How much does an on-demand service app cost?

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How much does an on-demand service app cost?

How much does an on-demand service app cost?

To mention upfront, the cost of on-demand app development is hard to estimate as it vries greatly from project to project. The average cost of an on-demand app development can vary from $15,000 for a very simple one platform project to $240,000 for a mature cross-platform app. The average cost of an on-demand app MVP is around $100,000.

Such a large discrepancy in app development price is due to the sheer amount of factors that go into any app development: number of platforms, technologies, number and complexity of features, design,  developer rates, etc.

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This article aims to give you a detailed explanation of the process of app development, the main features of an on-demand app, and an estimation of the app development cost.

On-demand Business Model and How It Affects App Development

Demand in this business model is very important: the business tries to find offers to satisfy the existing demand, not the other way around. The platform itself, however, acts as a moderator, as a space where clients can place their inquiries, and the providers can compete for a chance to take on the job.

Regardless of whether the platform was built for virtual services or physical products, an on-demand business model works best when operations run online: this means that the service providers get access to all existing offers, and all clients have access to all service providers to choose from which ultimately leads to the market becoming more competitive and diverse.

There are hundreds of on-demand services now, from giant multinational companies like Uber, to your local food delivery that you use several times a week to get fresh hot meals in a matter of minutes.

Main Aspects of On-demand App Development

There are many things to be aware of when creating an on-demand service. However, these are the key items you just can’t do without:

Onboarding

The highest priority in any provider-client interaction is its success. As a platform, you have to make sure that the service delivered was so good that the client will be a returning one, as well as the provider. The purpose of the onboarding process is to acquaint both sides of the process with how to get into it as fast as possible while providing all necessary information. Onboarding is a vital part of any on-demand business.

Provider onboarding – your platform is as credible, safe and reliable as your providers are. These people are your reputation, which is why you need to make sure that you screen candidates before you allow them to be a part of your business. If you are a taxi-hailing business, you need to check their driver’s license and criminal history and make sure they do not operate with expired or invalid documents. You can screen candidates via the app, in real life or on a separately constructed website.

Client onboarding – in contrast, this part should be as short and easy as possible, so the client doesn't get tired and change their mind about using your platform. Usually, setting up a simple profile and entering a valid card for future payments is enough.

Chat

Another essential component of most on-demand apps is chat. Allowing providers and clients to freely communicate will not only resolve any misunderstandings, but also help clarify job details. It is worth noting that free provider-client communication might lead to platform abuse so you need to establish clear rules and implement message filters to minimize potential harm. This includes profanity and nudity filters if your chat has an attachment feature, and any other filters important to your service: for example, you can filter the words “address” and “street” to prevent your providers from asking client address when they are not supposed to. You should also keep chat logs somewhere in the system to make sure you can resolve any conflicts and address client or provider reports. Chat is a great tool that helps moderate provider-client interactions and saves you a lot of effort in the process but it should be well thought out and implemented responsibly.

Priorities

On-demand app development is a complex process involving multiple stages. It’s important to prioritise the development stages to bring the release date forward:

Mobile

Mobile is the first priority of any on-demand service. Since the business model relies heavily on online interaction, it needs to be easily accessible for both clients and providers. Most purchases nowadays are made from mobile devices, and your on-demand service will most likely be no exception. When you have the choice, make mobile app for your platform the highest priority on the development list: it should run flawlessly, be responsive and user-friendly.

Admin Panel

Admin panel is the second most important part of your platform. Admin Panel might be a work in progress for a long time since not all of its features are paramount to the initial launch, however you cannot underestimate its importance. Admin panel allows you to watch over every single operation that goes on your platform: oversee the account information of providers and clients, have access to chat logs and user history. All this information has two main applications: support and analytics. If somebody is misbehaving on your platform, a fraud takes place or somebody is not satisfied with their end of the deal, you will have every detail of the interaction to determine whose fault it was and what measures are to be taken. Admin Panel can also be a hub for all your analytics and reports to see how your business is performing and what you can improve upon.

Web

It’s good to have your platform available not only on mobile but as a web application. Though it is very likely that the vast majority of your users will stick to the more accessible and responsive mobile app. Thus, web version is not a top priority by any means: if you have your mobile app and admin panel all set up and running like clockwork, then you should consider a web application.

 

On-demand App Architecture

On-demand applications usually consist of the following parts:

Client app

This is the app that gets the most attention and is the “face” of your company. It needs to be well-designed and be user-friendly. The first stage of development always includes a mobile client app, a web client usually comes in during the later stages of development.

Provider apps

The app that providers will use. It can include provider reliability checks to screen new providers.

Admin Panel

An irreplaceable instrument for you and your stuff to oversee the platform, regulate conflicts and generate reports on effectiveness and productivity.

Backend

A vital part of any on-demand platform that stores data, statistics for strategic planning and makes sure that all applications are quick to respond and run effortlessly.

Third-party apps

On-demand applications usually benefit greatly from integrations with other apps and services:

  • ePayment – on-demand application should be able to handle all financial operations from within the app for smooth user experience and safety, that is why the integration with ePayment service providers is paramount;
  • CRM – it is possible that you will need CRM integration to manage the provider-client relationship more effectively.
  • Onboarding – you can manage your onboarding through third-party services to make sure that your service providers are credible and reliable and can be responsible for the quality of service they offer.

Life Cycle of On-Demand Apps

On-demand applications are usually start-ups that have several stages of development:

  1. MVP (Minimal Viable Product) – characterized by a quick start, constrained budget and concept experimentation
  2. MVP performance analysis, reevaluation of the project, review of requirements and strategy development
  3. Mature application

Minimal Viable Product is usually the first stage of an on-demand project and it plays an important role in application development. Here are the main traits of the MVP:

  • High risk
  • Time constraints
  • Budget constraints
  • Importance of marketing
  • User communication and support are prioritized for building a good reputation
  • UI is prioritized over architecture to impress users and keep them as returning customers
  • Low performance requirements since the number of users is usually low

MVP Priorities

High priority:

  • Mobile UI (especially for the clients)
  • Quick feedback and support response

Low priority:

  • Architecture
  • Web

Where you can cut corners

There is a number of points during development where you can cut corners or opt for a cheaper alternative. Here is the list of things you can consider when managing your development budget during the MVP stage:

You can choose a monolith architecture model for your MVP: it will be considerably cheaper, and later down the line you will still be able to break it down into smaller modules and move to microservices

  • Don’t invest into developing a web version of your application just yet;
  • Use cross-platform technologies for your mobile apps;
  • Onboarding for providers can be done outside of the application through calls, emails or interviews.
  • If you have a full and detailed understanding of what you would like to have in your app and what kind of project you want it to be, it will save you time and money on business analysis and specifications.

Technologies

Mobile

Since cross-platform development is usually a good choice for a constrained budget, you should opt for React Native or Flutter. For OS specific features or OS specific UI design and layout a platform-based approach would work best. But in this case it would be better to develop for one platfrom at a time. This would save bugdet on back and forth changes which most probably would take place initially. However, this approach takes more time compared to development of an app for both platforms at the same time.

Web

React and Angular are the best options, both being the gold standard in web development for now.

Backend

With backend, there are a lot of options and things to consider:

Node.js – based on JavaScript, which guarantees you a quick start and quick results and additionally save up some money along the way

.NET Core – a mature platform and a powerful versatile instrument in professional hands with a steep learning curve

Hosting – if you have an option of setting up your own servers to host your application, you can go for it but do keep in mind that this entails additional expenses on DevOps operations since you will have to set it all up manually and from scratch. The other option would be cloud hosting where you can rent a cloud environment and services for your project and supply them with a variety of additional services needed for the micro-service architecture such as AWS Lambda. Database choices are heavily project-based and will depend on the type of application you are building: Postgress, Mongo, MS SQL, Amazon RDS, Amazon DynamoDB, Azure SQL, etc.

  • On-premise: if you have your own servers, you can use Kubernetes and Docker. This will save you money in the short run, but the upkeep will cost more in the long run.
  • AWS, Azure, Google Cloud – if you don’t have your own infrastructure, cloud hosting is a cheaper and more reasonable option. As an added bonus, you have to have much less DevOps expenses at the start of operation.

We have worked with all of these technologies and can speak from experience about their advantages and disadvantages.

How much does it cost to develop an on-demand MVP app

Here’s a basic outline of an MVP on-demand development:

Cross-platform mobile client app

  • Order creation – a staple of any on-demand app
  • Bid viewer – if several providers compete for a job, the clients need to be able to see their offers
  • Bid choice – this feature allows the client to pick the desired provider and start the job
  • Job status – the client should know at any point in time what is happening to their order and at what stage it currently is
  • Third party e-payment – built-in payment will allow you to have control over financial operation on the platform. You won’t have to worry about cash payments damaging your reputation with either provider or client trying to scam
  • History – this is a very important feature that will save you a lot of support time. Customers and providers often want to look at details of their previous order to resolve issues or repeat the order
  • Push notifications – an important tool that facilitates communication between the provider and the client while the job is being done, saving a lot of time and effort for your support team.
  • Third-party support system – if your users find themselves in a situation they cannot resolve on their own, your support team must be ready to address the issue instantly. By allowing users submit tickets to the help desk, you are building a good reputation that is vital to the existence of your platform

Hours needed: 1000 for two platforms

Cross-platfrorm provider client app

  • Onboarding – cheaper done via other means (phone calls, emails, etc.)
  • Job viewer – a vital feature for any on-demand app
  • Bidding – if on your platform providers compete, you should equip them with features to do so;
  • Job statuses – with this feature providers can let the clients know how their order is doing
  • Job history – providers should be able to see their previous jobs
  • Push notifications – quick way to see if there are any changes to the job

Hours needed: 1000 for two platforms

Admin Panel

You need to set up some basic view-and-edit features from the start. No need to have many roles yet.

Hours needed: 500+

Backend

Here you are better off opting for a monolith architecture with module structure. Monolith approach is less demanding in terms of developer qualifications so you would be able to staff your development team very fast.

Hours needed: 1000+

Total hours for an MVP on-demand app: 3500+

Module Features Minimal Hours
Client app

Order creation
Bid viewer
Bid choice
Job status
E-payment
History
Push notifications
Third-party support system
Feedback module

~1000 for two platforms
 Provider app

Onboarding
Job viewer
Bidding
Job statuses
Job history
Push notifications
Feedback module
Provider screening module

~1000 for two platforms
Admin panel

View-and-edit features
Access rights hierarchy

~500
Backend Monolith architecture with module structure ~1000
Additional features Low scalability
Low to medium performance
Fail proof system

 
Total   Starting at 3500

 

How Much Does It cost to Develop a Mature On-demand Application

The development of an on-demand app mature application has different priorities compared to MVP:

  • Scalability – if your platform experiences an influx of new users, you need to be able to scale your system accordingly to accommodate all of them
  • Performance – no matter how many users you have on your platform simultaneously and how many operations your system processes every second, it should provide a smooth experience for all your customers at all times;
  • Fail proof system – even if something fails in any part of your system, you should have a backup solution that will allow your platform to continue functioning while you fix the issue
  • Feedback – you will likely receive a lot of feedback and not every single word would be that of praise. Correct prioritization of technical issues paired with implementing new features at a rational pace is a difficult feat to accomplish, but a necessary one nonetheless
  • UI – a mature app should look like one.Your users should have an easy and clear way of posting a job and completing it. Gather user feedback, analyze how they use your app and make changes accordingly
  • Reputation and onboarding – the onboarding process may need to become more strict to keep up with the influx of users

Usually it costs twice as much as MVP. Mature application includes every feature that was cut from the MVP and a lot of work done on the Admin Panel and on the backend.

Where you can save money

Mobile

Stick to a cross-platform solution: a shared codebase is a great advantage and a time-saver, especially if you are making changes and fixes quite often. Sturt-ups tend to change design, or requirements, or both quite frequently, and you will save a lot of effort putting your code in one place

Web

There aren’t many corners to cut but you still can fiddle with premade UI packs with standard controls to avoid developing your own. Stick to React or Angular.

Backend

Microservice architecture will be the best pick if you aim to scale your platform to accommodate many users and simultaneously ensure spotless performance

Here's how much the development of an on-demand mature app from scratch costs:

Module Features Hours
Client app

Order creation
Bid viewer
Bid choice
Job status
E-payment
History
Push notifications
Third-party support chat
Feedback module

~2000 for two platforms
Provider app

Onboarding
Job viewer
Bidding
Job statuses
Job history
Push notifications
Feedback module

~2000 for two platforms
Admin panel View-and-edit features
Multiple user types with multiple level access rights
~1000
Backend Microservice architecture ~2000
Additional features

High scalability
High performance
Fail proof system

 
Total   Starting at 7000

 

How we approach on-demand projects at Businessware Tecnologies

On-demand start-ups are always exciting for us so we treat them with the utmost care and attention. Our project management process stood the test of time and proved to be the most customer-friendly and efficient.

Project Discovery

On the first stage we explore the client’s idea. If you already have a full-fledged concept, we will provide you with our project plan and cost estimation. If you don’t have specifics – no worries. Our analytics will help you flesh out your idea and prepare all necessary documents: vision, specification and estimation. This stage ends in a commercial offer with development process details and a pack of project-related documents.

Development

The most labor-intensive stage of any project. We offer a full spectrum of services throughout all stages of project development: analysis, design, development itself, quality assurance and support. We stick to Agile approach which means stable delivery and fast response to requirement and design changes. We also make communication our priority, holding regular meetings with clients, sending status updates and showcasing demos as the project is growing.

Launch

When the project is ready to go live, we submit all necessary information to AppStore and Google Play, create a pack of document with instructions and guides if they are needed for our client or their staff, and perform a final round of testing to make sure that the launch will be impeccable.

Maintenance

For the warranty period specified in the offer, we will readily help with any problems the platform happens to face. If our clients want to add new functionality or features (happens all the time), we address it as a little project: we discuss specification, give the estimate, and when everything is agreed upon, we develop and deliver.

The Total Cost of Developing an On-demand Mobile App

The cost of an on-demand app depends on the rates of developers in your area:

Region Mobile Developer Average Hourly Rate
North America $60-80
Western Europe $45-65
Eastern Europe $20-30 

 

With the average hourly pay for developers in Eastern Europe being around $25, here’s a rough approximation of how much it costs to develop an on-demand mobile app:

Features MVP Mature app
Client app and provider app $50,000+ $100,000+
Admin panel $12,000+ $24,000+
Backend $25,000+ $50,000+
Total cost $87,000+ $174,000+
Time 3500+ hours 7000+ hours

 

Please keep in mind that total costs vary depending on the project. The more our team will know about your project, the more accurate the cost estimation will be.

We here at BWT strongly believe that on-demand applications are among the most interesting and exciting projects a software development company can have. Through our extensive experience developing, maintaining and improving on-demand platforms we have learned that there is no limit in innovation and growth. We are proud to see the projects we helped bring to life thrive on their respective markets, driving the very notion of an on-demand service to a whole new level.

We have also learned that collaboration and discussion are the key components of success when it comes to on-demand service development, that is why we have made communication with the client our top priority. Even if you do not yet have a clear idea in mind, we are more than happy to offer our knowledge and expertise in the field and help you bring your on-demand service project to life. Just drop us a line at sales@businesswaretech.com and we will contact you as soon as possible.