On Demand Services – “Pay-As-You-Go” Model
Any need of an individual or a business if it is time-consuming and expensive means their lies an opportunity. If any concept or idea can increase speed and reduce cost, it is a big hit.
The concept of On Demand Services is not new, for example, since 1650’s the postal system would route items to specific post offices for receipt or delivery. It was advent of zip/pin codes when delivery started by post man.
Horses and Coaches were replaced by faster means railways, aircrafts and automobiles.
In 1850’s AMEX or American Express started Express mail offering faster speed of delivery to individuals and businesses.
Till 1882, companies were required to build and maintain their own generators. Edison’s proposition to pay for electricity as a utility on “pay-as-you-go” model became a huge success.
Telephone offered faster communication, mobile phone even faster communication on the move and now with smart phones we all are connected. Twitter became a super hit with customers as they started getting faster responses compared to Email (The new Snail Mail). Two thirds of all mobile accounts are pre-paid.
There are three kinds of services in on demand:
Point to Point Service (PtP) i.e., Taxi service by an app is a point to point service whereas, fuel service as an app where fuel delivery to your parked car is a Point to Point item service (PtPi).
Ambulance service by an app is a PtP where patient is taken from one point and dropped off to the hospital whereas Hospital Bed in a mobile van is a Point to Point extended service (PtPe) where the mobile van offers all facilities of the hospital in the van itself, it is an extension of the hospital but on demand available to you.
Offering pre-paid option to the customer has many advantages to the businesses. If Indian electricity companies switch to pre-paid model, 1000’s of crores of rupees loses can be saved. Lot of start up’s focus on subscription, instead of considering hybrid (Subscription plus pay as you go) or adding pay as you go option. It is the most effective way to reduce the barrier to entry for the customer and huge scale opportunity for the business.
Every industry is evolving (Travel, Entertainment, Hospital, Education, Office or even Home). The user experiences are improving day by day and in future probably we will be mostly moving our fingers for getting most of the work done.