delivery app? The three apps are viable side hustles and there is no one that is better than the other. It all depends on what is available and popular in your area. Choose the one that offers the options and rates that match your preference. Also, be sure to read their policies and to agree with them.
How can I boost my food delivery income? You can earn more income from food delivery apps by signing up on two or more food delivery services, so long as they operate and are popular in your location. This can help you gain more clients by accepting more orders, optimize routes and ultimately boost income.
How much can you make with food delivery apps? Depending on your number of deliveries, customer location, time, tips and a number of other factors, food delivery apps generally pay drivers the minimum wage to around $20 per hour. Every platform has different payment processes and policies. You also need to consider expenses.