The “On Demand” platforms are probably the most talked about types of models around these days (FYI, publicity isn’t always a good thing).
For efficiency’s sake, let’s just dig into the On Demand model as a whole…
What’s the deal?
These models are all pretty much the same in terms of how they operate – a client comes in requesting a service, the platform sends the service professional (that’s you!) to perform said service, the client pays the platform, and then the platform pays the service professional for work done anywhere from 75-85% of the job.
They call it “On Demand” because of the convenience for the client. Clients want to book a service and they (for whatever reason) don’t care who comes to perform the service – they just want it done. So that’s the client’s mindset.
For you – the professional – the platform sends you these jobs directly. They tell you what to do and where to go. Then it’s up to you just to perform the service. You don’t have any real interaction with the client, and the entire scheduling and payment part of the transaction is done through the platform itself. You are advised on how to behave (almost like an employee) and you need to agree that the customer is the customer of the platform, not you.
But it’s pretty much guaranteed money (for the work you do), you don’t have to spend any time or money marketing, you only give up a fee (the platform fee) when you get paid, so no upfront costs or financial risk.
How do I set it up?
Since you’re essentially working for the platform directly, setting yourself up for these On Demand companies take a bit of time. They usually do a background check, references sometimes, even bring you in for a personal interview potentially. Each setup process is a bit different depending on the platform, but expect a bit of time to go by before you can start accepting jobs.
What are the risks?
The risk of On Demand platforms is you not being able to grow your business. You’re treated essentially as a subcontractor or employee, and are shielded from having direct access with the clients you serve. Thus you can never really build a base of a clientele from which to grow your business to a larger scale.
The platform is your boss. So long as you do a good job and the platform is large enough to attract a lot of consumer traffic, you’ll get team members on jobs and paid. However, the pay might be 20% less than what you would normally charge clients directly (since the platform is taking a cut), and your upside is limited. There are also rules you need to abide by in order to continue working for this new boss of yours.
More detail around how entrepreneurial professionals can exist (or can’t exist) in this On Demand world can be found here.
On Demand platforms overall are ideal for the type of professional who fits into one of the below categories:
(1) You’re just starting out. Say you’re just jumping into a new industry and would like to hone your skills or get some experience under you and even get some cash in your pocket. Taking jobs from an On Demand platform will give you the practice and feedback you need to perform a solid service. Reviews are quite common on these platforms so you’ll be able to manage and react to feedback, and you’ll be able to hopefully save some money along the way to then start your own business when the time is right.
(2) You have no desire to grow a business. A lot of the workers for On Demand platforms have no interest in entrepreneurship or building a business. They essentially consider themselves as employees or contractors, and are perfectly fine being told where to go and what to do so long as they get their paycheck at the end of the week.
If you are, however, a professional who is an entrepreneur at heart and you’re interested in leveraging these platforms to grow, then here’s a major pro tip: start taking these customers “off platform”.
Here’s what I mean – these platforms deal with the customer directly, and simply send you (as the professional) to perform the service. You technically are not permitted to “steal” the client…that is you aren’t supposed to approach the client and say – ‘Hey, next time you need service can you just call me directly? That way, we don’t have to get the platform involved. The price and service quality is the same for you, and for me I can keep 100% of the service price.’ That is what we call going off platform.
The reality is, for many customers they are totally fine going off platform. If they like you and your service quality, then going to you directly the next time they need a service is actually preferable because they know what service quality to expect (as opposed to going to the platform and getting a new professional to help them). So long as that customer doesn’t tattle on you, then this is the ideal way for you to build a solid book of business and recurring clientele.