The 3 most important things you need to know about on-demand service apps


On-demand apps aim to target customers who need fast and easy access to services. In order to meet this demand you need to create the perfect buying environment.

Uber, Instacart, Netflix, and Grubhub – on-demand service apps have smoothly and sweepingly entered our daily lives. At one point, the fresh wave of on-demand service mobile applications for iOS and Android marked a sharp reversal in how businesses provide their services to customers. Not only is it that everyone is so busy with their careers and families that there is no time left on routine tasks like shopping, cooking, driving, or housekeeping. There have been a number of global societal changes in the recent past that resulted in the growing popularity of on-demand services.

These useful mobile apps aim to target customers who need fast and easy access to services. In response, the market meets this demand creating the perfect buying environment where people can be sure about the quality, convenience, and trustworthiness of the service delivery process.

1. What is an on-demand service app?

On-demand service apps are service platforms that connect waiting-time-sensitive customers with independent service providers or agents. Such an app serves as a mediator between a business and a customer, allowing them to find each other in the first place and engage in a customer-provider relationship on mutually satisfactory terms. These transactions are different from those in a traditional employer-employee relationship. The mediation of these relationships doesn’t fit any conventional model of cooperation either. Instead, it is a large-scale rethinking of labor laws that is still ongoing.

These applications have gained their popularity due to their ability to meet the demand of each particular individual. Besides, as the number of mobile users keeps growing, user expectations shaped by this shift have also risen so much that users expect to get what they need at nearly any given moment by tapping a couple of times on the screen. The bar has been raised so high that there is no other option than comply with the standards.

To give you a clearer picture of the on-demand service market landscape, we suggest you take a look at some recent statistics, trends, and data.

According to the National Technology Readiness Survey (NTRS,) from 2018 to 2019, the US on-demand economy reportedly grew by 18%. Also, the report offered the analysis of participation in the on-demand economy by category in 2016-2019:

Another analysis by NTRS found that the number of on-demand consumers doubled from 2016 to 2018 (25 and 56 million, respectively.)


2. How an on-demand business model works

Generally speaking, with on-demand self-service, customers are free to decide which services to use or subscribe to and how much to invest in using them. Everything is available at the swipe of a credit card or through an online payment system.

Companies like Uber or Netflix connect people who want goods (e.g., a meal from a restaurant) or services (e.g., video streaming) with people who can provide them with what they are looking for for a certain price.

Usually, on-demand service apps focus on a single domain area like Airbnb that helps people find housing, Lyft that provides transportation, and GrubHub that allows ordering meals. Sometimes such specialization results in one company launching and running multiple businesses across different domains, as it happened with Uber and Uber Eats becoming two separate applications. This way, it remains relatively easy for consumers to navigate through a segmented service marketplace. They always know which app to open when searching for a particular thing they want, be it food, taxi, housing, or entertainment.

An on-demand service business model is also characterized by immense delay sensitivity and high agent independence. In other words, users expect goods and services to be delivered immediately. On the other hand, agents (service providers) serve as independent contractors in the sense that they decide whether and when to work and receive payments from the platform for each service completion.

An on-demand model enables access to a larger pool of service providers and customers and is meant to drive a better customer experience. Therefore, on-demand service platforms are usually developed in the form of both a mobile app and a web app for users to get to what they want faster and more easily. These apps are, in turn, managed through the admin dashboard that allows you to watch over every single ongoing and completed operation.

A deeper look into Home Services

Online on-demand home services are forecast to grow by over USD 1.5 billion from 2020 to 2024.

On-demand domestic services can be classified as follows:

      • House cleaning & repair services
      • Packing and moving
      • Babysitting
      • Pet care
      • Others

Online on-demand home service apps can grant users access to a large pool of registered professionals who will take care of their homes, children, and pets. Customers need a simple tool for booking cleaning and other home services online. This tool should also enable price comparison, guarantee each contractor’s credibility, and allow checking out reviews and ratings. Such a demand has given rise to many new online home services emerging in the form of both web and mobile apps. Also, users can either choose to request assistance from an independent organization that employs workers directly or opt for a marketplace that serves as a mediator connecting customers with specialty contractors.

3. How to build a successful on-demand service app?

On-demand service apps differ a lot. Using a ride-hailing app, we keep our expectations not too high. If the driver arrives in time, doesn’t get lost, and the car is clean, the service quality can be considered fine. However, there are more elaborate services like babysitting, medical advice, a facial, or a haircut that demand a much higher level of expertise. Then it won’t suffice if a random person shows up to do any of those things. We expect a professional in their field to take care of us.

One way or the other, there are still distinct basic principles, according to which all on-demand service apps for Android and iOS are being built. We suggest you should take these five steps to create your successful on-demand service application:

  • Choose a niche. Your unused growth capacity can go beyond the categories we mentioned above. There is more to explore in the realm of on-demand services. So, keep your options open and do not focus on the area where other companies have already found their success. Find your own specialty but remember that it’s not enough just to fill the niche. This niche must be filled with a product that people will love, the one that will make their lives better. Make sure that the end-product Reliable, user-friendly, and available at all times.
  • Start locally. Start small, think big, they say. This is precisely the case when you should follow the advice. It’s always a good idea to explore and probe first before you commit entirely to the business. It is wiser to fix the flaws and take your time to tie up loose ends when there is not too much at stake. Operating locally, you will be more likely to have things under control – be it recruiting new contractors, logistics management, professional training, marketing, or app updates.
  • Define your target audience. Knowing who is that particular person your service is set to benefit from is crucial for your enterprise success. It actually is not essential if you think your app is flawless. Your audience must be convinced of it. Always develop a product with the end-user in mind. And the number of attempts for you to demonstrate the efficiency of your on-demand service app to the prospect user is very limited. Do thorough market research, conduct beta testing, and do not forget to look through our article on what mistakes to avoid in your marketing campaign.
  • Define a pricing strategy. Finding the right pricing strategy is the top priority for any for-profit business. For some on-demand service apps, it is the provider who sets the pricing, while in a traditional on-demand marketplace, sellers define their own prices, and you can only charge a service fee. However, when it comes to money, the chance you will make a blunder is always there. The most dangerous strategy is to price too high. Don’t be greedy. It can make you incapable of meeting the competition and undermine all the efforts taken to create the app.
  • Decide on the functionality. Sure thing, the functionality of a beauty-on-demand app will differ from the one in a telemedicine application. Besides, you will probably have to create an app for customers, an app for service providers, and an admin panel, which all require different features. Nevertheless, there are some basic features that any on-demand service app won’t do without. User registration and authorization.


      • App users must be able to easily create and set up their profiles. It will provide you with essential behavioral information and allow customers to view registered agents’ detailed profiles.
      • Product or service search, filters, and lists. Filters, lists, and catalogs help users navigate the app and spend less time searching for an ideal specialist.
      • Map integration and live delivery tracking. With the help of geolocation services, customers and independent service providers will be able to check each other’s whereabouts and thus find out the estimated time of arrival.
      • Shopping cart and order summary. Be it an appointment with a doctor or stylist, today’s lunch, or a ride, customers should be able to review their order, modify it, cancel it if needed, and confirm the details.
      • Payment methods integration. Having multiple robust payment gateways is a must for any on-demand service app. Ensure it is seamless and secure for app users to pay for services and that agents face no difficulty when retrieving the money.
      • Ratings and reviews. This feature is mandatory for any app that is meant to serve as a place where service providers and service recipients meet. By checking reviews and ratings, customers can make an informed choice and eventually have a more satisfying experience.