BIA/Kelsey NOW | Seattle, our second local, on-demand economy (LODE) conference, kicked off last Thursday with a short explanation of the emerging technical, design, demographic and work arrangements that are reshaping local markets. Senior analyst for LODE Mitch Ratcliffe set the stage with a 10-minute (actually about 14 minutes) summary of last year’s LODE revenues, the 2016 addressable market and projections to 2030 based on our analysis of the American Time Use Survey.
We had projected approximately $18.5 billion would be spent on on-demand services in 2015. Based on a surprisingly high adoption rate of on-demand services, reported by Burston-Marsteller and the Aspen Institute in January 2016, we have increased our 2015 market revenue estimate to $22 billion–this figure represents the total spending by on-demand customers, approximately 24 percent of which would be recognized as revenue by on-demand companies after paying workers. Most of the spending was in driving/transportation, but the transition to on-demand in home services and professional services accounted for approximately a third of the spending.
We also provided projections for the addressable market size in 2016, approximately $510 billion versus $465 billion in 2015. The key to understanding this growth in addressable market lies in the continued pricing of unpaid work by women, mostly, in the home. Women continue to do more than twice as much in-home work that goes uncompensated and uncounted in the U.S. GDP. Because many on-demand services are home-focused, we project that the pricing-in of this unpaid work by women into the GDP will create up to $3.1 trillion in newly accessible pay, and on-demand marketplace revenues, by 2030.
In addition to that large tranche of newly recognized labor value, local on-demand services will cannibalize many existing industries. Our upcoming Local On-Demand Market Report for 2016 will break out both new and disrupted revenue by industry.
We’ll be posting all the NOW video over the next two weeks. Enjoy!