City Taxis has teamed up with 20 eateries and two ‘dark kitchens’ - which only cook takeaways - to create ‘City Grab’.
Established restaurants Ashoka and Elif on Ecclesall Road, as well as newcomer Kommune, have already signed up to the project which will see City go head-to-head with global giants such as Deliveroo.
The Students’ Union at the University of Sheffield is already using the service via an app called ‘Food Union’ with officials hailing its ‘buy local’ ethos of using independent eateries - including the union’s ‘Bar One’ and ‘Interval Kitchen and Bar’ - and drivers who work for a Sheffield firm.
City Taxis boss Arnie Singh said: “If you have got stuff to move fast, that’s where we come in. We have resources that are pretty under utilised.”
Business development manager Paul Gosney came up with the idea after figures showed City cars have capacity do to more journeys, he added.
Consumers pay the taxi fare on top of the food bill.
City also charges restaurants 15 per cent of the food bill, less than the 35 per cent charged by other firms, Mr Singh said.
He added: “We deliver further and faster because we have the cars and the network.”
The firm, which spent £250,000 on the technnology, aims to franchise it in 20 cities over the next 15 months, he added.
Twenty restaurants in each city doing 50 jobs a week adds up to 1m jobs-a-year.
Mr Sing said ‘City Grab’ could also be used to deliver drinks to bars and pubs that had run out of stock and they were investigating delivering prescription drugs from pharmacies to patients and urgent orders for clothes.
City has 1,500 self-employed drivers in Sheffield, some 450 have registered for the new service.
In recent years the firm bought rivals in Sheffield, Rotherham, Barnsley, Chesterfield and Derby in a bid to stave off competition from Uber. Mr Singh led a management buy-out at the company a year ago.