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 varies 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.

This article we 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.

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.

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 — through an app or in real life — before you allow them to be a part of your business.

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

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.

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 meet deadlines.

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 keep a close eye on every interaction. 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. However, users will likely stick to mobile as a more convenient version, so a web version is not a top priority by any means: once 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 app

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.

Backend

A vital part of any on-demand platform that stores data, statistics for strategic planning and oversees application performance.

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.
• CRM — CRM integration helps 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.

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, project reevaluation, 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
• Emphasis on 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

Here is the list of things you can consider to lower your development budget during the MVP stage:

• Monolith app architecture: 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 to save budget on back and forth changes that are bound to happen 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.

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.
• History —customers and providers often want to look at details of their previous order to resolve issues or repeat an 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+

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.
• 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 systems — when you app is down, you should have a backup solution that will allow your platform to continue functioning while you fix the issue.
• Feedback — listening to your users and responding in time is vital for an on-demand service.
• 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 a mature app costs twice as much as an MVP and takes twice the time to develop. A mature application includes features that were cut from the MVP along with an improved admin panel and backend.

Where you can save money

Mobile

Stick to a cross-platform solution: a shared codebase is a great advantage and a time-saver.

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.

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:

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:

Please keep in mind that total costs vary depending on the project.

Conclusion

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.

Interested? Drop us a line and we will get in touch with you ASAP.

The article was originally posted on www.businesswaretech.com