What if I tell you that your door lock breaks tonight when you try to enter/leave your place? Or maybe you pull the sink faucet right off the wall and your house gets flooded? Or maybe a malfunctioning light is your kind of bad luck? Don’t worry, we are not wishing a spree of bad luck to all our readers. But even if none of the above happens to you, there are quite a few situations in your everyday life where you need to employ professional services at your home/workplace, especially on an on-demand basis. Not too long ago, you would have picked up your copy of yellow pages, rang up your building watchman or harnessed your own repository of curated contacts to get the right serviceman. Today, as it is with many such tasks of the recent past, there’s an app for that.
In fact, there are quite a few apps and services offering you hyperlocal, curated service professionals at your doorsteps as and when you need them. Their services range across the examples we talked about above and a lot more. And with the huge range of services, comes the confusion towards which one to use. Here, we explore some of the most landmark services and what you should use/avoid them for – as a result, figuring out what really works in India when it comes to these services.
The level field
To understand what’s unique and different about some of these services, it’s important to understand what most of them have in common. For instance, regardless of the service model and monetization, almost every single one of these service providers boasts a roster of personally verified professionals, with background checks and police verifications done. Another similarity among the ones we are talking about is their involvement in several verticals – be it beauty, plumbing, household help, car care etc. And that’s pretty much where the segment wide similarities end. Sure, while availing a service you may not find noticeable differences, but there’s a lot that goes on under the hood that acts as differentiators in this segment.
Discovery vs Onboarding
The discovery of services around you is what puts the ‘local’ in hyperlocal. That’s why every one of these services gets your location first. Urbanclap started in 2014, started off as a search and discovery platform, something that competitors like Hometriangle still define themselves as. The advantage here is mainly to the service professional, who gets to maintain his brand identity as well as the flexibility to quote what he/she deems suitable remuneration for the services offered. On the other hand, the customer also gets to choose between different price points for the same service. Cheep is a good example of a discovery service offering the flexibility of choice between different professionals based on their quotes, experience, ratings etc.
Onboarding, on the other hand, is when a service discovery platform, like Urbanclap, takes on the role of a service provider itself. Professionals are on-boarded and trained according to company standards and fixed rates are charged for their services. This way, the company presents a more unified front in terms of service quality and pricing. On the other hand, this often ends up in higher prices than average as the amount has to involve a commission for the platform itself. Zimmber, a Quikr owned hyperlocal services startup, also works on this model.
As you can probably understand from the differences between the two, both of them have their advantages hence both work in different situations. While individuals who do not wish to delve into negotiations, verification etc would prefer the latter, quite a few users do like to exert a certain degree of control over the services they go for and hence go after the former.
Depending on what they offer, or to be more precise, how they offer their services, there are different ways in which these platforms look at monetisation. For basic search and discovery platforms, like search engines, classifieds of as well as platforms like Justdial, revenue streams in mainly through things like subscription/registration fee as well as advertising. Since they depend on one-way lead generation (showing the customer results based on their requirements), they can charge service providers to be listed higher in such search results. On the other hand, they can also charge customers a fixed amount to be able to avail their services, or for a higher tier of their services.
For transactional platforms like Housejoy, Urbanclap, Cheep and more, there are certain other streams of revenue available. At any given point, these platforms are aware of the request generated by the customer, as well as the specific services (and its details like pricing, what’s included etc) being offered by the provider. Hence they are able to close the loop on a complete transaction, knowing exactly which customer to match with which provider. This allows them to charge a commission from the provider to avail a job. UrbanClap follows the commission model where it provides instant booking of services. The consumer buys the service, professional pays commission amount to accept a booking, and the platform helps with the delivery and operations using its automated engines. Think of it like how an on-demand cab service provider works – just with a fixed percentage charged the moment a cab driver accepts a ride.
Additionally, reverse-bidding, available on platforms like Cheep, opens up additional revenue segments. For instance, a job gets listed in a locality. Any providers who have listed that locality as their service area will be able to see the job request and bid on it. While the platform still charges the standard 10% commision, a more interesting and effective source of revenue has to be, if at all, what the professionals pay to be able to bid on the service – think of it as a buy-in of a kind – which should be usually proportional to the standard value of the services requested. A restriction like this is inevitable to avoid bids from every professional in the area for every job that suits their profile.
Apart from the additional revenue methods, the transactional model offers greater control over service quality, hence allowing greater monetization opportunities for both the platform as well as the provider. Even with the initial training and equipment costs involved, appropriate assistance from the platforms can and does offset that.
|Amid all of this, the service providers stand to gain beyond monetary compensation as well. For instance, Cheep provides insurance to service providers for any damage or harm incurred during service delivery. Although, they do have to forego the same if they chose to take on work beyond Cheep assignments as well – which is something that they aren’t explicitly forbidden from doing. “There is no abiding from CHEEP for PROs, they can work individually as well as with any of the competing brands,” says Dr Diwan Rahul Nanda, Group Chairman and Founder, Cheep, “but so far we have achieved 95% of retention for our 35,000+ PROs by the virtue of training programs, workshop, loyalty programs and benefits like health cum injury insurance CHEEP provides to them.”|
Future of the segment – Aggregators of aggregators
So, remember the broken doors locks and malfunctioning lights we started off with? What if you were to try and get that fixed today? Whereas Urbanclap charged by the hour for services like plumbing and electrical work (with additional charges based on work), Housejoy states upfront that prices are upwards of Rs 150 and will be detailed further upon inspection of the task. On the other hand, for beauty services – say, for instance, a Pedicure, Housejoy charges Rs 175 whereas Urbanclap starts off at Rs 199.
The point of the comparison? Well, it is abundantly clear that there is no distinct leader in India’s hyperlocal services market when it comes to pricing. In such a situation, how does a customer chose between platforms for a particular service? How do they ensure that they are getting the most bang for their buck? That is where the future of this segment lies.
QuikrServices has tried to answer that question in an interesting way. Instead of setting up their own network of services, they have established subsidiaries or partners across verticals and provide a curated list of services powered by these platforms on their portfolio of services. This allows them to take the advantage of networks already established in various cities and offer only those services that are readily available there. For instance, bike rentals in Mumbai are powered by RoyalBrothers, home services by AtHomeDiva etc. Although, for services beyond that, QuikrServices works on a reverse bidding process.
Taking this entire segment to the next level would require a more direct and head-on competition between the players. And for that, we need an aggregator of aggregators – a platform that simply lists every single service offered by the hyperlocal services startups in a comparative fashion, allowing the customer to make an informed decision. Something like this is being offered by Areo, an app from Google, but it will still take some time for the platform to mature and provide a comprehensive repository of services. This would not only enforce better pricing but also provide an impetus to platforms to be upfront and transparent in their services. The platforms are in it to win it anyways, and the service providers are also gradually making a profit. It’s about time that benefits beyond convenience trickle down to the customers too.