|Why A New Generation Of On-Demand Businesses Rejected The Uber Model
By: Fast Company
When Miguel Zabludovsky opened his first laundry delivery service, Slate, in 2005, he pitched customers convenience: He would pick up their unsorted laundry (literally: he was both CEO and courier), and his subcontracted eco-friendly dry cleaners would clean it however they saw fit. Two years later, he opened his own laundry facility, which for several years cleaned dresses for high-fashion rental service Rent the Runway. Two years after that, he added home cleaning to the business. It wasn’t until 10 years after starting the laundry service, in January 2015, that Zabludovsky repositioned Slate as a tech company.
At first glance, Slate looks a lot like other "on-demand" apps that leverage mobile technology in order to allow the masses (or, at least, the masses who have disposable income) to summon anything from a late-night taco to a home cleaner. Like these startups' workers, Slate’s cleaners—who visit every day to make beds, do light cleaning tasks, and tidy and pack up laundry for pick-up by Slate drivers—manage tasks and schedule through a mobile portal. Like these startups' customers, homeowners make requests about how and when they want tasks completed directly through a newly launched app.
But Slate’s business, which started with service operations and later added technology, has been built with almost an opposite business philosophy as startups like courier service Postmates, grocery delivery service Instacart, cleaning service Handy, errand marketplace TaskRabbit, and the many other startups that embrace an Uber-like business model. While those "Uber for X" startups seek to distance themselves from the driving, cleaning, and delivering they facilitate, instead functioning only as a technology layer on top of other businesses, Slate fully believes that it is a cleaning and laundry company. "We’re not techies," Zabludovsky says. "We’re cleaning 130, 140 houses every day."
Zabludovsky, who over the years has both subcontracted and owned his laundry services, believes it's better for business to own more of the process, not less. "There is no doubt to us that if we want to be successful, and if we want to be in the cleaning of clothes business, then we have to own that business," he says. "It’s very difficult to get the kind of consistent quality that you need to provide to keep customers without doing it yourself."
Once promised as the future of "everything," the "Uber for X" model has recently come under scrutiny as startups in the category falter. Some, like on-demand parking services Luxe and Zirx, have pivoted. Others, like Instacart, have raised prices. And many others have struggled to live up to high valuations. Pundits have even gone so far as to forecast an "on-demand apocalypse."
But there is more than one way to coordinate and deliver conveniences through smartphones—even more than one way to do it for a lower price—and not all of them are dead. While the first generation of "on-demand" companies had a business model similar to the one made famous by Uber, many new service-sector startups are instead launching, or pivoting toward, a philosophy more aligned with Slate.
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This article was published on Fast Company. A link to the original piece appears after the post.
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