[tsestrich]

As the co-founder of an on-demand service company [1], I have to agree partly with the core argument about trust, but disagree with its conclusion about the model's viability. It is definitely hard to ensure trust and satisfaction among customers without owning the entire process end-to-end. At our (currently small) scale, we manage this by offering fanatical customer service and communicating aggressively with our service providers. However, only time will tell if this will scale. I think there is a middle ground between a company shrugging it's shoulders and forcing the responsibility of vetting onto its customers, and completely guaranteeing quality. For instance, we add a layer of reviews that otherwise can be hard to find for tax preparers, stringently vet service providers, and also add a layer of customer protection by not charging them until they are satisfied. The article makes it seem as if the on-demand model implies no responsibility for quality by the company.

It seems that the real issue is that on-demand companies that charge a premium to "traditional" alternatives have a hard time justifying that premium if all they provide is a thin tech layer on top of said services. Uber is not only more convenient, but also now cheaper in many cases than taxis. I still think (albeit with strong bias) that if you can offer convenience AND cost savings, there is a legitimate value for the on-demand model.

[1] Taxaroo, https://www.taxaroo.com

[danieltillett]

The real problem is can you run your service with the quality of labor you will get as you scale. The reason you can offer fanatical customer service is your people are better than the average in the industry. It is very hard to scale labor quality.

[tsestrich]

That's a fair point, but it's so far down the road that for the foreseeable future it won't be a problem (at least for us). We're not under VC-backed pressure to grow at some unsustainable pace, so we can choose to bring on service providers at a pace that allows us to maintain quality. This definitely is a problem for the large on-demand companies out there, but that itself is part of a bigger problem where every startup thinks they need to be a billion dollar company (for many reasons)

[danieltillett]

The pressure to be a billion dollar company comes from the need for the investors to get a return on their money.

Rapid growth and quality are not normally compatible. I am glad to hear you have the freedom to grow at the right pace.