Why the Future of the On-Demand Economy is in Good Hands

The on-demand economy has been written about extensively in the past couple of months. We felt that not enough ‘insider’ perspective was secured as part of the reporting so we organized a Meetup featuring the CEO of Handy and NYC General & Operations Managers from Lyft, Luxe and Breather. We wanted to hear straight from the frontline leaders. What is the future of the on-demand economy? What is truth and what is fiction? Our Meetup recap below:

Building a lasting business in the on-demand economy is a tricky task that goes beyond making a shiny, app-based version of the consumer-producer interaction; in order to increase your market share (especially if you are pulling it from an existing player), you need to truly present an opportunity for a more fluid transaction between the consumer and producer. In other words, you can’t just doll up an existing service and expect to succeed, you actually need to improve the status quo.

Applico Meetup @ General Assembly

Standing room only at Applico Meetup @ General Assembly

Applico recently hosted a Meetup that covered a range of topics surrounding the on-demand economy with representatives from Handy (a platform that connects people to fully-screened household service providers like a handyman or cleaners), Lyft (the popular ride-sharing app), Breather (an app dedicated to improving and/or replacing the traditional conference room and office space), and Luxe (a new service revolutionizing the valet parking experience). Throughout the conference, one key tenet continually rang true: the user experience must be impeccably efficient to the point of flawlessness. Why is this? It all comes back to network effects.

Applico CEO Alex Moazed Handy CEO Oisin Hanrahan

Applico CEO Alex Moazed & Handy CEO Oisin Hanrahan

It might seem like being the first mover in the app-based iteration of a given on-demand service is the key to success, but that simply isn’t enough. To really benefit from network effects (the idea that your network of users builds upon itself, organically growing your company), you need repeat users and you need referrals. Without these, you are dead in the water, and you won’t get either without providing an excellent environment for both consumers and providers. As Oisin Hanrahan, Co-Founder and CEO of Handy explained, when someone calls an Uber but sees that it will be a 16 minute wait, they might be tempted to just go downstairs and call a regular cab, or even a Lyft; the same holds true for providers, who will look to other opportunities and platforms if their experience is not sufficiently meeting their needs:

So there is this two-sided network effect where customers are driving bookings, bookings are driving pros to the platform, pros are driving availability, and that is coming all the way back around and driving customers and bookings…in every single market we’re in, we don’t think about how to grow the number of zip codes…instead we think, ‘how do we go deeper and deeper into every market we’re already in?’ Because by driving more density, it delivers a better experience for customers and a better experience for pros.

Breather Packy McCormick, Luxe Pooja Dhargalkar, Lyft Seth Melnick, Applico Greg Battle

(L-R) Breather’s Packy McCormick, Luxe’s Pooja Dhargalkar, Lyft’s Seth Melnick, Applico’s Greg Battle

LISTEN To Your Users

Your users – both consumers and producers – can be an incredibly valuable resource when it comes to finding out what’s working and what isn’t (this makes sense, as they’re the ones using it all the time). This can mean you hold focus groups, study the customer satisfaction rankings, develop a robust support team, and just generally seek out feedback as much as possible. You need the trust of your user base, otherwise they won’t come back and won’t tell other people to get on board. Lyft, to provide one example of diligent and successful listening, heard overwhelmingly from their drivers that the payment system was too slow and inefficient. Knowing how important it was to keep their supply-side (their pool of drivers) strong, Lyft incorporated Express Pay, which cut the wait time on getting paid from a week to 12 hours. Needless to say, their drivers were pretty excited and appreciative that their voices had been heard and that they had an impact.

FOCUS On What You’re Good At

At Applico’s Meetup, an audience member asked Pooja Dhargalkar (Luxe NYC GM) why Luxe had not decided to move into the rental car space using the vehicles that their consumers leave with them. Her response was simply that they are acutely focused on doing what they do – valet parking – better than everybody else in that space. Expanding into renting the cars out is a distraction, at least until they have cornered the valet parking market, that would negatively impact their ability to excel in their primary space. As Seth Melnick (Lyft Senior Operations Manager) succinctly put it,

don’t try to be everything to everyone – we’re just trying to make this specific part of life easier.

ADAPT To Survive

The concept of differing “playbooks” came up at the Meetup, meaning: how do you find a balance between having a centralized platform and catering to diverse markets? The answer is to begin in your incubator city, and develop your platform to the point of excellence, listening to feedback, honing in on what you want to focus on, and adapting to new and unforeseen circumstances. Once you’re there, you want to identify what things are universal – in Breather’s case, it is having top-notch office spaces that consumers feel comfortable working in where you don’t need to interact with a person to use the space and the payment transaction is flawless. At the same time, take note of what might differ from city to city – what are the primary industries to market to in a given city, is space currently an issue here, etc. Know what things are constant and what variables are in play in various markets, identify which markets are good fits, then move in and adapt to survive.

Filed under: Platform Innovation | Topics: on-demand, platforms

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