Uber, Instacart, Netflix, and Grubhub — on-demand service apps have easily and sweepingly entered our everyday lives. At one point, the brand new wave of on-demand service mobile applications for iOS and Android marked a sharp change in how companies provide their services to clients. Not only is it that everyone is so busy with their careers and families that there’s not any time left on regular tasks like cooking, shopping, driving, or housekeeping. There have been a number of global social changes in the recent years which resulted in the growing prevalence of on-demand services.
These mobile apps aim to target clients who require quick and easy access to services. In response, the marketplace meets this requirement creating the ideal purchasing environment where individuals can be certain about the quality, ease, and trustworthiness of the service delivery procedure.
We have collected and analyzed the new statistical data and are prepared to present a comprehensive on-demand market landscape review followed by some basic principles of effective on-demand service app development. In this guide, we’ll also look into what an on-demand service platform is and the way this business model works, what kinds of on-demand service apps are there, and what actions you should take to create your own on-demand service application.
What’s an on-demand support app?
On-demand service apps are support platforms that connect waiting-time-sensitive clients with independent service providers or brokers. Such an app functions as a mediator between a company and a customer, permitting them to find each other in the first place and participate in a customer-provider connection on mutually satisfactory terms. These transactions are different from those in a standard employer-employee relationship. The mediation of these relationships does not fit any traditional model of cooperation . Instead, it’s a large-scale rethinking of labour laws that’s still ongoing.
These applications have gained their popularity because of their ability to satisfy with the demand of each specific individual. Besides, as the amount of mobile users keeps growing, user expectations shaped by this change also have risen so much that consumers expect to get what they want at any given moment by tapping a few times on the screen. The bar was raised so high that there’s not any other choice than comply with the criteria.
To give you a clearer image of this on-demand service market landscape, we advise you to have a look at some current data, trends, and information.
According to the National Technology Readiness Survey (NTRS,) from 2018 to 2019, the usa on-demand economy allegedly grew by 18%. Additionally, the report offered the analysis of involvement in the on-demand market by class in 2016-2019:
Another analysis by NTRS found that the amount of on-demand customers doubled from 2016 to 2018 (25 and 56 million, respectively.)
According to this research by eMarketer, the amount of smartphone delivery app users in the US will reach 53.9 million by 2023 compared to 36.4 million consumers in 2019:
Of course, we can go on with more industry-specific statistics. However, there’s in fact no requirement to do so. The upward trend is readily observed across all of the on-demand service categories. Particularly in the light of this COVID-19 pandemic, people tend to use on-demand services even more often and voluntarily. So, let’s not labour the point and learn how an on-demand service business model works.
The way an on-demand business model functions
Generally speaking, with in-built self-service, clients are free to choose which services to use or subscribe to and how much to invest in using them. Everything can be found in the entrance of a credit card or through an internet payment system.
Companies like Uber or Netflix connect those who want goods (e.g., a meal from a restaurant) or services (e.g., video streaming) with individuals who can provide them with what they’re searching for for a particular price.
Usually, on-demand service apps concentrate on a single domain area such as Airbnb that assists people find home, Lyft that offers transport, and GrubHub that allows ordering dishes. Occasionally such specialization results in 1 company launching and running numerous companies across different domains, as it happened with Uber and Uber Eats getting two different applications. In this manner, it remains relatively simple for customers to navigate through a segmented service marketplace. They always know which app to start while seeking a specific item they need, be it food, cab, home, or amusement.
An on-demand service company model can be characterized by immense delay sensitivity and large agent liberty . To put it differently, users expect goods and services to be delivered instantly. On the other hand, agents (service providers) function as independent contractors in the sense that they determine if and when to operate and get payments from the platform for each service completion.
An on-demand design enables access to a bigger pool of service providers and clients and is supposed to drive a better client experience. Therefore, on-demand service platforms are often developed in the kind of both a mobile app and a web app for users to access to what they need faster and more easily. These apps are, in turn, managed via the admin dashboard that lets you view over every single continuing and completed operation.
Forms of on-demand service apps
The essential portion of the on-demand business is knowing what people want and which way of getting it’s the most natural for them and seamless for the broker. Basically, there are 3 options. Customers and customers of a company can access services after business-to-customer (e.g., Netflix,) business-to-business (e.g., Glovo’s upcoming B2B logistics unit,) or customer-to-customer (e.g., Airbnb) model.
forms of products and services delivered within the on-demand business model frame also differ considerably. Regardless of whether it’s B2B, B2C, or C2C — the receiving party will appreciate it if the platform isn’t only capable of linking them with the supplier but can also save their time and make their life somewhat better along the way. As of now, there are numerous classes where such developments have become and proved feasible.
In a way, these classes can be clustered together to form a group of internet marketplace apps.
As a sort of eCommerce app, an internet market is an on-demand platform where service or product is provided by numerous third parties. On-demand marketplaces are per se an umbrella term that covers a whole lot of subcategories, including but not limited to:
- Consumer products: Etsy, eBay, and Poshmark
- Crowdfunding: Kickstarter, Patreon, and Gofundme
- Instruction: Udemy
- Recruiting: Really, Glassdoor
- Delivery: Instacart, Postmates
- Food: Seamless, Doordash, and OpenTable
- Transport: Uber, BlaBlaCar, and Lyft
Let us discuss a few of these classes in a little more detail.
1. ) Transport: logistics & taxi-hailing
On-demand transit is not new. Dial-a-ride has existed for quite some time and is still being used. But, technology has evolved to create on-demand transport services much more accessible to a larger audience.
That said, it ought to be said that the worldwide on-demand transportation services market is segmented. There’s distinction by type, vehicle type, and business model. Thus, we can single out apps for passenger transport and goods transport .
Of course, the discussion of this on-demand market would be incomplete without mentioning passenger ride-hailing providers such as Uber and Lyft. Such on-demand companies can adequately compete with conventional cab companies, which makes the latter rethink how they provide their services and how to enhance the customer experience. With cab e-hailing platforms, individuals are free to purchase a ride anytime and nearly anywhere. Moreover, what makes on-demand ride-hailing businesses stand out is their comparatively larger fleet size, wider reach, higher degree of flexibility, agility, and investment capabilities.
It isn’t as cut and dried in the case with logistics on-demand applications as it is with passenger transport apps. On-demand logistics is an extremely controversial sector. Tellingly, both industry-leading providers UberRUSH and Shyp both finally decided to shut up shop rather than fighting to stay afloat. The on-demand logistics market has a lot of pitfalls. Transportation services are complicated, and there are lots of things to consider when working out the logistics: fleet maintenance, labour pool training and development, goods handling, order tracking, and much more.
So no wonder that startups feel somewhat unsure about trying to be successful by operating in this industry segment. On the opposite side, people who do choose to test will face little to no competition.
2. ) Food & grocery delivery
The on-demand delivery model is here to stay, and the continuing success of on-demand food & grocery delivery apps demonstrates the point. In April 2020, the international Google searches for”food delivery” sky-rocketed, reaching new heights. The pandemic crisis has changed how people get food and groceries.
The food & grocery delivery industry is undoubtedly among the most common on-demand service categories. And its popularity hasn’t been as predictable and constant as it’s now. As an example, according to Statista, as of March 2020, the U.S. market experienced considerable growth in grocery delivery app downloads on account of the coronavirus pandemic. In addition to it, based on Brick Meets Click/Mercatus Grocery Survey, U.S. online grocery sales reached $7.2 billion in June, which is a 9% increase over May. 45.6 million families used pickup and delivery services in June 2020 compared to 16.1 million in August 2019.
That said, the increased prevalence also means a greater competition rate. Nevertheless, it isn’t a bad thing in the end of the day. Online grocery shopping and food delivery app providers’ progress shouldn’t dissuade you. On the contrary, it should motivate you to take advantage of what others have already tested and proved effective and launch your own item, adding a twist to its feature set. Thus, among the food & grocery delivery best practices is to produce various products for clients, delivery people, shop managers, and admins.
Apps like UberEats, GrubHub, Instacart, Glovo, and Postmates show that clients need an on-demand shipping service to receive groceries out of their favorite grocery stores and food from their favorite restaurants without leaving home. It means on-demand food & grocery delivery is extremely likely to remain popular among clients, therefore we have to say more advancements in this industry are yet to come.
3. Healthcare & telemedicine
Whether you can not find time to find a doctor, you’re in a far-off place, or you do not wish to expose yourself to the coronavirus, on-demand healthcare service apps are there to assist you.
The telemedicine industry is fast growing now, continuously embracing the most up-to-date technology to guarantee the end products’ high quality. Telemedicine apps are also referred to as doctor on-demand applications, which means their primary aim is to safely, securely, and seamlessly connect people looking for medical consultation with medical professionals capable of supplying it.
Using on-demand apps like Zocdoc, Healthtap, Doctor on Demand, and LiveHealth Online, an individual can discover needed specialists, assess their evaluations and certificates, schedule appointments, and receive consultations online with a video call. Calling a doctor on-demand isn’t the only characteristic of telehealth apps. Such apps may also be convenient for remote patient monitoring, collecting health information, asking a physician visit, wireless testing, prescription tracking, and more. The entire potential remains to be discovered.
What can be said with complete certainty is that for on-demand healthcare apps to become valid, they need to comply with all applicable laws and regulations, such as HIPAA, GDPR, and MDR. A complex regulatory environment isn’t the only challenge, however. The growing competition and issues related to health insurance policy direction can stand in the way of your aspiration to make healthcare available on-demand to anybody who possesses a smartphone or a PC.
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4. ) Fitness
Regular workouts are an essential component of a healthy lifestyle. In 2020, fitness apps can go above and beyond, providing you with highly personalized on-demand physical fitness services. The data on trends in the fitness industry illustrate the truth of the statement:
First of all, a personal trainer right in your smartphone or an extensive selection of home/gym workout programs in the reach of your fingertips is convenient. Then, it is going to be harder to keep finding reasons to postpone your hitting the gym.
The on-demand version is truly changing how the fitness industry functions. With an on-demand exercise app, clients can ask both online and onsite training guided by a fitness expert of their choice. Just imagine your own personal trainer comes to your living space and you say you don’t feel like squatting, or you schedule an internet workout but don’t show up. That’s rude. It’s a real commitment, and you should most likely be prepared right away for your own exercises.
Online fitness marketplaces are all set to benefit both users and trainers requesting a workout. You’ll also have access to all additional perks inherent in the on-demand business model like flexibility, reliability, simple booking and payment, evaluations, and reviews.
5. ) Beauty
Mobile beauty apps are also starting to provide on-demand services to customers. Needless to say, it was possible to invite a wonder master to your house before the pandemic. But this all is getting into a whole new level.
Beauty-on-demand has all opportunities to turn out a successful investment. The year 2020 has begun the disruption of brick & mortar spa and beauty salons. Beautystack, BeYou, and Soothe are just a few on-demand beauty support applications for reserving stylists and therapists. People still need to invest in quality private care. It’s simply the format of this booking and supplying of the care that has changed.
Using at-home salon beauty solutions, selecting a beauty professional to complete a makeover for a particular event, obtaining beauty products delivered to one’s house, booking an appointment at a beauty salon or spa facility, or obtaining any other skincare and health services in the comfort of someone’s home — beauty-on-demand apps provide these services currently today!
So, why not take advantage of what the industry offers, save time, and decrease the probability of exposure to the coronavirus by appreciating one’s preferred beauty and health services at home? After downloading the app, the user normally can easily book a neighborhood beauty professional choosing from one of the choices listed on the app. After the booking is confirmed, a stylist sees the customer, they arrange the time and location for the appointment where the selected services will be implemented.
Entertainment-on-demand is flourishing. The introduction of on-demand streaming services such as Netflix and Amazon Prime has radically changed how people would rather watch TV shows, TV series, documentaries, and films.
Nowadays, numerous video-on-demand providers compete for prospective clients’ business, while new ones introduction increasingly more frequently. The amount of on-demand customers keeps growing accordingly. As an example, according to Statista, in the 3rd quarter of 2020, the amount of Netflix paid subscribers globally attained 195.15 billion.
However, the competition in this sector is fierce. Not all video streaming startups succeed. A number of them suddenly fail. This is just what happened to Quibi, a startup that raised $1.75 billion but failed only 6 months after it debuted in April 2020. So, there are plenty of examples to look around and learn from. Success is delicate when it comes to video-on-demand services. 1 way or another, individuals need entertaining content tailored to their tastes, and in the end of the day, an individual can never know what idea can turn out another Netflix.
7. Home services
Online on-demand home services are forecast to grow by over USD 1.5 billion in 2020 to 2024.
All on-demand national services can be categorized as follows:
- House cleaning & repair services
- Packing and moving
- Pet care
Online on-demand home service apps can grant users access to a huge pool of registered professionals that will look after their houses, kids, and pets. Customers require a simple tool for reserving cleaning and other home services online. This instrument should also enable price comparison, guarantee every contractor’s authenticity, and allow checking out reviews and evaluations. Such a requirement has given rise to a lot of new online home services emerging in the form of both web and mobile apps. Also, users can choose to request help from an independent organization that uses workers directly or decide on a marketplace that acts as a mediator linking clients with specialty contractors.
How to construct a successful on-demand service app?
On-demand service apps differ a lot. With a ride-hailing app, we maintain our expectations not too significant. If the driver arrives at time, does not get lost, and the vehicle is clean, the service quality could be considered fine. However, there are far more elaborate services such as babysitting, medical information, a facial, or a haircut that require a higher degree of expertise. Then it will not suffice if a random person shows up to do some of those things. We expect an expert in their area to take good care of us.
One way or another, there are still different basic principles, based on which all on-demand service apps for Android and iOS are being assembled. We suggest you should take these five steps to make your successful on-demand service application:
1. Choose a niche. Your newfound expansion capacity can go beyond the categories we mentioned previously. There’s more to explore in the world of on-demand services. So, keep your options open and don’t concentrate on the region in which other companies have already discovered their achievement. Find your own specialty but bear in mind that it is not enough merely to fill the market. This niche must be full of a product that people will love, the one which will make their lives better. Be sure the end-product Reliable, user-friendly, and accessible at all times.
2. ) Start locally. Start small, think big, they say. This is exactly the case when you need to follow the advice. It’s always wise to research and research first before you commit entirely to the enterprise. It’s wiser to correct the defects and take your time to tie up loose ends when there isn’t too much at stake. Operating locally, you’ll be more inclined to have things under control — be it recruiting new builders, logistics management, professional training, marketing, or app upgrades.
3. Define your target audience. Knowing who’s that specific person your ceremony is set to profit from is vital for your business success. It actually isn’t essential if you think that your app is flawless. Your audience has to be convinced of it. Always create a product with the end-user in your mind. And the amount of attempts that you demonstrate the efficacy of your on-demand service app to the prospect user is quite limited. Do thorough market study, conduct beta testing, and remember to look through our informative article about what mistakes to avoid in your advertising campaign.
4. ) Establish a pricing strategy. Finding the ideal pricing strategy is your top priority for any for-profit enterprise. For many on-demand service apps, it’s the supplier who places the pricing, while in a classic on-demand marketplace, sellers specify their own prices, and you may just charge a service fee. But when it comes to money, the chance you will make a blunder is always there. The most dangerous strategy is to price too high. Do not be greedy. It can make you incapable of fulfilling the competition and undermine all the efforts taken to make the app.
5. ) Choose the functionality. Sure thing, the performance of a beauty-on-demand app will differ from the one in a telemedicine application. Besides, you will likely have to make an app for clients, an app for service suppliers, and an admin panel, which require different capabilities. Nonetheless, there are some basic features that any on-demand service app will not do without.
- User registration and consent. App users need to be able to easily make and install their profiles. It will give you essential behavioral information and permit customers to see registered brokers’ detailed profiles.
- Product or service search, filters, and lists. Filters, lists, and catalogs help users browse the app and spend less time trying to find an perfect specialist.
- Map integration and live delivery monitoring. with the assistance of geolocation services, clients and independent service providers will have the ability to look at each other’s whereabouts and therefore learn the estimated time of arrival.
- Shopping cart and order summary. Can it be an appointment with a physician or stylist, today’s lunch, or a ride, clients need to have the ability to review their purchase, alter it, cancel it if desired, and confirm the information.
- Payment methods integration. Having multiple strong payment gateways is essential for any on-demand service app. Ensure it’s easy and secure for app users to pay for services and that agents face no problem when retrieving the money.
- Ratings and testimonials. This attribute is mandatory for any app that’s supposed to function as a place where service providers and service recipients fulfill. By assessing reviews and ratings, clients can make an informed decision and finally have a more satisfying experience.
Some of the most revolutionary electronic products introduced to the marketplace over the past years are on-demand service apps. Fortunately, there’s still a great deal of space for new entrants and tons of markets left for in-built service apps to fill. Delivering service directly to individuals who want it can actually change lives for the better.
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