How Much Does It Cost to Develop On-Demand Service Application?

Author : johnsmith61777
Publish Date : 2021-04-29 11:25:51
How Much Does It Cost to Develop On-Demand Service Application?

It’s been an exhausting week at the office and thankfully it’s the weekend now. All you want to do now is sit back, relax, have some Sushi, and watch your favorite TV show. Well, thanks to the hard work of on-demand app development companies, you can do all of that in an instant and without even leaving your home via apps like UberEats and Netflix.

According to Statista, in the US alone consumers’ spending on everything on-demand applications is around $57.6 billion and by 2023, the global mobile app revenue is projected to reach a staggering $935 billion.

The on-demand services sector is booming and especially since the COVID-19 lockdown, it is the key to business success. You must be thinking how much does it cost to develop a mobile app? Or is it expensive to outsource an on-demand mobile app development company? In this blog, we are going to break down how the industry works when it comes to calculating the app development cost. So let’s dive straight into it.

App Development Cost

There is no magic number, let’s just get that out of the way first. There are various factors at play that determine the on-demand app development cost. These apps could cost you anywhere from $200 to $200,000, depending on the nature of the mobile application. Don’t worry though, all on-demand services app development costs are not the same. It is all based on how simple or complex the project is.

So how does an on-demand mobile app development company calculate the cost of a simple app? Here’s an industry staple formula for calculating the cost of your app development process.

App development cost = Hourly effort ✕ Hourly cost

Now, let’s say that your mobile app has 5 core features. The app development agencies would now think about how much time each feature will take to complete. 

(Agency A)

On-demand App Development Company Cost


Time required


30 hours


70 hours


50 hours


200 hours


100 hours


Total = 450 hours

Now consider that this company’s hourly rate is $50.

450 ✕ 50 = $22,500

So you get a rough estimate that company A will charge $22,500 for your on-demand app solution. 

Now, let’s look at another web and app development company that charges $100/hour. It would look something like this:

450 ✕ 100 = $45,000

So company A will charge $22,500 and B $45,000. However, it does not mean cheaper is better.  It is just to give you a rough estimate of what to expect.

When developing a complex app the number of hours will increase and ultimately increase the cost of developing the on-demand application. If it takes app developers at agency A 1000 hours to complete a complex project the app development cost will be:

1000 ✕ 50 = $50,000

And agency B will charge:

1000 ✕ 100 = $100,000

That’s how the costs will look for two different apps from two different companies.

Now the question arises, why do these on-demand app development companies charge? How do they define their hourly rates? Alright, so let’s look at what influences the hourly rates.

Which Five Factors Affect the Cost of an App Service?


One of the biggest factors influencing the hourly rates is demographics. The cost will vary greatly if you outsource an on-demand app development company in Canada or the US versus the Philippines or Ukraine.

According to Indeed, the average hourly rate of app developers in the US is around $46.32 in 2021 and in Ukraine, it's around $37.


The second factor is going to be the platform. If let’s say, you are just choosing Android app development or iOS development, the cost will be less. However, if you opt for both, the cost will be higher.

App development costs will also vary depending on whether you are going with a Native app or a Hybrid.

App Features

This is probably the most important factor that helps any on demand app development company calculate its hourly rates

Features like Sign up, location-based services, secure payment gateways, online streaming, language translation services, offline mode, or AI-powered ChatBots, will play a huge role in defining the cost of an on-demand services app.

On-demand Services app UI/UX

The fourth factor is the UI/UX design development process. Do you want a bare-bones design or a premium minimalist one? 
The visual complexity will increase the effort required and add to the app’s cost.

Experience and Quality of Work

Another major reason why software agencies charge how they charge is the team members’  experience. The devs usually have different hourly rates based on skill sets.

Each team member such as devs, QA testers, designers, and Project Managers will have different rates per hour. Any reasonably-sized app development company houses somewhere around 5 to 8 employees. So this factor is going to impact the cost of your app. 

The best way to go about it is to conduct thorough market research. Compare different companies. Jot down the pros and cons of choosing one company over the other and then take action. Don’t get stuck in the research loop. Also, do not fall for competitive prices. Less cost doesn’t always translate into high-quality apps. Choose quality over price. 

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