How Blockchain Can Make the Online Food Delivery Process Reliable and Decentralized?

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Next, to the on-demand taxi booking industry, the one that is functioning smoothly with millions of users is the online food ordering and delivering. It is also famous among entrepreneurs because of the business model. The initial capital is very less in this business and there are so many things to experiment.

Similar to the taxi industry, the food delivery industry also suffers from centralization and lack of transparency. Even with a 20-25% commission for every order, the food delivery business is not achieving the potential growth.

So, this cannot be solved without technological intervention. I hope blockchain tech can eliminate the problems in on demand food delivery and can form a decentralized food delivery network.

Before going deep into it, let me explain the working of online food ordering and delivery.

In a typical food ordering app, you register name, address, and location. Next you log into the app and search for the restaurant and add food to the cart. And finally, select the payment method and order the food.

Now, the order is assigned to a particular restaurant. The restaurant cooks the food and in the meantime, the food app company assigns a delivery partner to the restaurant. The delivery partner picks the food and uses the map to deliver it to the customer.

If you see very closely, starting from sourcing the material in the restaurant to delivering the food to the customers, a supply chain is formed.

Now we can see the problems in online food delivery and how blockchain can eliminate it.

Unreliable Supply Chain

When a customer order food using the app, he/she doesn’t have any idea about the hygiene conditions while making the food and also the quality of the food delivered. The same is with the restaurant, they don’t know the quality of the material they use for making the food.

This problem can take a huge toll on the food ordering business. The trust factor of the user comes down when they find that the quality of the food ordered is compromised. An unreliable supply chain is the reason for this.

With this abysmal supply chain, even the food ordering app company cannot check the state of the food delivered.

Blockchain tech uses smart contracts in the supply chain. A smart contract is a computer program that directly controls the transfer of data between parties under certain conditions. Each stakeholder in the supply chain can update the information about the food in a digital ledger. The smart contract works automatically by matching the data in the ledger with the already present standard data.

For example, the supplier of raw materials can update the quality and price in the ledger. The restaurant owner, in turn, can assure the quality of materials by using the output data from a smart contract. The same applies to restaurants. The app admin can verify the quality of food being delivered using a smart contract.

Using blockchain tech, a certificate of excellence can be given to the food delivered.

Abysmal Commission for the Delivery Partners and Restaurants

On average, a food delivery app company takes around 20-30% as commission for each order. The commission is proportional to the no. of people in the supply chain.

Even then the delivery partners and restaurants are provided small commission by many food delivery app firms.

By bringing blockchain, the third party app owner is replaced by the restaurant owner. This improves the overall business efficiency and higher commission for the delivery partner and the restaurant.

Security Check and Verification

From the admin and customer point of view, the credibility of the delivery partner and restaurant is important. Here blockchain uses smart contract to automatically verify the documents and licenses for both the restaurant and delivery agent. In case of any discrepancies in the documents, the admin is alerted.

Even during cashless payments by the customer, the process can be made relatively easy and simple using blockchain which was otherwise cumbersome and complex.  

Apart from it, B2B payments between admin and restaurant, restaurant and material supplier, are made fast with added security. Normally B2B payments attract high processing fee and unnecessary time delay. This is not the case with blockchain applied payment system.

All the B2B transactions are done using smart contracts which works automatically to verify the data.

While the applications of blockchain are not limited to what I said above and still researches are going in this technology. Online food delivery startups even after getting 20-30% commission are not running sustainably. With blockchain in payment system, B2B transaction, and food sourcing and delivery, the overall cost is reduced and this will definitely lead to sustainability in this business. So, blockchain is a safe bet.

SpotnEats is a leading Ubereats like online food delivery app clone script. We have helped many existing restaurants and new entrepreneurs with our solution and most of them are satisfied with it. We always apply the latest technology to our solution and that said, we are working hard to apply blockchain in SpotnEats solution.

If you are keen to get our solution to run a food delivery business or want to upgrade your restaurant with our solution, we are ready to work with you. Please send all your doubts and queries to hello@spotneats.com. You can also speak directly with our business executive regarding your need. Please connect with our expert team at Whatsapp .

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About the author

Steven Smith

I am working as a Senior product developer and have developed and delivered Web and Mobile products for numerous clients.

By Steven Smith