In today's newsletter, we talk about Urban Clap and the rise of the gig economy.


The Story

We’ve been wanting to do a story on the rise of the gig economy for a while now and when we heard Urban Clap changed its name to Urban Company, we couldn’t help ourselves but whip up an article on this matter.

But before we get to the crux of this story, a more fundamental question. Why is there even a need for an Urban Clap?

Well, for starters, booking a service professional like a plumber or a carpenter has always been a pain. You call your favourite guy at 6 PM. Tell him you need to get some work done and wait for him to show up. But then he doesn’t. So you call a friend who hooks you up with another chap and wait once again. He takes his own time but eventually, does show up. Only, problem — he looks shady. You don’t know if he’s going to fix your faucet or beat you with a wrench. But you can’t back out now. You give him the job and pray everything works out. Eventually, though he gets to work and charges you an exorbitant service fee. You haggle but to no avail. After all, if you don’t pay up, he could turn to the wrench. This whole episode has left a bad taste in your mouth and you vow to never book his services again.

But where else do you go? More importantly, what if you are in a new city and don’t know anyone. Yeah, you are done for.

So it doesn’t take a genius to figure out that Urban Clap solves a very important problem. It allows you to book service professionals you need (carpenters, plumbers, beauticians, yoga teachers) on an app with some extra benefits thrown on top.

For instance, let’s start with price discovery. You know what you’re going to pay when you book a service professional here. You don’t have to haggle anymore and in the event, there’s a dispute, you deal with Urban Clap directly.

Also, there’s the safety issue. This is perhaps the only domain where the service professional spends quite a bit of time over at your place. So Urban Clap promises to conduct elaborate background checks, and also track their professionals’ locations while they get the job done. It’s the kind of assurance that puts your mind at ease

And it’s not just the customers who benefit here. Even the service professionals have a lot to gain. Traditionally, service providers have either had to join a company or rely on referrals for work. But now, Urban Clap has opened up a whole new world of possibilities offering these people a chance to manage their own working hours and potentially earn much more.

All in all, it does great work. But that begs the question? If it solves such important problems, why isn’t Urban Clap talked about as much as an Uber or a Swiggy?

Well... simply because you don’t use Urban Clap as much. Unlike food and travel, AC repair isn’t exactly a frequent purchase. Which means, the company won’t make a lot of money unless they can find a way to mess with your air conditioner time and again.

Which brings us to the last point. The biggest challenge for Urban Clap is to find a consistent stream of revenue. And so, they’ve had to turn their attention elsewhere-to Beauty and Personal Care segments. Unlike plumbing, you need to get yourself groomed every two weeks. How about a personal trainer? That’s an activity that involves frequent engagement as well.

They are also trying something else that’s really interesting. Right now, they are the furniture assembly partners for Ikea’s Hyderabad store. So if you buy anything on Ikea and want to put the whole thing together, Urban Clap is waiting for you. And in turn, they get access to customers without worrying about high acquisition costs.

They even claim to have a presence in four countries now- India, Australia, Singapore, and the UAE and plan to expand within the country and beyond. In fact, the recent name change (from UrbanClap to Urban Company) was prompted by this development. Ergo, to appeal to a wider audience.

Nonetheless, the rise of the gig economy is well underway and we hope startups like Urban Clap can help add value across the ecosystem.

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