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Also known as the access economy, the on-demand economy fulfills consumer demand on the basis of immediate access to goods and services. It is a business model driven mostly by technology companies. They've created efficient digital platforms that make more efficient use of existing unutilized assets and infrastructure at scale.
Access is better than Ownership is a fundamental principle of the on-demand economy. It asserts that it is better to temporarily rent something than to buy it permanently. Likewise, on-demand businesses rely more on freelancers, rather than the hiring of full-time employees and contractors.
When looking at technology, it's worth looking at how things operate today and how they will operate in five years. One thing consistent to almost all on-demand business models is the need to "immediately deliver" products or services. All major players in the on-demand market involved with shipping or transport services are active in autonomous vehicle development, of one sort or another. So are all major auto manufacturers – Ford, GM, Toyota, Mazda, Honda. And so is Amazon. The following provides a snapshot of some of the most recent investment announcements:
- Invested $500 million into Lyft in 2016
- Invested an undisclosed amount (believed to be over $500 million) in acquiring Cruise, which in late September 2018 received a $2.75 billion boost from Honda.
- Launched BOOK, a "Cadillac subscription service" that lets subscribers try out 18 different Cadillacs over a year.
- Actively engaged with Lyft.
- Backed Argo AI with a $1 billion investment
- Recently announced the launch of Ford Autonomous Vehicles, LLC, projecting $4 billion in investments through 2023
- Partnering with Lyft and Uber, recently announcing SharedStreets, "a new data platform designed to make it easier for the private sector to work with cities around the world and leverage data to improve urban mobility."
- In March of 2018 announced its own $2.8 billion AV investment in TRI-AD, Toyota Research Institute-Advanced Development.
- With SoftBank announced in October of 2018, launched Monet Technologies Corp, an "autonomous mobility company to deliver on-demand service to people's doorsteps by robocar" – starting with $17.5 million and scaling up over time with another $87.7 million.
- In collaboration with Amazon, Uber, Didi, Mazda, and Pizza Hut to develop, "an autonomous shuttle that can be used to deliver people – or the packages they've ordered – to their destination.
The On-Demand economy is definitely the future. It offers consumers what they've craved for many centuries: immediate gratification of every need, at the tap of a button. Empowered by smartphones, people have developed a sense of entitlement to get what they want faster, easier and cheaper. As a result, businesses need to push hard to improve and optimize value chains, simplify features and make the UI and UX of their apps frictionless.
The On-Demand business model is changing the way people think, buy and spend globally. The technologies that make it possible are still very new – and rapidly evolving. Tech-savvy customers around the world have already figured out how beneficial the On-Demand economy is. They're the perfect target audience to work with.
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