Business ideas for 2015: On-demand service app

Whatever your view on taxi giant Uber, the app-based transportation network is undoubtedly a frontrunner in the world of on-demand services – so much so, in fact, that its name has coined a whole generation of new start-ups – the ‘Uber for X’ market, as it’s become known.

Just like ‘Airbnb for X’ before it, a whole wave of start-ups are vying for a share of the large, and potentially lucrative mobile services market – and while taxi apps and holiday rentals may be overdone, there are a whole range of other sectors – and regions – to potentially disrupt.

From domestic services to health and beauty and even parking – there’s still an opportunity for online platforms and apps to capitalise on this popular trend and transform previously laborious tasks into instant, low-cost solutions (particularly outside of London).

Starting an on-demand service app: Why it’s a good idea

Although there are an increasing number of players entering the market, the sector continues to show rapid growth. Cisco predicted a 66% increase in the smartphone market every year for the next four to five years with expectations that there will be two billion smartphone users in 2015 and 2.7 billion by 2018 and research commissioned by Google revealed the app market is forecast to be worth over £30bn to the UK economy by 2025.

So, there’s no denying there’s money in apps – but why are on-demand service apps so popular and where do the primary opportunities lie in 2015? Well, as professionals become increasingly time-poor, and consumers become more and more used to having access to a range of services at their fingertips, demand for such offerings will only increase.

What’s more, with so many of the existing players focused on London, there’s a ready-made opportunity to launch a regional equivalent of any of the current frontrunners. It’s also an area with plenty of opportunity for growth, once you’ve established a satisfied userbase – there’s the potential to expand into other verticals. You may start out offering cleaners and eventually branch into handymen, etc.

On-demand marketplace Bizzby secured 40,000 users in its first three months of trading for its service that offers a range of consumer services at the click of a button, from an electrician to manicurist, so a more general marketplace also presents another promising avenue.

On-demand service app business opportunities

As with the taxi and holiday rental space, cleaning has already become a fairly congested space, but the market potential is huge and offers high returns. Alongside Berlin-based Helpling, which claims to be the “most widely-available platform for on-demand home services” and recently secured $17m Series A funding, and US giant Homejoy (backed with venture capital of $38m), there’s a number of growing UK players including Housekeep, Hassle and Mopp.

The cleaning model is clearly one with legs, all of the UK players mentioned are also funded and Mopp was recently acquired by US home services company Handy after citing 900% growth in 2014. However, only Mopp has extended its reach outside of London currently, listing Birmingham, Brighton, Bristol and Manchester as options – so a regional equivalent in this market could offer an interesting opportunity.

Alternatively, there are other fast-growing areas of on-demand websites and apps that are still relatively untouched in the UK, in London or regionally. In the last year or so, a handful of US companies have sprung up in the health and beauty space. While the idea of on-demand beauty may seem unnecessary to some, it offers a life-saver to the beauty conscious – and with the beauty market worth £17bn in the UK and set to grow by 16% in 2016 – it’s undoubtedly a market worth exploring.

Parking is another growing area in the US for on-demand apps. Innovative firm SpotHero allows drivers to park their cars in private lots and garages that they find and pay for through the app – a proposition that would undoubtedly appeal to commuters who find it impossible to park by their local station or shoppers unable to find a parking spot at primetime on Saturdays.

Who else has started an on-demand service app?

Having originated in the US, Priv appears to be the first of its kind in the UK. Launched in November 2014, the beauty and fitness app will send you beauticians or fitness trainers to wherever you want, whenever you need them. After making waves in New York and Los Angeles, beauty websites and bloggers are describing it as the “app that’s going to change your life”.

Online marketplace YourParkingSpace was originally based around the concept of renting out private driveways. After considerable growth the business became one of the most popular places to rent out a parking space but since December 2013 the firm has pivoted to accelerate growth further. Looking to capitalise on the lucrative on-demand trend, the business has a new mission – to become the UK’s leading online parking marketplace (with an app planned for later this year).

Insider opinion

Harrison Woods, managing director of YourParkingSpace.co.uk, comments on the emergence of the on-demand market:

“It was only a year or two ago when questions were being asked if this so-called ‘on-demand economy’ was here to stay – and could it truly revolutionise peoples’ habits and disrupt traditional industries.

“I can confidently say that the question has been categorically answered and I would go to argue it’s now a revolution that has only just reached the starting blocks. To date it’s been driven by early adopters – the tech savvy among us – who are open to change – but the real growth is still to come when these on-demand service offerings are adopted by the mass population as the norm.

“We’ve seen it in the parking industry. In the early days customers were reluctant to book online, they wanted to talk to someone – either us or the parking space owner – before making a booking. This has now flipped onto it head. Customers want and expect to be able to book immediately.

“As was seen with the dawn of the internet in the late 1990’s the emergence of the on-demand market is creating a new paradigm shift. There will be new businesses that will emerge in this sector that we haven’t even considered yet. The opportunity is there, it’ll be interesting to see which new businesses seize it.”

Published Jan 2015