It’s a tough world out there for on-demand startups — confusion around the W2 vs. 1099 conversation, tough margins, and customer service are but a few of the initial obstacles for these companies. Add in the necessity of huge amounts of up-front capital and it’s an uphill battle at best.
But trust me, the on-demand economy will survive and eventually prevail, and 2016 might just be the year they do it.
At SXSW, where the tech world eats and drinks far more than they conduct business, the community tends to fall in love with a specific trend. Sometimes these trends last longer than others. Last year, it was live video broadcast with Meerkat, and past year’s brought us the likes of Foursquare, Twitter, and not-yet-forgotten Highlight. Though the on-demand space has been trending for years now, it seems that companies both large and small are looking to make a splash at the festival.
Postmates, the seasoned veteran in the space, is launching a partnership with Revolve clothing to let festival-goers buy their newest looks on-demand, delivered in 45 minutes or less. This isn’t the first time Postmates has offered clothes on the platform — after all, Postmates delivers anything. However, Postmates is making a clear run at the SXSW crowd this March.
Then there’s Favor, a smaller Postmates competitor who is partnering with the festival itself to deliver food. The company will deliver food from SXSW’s SouthBites Trailer Park, with food from vendors like East Side King, Veracrus, and Chi’lantro. The service promises delivery in 35 minutes or less with a flat $5 delivery fee. Favor, based in Austin, is now available across 19 cities and has targeted tier-two markets that Postmates and Uber aren’t already in.
Service, another on-demand company that provides on-demand customer service, is launching a program at SXSW. Service “Wizards” will be available via the app to do things like wait in line or reserve a spot for you at a popular venue.
But SXSW as a conference is also going heavy on the on-demand content. In a panel called “On-Demand Everything”, McDonald’s, Luxe and Groupon are participating in a panel discussing how all companies, not just on-demand service providers, can use technology to make the customer experience that much more convenient.
Another panel, called Partners for Successful On-Demand Grocery Delivery, includes Whole Foods execs and Instacart’s head of BizDev Nilam Ganenthiran.
In short, expect to see a lot of on-demand promotions, partnerships, and special discounts at the festival in Austin this year.