What do we want? 

Everything!

When do we want it?

Now!

And it seems that getting everything we want RIGHT NOW is a reality with the event of on demand app services. No wonder you’ve decided to get in on the action!

But how do you know if YOUR idea is right for an on demand app?

Let’s say, you’ve definitely come up with the next Uber for X solution.

Congrats! But what’s next?

You’ll need to think about frequency, skill level, supply, gig workers, quality incentives, unit economics – and that’s just the beginning. 

It’s quite the headache. And it’s a lot to process. But making sure you’ve checked all the boxes could mark the difference between your success or failure.

And then you have to design and build an on demand app from scratch! 

That’s why this guide will tell you:

  • How to find out if an on demand app is the best solution for your product or service.
  • How to source supply, hire gig workers, and use unit economics to your advantage.
  • How to design an on demand app and choose a matching algorithm.
  • How to launch your app once it’s finished and monitor product market fit.

Already know you’re going with an on demand app? Need help with the development? At Iterators, we design, build, and maintain custom software and apps for your business.

iterators employee training software consulting

Schedule a free consultation with Iterators today! We’d be happy to help you design and build your on demand app so you don’t have to worry about it.

Step 1: On Demand App Development – Is It the Best Choice for Your Idea?

So, you have an idea for a product or service. But what’s the best way to deliver it? 

Should you make an on demand app or something else? 

Deciding that an on demand app is right for your business model is the first step in on demand app development. So, let’s start with the basics.

What is an on demand app? 

An on demand app is a mobile application that allows you to order services in real time or as close to real time as possible. Need a taxi right now? Just click a button in the app. Minutes later the taxi appears and takes you where you need to go.   

Examples include:

  • Uber (Rideshare App)
  • Lyft (Rideshare App / Uber Alternative)
  • Airbnb (Sharing Economy App for Housing)
  • Hotel Tonight (Housing/ Hotels)
  • Grubhub (On Demand Delivery App for Food)
  • DoorDash (On Demand Delivery App for Food)
  • UrbanSitter (On Demand Services App for Babysitting)
  • Papa (Grandkids On Demand)
  • Riovic (On Demand Services App for Insurance)
  • Sanctuary (On Demand Services App for Astrology Readings)
rideshare apps uber

So, to decide if you should deliver your product or service via an on demand app you should ask yourself:

  • What is the problem I’m trying to solve and what are my customers’ pain points? 
  • What is the frequency of the problem I’m trying to solve?
  • Can I solve the problem in real time or do people need the problem solved in real time?
  • Is it possible to build a supply chain that would solve the problem in real time?
  • Is it possible to connect the end-user to the supply to make the service on demand?

One of the key points is making sure the frequency of that problem is high. 

For example, Uber is a successful rideshare company because people need to go places a lot. Whether they do it every day or even many times a day, people take taxis often. 

An unsuccessful on demand app service is based on things that people do once a year or once a month. For example, getting a haircut. 

RIGHT

On demand app for ridesharing – e.g., Uber.

WRONG

On demand app for washing your car – e.g., Cherry.

on demand app jobs frequency scale

Let’s say that you decide that the problem you’re trying to solve is a high-frequency problem. And you can solve it in real time with an easily accessible supply chain. 

Then – YES. You CAN deliver your product or service as an on demand app.

“The first question to ask is what’s the problem? What are the pain points potential customers feel? Let’s say the problem is high frequency or you can deliver it in a real-time or on-demand way. Then the next question – is it even possible to build a supply chain to make it on demand? If yes, then you do have a potential solid use case for building that on-demand service.”

Payam Safa, Founder and CEO, Bellhop

And the good news?

On demand app use more than doubled in two years, increasing from 25 million users in 2016 to 56 million in 2018. Users focused on buying products and services from online marketplaces, spending almost $30 billion in 2017. Users spent less than half that amount (around $15 billion) requesting on demand transportation services.  

Pro Tip: To define the problem your app solves, ask your potential customers! You may think you’ve identified valid pain points, but it’s always best to double-check. And while it’s often true that invention is the mother of need, you don’t want to create a useless app by accident.

Think you might have a use case for a blockchain application too? Want to make sure? Check out our article: 5 Steps to Unlocking the Value of Blockchain Applications

Step 2: Deciding if Your On Demand App Idea is Complicated or Simple

So at this point, you know there’s a problem. You know that problem happens frequently. And you know that there is enough supply to fix that problem with an on demand app.

But you’ll need to ask yourself a few more questions. 

For example: 

Does the person providing the goods or services need to be highly skilled?

It’s an important question to ask. 

If the skill level is low and universal – e.g., driving – you’re closer to selling a commodity than a service. And that’s a good thing. You’ll need a less sophisticated on demand app to push a commodity. Plus, you’ll have more supply.

If the needed skill level is specialized, you’ll need to create a more sophisticated service.

That means:

  • You’ll need to build a more sophisticated app with more features. 
  • You’ll need to source a more sophisticated supply with skilled professionals. 
  • You’ll need to provide a quality of service that is comparable every time it’s delivered. Or you’ll need to provide a service delivered by the same professional every time.
  • Your providers will need to spend more time delivering a service.
  • Your providers will need more money to deliver a service.
on demand app jobs skills scale

Needless to say, that makes things more difficult. 

The less skill it takes to deliver a product or service, the more suitable it is for an on demand app solution. Again, a good example is Uber. 

It doesn’t take a lot of skill to drive a car. Almost anyone can do it.

That means:

  • You have a lot of supply. 
  • The service is consistent from one use to another.
  • You don’t need the same person to drive the user every time.

Now, let’s look at on demand tutoring. 

Let’s say you want to build an on demand tutor app. You live in a college town so there’s a local supply. But you still need to find skilled tutors. That thins out your possible supply. 

Plus, you’ll have to come up with a way to vet the tutors through your app. That means more features for your on demand app.   

Next, your customers will experience the service best if they can book the same tutor for their kids every time. If not, they can easily compare the level of service experience. 

For example: 

James was a good tutor. My daughter passed her test. 

Mark was a terrible tutor. He didn’t have a basic understanding of math. My son failed his test.

You could argue that any profession that would suit an odd jobs app could be the same. Think of maids, handymen, and hairdressers.

on demand services app tutoring job

Let’s say you want to create legal services on demand. 

Your user will need to explain the nature of the problem to get an attorney. The attorney needs to prove they have the skills and are specialized enough to take the case. 

And the on demand app needs to match both parties so they can communicate their needs.

Both tutoring and legal advice comprise several sessions with the same professional. That limits that person’s ability to take on other clients. Plus, the cost margins are high. 

Services provided by a maid, handyman, or hairdresser are also time-intensive. Even if they don’t need to be provided by the same professional every time. 

So, the problem you’re trying to solve may be very real and frequent. Yet, sophisticated services might not be the most suitable for an on demand service app.

At the end of the day, it’s best to choose a service for your on demand app that requires universal skills. For example, cooking, biking, driving, or running an errand. 

That way you can bring that service as close to a commodity as possible.

Pro Tip: If you can imagine eliminating the human element from the supply side, you’re better off. For example, on demand delivery handled by drones. Just having the capacity to shed the human element brings your service as close to real time as possible.

Step 3: Deciding if You Have the Manpower to Deliver On Demand Services

There are two sides to every on demand app service – consumer and supply. 

If your service has product market fit and is relieving a frequent pain point, you should have a steady supply of consumers. 

On the flip side, you need to also make sure that you have plenty of supply. 

What is supply?

For Uber like apps, that means drivers. But supply also includes the means necessary to deliver. So, for Uber like apps that also means cars. 

Let’s say you’re an on demand delivery app for food. Your supply will include:

  • Food 
  • Restaurants
  • Couriers
  • Transportation for Couriers

“You can think of supply as having distinct parts. You have the restaurants and you have the couriers. With transportation, the supply is the driver with the vehicle. You can think about those two things as distinct units. And you need both. That’s going to be true for other on-demand services as well.”

Payam Safa, Founder and CEO, Bellhop

Let’s say you’re building an on demand app for food truck delivery. You’ll need to ask: 

  • Who will supply the food? 
  • Who will deliver the food? 
  • What do the couriers need to deliver the food?
  • How will I motivate people to sell and deliver food through my app?
  • Are there any requirements I need my food trucks or couriers to meet? 
on demand delivery app jobs flow

Finding the Who – How to Source Supply for Your On Demand App

It’s best to start with a local supply. Before your app becomes known, you can’t expect people to adopt it without prompting. Start by signing up local businesses or encouraging suppliers to use your app. Of course, the process will look different depending on what you’re selling.  

One way to source supply is the most simple – go around and ask. 

If food trucks are your supply, find all the food trucks in the city. Visit them one by one. And ask them to use your on demand app. 

As for couriers or gig economy jobs, you’ll need to post job offers. But you’ll want to keep a few things in mind as gig economy workers are a unique workforce.

First, between 25 and 30% of the US workforce engage in gig economy jobs on a supplementary AND primary basis. Less than half (under 15%) rely on gig work as a primary source of work. So, it’s safe to say that most people use gig economy jobs to supplement other incomes.

Another thing to keep in mind is that people aren’t necessarily using on demand apps to do gig economy jobs. A study by McKinsey shows that just 15% of independent workers use a digital platform or on demand app to do gig work.  

That’s going to change the way you attempt to attract gig workers.

gig economy jobs

To address the first issue, it’s best not to think of gig economy workers as regular employees at first. Instead, think of them as you would a customer – identify their pain points. Why do they want an extra job?

Think of your on demand app as a tool that creates a marketplace connecting two customers. For example, people who want to drive and people who want to be driven.

Uber uses the same strategy and doesn’t look at their drivers as employees as much as customers.

When you view gig workers as customers you start to understand what’s driving them:

  • Extra Money
  • Fun Hobby
  • Opportunity to Socialize
  • Break from Real Work

While there are those workers who are “all-in” and will treat your gig as a full-time job, you need to account for the side hustlers and hobbyists. And while you want to make gig economy jobs seem fun and social, you still want to target high-quality, full-time employees. 

So, strike a balance in your on demand job offers – emphasis the fun, flexible nature of the work with a wink to attractive salaries and opportunities for full-time gig workers.

To address the second issue, you’ll want to go beyond your on demand app as a sign-up point for work. It’s important to place offers for on demand jobs in a variety of places that people would go to look for a normal job.

Where you should post job offers:

  • Social Media Networks
  • Dedicated On Demand Job Boards
  • Career Page on Your Website

A recent study found that 65% of gig economy workers not placed by a staffing agency found work through professional or social media networks. Job boards catering to gig economy jobs helped 32% of workers find a placement. And 26% found work through company websites. 

Once you have a supply of people for your on demand app, the next step is hiring a Community Manager. Hiring a person dedicated to managing supplier relationships is one of the best hacks.

on demand services app gig economy jobs

They can do the research, sign up suppliers, and organize meetings. A Community Manager can also work as a contact person for suppliers when things go wrong. 

Another perk? 

Community Managers encourage and incentivize word-of-mouth referrals among gig workers. Imagine your full-time gig workers acting as brand ambassadors on your behalf. Have your Community Manager host events to encourage referrals when you’re recruiting.

Hiring a Community Manager is easy to do on a local, “city” scale. And when you expand, all you have to do is replicate the process in different cities.

How to Incentivize Quality Supply for Your On Demand App

You’ll also want to test the supply to make sure it’s good quality. There are a million ways to test supply depending on what you’re selling. 

A more universal approach is to start by creating a list of criteria for your supply. Let’s go back to our food truck example. What requirements do your food trucks need to meet to ensure quality? 

Here are some things you might add to your list:

  • Tasty Food
  • Cleanliness
  • Quick Order Fulfilment
  • Location
  • Time on the Market
  • Brand Awareness
  • Engagement with Your App

Of course, your criteria will differ depending on the purpose of YOUR on demand app. For example, you might only want to sign established food trucks that provide tasty food fast. Or you may decide to also sign up new food trucks to stay ahead of trends. Make sure your criteria line up with your offer.

Next, you’ll need to decide how you measure things like “tasty food.” Did the food truck get any press, awards, or reviews for their food? What ingredients do they use? Are they popular? Do YOU like to eat there? Decide how you’ll go about reviewing your supply against your criteria.

Finally, you’ll need to keep an eye on your suppliers to make sure they continue to meet certain criteria after signing. For example, it’s very important that your suppliers signup, are active on the app, and have updated profiles. 

When companies like Uber move to a new city, they often offer signup and referral bonuses. Offering signup, usage, and referral bonuses at first, is a good way to incentivize suppliers to use your on demand app in the first place. 

Going further, it’s also a good idea to incentivize quality as well as quantity. To do that, use analytics to see if your suppliers are generating positive ratings and reviews. A dip in their ratings is a red flag that quality might be dropping. 

gig economy jobs reviews and ratings

Now, some on demand apps use ratings and reviews to police supply. You don’t want to do that. For example, let’s say you decide to remove any supplier whose rating drops below a 3.0. Automatic removal often leaves suppliers feeling confused and angry. 

Instead, use ratings and reviews as a way to manage quality. When a supplier’s rating drops, investigate the reason. Provide feedback or second chances to improve quality. When a supplier’s ratings soar, reward them for providing a quality service. 

For example, Uber is going beyond rewarding quantity with a new incentive program called Uber Pro, which is still in beta. Drivers can still earn points simply by driving, creating more availability of supply, but the best suppliers are also rewarded.

Drivers who keep their star rating at 4.85 or above, cancellation rate at 4% or below, and acceptance rate at 85% or above earn extra rewards. These rewards include extra money and coverage of operation costs like gas or car maintenance.

uber economy rideshare app rewards uber pro

How to Incorporate Unit Economics into Your On Demand App

Finally, you’ll want to make sure you have solid unit economics built into your supply chain. 

What is unit economics?

Unit economics is the amount of money you make and the costs you have in relation to a “unit,” which is usually a customer. Essentially, unit economics answers the question – does the price cover the costs and still make me money?

For on demand apps, the unit is one ride, one haircut, one meal, etc… Subtract from your price what it costs to pay for the supplier, the delivery person, rewards, and other costs. Is your service still profitable? 

You have to find an engine of growth.  Ask yourself:

If I’m putting in $1 am I getting $2? 

If yes, you’ve figured it out. If no, you’ll bleed money.

The point is to strike a balance between a sweet price point and making enough money with your on demand app. You also have to make sure your suppliers make money. So, unit economics balance everything from distance and effort to skill and product quality.

How do you do that? 

Ask yourself: How much will it cost to provide one user with the service? 

Using our food truck example: 

  • How much does the food cost? 
  • Does the food truck need an extra cut?
  • How much does the courier need to make based on distance and effort?
  • How much do I need to cover rewards and incentives?
  • How much do I need to make to cover other costs?
  • Am I bleeding money or am I set for growth? 
  • Does the price allow for operation and make the company profitable in the long run? 

Pro Tip: You’ll need to map out clear rules of participation. Create guidelines for businesses interested in joining on the supply side. Plus, create clear protocol guidelines for various situations. That way everyone knows what is expected and you can easily resolve conflicts.

Employee training is a surefire way to make sure that your employees feel engaged and purposeful at work. It can also help with unit economics. Want to find out how? Read our article: A Full Guide to Employee Training and Development (Examples)

Step 4: How to Start Designing Your On Demand App

Now, it’s time to get to work. 

What do you need to consider before you hire programmers and start to build your app?

“Step one is to build a prototype. Something that allows you to get feedback. Once you have an idea of the core functionality, develop a minimally viable product or MVP. An MVP is the most simple solution to deliver your product. Once you have that, start testing and get feedback. Then you iterate the development to build additional features. These should take the product to market and grow it. So, it’s a cycle and it’s a continuous development process.”

Payam Safa, Founder and CEO, Bellhop
rideshare companies bellhop app
Bellhop Rideshare Comparison App

Here’s a list of things that you’ll want to do:

  • Check Other Apps
  • Select Features and Functionalities
  • Split Features – Nice/ Need-to-have
  • UX/ UI Design
  • Create a Rough Timeline and Budget
  • Hire Programmers and Build the App

Yes, the first thing you’ll want to do is check other apps that are similar to yours. See what kind of features and functionalities they have. Does your on demand app need them? Or can you do without them?

It’s important at this stage to think of the user journey. And not just your customer’s user journey. On demand apps can comprise up to three separate applications:

  • Client Facing
  • Supplier Facing
  • Delivery Facing
on demand app development

The first step is to decide which of the three components your on demand app needs. Each of these components will need a different set of features to function. So, the next step is selecting features for each part of the application.

Here’s a quick rundown of obvious features you might want to include: 

Push Notifications

Push notifications are how the client and supplier facing parts of the app talk to one another.

A client makes a purchase through the app and a push notification is sent to the supplier to fill the order. A push notification is then sent to the client alerting them to the fact that their order was successful and service is on the way. 

Therefore, push notifications are a feature that you would want to include across various parts of your app.

Real Time Location Tracking

Once the client receives a push notification, real time location tracking allows them to see the progress of the on demand courier, driver, or service provider. Do keep in mind that not every on demand app will need tracking.

Frictionless Payment

If you want it now, you want to pay for it now. That means your app needs to allow for fast, easy, and secure payment transfers. 

on demand services app features

Here’s a list of other common features for most on demand apps: 

  • Login or Account Signup/ User Profiles
  • Messaging
  • Reviews and Ratings
  • Abuse Reporting
  • Loyalty Programs
  • Data Collection
  • Data Pipeline
  • Help and Support

When you’re looking at similar apps, ask yourself:

  • Which features did they use?
  • Does my on demand app need the same features?
  • Which features could I cut for my MVP?
  • Where in the user journey do these features appear?
  • How does each feature appear to the user?
  • What could I do to improve various features?

To decide which features to keep and which to cut, make a list of the features you need to have for your MVP.

So, let’s go back to the master list of common features for on demand apps:

  • Login and Account Setup
  • Matching Algorithms
  • Push Notifications
  • Messaging 
  • Payment Integration 
  • Real Time Location Tracking
  • Reviews and Ratings
  • Abuse Reporting
  • Loyalty Programs
  • Data Collection
  • Data Pipeline
  • Help and Support

Which of these are absolutely necessary? For your MVP, you’ll want to choose only the most basic features. As you test the product, you’ll add more features.

Here’s what your final decision might look like:

MUST HAVE FEATURES FOR MVP NICE TO HAVE FEATURES
Login and Account Setup Messaging
Matching Algorithms Real-time Location Tracking
Push Notifications Abuse Reporting
Payment Integration Loyalty Programs
Reviews and Ratings Data Collection
Help and Support Data Pipeline

Of course, not every list of features will be the same for every on demand app. You have to decide for yourself which features will be necessary to deliver your product or service. 

It’s going to be up to you and your developers to decide what you need. But you can ask yourself the following questions if you’re struggling to decide:

  • Is the feature necessary for the user to reach the end goal?
  • Will I need to gather user feedback on the feature to implement it properly?
  • Can the user still complete all steps in the user journey without this feature?

Now that you have your features, you’ll want to move on to UX/UI design. It’s important to lay out a proper framework for your on demand app. The programmers or software developers you hire will need it to have a clear idea of what you want to build.

Finally, you’ll want to map out your on demand app development project to get an idea of a loose timeline and budget. It will look something like this: 

  • An estimated timeline for phases.
  • An estimated budget for phases.
  • Which phases will include which features.

When it comes to budgeting, you’ll need to be flexible. Projects can range in price depending on their complexity. But to get a general idea, it’s best to shop around.

“The best way to budget is to speak to a handful of development companies to get price quotes for an initial MVP. Just understand that that initial version is not going to be the endpoint. The first version is going to cost you something based on an estimate of the requirements. Then you’re going to have additional costs to iterate and develop on top of the initial product.”

Payam Safa, Founder and CEO, Bellhop

Pro Tip: Looking for similar on demand apps? Check out Product Hunt’s list of Uber for X apps to see what’s already on the market. It’s a great source for finding similar apps.

Need to hire a programmer to make your on demand app? Not sure how to go about hiring a technical person? Find out: How to Hire a Programmer for a Startup in 6 Easy Steps

Step 5: How to Choose a Matching Algorithm for Your On Demand App Service

The main function of an on demand app is to match people with the things they want now. There are a couple of ways to go about doing that.

  • Manually
  • Automatically

Manual matching is exactly how it sounds. Either an administrator chooses who to match inside the app, or the user matches themselves with a provider. Pure manual matching only works when there is a low volume of consumers and suppliers. 

A good example would be a B2B on demand app. It’s not difficult to match two companies from a small pool. But imagine trying to manually match every request for a taxi as it’s made. 

That would be insane! 

That’s where the second kind of matching comes into play. Automatic matching requires a matching algorithm to work. But it can handle bulk matching very fast. Matching algorithms do the heavy lifting so services are rendered quickly and efficiently.

matching algorithm on demand delivery app

It’s also possible to create a hybrid app that uses both manual and automatic matching to pair a user with the right provider. 

A good example is Ubereats. A matching algorithm shows users restaurants based on their location. Then the user manually selects a restaurant based on what she wants to eat.

But how do you choose how to match the various parties using your on demand app?

It’s all about mapping out matching constraints. 

Again, let’s look at Uber as an example.

The user hails a taxi from the rideshare app. The app matches them with a driver. The algorithm uses constraints like location and availability to match users with drivers. 

The algorithm also takes into account the speed at which a driver responds to a client’s request. While it may match the user with eight drivers, it’s the driver with the quickest response time that “wins” the client. Things like ratings can also come into play.

But let’s say your app is a little more complicated. You want to build that on demand tutor app discussed earlier. Now, the matching algorithm has to process a lot more constraints:

  • Type of Subject – e.g., Math, Science, or Literature
  • Level of Subject – e.g., Remedial Math vs. Astrophysics
  • Availability of User and Tutor
  • Proximity of User and Tutor

And that might not even cut it. 

So, what are the basic constraints to keep in mind when you’re deciding how your on demand app is going to match users with suppliers?

Let’s start with the basics. 

Here’s a list of 5 basic constraints: 

  • Time
  • Location
  • Item/ Provider
  • Price Point
  • Personalization

And you can break each of these down into more specific matching constraints. For example, you may need to match your users to specific providers – e.g., I want the same hairdresser as last time I used the service. 

Or you may want to match users to items or people with specific qualities. Your user wants florists that stock gardenias. They need someone who can lift 50 pounds.

So, the first thing you’ll want to do is figure out what the constraints for matching will be. 

Ask yourself: 

  • Does my on demand app sell simple services (driving) or complex services (tutoring)? 
  • Do I need to connect two parties or more? Who needs to be matched?
  • What are the constraints for every match I need to make?
  • Does the matching need to be manual, automatic, or a combination of both?
  • Do I need to add an element of personalization to my matching? Do I need to collect data from the user to personalize matching? 
  • Am I matching on a buyer’s market or a seller’s market? How will that affect what I offer?
  • Do I need to add a competitive element to matching?

When it comes to the number of people you’re connecting, think about who the on demand app connects. For example, you have a food truck app. You’ll need to connect two parties:

  • The user with the food truck.
  • The courier with the food truck.

Next, you need to think about constraints:

  • Location – You’ll want an algorithm that filters out people outside the area of delivery.
  • Item – You’ll want to allow manual matching so users can choose the item they want. 
  • Location – You’ll want an algorithm that filters out couriers far from the food trucks. 
  • Speed – You’ll want to award the courier with the fastest response time the ticket.
  • Time – You’ll want an algorithm that takes speed and location into consideration so that the food gets to the user within a reasonable amount of time.

Based on the constraints above, you’ll need a hybrid approach to matching.

Recommendation VS Matching – How to Personalize Your Approach

What about personalization? 

Personalization often comes into play once you collect enough data on a user to offer recommendations. But what’s the difference between recommendations and matching?

Let’s say Tasha selects Macho Tacos three times in a row. It’s safe to say she likes Mexican food. Now, you can personalize her offer by recommending her more taco food trucks.

To do that, you’ll need to add a recommender system to your on demand app, not a matching algorithm. Recommender systems pair users with things similar to what they already like. Matching algorithms pair users based on certain constraints and parameters. 

Here’s an example:

RECOMMENDER SYSTEM

Sarah likes red dresses, so she might like red shoes too.

MATCHING ALGORITHM

Sarah lives in SoHo. So, she can only order food from nearby districts.

recommender system matching algorithm

You can also use recommendations to incentivize suppliers. For example, only suppliers with 4.5 stars or more are shown as recommendations to users. That encourages suppliers to provide a quality product so they can reach more users.

Do keep in mind that the more data you need to collect, the more manpower you need. Matching algorithms are something that your programmers will code into the on demand app. Anything data-heavy may also require a Data Analyst.

Buyers Market VS Sellers Market – Incentivize Users and Suppliers

Another element to take into consideration is if the market leans toward buyers or sellers. 

Why?

You can use market feedback to add an element of competition and incentivization to your on demand app and matching algorithm. For example, when you have a buyers’ market, suppliers compete for clients. You can design your matching algorithm to award the fastest or best suppliers with clients. 

When you have a sellers’ market, buyers compete. You could design your matching algorithm to handle that through ratings or tipping. You can also implement surge pricing to offset and incentivize availability. 

on demand economy buyers sellers market

Surge pricing can also allow for your algorithm to handle both market situations. In such a situation, both buyers and sellers compete for the best prices and fares.

Adding an element of competition also can allow users to match with more than one person. Matching users with multiple options allows them to choose the best. 

Pro Tip: You’ll also want to take ethics into consideration at this point. Matching algorithms can have an unintentional built-in bias. You can avoid that by applying the correct methodologies. Here’s an Ethical OS Toolkit to help you identify potential ethical risks for your on demand app.

Want to read more about how recommender systems work? We’ve got you covered! Check out our article: An Introduction to Recommender Systems (+9 Easy Examples)

Step 6: Launching Your On Demand App

Once you’ve got an MVP, it’s time to launch it. 

Launching your on demand app is just the first step to getting closer to your final product. You’ll need to test how the app does. Get feedback. And integrate that feedback by iterating on your initial design. 

It’s during iteration that you can add all the additional features that you had to sacrifice in the beginning. It’s also the point where you use feedback to improve the features you already have. 

Once you’ve made updates and improvements. You relaunch, test, and iterate.

launching apps like uber

It’s a wash, rinse, repeat process that could take a long time and a lot of money to perfect. At some point, you will also find out if your on demand app has product market fit. If not, you may need to pivot when you see that your service isn’t hitting the market the way you thought it would. 

“There is going to be continuous development that is going to happen over years or decades. It depends on how much growth your business is going to have. At Bellhop, the company continues to evolve. What we started with is different than the solution and product we have on the market now. We pivoted along the way.”

Payam Safa, Founder and CEO, Bellhop

Here’s what the Bellhop on demand app looked like as an MVP before the pivot and what the app looks like today:

rideshare apps bellhop pivot

And finally, once you gain some traction, you’ll want to expand your service. But the only way to get to that point is to make sure that your on demand app idea is solid in the first place

So, it’s launch, test, iterate. Launch, test, pivot. Launch, test, expand. Cha, cha, cha. With many steps between.  

Conclusion

While on demand apps are the hot solution for tacos and taxis, it might not be the best option for your idea. You need to make sure you’re hitting pain points. You need to make sure the frequency of the problem is high and the skill level is moderate. 

It’s a lot to manage. But checking all the boxes makes all the difference. Once you’ve done that you can be confident that all the design and development is a good investment. 

At the end of the day, time is what matters. Making what we want accessible in real time frees us up to do the things that are most important in life.