MGMT20143 Project: Think Big - On-demand Rides Business Plan Report

This project presents a comprehensive business plan for an "On-demand Rides with Bikes" service, addressing the rising demand for cost-effective and convenient inner-city transport in Australia. The project begins by identifying the customer problem: the need for cheaper and more flexible transport options compared to public transport and app-based taxis. It then persuasively argues the benefits of the proposed business model, highlighting its advantages for both owners (earning opportunities) and riders (cheaper fares). The business model is detailed, including key partners, resources, activities, value propositions, customer relationships, channels, customer segments (millennials), cost structure, and revenue streams. The project further explores key interrelationships, critical success factors (innovation and cost-effectiveness), and potential risks. An evaluation of the overall feasibility is provided, concluding that the business idea is promising, provided effective customer and driver relationship management is implemented. References and a business model canvas are included.

Running head: THINK BIG
Think Big
[On-demand Rides with Bikes]
Name of the student:
Name of the university:
Author note:

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Executive summary
The main purpose of this project is to develop a new business idea and let the readers learn the
ways of developing and running a new business. In this project, “On-demand riding with Bikes”
is being projected as the proposed business. The reason for selecting this idea as stated in this
project is the rising demand for cheaper and friendlier riding with app-based taxis and other
transport means. The proposed idea is rather riding with bikes. This has been picked up due to
being cheaper even than the taxis.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Customer Problem.......................................................................................................................3
3. The persuasive argument of the customer benefits......................................................................4
4. Discussion of the proposed business model................................................................................5
5. The key interrelationships............................................................................................................6
6. Critical success factors................................................................................................................7
7. Critical risks and assumptions.....................................................................................................7
8. Evaluation of the overall feasibility.............................................................................................7
9. Conclusion...................................................................................................................................7
References........................................................................................................................................9
Appendix:......................................................................................................................................11
Business Model canvas:.............................................................................................................11

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1. Introduction
The main purpose of this project is to discuss and describe a new business idea to be
implemented with the help of a business model as proposed by Osterwalder & Pigneur (2010).
The new business idea is “On-demand Rides with Bikes”. This business idea is in response to
and to address the employment crisis in Australia. Though the unemployment rate is falling
sharply, it is still problematic. According to the latest information released by the Australian
Bureau of Statistics (ABS), the unemployment rate stood steady at 5.0% in 2019 (Abs.gov.au,
2019). There is still the need for a further fall in the unemployment rate to attain 100% full
employment in Australia. It is also noteworthy as well that there is a significant surge in the
minimum wage (The Guardian, 2019). The rise in the minimum wage should excite those who
are still jobless or wish to own an independent career having no compulsion of the employer.
These concerns are being tried to cover in this study with a new business idea. The proposed
business idea promises to provide a new and exciting career opportunity to many especially the
millennials as they are physically fit for this opportunity.
2. Customer Problem
The demands for cost-efficient and convenient inner-city transport have grown massively
in Australia over a span of the past five years (Ibisworld.com, 2019). This is the reason why on-
demand rides have gone to huge popularity over the same span of time. People those who can
afford “On-demand Rides” want to skip from using public transport due to the many challenges
it offers. The list of challenges includes longer wait-time, inflexible transporting system, late
reaching due to multiple stoppages in a way to the destination (Miller et al., 2016). Due to all
these reasons people those who use public transport are not just getting late to their offices,
educational institutions and other places but are also being troubled in their way to these places.

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The journey with public transports is not very pleasant as compared to “On-demand Rides”
transports. On the contrary, “On-demand Rides” provides a flexible system where riders can
book their rides at their own will. They can even schedule their rides one or a few days in
advance depending on the travel distance. Moreover, the fares are cheaper than traditional taxis
most of the time, not considering the surge charges (Rayle et al., 2016). Furthermore, the ride
will not stop at multiple stoppages except on the riders’ will as the riders can also modify the
destination location. A change in the destination location will accordingly impact the fares
(Rayle et al., 2016). The cons of using public transport and the pros of “On-demand Rides”
together support the rising importance of on-demand ride with a variety of transport means.
3. The persuasive argument of the customer benefits
As stated under the “Customer Problem” section the proposed “On-demand Rides” with
bikes should be a healthy move for both the owners and riders. Owners in the form of “On-
demand Rides” will find an easy option to earn a healthy amount provided that they are logged in
to the service for a maximum amount of hours. Sokolová, Mohelská & Zubr (2016) opine that
pay is one of the benefits affecting the employee job satisfaction. The article suggests that good
pay is a significant employment requirement for the workers. Riders, on the other hand, will have
a cheaper and convenient riding option. “On-demand Rides” with bikes is comparatively cheaper
than “On-demand Rides” with app-based taxis. As observed by Wirtz & Zeithaml (2018), cost-
effectiveness and service excellence if both can be met will help the employer outperform their
peers. The article indicates the significance of a cost-effective approach that means delivering
services at comparatively cheaper price rates. Hence, this article confirms the significance of low
rates offered to the customers. However, it is less convenient than “On-demand Rides” with app-
based taxis due to the built-in area, which is more spacious and comfortable in app-based taxis.

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4. Discussion of the proposed business model
The business model being chosen to implement the proposed idea have several components.
These are as under (Osterwalder & Pigneur, 2010);
Key Partners: The list of key partners will include a partnering company providing the
technology-based platform for the business, drivers who do not win a bike and wish to join this
business to start earning, and a bank that will provide financial support to initiate the business.
Key Resources: One of the key resources for the proposed business idea are its
employees supporting its various aspects like a marketing department. For a new business, it
would be very challenging to attract talented people. However, with effective marketing of the
idea, and with a good salary and other related packages the business should be able to fill the
vacant positions within the targeted time span. Under physical resources, the business would
need a GPS tracking system, which will help the riders book their rides and the business track the
number of bookings against each one of the bikes. Under financial resources, the company would
require the loan to support all these initiatives and also need to maintain a healthy cash flow to be
able to operate in a long-term (Nielsen et al., 2017).
Key Activities: The key activity will be to provide riding services to those who need it on
a daily basis.
Value Propositions: This new business idea provides an earning opportunity to even
those people who own a bike. In public transport, bikes have never been used before. Indeed, it
was only used as a private transport mean. No one had ever thought of that bikes could also be
the way to earn money. This will now happen with this new business idea.

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Customer Relationships: Customer relationships will be established through a dedicated
app, which they will use to book their riding. Riders after booking their ride will be able to
communicate with the drivers by making a phone call.
Channel: Channel of communication is the app to be used for booking a ride, and a
phone call to speak to the rider and driver.
Customer Segments: The targeted customer segment will be decided based on
demographic factors. Hence, the target segment is, of course, the millennials. It is because they
are physically more fit than Baby Boomers to ride a bike. Additionally, they carry enough
passion in them to remain energetic throughout their entire traveling for a day, which can even
equal the miles.
Cost Structure: The business will require huge financial support to be received in the
form of a loan from a banking company asking for a minimum interest rate.
Revenue Streams: Revenue streams on a broader aspect will be the two resources. These
are customer booking an order and pricing surge technology.
5. The key interrelationships
There is a healthy synchronisation between the owner of the business and the investor.
The owner was able to convince the targeted bank with its business idea and became eligible to
receive a healthy amount in loan needed to initiate and support the business. The idea has been
circulated among the finance, IT and human resource teams. The IT team has understood their
role-play in the business. Similarly, the human resource team has understood the kind of
professionals needed to support marketing activity. The finance team has a good understanding
of how to finance in which kind of activities (Töytäri & Rajala, 2015).

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6. Critical success factors
The idea itself is one of the key success factors. “On-demand riding with bikes” will be a
pretty innovative idea for the Australians. This idea will offer a cheaper riding option to
customers as compared to the other app-based taxis and traditional taxis. This is also one of the
success factors. This business should be able to receive more booking as compared to riding with
app-based taxis as because it is relatively cheaper (Chou & Pramudawardhani, 2015). This is yet
another success factor. However, comparable to riding with taxis this business will offer a less
convenient and less secure riding to the riders.
7. Critical risks and assumptions
One of the critical risks could be the feedback of the drivers. Cost-effectiveness is one of
the key highlights of “On-demand riding with bikes”. While offering cheaper than the app-based
taxis’ rates the business might not be able to meet the rising expectations of its drivers for a
healthy pay. This may create a feeling of disinterest in them, which can be threatening for the
business in the long-term. Additionally, riding with a bike will be not as convenient as the app-
based taxi due to its built-in area, which is far much bigger and convenient than a bike. This can
limit the growth of the proposed business (Falkner & Hiebl, 2015).
8. Evaluation of the overall feasibility
Overall this should be a good move considering the rising demands for a cost-effective
on-demand riding in Australia. This business is very much feasible from financial, physical and
human aspects of a business. The only challenge that lies is in managing a long-term relationship
with customers and drivers.
9. Conclusion

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To conclude, it can be said that the proposed business idea should be a success
considering this being a very new concept in Australia and also that it offers to ride at a fairly
minimal price. However, the business should be able to manage an effective relationship with its
customers and drivers by balancing the demands of the business in an effective manner. This
means both customers and drivers should see the benefit of being with this business. However,
this should not come at the price of sacrificing the profit of the business.

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References
Abs.gov.au. (2019). 6202.0 - Labour Force, Australia, Mar 2019. Retrieved from
https://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/6202.0Media%20Release1Mar
%202019
Chou, J. S., & Pramudawardhani, D. (2015). Cross-country comparisons of key drivers, critical
success factors and risk allocation for public-private partnership projects. International
Journal of Project Management, 33(5), 1136-1150.
Falkner, E. M., & Hiebl, M. R. (2015). Risk management in SMEs: a systematic review of
available evidence. The Journal of Risk Finance, 16(2), 122-144.
Ibisworld.com. (2019). Ridesharing has Grown Massively in Australia | IBISWorld Industry
Insider. Retrieved from
https://www.ibisworld.com/industry-insider/industry-insights/ridesharing-has-grown-
massively-in-australia/
Miller, P., de Barros, A. G., Kattan, L., & Wirasinghe, S. C. (2016). Public transportation and
sustainability: A review. KSCE Journal of Civil Engineering, 20(3), 1076-1083.
Nielsen, K., Nielsen, M. B., Ogbonnaya, C., Känsälä, M., Saari, E., & Isaksson, K. (2017).
Workplace resources to improve both employee well-being and performance: A
systematic review and meta-analysis. Work & Stress, 31(2), 101-120.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a handbook for visionaries,
game changers, and challengers. John Wiley & Sons.

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Rayle, L., Dai, D., Chan, N., Cervero, R., & Shaheen, S. (2016). Just a better taxi? A survey-
based comparison of taxis, transit, and ridesourcing services in San Francisco. Transport
Policy, 45, 168-178.
Sokolová, M., Mohelská, H., & Zubr, V. (2016). Pay and offer of benefits as significant
determinants of job satisfaction: a case study in the Czech republic.
The Guardian. (2019). Significant increase in minimum wage won't cost jobs, Labor says.
Retrieved from https://www.theguardian.com/australia-news/2019/mar/15/significant-
increase-in-minimum-wage-wont-cost-jobs-labor-says
Töytäri, P., & Rajala, R. (2015). Value-based selling: An organizational capability perspective.
Industrial Marketing Management, 45, 101-112.
Wirtz, J., & Zeithaml, V. (2018). Cost-effective service excellence. Journal of the Academy of
Marketing Science, 46(1), 59-80.

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Appendix:
Business Model Canvas:
Key Partners
 A partnering
company
providing the
technology-
based
platform
 Drivers
 A Bank
Key Resources
 Employees
 GPS tracking
system Under
the physical
resources
 The loan
amount under
the financial
resources
Key Activities
 Riding
services
Value Propositions
 Earning
opportunity to
drivers
 A very new
concept
Customer
Relationships
 A dedicated
app to book
and contact
the driver
 A phone call
to contact the
driver
Channel
 App to be
used to book a
ride
 Phone calls to
contact the
driver
Customer Segments Cost Structure