The COVID-19 has affected the lives of billions of people around the globe. With strict restrictions and lockdown from the government, people are staying inside their homes and performing their activities through online platforms. Considering this scenario, the on-demand economy is increasing at an unparallel pace delivering the demand by providing immediate access, convenience, and personalized experience to next-generation customers. In general, it is an economic activity that is widely practiced by tech companies. These companies have an objective to fulfill consumer demand via the immediate provision of goods and services. The economy provides a convenient way to provide goods and services for those who are in the market for them.
How the Economy Works
The on-demand economy works by using the latest technology to connect suppliers and consumers. The connection takes place through a technological service such as a website or smartphone application. Users need to sign up for the website or application to use the service. When a user needs a service, they can open the application, insert their requirements, and send a request to connect with a service provider. The service provider gets alert through the application of the service request and moves out to perform the task for the consumer. After the completion of the service, the payment method takes place through the technology company. The process is completely secure and there is no sharing of personal information between parties. Users can provide feedback and ratings once the service is complete. This can further improve the system and assist to provide a quality of service.
Benefits of On-Demand Economy
The on-demand economy has many benefits as it provides real-time fulfillment of goods and services. Users can experience easy and convenient service providers to meet their requirements. It can satisfy the needs of consumers in a cost-effective, scalable, and efficient way. Similarly, as a service provider, companies that operate in this economic model can realize the astounding level of profit, without all the overhead costs associated with traditional labor models. Since most of the economy is a service model, there is no staff to hire, train, or provide them with benefits. Likewise, for freelancers who are interested in providing service, the economy allows them to use their spare time to generate additional income. This allows freelancers to work as much as they want.
Drawbacks of On-Demand Economy
The major drawback of this economy is to maintain and ensure the level of user privacy. As hacking attempts can take place in any application, cybersecurity maintenance is a must. Even though cyber-attack prevention can be an expensive cost, but it is essential for consumer trust. Additionally, lack of customer loyalty is another limitation of this business model. As customers have many choices, they keep changing their brands or service providers. They never stick to a specific brand or service provider.
In the Context of Nepal
The on-demand economy has minimum competition due to the nature of its service. In Nepal, one of the popular examples is ride-sharing apps. To this date, there are more than dozens of ride-sharing platforms that allow bike owners to earn money by renting their back seats to riders. In addition, these platforms are also providing food delivery and couriers’ services. According to these companies, there are more than 500,000 active users and 100,000 service providers associated with them. Furthermore, Nepalese freelancers have also made their participation in international platforms such as Fiverr and Upwork. They offer services such as graphic design, web development, online consultation, and translation to various companies around the globe.
Regardless of regions and industry sectors, the development of on-demand app continues to grow. With access to every service at the fingertips, the on-demand economy is a suitable choice. As technology advances the on-demand services will continue to disrupt many sectors.