Posted on: | Posted by: Ajay Sudhakar

The Ultimate Guide for an Uber for X Business Model

uber for x business model

Uber for X: How to start your business journey

The grand success of Uber created ripples of change in the industry. It ushered in a new on-demand era, where numerous existing business models were reinvented while many new ones entered the arena to take the stage. According to recent reports, the total U.S. transaction value of the on-demand economy grew from $22 billion in 2015 to $34 billion in 2016 to touch nearly $57 billion by the end of 2017.

People’s engagement in the uber for x business model has seen a sudden growth. An estimated 41.5 million of them have purchased something from the on-demand platform in 2017, up from 25 million in 2016. With these statistics, marketing experts envisage that this number will hit 56 million by the end of the current year and 92.6 million by 2022. Sources from National Technology and Readiness Survey reveal that an estimated $75 billion have been spent on this growing economy, increasing 58% from $48 billion in 2016. This is why Varsity tutor, an online tutoring startup, has raised $50 million in funding from Chan Zuckerberg Initiative, a charitable organization founded by Facebook CEO Mark Zuckerberg and his wife, Dr Priscilla Chan.

However, before you begin your on-demand business journey, make sure you have conducted thorough market research, anticipated all types of risks and have run through your checklist numerous times to avoid any chances of errors and ensure a smooth run. Well, one might think that coming up with a new Uber for X model means designing and launching an app. However, the reality points towards a different picture, where a lot goes behind launching an innovative Uber for X app.

 

Here is the list of the things that one must adhere to before launching an innovative Uber for X app

Setting up the company

A company is always built upon that innovative idea which an entrepreneur plans to take to the market. That idea has to be experimented well in advance and researched on different aspects like how the consumer would derive benefits, the uniqueness of the offering, how different it is from the competition, etc. and build a robust setup that could promise a win-win situation for all stakeholders, i.e., the company, service providers and the consumers.

Getting service providers on board

Imagine the existence of Uber without its drivers. Not possible, right? The supply side, i.e. the service providers, is the ultimate backbone of any on-demand setup. Therefore, make sure that you offer them enough lucrativeness and a great big buck deal to have them on your side. This means that you need to offer them a strong value proposition to succeed in building a strong supply chain, one that is committed to achieving results. While choosing your service providers, make a clear note of their skill sets and if they could be aligned to your vision. Remember, without having a sound supply network, it could be impossible to establish a strong customer base.

Ease of use for the customers

The whole idea behind designing an Uber for X model is to offer convenience in abundance to consumers. Therefore, once your supply side is taken care of, you must lay a strong focus on making it big for the consumers. Start by building a simple, quick and easy-to-use app that helps them get rid of all the complexities involved in availing themselves of the desired services at their convenience. An app would be the customer’s first preview of your services. Therefore make sure that you create a superior U.I. and UX and keep the payment gateway extremely secure and simple.

Freelancers vs employees

Another important call that the business needs to take is whether it would tie up with freelancers, roped in as and when the demand arises, or build your permanent supply pool (employees), who would work as your full-time support, irrespective of the demand. Well, it completely depends upon the nature of your service, which model would you opt for. Ideally, in the beginning, working with freelancers works best for an on-demand player until you carefully analyze the demand for your service in the market.

Finding the right technical partner

Technology is what has been driving the on-demand world. How the consumer demand is captured instantly, directed to the service provider almost immediately while keeping the consumer in a loop at all times is only possible because of the use of high-end technology. Unless you have the best of it, you would probably be one of the tiny fishes in the pond who fail to get noticed. Therefore, it is important to look for the right technology partner whose hands are well placed on next-gen technology and who could develop the perfect app for your business. There are millions of experts out there who boast of a superior technology setup and who could lead your way forward. Still, it’s important to examine these companies’ track records and core competencies before getting the right partner on board.

Aligning incentives for your service providers

Good remuneration is a big factor that would draw service providers to your side. But, in the highly competitive world that we live in, a full stop cannot be drawn after the remuneration part. Please make sure you roll out clear incentive schemes and offer them additional perks, driving their motivation and multiplying your chances of success and growth.

Once you have conducted a sound, full-proof check of the above, you are probably on your way to getting started. The next question is – Do you have figured out the business niche? Well, it’s time to tickle the brain again and explore different territories.

Uber for X: 12 Unexplored Territories

Have you been thinking of launching an Uber for X app in this rapidly advancing market which has already displayed a huge appetite for the same? Well, then it’s time to give some more food to your thought. The rise in the usage of smartphones and the internet has increased the degree of on-demand services. With a few clicks on their phone screen, everybody, specifically Generation Z, looks for an instant fulfilment of their requirement, and the businesses are rushing in to give them what they want and where they want.

The on-demand economy grows exponentially, attracting more than 22 million users worldwide, transacting $57.6 billion annually. Today, we have an Uber for ‘X’ startup for an exhaustive number of verticals. Groceries, beauty services, car wash, food delivery, medicines, laundry, etc. One can conveniently order or avail of all of them sitting in the comfort of one’s home.

However, though plenty of Uber for ‘X’ models has been swarming the market lately, some segments still lack the clutter but are ripe for the entry of new players. This means that the ‘X’ here can still be explored, its potential could still be harnessed, and Uber for ‘so many other things can still be designed.

Let us talk about those unexplored uber for ‘x’ verticals with their future.

Cannabis

On-demand delivery of both medical and recreational cannabis has attracted quite a bit of attention lately due to various positive regulations introduced by the government in various U.S. states that promise to aid the segment’s growth. Sources predict that marijuana sales will hit $11 billion in 2018 and around $21 billion in 2022. Out of these figures, 67% will be covered by recreational weed and 33% by medical cannabis. Since the demand for cannabis is rising, on-demand apps will certainly see a bright time ahead, especially in the subcontinent of North America, as 64% of people living there support the legalization of cannabis.

The on-demand app enables a seller to extend his market to remote locations with an efficient delivery tracking system, integrating cultivators and merchants, accepting hassle-free payments online from a customer, and maintaining a record of transactions to further build newer avenues for his sales.

Alcohol

Beverage alcohol accounts for 15% of the total beverage’s consumption in the U.S. According to an analysis done by Rabobank, the online sales of alcohol in the United States hit $1.7 billion last year. Also, the annual sales of on-demand alcohol delivery apps earned $100 million in 2017, up from zero in 2013. Nick Rellas, the CEO of Drizly, a leading on-demand alcohol delivery company, estimated that online alcohol sales would touch $7-15 billion in the next couple of years.

As alcohol consumption across the borders continues to rise alongside the consumer’s growing need to receive almost everything instantly at their doorsteps, there is certainly room for more players to join the wagon and offer instant booze delivery services to a large part of the masses. AppsRhino provides perfect business solutions to create an online on-demand platform for alcohol delivery services which helps the service providers to be a cut above the rest.

Flowers & Gifts

There are always flowers for those who want to see them, a nice saying by Henri Matisse. The online sales of flowers itself will be touching $3 billion in 2022. On-demand startups like 1-800-Flowers and FTD are successful examples of on-demand flowers & gifts services. These people are routing bouquets from a florist near the customer, charging a percentage from the profit per cent gained by the florist. On-demand delivery services of flowers and gifts have seen an increased adoption rate because it is something that a large part of the population could relate to. Many more players would make their way into it since the opportunity is big. Many new players can easily position themselves to fulfil the growing instant demand for flowers at various events like weddings, funerals, and parties.

Legal Services

The technology pace has tremendously changed the market of legal services. More than 50% of in-house legal teams of practitioners prefer buying legal services from non-traditional law firms. These non-traditional law firms are nothing but an uber for ‘X’ like an online platform where clients and lawyers are integrated, and their demands are met accordingly. Founded in 2006, Avvo is an on-demand platform for legal services. It sells legal services and gives aggregated lawyers referrals by listing them on their platform along with their ratings and reviews. Since only limited platforms are available for this vertical, entrepreneurs and lawyers can establish themselves online with an on-demand app and dominate their market.

Tutors

Why move out and waste time when you can easily schedule and manage your tutoring appointments with comfort sitting at your place. A big thanks to the technology, which paved an online platform for one of the oldest professions of tutoring and learning. The uber for ‘tutor’, an on-demand platform, lets an entrepreneur or a tutor increase their market reach, generate more traffic in their profession, accept hassle-free payments and continue with their kind teaching work. The platform can have different segments in this vertical like tutoring studies, yoga classes, cookery classes, driving, etc. The on-demand platforms like Varsity tutor have raised $50 million in funding from Chan Zuckerberg Initiative, a charitable organization founded by Facebook CEO Mark Zuckerberg and his wife, Dr Priscilla Chan. The beneficiary company generally charges students $50 per hour, and the further amount depends upon the degree of difficulty of their study materials. According to Global Firm Analyst, a research firm, this industry is expected to hit $200 billion by 2020. Due to the fairly nascent nature of such services, many players have been eyeing the opportunity to introduce any of their tutoring services uniquely.

Security Services

Security has become a concerning factor in one’s life. It could be commercial security, residential security, industrial security, etc. Entrepreneurs can trigger their innovation in this unexplored area, right from providing individual guards to convoy services both in the armed and unarmed domain can be targeted. The security guards can be supplied to various events involving security concerns, such as bouncers at pubs and parties. Many entrepreneurs are eyeing this vertical as it was not affordable earlier due to monopoly. Now companies like Hawque have made the services affordable and increased the demand for guarding services that lack gigantic competition in the market.

Road Assistance

While travelling in a personal automobile is safe and secure. Still, we face vehicle breakdowns many a time. When no immediate assistance is possible nearby, the On-demand road services assistance (RSA) app comes to the rescue. An on-demand RSA refers to a mechanic available nearby the customer’s vicinity. On-Demand Road assistance app lets an entrepreneur to aggregate techies who provide services like fixing a failed engine, flat tire or helping with an empty fuel tank. Therefore, either a towing truck will take the damaged car to a nearby repair station or will fix the issue on the spot. The cost of availing On-Demand Road Assistance services is less than the market as it charges 5-10% less than existing market rates as more people prefer to contact local mechanics. StranD, a startup of India and Morni, a Dubai startup, provides 24/7 Road Assistance. New ventures can establish their niche since not many organized players exist in the market, and it is still an unexplored area.

Air Taxi

Road travellers consistently have concerns about being stuck in immense traffic congestion. Every day many hours are wasted on road traffic globally. To settle these concerns, Startups have been bringing their creativity forward by launching autonomous flying cars in regions with high density. For example, Uber plans to launch its first air taxi service in India with vertical take-off and landing (VTOL) aircraft. Thus, On-demand Air taxis can improve urban mobility, and customers can reach destinations in the shortest period. As the concept of Air taxis is fairly new and unexplored by many companies, it is certainly not an over-crowded market.

Bikes

In the era of increasing pollution and global warming at an alarming rate, governments and companies are working on finding alternatives to commute which are eco-friendly and pocket-friendly to customers. Bike-sharing is a trendsetter in this parameter as few companies have started this venture, and its popularity is growing. On-Demand Bike renting was first started in China. Apps like Ofo and Mobile have around 16 million users in China. Thus, the potential of on-demand bike renting lies in high traffic-congested cities with high air pollution indexes. It is widely promoted as an eco-friendly factor. Entrepreneurs can build an online aggregator uber for ‘bikes’ business model, which will help their customers locate and book a bike for themselves.

Baby Sitting

Parenting can be tough, especially for working parents who always strive to balance their home life and work-life, which creates anxiety. It is easy to find a babysitter, but finding an experienced one is tough. An on-demand babysitting platform allows parents to find caregivers by interviewing and analyzing them by considering reviews on their profile widely shared on social media and consulting with the families that the caretaker and hourly rates already serve. In 2017, the child daycare business earned revenue of $48.9 billion, and it’s expected to grow to $52.5 billion by 2021. Thus, On-Demand Baby Sitting is a platform where an entrepreneur can aggregate freelancers, list them accordingly and provide services to parents in need.

Astrologers

The demand for astrology services, which has always existed, is only growing with time. Nowadays, people are highly dependent on social media to solve their problems. According to Astrologers, 50% of millennials look upon astrology regarding career, relationships, daily horoscope, and world tours. So, this shows that the market of astrology business is not only limited to old age people. There’s huge potential for On-demand Astrology platforms in countries like the U.S. and India. A country like India, where 80% of the population avails of astrology services, has huge potential. Yodha App is one of the finest apps on the digital platform where you can chat with astrologers, and they provide you with quality services. One could delve deep into the idea and plan to take such apps to the market. Under the on-demand umbrella, these services are either offered as a part of home services or even as a standalone offering by many startups.

On-demand human ATM:

Have you ever got stuck in a situation where you need cash instantly, but there is no bank or ATM nearby? Well, that’s a haunting situation. Since there is a solution to every problem, there is a solution to this problematic situation. An on-demand human ATM can come to assist when one needs cash. One has to call to access the app and decide on a meeting point with the service provider, his human ATM. There will be just a minimal cost for every transaction, and users can pay via cashless modes of payments like PayPal. Companies like Nimble is doing great in this market. They charge $5 for every delivery, and it is almost worth it since one has to pay the service fee of using an ATM of $4 to the bank. Thus, the on-demand human ATM concept is convenient and an unexplored on-demand business sector. Newcomers can easily target this vertical as the growth rate of on-demand is expected to rise, and there isn’t fierce competition in the market.

Lately, there has been an increasing demand for instant fulfilment of the products mentioned earlier and services, meaning that opportunity is great for the new players to establish themselves in these unexplored domains with their innovative ideas of fulfilment and by launching their own Uber for ‘X’ model.

For startups who aim to become the next Uber for ‘X’ in 2018, the above list could be of great help. Though there can be various other unexplored territories where activities can be initiated, these are the hottest sectors ready to take off fast this year. Entrepreneurs must consider these as lucrative opportunities and work towards creating the right mixture of ingredients – a great idea, great engineering, good market insight, excellent approach and a partner like AppsRhino, which can put all of it together to design a perfect app for your business. If you have an idea for this uber for ‘x’ model, drop here a lead and discuss it with our expertise.

Uber for “X”: Revenue and Business model – Explained

Uber’s out-of-the-box idea, great technology base, and excellent business model drew the attention of so many others, who started to create their on-demand platforms, connecting buyers and sellers with online-offline integration by simply using a mobile app. This online-offline integration platform is known as Uber for the ‘X’ model, and only on this integration principle, the built models become successful. The startups came up with innovative ideas that fulfilled a particular community’s needs and demands instantly under the blanket of their comfort zone. Hence, the demand for their services surged, which gave them dominance in the market. Below are some examples of successful startups based on uber for the ‘x’ model and their verticals.

, many capital firms have invested more than $15 billion across 215 startups that were based on the on-demand business models, up from $7.3 billion the former year. Let me share the working of this business model in detail.

Key Stakeholders in uber for ‘X’ business model:-

Usually, there are three key stakeholders in an Uber for X setup:-

Customer (one who orders the product or service).

Product or service provider (The company/startup or the business runner brings the product or service to the platform).

Delivery fleet/ Individuals own vehicles.

Define your own Business Model:-

The successful on-demand business model is developed following the type of product, services, or solutions a company or business provides. Many business models can be explored revolving around the following parameters.

Scheduled or Instant Delivery

The deliveries of the products or services you’re planning to offer could be scheduled or even instantly promised to the consumers. This depends on the demand for your products. For example, suppose an entrepreneur goes with groceries delivery services or laundry services. In that case, the scheduled delivery type will be preferred, whereas, in the case of ambulance or food delivery, instant delivery will be preferred. The instant fulfilment model involves a handsome investment, a lot of peer pressure, and the company’s reputation is also a stake. So, the decision to select any particular model would depend upon various factors like your niche, amount of funds that you have, a timeline of demand of your service etc. Therefore, it is desired to analyze the requirement of the appropriate delivery model which would help you grow your business.

Decide your Niche

In the on-demand economy, deciding your niche is a crucial task. The primary objective is to attract more audiences by offering services, and certainly, those service(s) should not be of one-time use. The principle of an on-demand app is to engage the same audience repeatedly. Single niche companies like DiDi and Lyft have witnessed great success in their initial years and brought a revolution in the market. Examples of multi-niche companies are Urban clap and Paytm, which offers multiple services on their respective platforms. Therefore, the best way to decide your niche is doing some market research on traffic that has demand(s) and innovating the ways to fulfil this demand on an online platform.

Delivery Partners

Logistics is known to be the backbone of an on-demand platform. The fleet vehicle management system perfectly defines the on-demand economy, and without it, business survival may become arduous. Generally, two types of approaches could be followed – building your pool of supply personnel or tying up with some third-party vendors or freelancers who could be roped in depending upon the demand. In an aggregated business model, a firm would collate elements from various verticals to make up a single service, which would then be made available to customers under a single brand.

Uber is a perfect example of the aggregator model, where all it owns is a strong technology platform, whereas the ride-hailing leader hasn’t owned the cars and drivers. On the other hand, Doordash is a splendid example of an Uber for X startup that adopts the take-up rate delivery model with its fleet of drivers. In both cases, one needs to ensure that the supply is efficiently handled to receive his desired products or services at the right time.

Once you have drawn out a perfect business model, the revenue structure needs to be formulated. Remember, for each platform, the revenue structure would be unique, where each transaction would be monetized distinctively, based on the type of goods or services one is planning to market.

Establish a Viable Revenue Structure:-

Revenue Structure or revenue models of the on-demand economy can be categorized in the following ways:

Commission Based Revenue/Revenue Sharing:

A commission-based revenue structure is based on charging a percentage of the final amount received by the end service provider from a customer. Typically, in such setups, revenues are earned by way of commissions, where businesses usually charge 20-25% of the total amount earned from the customer. The most prevalent example is uber, in which the app refers a customer (rider) to the nearby cab driver available in the area and finally shares the end revenue generated by the cab driver.

Direct Sales:

A direct sale revenue structure refers to a company or startup’s pre-buying inventory or services and then offering it to the end customer at their rates. In this model, the responsibility of price regulation and service quality solely lies to the company. A very familiar example is Walmart, which has its inventory, regulates it, and then offers it to the end customer at take-up rates.

Advertisement Based:

An advertisement-based revenue structure means embracing or creating promotional ads for a website, application, or product. This method is often chosen by websites attracting high traffic and generating revenue by referring users to the ad-specific website through its channel. An Entrepreneur can opt for this revenue model as an optional one since it has some disadvantages too. While promoting their own business, they’ve to generate good users traffic and withhold the same. Ads can act as an obstacle in this way as many users may find them annoying, restricting them from app usage.

Subscription Based:

Amazon is a leading marketplace and has a worldwide market, operates in more than 13 countries, and offers a subscription to amazon prime. The users enjoy some special and extra privileges. Newcomers opting for this model can offer some extra services to their customers on a recurring charge, usually monthly or yearly, and it’ll help them retain their customers. This will also let their customers use their app continuously, generating more revenues for them. For example, suppose an entrepreneur is looking to build an online platform for delivering online food or groceries. In that case, he can offer paid delivery up to $X order and then free above that. In premium subscription, he can either offer free delivery on all orders or at subsidized delivery rates up to $X and free afterwards.

Conclusion

The final thoughts are that such models would continue to increase in numbers in the future as the concept has been absorbed decently by the masses. However, what’s important for each new business is to gain loads and loads of market insight before taking the final plunge. Technology is the key enabler of all these platforms, and there are a plethora of expert organizations like AppsRhino that help you design an Uber-like app in no time. Get in touch with the right set of experts who can partner with you and take your business ahead by designing the most appropriate app template for you.

And there’s more! We wrote a Guide on On-Demand Startup Fundraising, where we laid down all the important considerations for choosing and approaching the right investor for your company. Read to learn how to raise funds for your Uber-for-X venture.