urbanclap business model

An online marketplace that helps connect service providers with the service seekers, UrbanClap is marked as one of the fastest growing startups nationwide.   It is an end to your everyday problems.  Whether you want a beautician, a plumber, a technician, a yoga teacher, a lawyer or a counselor, Urban Clap is studded with professionals hailing in all.  Fueled with the idea to transform the way local servicemen are employed and paid, Urban Clap went live in 2014.

Earlier, home services were one of those sectors that had not witnessed many transformations.  Though services such as Sulekha, Yellow pages, and Just Dial were popular, yet wasn’t beneficial for the professionals. This kind of services used to employ an aggregator that would pass on the job to the skilled person and doing this, a major part of the money would be commissioned filling pockets of the aggregator.

Urbanclap, on the other hand, connects users directly with the professionals emerging out to be the best of its kind. The team has had a bundle of challenges but is continuing to paddle them all.

Back in 2014, they started with a handful of professionals and today urban clap has near about 50,000 professionals with another 15,000 in line trying to be a part of this growing community.

You might definitely be curious to know what backed this start-up and how did they drive their startup from scratch to sky high. So, let’s walk in through the business model of Urban Clap and together unbox their secret to success.

UrbanClap Stats and Facts: Funding and Major Milestones

• Launch Date: October 2014

• Founders: Abhiraj Bhal, Varun Khaitan and Raghav Chandra.

• Funding received: $110.7m (Till November 2018)

• Present in eight cities (New Delhi, Bengaluru, Mumbai, Chennai, Pune, Ahmedabad, Hyderabad, and Kolkata), urban clap offers more than 100 services, has a user base greater than 3 billion and employs more than 50,000 professionals

• Company valuation: $480 billion (as of December 2018)

• Average Order Each Month: 4,50,000 (as of April 2018)

• Headquarters: Gurgaon, INDIA

Also Read: How Uber Works: On Demand Taxi App Business Model Revealed

How On-Demand Service Apps like UrbanClap Works?

Being an online portal, urban clap connect online users with offline workers. During the initial stages, Urban Clap was merely a search and find platform.

However, today it is having a model that list professionals, trains them if required and then connects them with the real-time users. Users can effectively book everyday services on the portal.

They just need to search through the app, filter their required services and then schedule a service as per their own convenience. Where at one place, Urban Clap eases the process of finding skilled professionals for local services; it also benefits the service providers by eliminating middlemen and giving them direct access to customers.

Let’s have a quick look at How UrbanClap Works.

User End

• Using the intuitive mobile app of UrbanClap, the users can scroll through a gamut of services and select one that suits their requirements.
• Once they choose a particular service, an option to choose the package pops up. Now users can choose the one that fits their budget best.
• After they are done with the package selection, they can schedule their appointment at a date and time suitable for them.
• The app also allows users to go through the service provider, asses qualities and also affirm its presence by seeing the profile of the visitors.
• Services could be availed by advance payment and/or COD.
• Users can also rate and review the services.

Service Provider End

• The app has two-fold functioning; one section belongs to the user end and the other to the service provider end.
• When a service is booked on the app, the service providers working in that area receives a request. They can either accept or deny the same.
• The professionals can then analyze their work commitments and if available during that slot, they can either accept or deny the proposal.
• If the proposal is accepted, both the user and the professional are notified by a message confirming the service bookings.
• In case of emergency, the professionals can back off but they are charged.

Revenue Model of Urban Clap – an On-Demand Service Marketplace

Urban Clap follows a dual approach. It lists two kinds of options, one that is the booking section and accounts for the fixed pricing services and second is the non-booking or the variable prices services.

Based on the same, the company follows two approaches for driving money to the table.

1. Commission Model

For the fixed price services (plumbing, electrician or home cleaning), customers can book a service and based on their convenience pay either online or COD. Once the service is marked complete, money is transferred to the professional after deducting the said commission.

This is apparently referred to as the commission model. The user buys a service; professionals need to pay a commissioned amount to accept booking thereby gaining leads and then the two connect.

2. Reverse Auction

For the second category (photographers, interior designers or yoga instructors), urban clap has the policy of charging the professional for lead generation and listing sponsored. This is much like a reverse auction.   In this approach, the customers don’t book the service directly. Instead, they invest time in knowing about the service. A professional needs to pay a fee in order to accept the request.

Here, monetizing is solely dependent on the professional’s ability to convince the user to book the service. Urban Clap introduces five professionals to the consumer, who after his assessment could opt for one.  In case the profile of a professional isn’t viewed, the professional get back his credit paid.  Here is where the matchmaking algorithm comes into the picture. Better the algorithm less is the work done by the consumer.

The Final Call

Though urban clap has witnessed tremendous success past few years, yet it is just the start.  Recently, the app has been using data powered by AI enabling them to asses better the demands of a user. That’s How UrbanClap Works and is changing the industry toady.

Capturing needs of the user, allocating manpower and then tracking all under a single roof was a tough challenge. But the curious minds worked on their loopholes with the help of technology.

They have now fused Machine Learning and AI backed process to codify the way decisions are taken. Right allotment of professionals, analyzing who is available and where requires extensive processing at the back end and thanks to the tech team, they drive it pretty well. With such moderations and enhancements, it is anticipated that the startup has a long way to go.

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