Urban Company Business Model: How Does It Make Money?

Imagine a scenario where you urgently need a plumber but couldn’t find anyone in your neighborhood. What if you book a plumber in an app and get your work done within a stipulated time? Won’t it be a sigh of relief? Of course, it will. This is just one example of the many hurdles that people face in urban life. Urban Company saw it as a golden opportunity and established itself successfully. So, in this article, we will decode the “Urban Company Business Model” along with its diverse revenue sources.

Keep reading!

Urban Company: A Brief Overview

It claims itself as an all-in-one platform. Urban Company connects service seekers with service providers. In Urban Company, you can hire premium service professionals for household services. 

Their servicemen include a wide range of professionals from beauticians and masseurs to sofa cleaners, carpenters, and more. You can call it a mobile marketplace for local services. Do you know it is recognized as the fastest-growing startup in India? Let’s have a brief overview of the Urban Company.

Working Strategy: How Does Urban Company Work?

The company operates on a business model that connects customers with service providers in their respective cities. The Urban Company uses the following working strategies-

1. Service Categories

As you know, Urban Company is an online search-and-find tool for various services. The business works with ISPs (Service Providers for Individuals) and turns them into micro-entrepreneurs. Currently, it works exclusively in the following key verticals-

• Repairs
• Beauty
• Spa
• Grooming
• Home Painting
• Cleaning & Pest Control
• Fitness & Yoga
• Disinfection
• Installation & Uninstallation of Appliances
• Carpentry

2. Networking with Service Providers

Urban Company has a vast network of service providers, including freelancers and small businesses, who are registered on the platform. Also, Urban Company invites service providers to register on their platform. The company verifies the service provider’s identity, experience, and background before onboarding them. The company also provides training, tools, and equipment to service providers to deliver quality services.
 

3. Steps You Need to Follow

To use it, you need to follow the steps given below-

Step 1: Customer Booking

You can book the services through the official website or mobile application of Urban Company. Thereafter, you can select the service you need in the service category. Also, you need to book an appointment with the service provider. You will get all the information regarding the price, service details, and customer reviews on the platform. 

Step 2: Service Delivery

Once you book the service, the service provider arrive at your location at the appointed time. He/she will deliver the service. Based on the quality of the service delivered, you can share your feedback and ratings on the platform.

Step 3: Payment 

Here, is the final step where you need to pay for the service you received. You can pay either online (Paytm, PhonePe, etc.) or offline (cash on delivery).

4. Training & Quality Control

Urban Company ensures quality service delivery by training and monitoring service providers. The platform also has a customer support team to handle any complaints or issues that customers may face.

5. Expansion

Urban Company has expanded its services to several cities in India and has also launched in Dubai, Abu Dhabi, Singapore, and Sydney. The company plans to expand to other cities in India and other countries. 

Revenue Sources: How Does Urban Company Make Money?

Urban Company generates revenue from various sources. Here is how its revenue model works-

1. Commissions

Urban Company charges a commission on each transaction that occurs on its platform. This is the primary source of revenue for the company. However, the commission rate varies depending on the service category and the service provider. Earlier the commission ranged from 8.5% to 30% for small and large orders respectively. But after protests from several partners, the company cut its commissions to 25% for high-ticket orders.

2. Subscriptions

Urban Company has launched Wellness and HomeCare memberships with which you can avail of numerous services at alluring discounts. If you purchase a subscription for Rs.699 then, you can avail the discounts worth Rs.2800. However, the maximum discount that you may get in a single booking will be limited to Rs.300. All these subscriptions contribute to a significant amount of revenue for the company.

3. Advertisements

You must have seen advertisements for services and service providers on the platform of Urban Company. Obviously, the app officials won’t suggest it for free. They charge heavy fees from these service providers who promote their services through the Urban Company’s app/website. This, in turn, generates a considerable amount of revenue for the firm.

4. Product Sales

While selling the services, the company saw a golden opportunity to sell products related to the services. Such as home cleaning kits, grooming products, wellness products, etc. This has appeared as a new and effective revenue stream for the company.

5. Partnerships & Collaborations

Urban Company has formed numerous partnerships with other companies to offer additional services to its customers. The partnered companies include Loreal, Ikea, The Man Company, Bayer, National Skill Development Corporation (NSDC), etc.

Marketing Strategies

It is a crucial part of Urban Company business model. It uses various marketing strategies to acquire new customers and to expand its loyal customer base. Apart from video commercials featuring celebrities, Urban Company uses the following modes of advertisements-

1. Digital Marketing

Like any other company that operates on the online platform, Urban Company also utilizes digital marketing strategies. It includes search engine optimization (SEO), Social media advertising, influencer marketing, etc.

2. Referral Marketing

It has a referral program that rewards customers who refer new customers to the platform. This incentivizes existing customers to promote the platform to their friends and family, helping the company acquire new customers at a lower cost. Being an existing user, if you invite your friends to the Urban Company app, then you will be termed as a “Referrer.” The rewards range from Rs.120 to Rs.2000. Thus, it is a powerful method of advertisement.

3. Promotions and Discounts

The urban company runs alluring promotions and discounts from time to time. This aids in attracting new customers and retaining the existing ones. For example, the company might offer a discount on the first booking or offer a discount for repeat customers.

4. Personalized Marketing

Although it targets only a handful of individuals it is one of the most efficient marketing methods. Urban Company uses data analytics and machine learning to personalize its marketing messages to individual customers. This helps the company create targeted campaigns and improve its customer engagement.

Final Words

Urban Company business model has proven to be successful by connecting customers with reliable service providers and providing quality services. And that too at affordable prices. It ensures the best quality of service delivery through training, monitoring, and customer support. It earns money by charging a commission on service transactions made through its platform. Its diverse revenue streams like subscriptions, advertisements, and partnerships contribute to its income.