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On Demand Business Models

By Tanvir Singh 16th October 2020

With its speed, quality, and convenience on demand business model have quickly become the first-choice option for both budding entrepreneurs and seasoned business people looking to go online. 

on demand guy

Omnichannel presence is more vital than ever today, it not only promises business from all sources but also provides an opportunity for cross channel sales, and this is where most on demand business models show their USP. 

A dynamic economy brings about ever-changing trends. Having a staggering $57 billion market presence, on demand solutions give immediate gratification to consumer demands. This drives more revenue for businesses as an on demand model provides an omnichannel presence and promotes cross-channel sales.

We will take a look at what is an on demand business model, how they have taken the market by storm, and what are different on demand business models for you to look into.

What is an on demand business model?

As the term already suggests, “on demand” means serving the consumers when they demand. An on demand business aims to provide prompt (or taking minimum time) delivery of goods and services at their doorstep. The on demand economy works on speed and ease of solutions, making them popular in times where we chase instant answers to everything.

With the sheer potential for tremendous market growth, many companies have an on demand platform that can deliver to customers in real-time. Most on demand platforms are offered through mobile apps, making solutions available to consumers at the fingertips.

So, what are the different on demand solutions that have revolutionised the way we consume products and services? Let’s dive right into them!

Food On Demand Model

Food delivery apps have metamorphosed the way we access and consume food. They have redefined the convenience aspect of accessing food – they save time, are quick, and only require a few taps on the phone.

Many food startups have exponentially and globally grown in the past years. The demand for food solutions is constant and eternal, making it a great way to set up your on demand food app.

Key players include UberEats, Instacart, Grubhub and more. If you want to try clone apps of these player click on the hyperlink.


Source: https://www.statista.com/outlook/374/100/online-food-delivery/worldwide

Relevant Examples:

InstaCart Business Model: How it Works? 

How GrubHub Works: Business Model Explained.

Food On Demand: Business Models of Meal Delivery Startups

What does it cost to make an app like UberEats?

Logistics On Demand Model

Traditional logistics and courier services, though get the work done, come with many hurdles. The process of getting something from point A to point B can be a complicated and expensive process that can delay deliveries.

On demand logistics simplify deliveries. They work by transporting goods on the same day or earlier with minimum speed bumps. According to a survey, the on demand logistics market is forecasted to touch a whopping $75 billion by 2030! Switching to an on demand logistics model is time and cost efficient, and lets consumers track their deliveries in real-time.

Look at this graph by Winnesota to understand how customers are willing to pay more increasing levels of convenience 

Shows stats for consumer pay

Relevant Examples:

How FedEx Works – Business Model & Revenue Sources 

Service On Demand Model

Getting your hair coloured, and getting plumbing done in your house are two very different services, but what if there was a solution that brought these service offerings under one umbrella? That’s what an on-demand service aims to deliver – a compact and integrated space that is a one-stop solution for the consumer’s hyperlocal service needs. 

An on demand service platform lets consumers find, book, and review professional services without stepping a foot outside. For example, companies like UrbanClap, Fiverr and Upwork have helped to bridge the gap between service providers and consumers by a great measure.

Read the blog: On demand economy survey to understand the market potential 

stats for on demand mobile

Relevant Examples:

How Does the Urbanclap/ Urban Company Business Model Generate Revenue?

Fiverr Business Model

Upwork Business Model

Building an On Demand Service App with Husky

On Demand Delivery Model

Just like a logistics business, an on-demand delivery has redesigned traditional delivery means. An on demand delivery model utilises time and resources at hand optimally to ensure orders reach their destination in record time.

An ideal example is Postmates. The on demand goods delivery solution dominates the American market. Postmates lets customers get anything they need to be delivered to their doorstep with a minimal fee. Aiming to solve a real barrier in the delivery segment, the company has garnered multiple rounds of funding from investors and has become a daily name in the market.

stats for on demand delivery fees

Source: https://www.winnesota.com/ondemandtransportation

Relevant Examples:

How Postmates Works: Business Model and Revenue Sources Explained

How Dunzo Works: Business Model Explained 

How to Create an On Demand Delivery App? – Top 4 Things to Consider

On Demand Transportation Service

If you did not own a vehicle, then missing appointments or flights was a usual affair. It was not uncommon to see waving hands and anxious faces on the roadside hoping for a taxi to give them a ride.

On demand transportation services like Uber and Lyft have changed the way we move, for good. Such taxi solutions have transformed the way we move; cabs and taxis are now just a stone’s throw away from you. 

Cab-on-demand services connect riders with travel aggregators in seamless, easy-to-use interfaces where they can just simply put their pick-up and drop-off location to get a cab in about 5 minutes. 

People are always in need to be somewhere, and on demand cabs are still right around the corner.

Relevant Examples:

How Uber Works: Insights into the Business & Revenue Model

How Lyft Works: Insights into Business Model

How Jugnoo Taxi Works

How to Build a Corporate CarPool App?

Why has on demand market growth been monumental

If you’re planning to start your own on-demand business (and we believe, now is the right time to) then here are the factors that determine how well you take off:

Easy-to-use UI

Consumers avoid complications. They not only want solutions; they want them with a few taps and clear instructions. Software and delivery solutions that make it difficult for consumers to access the service, compel them to look for other choices. 

As an on-demand service provider, you want to make sure your service is readily accessible to customers. This includes optimizing your apps and website that catches their eye. The UI needs to be navigable with real-time tracking options. An ideal on-demand business model simplifies communication between customers and delivery partners.

Reliability and Accuracy

We tend to trust services and platforms that we have experience with. As an upcoming trend, on demand business models need to build trust. Customers will find your on demand solution reliable when you constantly and consistently meet expectations.

Timely delivery of orders and completion of raised tasks will help you build a happy clientele. Your delivery partners must be skilled to avoid any mishaps and delays and make sure to complete orders in time. But this does not have to come at the cost of quality. Incase of any issues or problems faced by customers, you have to be quick and fair with resolutions. 

In stiff competition, your best bet to become successful on-demand business is to bag happy customers.

Updates on Business Trend

An on-demand economy is vibrant and ever-changing. This means to get noticed in the market; you have to make sure you’re up to date with alterations and are ready to modify your service accordingly.

As a real-time service market, you need to know customer location, inventory, delivery partner’s location and live traffic updates. For a larger picture, it’s great to be acquainted with technology growth and updates, especially for last-mile delivery services.

The Future of On-Demand Business Model

It’s clear that on-demand solutions will remain dominant in years to come as the chase for convenience and accessibility doesn’t seem to die down. As technology climbs up the ladder, consumer demands and trends will skyrocket. 

Additional Resource: 

On Demand Economy | Statistics that Define the Future of On Demand Startups

On-demand business model target delivering solutions to customers in the moment, which has always been an innate consumer need. Getting everything at your doorstep any hour of the day feels like magic and gives consumers a sense of empowerment.

The future of on-demand solutions is bright, as newer technological enhancements are turning user-experience a notch up. With seamless UIs, and use of AI has now altered the way we shop and transact. On-demand business models have taken a further leap as we have become more dependent on solutions that give us instant gratification. 

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