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The on-demand economy has become quite the rage with these business models becoming popular among customers. The buyers are enjoying the new found luxury which will provide them goods and services at their door step. But wait this is not about just costumers or consumers alone but business also benefit through this mode.
Though the companies have to take the extra step of handling the entire logistics work it has proven to be profitable to them. Today more consumers are ready to buy products from various businesses even if it is far away for commute; the ease of availability lets them choose at any point of time.
Growth in other verticals
This has also led to the growth of many companies apart from the core company which provides the service or product. Today there are dedicated companies for the purpose of logistics alone. They take up the delivery service for various companies and bridge the gap between seller and buyer.
There are website and application development companies, who are building apps for these companies who do not have IT as their core.
This has in turn boosted the sales of smart phones and the number of internet users. Today one can come across the price war between various smart phone sellers and that of internet service provider. The market for both of them has grown leaps and bounds.
Though this revolution is a little old to the west world it is now in action in most of the Asian countries. It has led to the beginning of many entrepreneur dreams and funding spree.
This has led to the increase in jobs for un-skilled laborers, delivery persons and online order managers. A basic qualification of high school will fetch them these jobs.
It has also lead to the increase in consumerism; earlier the idea of going to places far away and doing a purchase or availing a service wouldn’t have excited consumers as it does now.
The comfort of on-demand encourages people to buy more and is increasing the value of market.
Issues surrounding an on-demand company
These setbacks are faced mainly in developing countries and some of them even in developed countries. The lack of well networked logistics, there are very few companies which have wide coverage of consumers in these place.
Lack of proper infrastructure in terms of roads and highly congested traffic creates a hurdle to companies. Transaction of money is another major issue. Since these countries at the beginning of development, the people are not acquainted with credit or debit cards.
This means the transaction has to take place through cash on delivery mode. So it leads to several layers of accounting and verification.
Not all areas are well connected with internet as their infrastructure is at a budding stage. Poor penetration of internet limits the number of costumers for these companies.
Apprehensions about on demand companies
Since these companies are still in their nascent stage costumers are skeptical about buying from them and tend rely on brick and mortar stores.
These companies are at their starting stage and cannot pay high here is where the real deal begins as they need talented people to handle their business.
Contract based workers
This has led to many companies hiring workers on contract basis. In case of Uber, it does not classify its workers as employees but as contractors. Such models give the workers a freedom to choose their time and place of work. In a sense it breaks the barriers of a 9 to 5 job.
But with glamour quotient attached to the work style of start-ups, many graduates look up to work in those environments.
What attracts the work force the most is the ability to grow and learn along with the company which is restrained by various levels of hierarchy in well established organizations. They get the chance to experiment and implement their knowledge.
Many companies similar to Uber face the heat of regulations. As there are no clear regulations surrounding these businesses it makes difficult for the companies operation. It creates ambiguity over their operation methodologies. It is high time governments across the world start framing rules which are beneficial both to the company and the economy.
Too many ideas
The grim side of these start-ups is way too much of competition. Today there are niche start-ups in almost all the sectors which may sound sweet to the customers with wide choices. However for companies it is cut throat competition and price wars.
They tend to rely heavily on funding in the initial stage of their development. The slash down prices to gain market space but customer loyalty is a log lost phrase. Today customers are looking out for new companies which offer latest offers at cheapest price. This means the survival of a company is a herculean task for its owners.
Recently Home Joy a cleaning service company and shuddle online taxi service for kids both of them based in USA shut down their operations. A demise of few companies is not the end of the game but it is a signal that not everything is positive around starting companies there are down-falls too.
But on the brighter side start-ups have a grand welcoming from funders, they are more open to new ideas than ever before. There are dedicated platforms for fund raising and launching an idea.
Multinational start-ups and cloning
Expanding a business after a successful beginning in a country is a maze game. Even before an idea gets well established in one part of the globe, there are companies ready to the duplicate their idea in their home market. Uber is a classic example for this, though one call it an aggressively expanding company they have competitors in every country including their home country USA.
Though the idea originally belongs to them there are replicas which perform better than Uber in many places. For example Ola has bigger market in India than USA so does Didi Kuaidi in China.
Clones keep sprouting at moment a success story is begins.
For all those entrepreneurs with a dream it has never been a better time to start your dream venture despite all these trouble, after all no success is sweet without struggles and obstacles. Don’t give up at the first hit of loss or a setback. Thus wishing luck to all the beginners and big thinkers.