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A Comprehensive Guide to Developing a Mobile App For On Demand Economy in 2020

4162 Views | 1 min | Published On: September 21, 2019 Last Updated: May 8, 2020
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A bubble or an evergreen trend – what do you mean by On demand Services or Economy? Well, the question disturbed many but the answer is right here now. On demand economy is booming and is here to stay.

As per the Harvard Business Review, it is each year attracting more than 22.4M customers, and the spending is about $57.6B. And, if we look at the marketplace, online markets are spending the most with 16.3M users who on average spend $36B each year while shopping online.

But, what is going to be the state of On demand economy in 2020 and in the years to come! The answer is quite simple.

“The economy is getting better, becoming popular,  and spreading in the world like fire!”

Planning to step-in it? Let’s first analyze what will be the on demand economy in the years to come.

What Is On Demand Economy?

You name it – just tap it and have it. 

That’s exactly the working model of billion-dollar on demand economy. It is defined as the technological trend created by tech-savvy companies that satisfy the demands of consumers via instant provisioning of services and products. For example: 

  • Transportation of Product or People (Uber, GrubHub)
  • Finding Work via Marketplaces (Upwork, Fiverr)
  • Renting Out Space (Airbnb)
  • Providing Other Services in a Tap (Urbanclap, Wonolo).

By revolutionizing the behavior of users in urban communities around the globe, the number of On Demand Services, classifications, and the development of the industry is growing at a fast pace.

According to the business wire, around 7.6M Americans will act as suppliers in On demand economy by 2020. However, this is only one validatory insight that demonstrate how on demand disruptors like Uber and Netflix have brought forth a market that both users, as well as investors, are loving with all their hearts. 

What began with an on demand taxi application has now expanded into various diverse market segments ranging from real-estate, grocery delivery, home services, beauty, cosmetics, doctor and much more.

The current state of on-demand application startup economy is becoming aggressive to such an extent that no matter what industry you explore, you will find a well-established on-demand company fulfilling the needs of customers.

In spite of all this, there are companies or entrepreneurs that are still going back and forth when entering this million dollars on demand economy. And the reason behind this is the misconception that the on-demand economy is a bubble that is now going to burst.

However, it is just a misconception. Here are a few stats to prove the same:

  • On-demand Consumers Spend $57.6B Annually

The on demand application economy is attracting over 22.4M consumer every year to spend around $57.6 billion to get services when they desire and they are happy spending a little extra money for the same.

  • 51% of Retailers are Offering Same-Day Delivery Service

Because of these buying preferences, numerous retailers have also entered the On-demand economy to offer speedy delivery services. A result is that the number of retailers putting resources into On demand has developed from 15% to 51% by 2018 and this number is expected to hit 65% by the end of 2019.

  • On-Demand Food Delivery Market Is Expected to Hit $161.74 Billion by 2023. 

While the disruption started from the transportation industry, it has covered every other industry under its hood now. According to statista, on-demand food delivery market is expected to hit $161.74B by the end of 2023. Food Delivery Apps like DoorDash Getting $600M Funding is the Proof.

On-Demand Economy - The Super Power With Many Stars






With this, we now know how on demand economy is all set to be the leader of the business world – making real-time availability an essential element of every business vertical in 2020.  Let’s now put the spotlight on how these on-demand services work and what is the common business model that they follow.

Business Model of On Demand Services Flourishing in On-Demand Economy

On-Demand focuses on having access to all that it needs rather than trying to own it. For example, let’s say you need a car to travel in. You have two basic options in this case:

  • Purchase a car, get the insurance, find a place to park it and get it registered.
  • Rent a car and pay only for the time you use it.

On-demand economy likes the second option more. Why? Here is the reason:

According to research, Americans drive an average of around 40 minutes every day. That shows that an average vehicle is utilized less than 5% every day in the USA. And that is gigantically wasteful. 

In on-demand, the focus is always on the scale – not just one car, however getting benefits from countless cars. It is the difference of getting one car to serve one city or leasing several cars and providing services in several cities. 

On-demand businesses follow the second option. And this is the reason why the world’s biggest taxi company and the leader of the on-demand economy – Uber – owns no taxi. A mobile app that has disrupted the million-dollar hospitality industry – Airbnb – owns no hotel. 

The On demand economy is smart and don’t believe in owning anything rather focuses on developing access. Here is how these on demand leaders work and a complete guide to their business models:

So, now that we know the essential fundamentals of the on-demand economy and its driving force, let’s see a few important variables that you must pay heed to if you plan to enter the on demand economy in the year 2020.

On-demand mobile apps

5 Important Factors to Consider While Selecting Your On Demand Business Model

1. Degree of Commoditization

It is defined as the number of factors related to a service or product that purchasers have to select while buying something. Lesser the factors – more commoditized a service or product will become. 

For example, Uber as a platform is profoundly commoditized with purchasers just choosing the sort of vehicle (One factor before availing the services). However, for Airbnb, the users have to think about the date of the booking, location of the listing, number of days, offices accessible, lease, and so forth.

2. Supply and the Platform Relation

A business model may include aggregating existing independent businesses or consultants or connecting the supply directly. Previous is simpler to scale while in the latter’s case the business is also responsible for preparing and fixing the guidelines. 

Doesn’t matter whatever way you select – the services should be two things – easy to avail and fast. This is the main ingredient of being successful in the on-demand world.

3. Pricing structure

Price is a basic factor which you should consider while deciding your on-demand business model. The prices of your product or services should not go sky-high in order to fulfill the requirement fast. One must take this decision dependent on the level of commoditization.

4. Instant vs Scheduled

There are specific niches like transportation, food and so on where instant delivery can act as a game-changer. But, this instant delivery model requires an enormous investment in technology as well as logistics and can bring about lesser benefits for the organization. 

While on-demand niches like groceries, laundry, and so forth can chip work on the aggregate scheduled delivery model without a gigantic effect on the demand or revenue of the company.

The instant delivery model isn’t prescribed for the organizations with an unpredictable or unstable demand as it creates a lot of pressure and in case of failure to do so the company’s reputation is at stake. Thus, the last decision should be taken dependent on the buyer needs, desires and the company’s capacity to satisfy the same.

5. Stakeholders

Most on-demand applications or platforms deal with at 2 stakeholders. The association of more partners outside the platform also impact the business model. For example, Uber manages two key partners: travelers and drivers, while applications like Postmates that don’t have their own framework to deliver merchandise have a third key partner to deliver meals.

Also Read: How Much Does it Cost to Develop an App like Uber or Careem?

3 Trends That Will Shape the On Demand Economy in 2020 

Providing ease and convenience to users at affordable prices is the main idea behind businesses thriving in the on-demand economy. Let’s have a look at what’s in store for the years to come in this booming industry that will reshape it in every way:

1. The Ubiquity of “Tap” and “Get” Will be There In All The Industries

The most rapid rise in technology over the most recent years has been in the “Uber for X” organizations, a bunch of on demand mobile applications that get customers what they require when they require it. 

As indicated by CB Insights, these organizations have taken billions in investment, even if we exclude the transportation giants like Lyft and Uber. 

The entire on-demand trend began in transportation with Uber. It was started as a black car service intended to make people feel like they were riding in style during special occasions however rapidly turned into the ubiquitous option for individuals in cities. 

One example of its transformative power is that it now completes multiple times the number of rides that the whole taxi industry did in San Francisco before Uber was founded. 

It wasn’t long before on-demand moved into other areas. Postmates gave eateries a cool way to deliveries, while businesses like Sprig & Munchery made another kind of quick, sound supper alternative. 

The fact of the matter is that anything that doesn’t have an on-demand service yet – will likely have in the years to come no matter in which industry you are. Also, we are in the middle of many startups of these types, “variety” is becoming “ubiquity.”

2. Brands Will Get Stronger Together

Still, even with ubiquity, there are limitations in what number of organizations can be real players. One of the significant drivers molding the industry in the next year or two will be consolidation in which players acquire or merge with other organizations offering similar services in order to compete better with others.

3. Expectations and Opportunities – Both Will Increase for Customers and Brands

The final thing that will shape the on demand economy is “expectation.” 

With regards to customer desires around on-demand, the genie is completely out of the world now. In only a couple of years, we’ve been totally compelled to expect that anything we need can be delivered to us, wherever we are in a couple of hours. 

This is going to put a huge effect on how every brand will think about serving its customers in 2020. For some, it will require another layer of consideration around service and transportation that wouldn’t have recently shaped the purchasing decision of customers.

If on-demand trend is creating a new challenge for businesses, it is also creating gigantic new opportunities for businesses to scale. For retailers, same-day delivery is the bridge that makes the obstruction between e-commerce businesses and physical stores totally penetrable. Utilized well, this implies a lot more prominent ability to drive important offline retail conduct like motivation purchasing online.

Also Read: White-Label or Custom Mobile Application Development: Which Way to Go?

How Much Does it Cost to Develop an On-Demand Mobile App?

When developing an on-demand app, you have to build apps that cater to three stakeholders – the user, the business providing the services and the person who is going to make deliveries. And, the app flow, UI/UX is going to be completely unique in every one of them.

Alongside that, this category of apps requires the integration of various features like in-application payments, real-time tracking, chat, instant notifications, rate and review and a number of other features as well. Since through one on-demand application, a mobile application development organization is creating three applications, the cost is going to be a bit high when compared to other types of apps.

Keeping all these features and points into consideration, on-demand mobile app development like Uber and Airbnb, can cost you somewhere around $50K to $60K. 

However, if you want to take advantage of a white-label solution for jumping in this thriving industry, the cost can also go down. And, if you plan to integrate advanced features in your on-demand app like AI, Chatbots, Self-learning algorithms, etc, the cost can go even higher.

All set to be a part of On demand economy? Contact Apptunix – a Renowned On-Demand Mobile App Development Company serving businesses with top-notch solutions.

On-demand apps



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