The Cost of Developing an App Like Uber

The sharing economy is booming and the race to create an apps like Uber is on every entrepreneur and startup’s to do list. Just about everybody wants to make an app like Uber and adapt the on-demand platform to different industries.

We get a lot of requests from prospective clients asking us how much it costs to develop an app like Uber. App cost estimation is complex and in order to pinpoint how much it costs to build an Uber app it’s important to examine a number of important aspects.

This article will look in detail at how an app is made, the cost to develop an app like Uber and will give startup founders insights into what it takes to produce an app. At the end of this article you will have a better understanding of the following:  

• The cost to build an Uber app.

• The kind of app you can expect to develop depending on your budget.

• What the project budget is composed of.  

• How app development companies estimate the cost for projects.

• The cost of app development around the world.  

• The pro's and con’s of working of outsourcing your app development to different regions.

The Uber Business Model

When people talk about making an app like Uber what they really mean is applying the Uber model business and platform to tap into the benefits of the sharing economy. The sharing economy allows people to rent cars, apartments, tools and other goods or services directly from one another. The Uber model uses an online and on-demand platform to provide services or goods that people can “share” offline.

The benefits of the shared economy are abundant. It cuts out the middleman and empowers the user. It uses the online world to connect people with want they want, making it easier and cheaper than the traditional model.

The sharing economy and peer to peer technology have changed how a lot of companies do business by providing apps to connect with users while cutting down on cost. The model has allowed for scalability at low costs by using data in a smart and efficient way.  

Adopting the Uber model for your business and making an app that fits the needs of your industry will depend on a number of factors that will be discussed below.

Find out how we managed to build a custom home health care scheduling software and medical insurance claims processing software development.

Breaking Down App Cost Estimates

The first answer that you’ll get when asking how much it costs to develop an Uber like app is an obvious one: it depends. The cost to develop anything depends on your custom needs but for the purpose of this article and in order to be more specific about costs we will assume that we’re trying to estimate the costs for an Uber like app that is ready for market, well designed and can be scaled.  

There are several components to analyze when trying to estimate how much it costs to develop an app like Uber. The amount of time and money it takes to make an app depends on the product requirements, the UI and UX designs, the development and the backend costs. We’ll also look at the additional costs of post-release and how much it costs to make a mobile app around the world.

 1.The Product Requirements Document

The Product Requirements Document is an important phase at the very beginning of an app development project. This phase defines the entire project and the document should contain a breakdown of the following:

• The project’s goals

• The stakeholders

• The target market  

• User personas

• User stories

• System roles and functions

• Version requirements

• Security and data requirements

At this early stage of the project it’s important that you work closely with the app development company to discuss the fundamentals. The Product Requirements Document will help you establish the most important features and it should take 30 to 80, depending on the depth and complexity.

Every app will have its own set of basic functions and features. These basic features and functions are determined by the kinds of people that will use your app and ultimately will depend the complexity and cost of app development. A sharing economy app is made up of customers ordering services, service suppliers, a platform for processing the order which also provides communication between parties and a medium for payment transfers.

A customer may want to order a service (for example a ride home from a destination on a map), the staff will want to be notified of the customer’s request, and the managers will want to see the workload of their staff, data reports and have the ability to edit and create staff accounts.

 2. UI and UX Design Costs

If an app stands any chance of success it must be flawless. Users value a beautifully designed app and in some cases the design can be almost as important as the app itself.

Design is one of defining elements of the product’s development. The apps needs to look beautiful and run smoothly. Both are essential for ensuring your app’s success.

“Which person would you like more – good-looking or a smart one? Kind or beautiful? What a stupid question – you would say – I like people who are beautiful outside and in!”.

The mobile app design process should begin with a Design Analysis. During the Design Analysis period the designer examines the product requirements, checks out the competition, investigates the clients portraits (User Personas), and dives into the product idea. This process gives the designer a starting point.

The next stage in the process is content creation, this involves the text, images and video that your app will use and customers will interact with. There are two options when it comes to content creation that can have an impact on the cost. Either the client provides all the content and the development company makes suggestions or the client relies solely on the app development company’s expertise.

After all this information has been collected, the app development team begins to develop the wireframes. This is the UX design stage, where you define how the user will interact with your app, create its fundamental structure, construct user navigation pathways, build mockups and test the app on real users. 

UX defines how a user will interact with the product and there are fundamental UX best practices that need to be implemented at this stage. When your UX wireframes are ready, you can move onto the UI phase. Here is an example of wireframes we made for Wendy’s Team, a startup that connects the elderly with carers. UI design is concerned with the visual interface elements. At this stage the designer chooses the fonts, color scheme and designs the visual appearance of every form and every element.

The UX and UI stages of app development can take between 150 to 430 hours depending on the amount of screens that the app needs. Below you will find time estimates for each phase in the mobile app design process:  

3. Development and Backend Phases

The backend is the part of the application that makes the magic work. It manages all the data, exchanges information and handles the requests between the users and the mobile app. The backend also manages all the push notifications, payment details, authorization and data security transfer.

The timeframe for the development of the app’s backend should take between 100 to 500 hours in first stage of the development and this depends largely on the complexity of the project, levels of a security, role interaction complexity, among other factors. Below you will find a breakdown of the time estimates for each of the major phases in the development of the backend:

It makes more sense to develop the app for either iOS or Android, launch it in one platform and then use the use feedback for the development in the remaining platform. This helps to reduce costs and you can adapt the new user requirements before launch.

Each platform has it own pros and cons, for example Android is more fragmented than iOS and so the development team need to adapt it to more screen sizes, densities and versions. As the Android is an open source operating system, you can experience different behavior across devices. When it comes to deciding which platform to build your mobile app on first your decision should be based on two factors: where you will launch and for who. If you’re planning to launch your app in the US then you should build it on iOS because most users have iPhones. Outside the US, you should analysis your target market and decide what device your public uses most.

The timeframe to develop the app in either of the two platforms can vary from 350 to 700 hours and will depend largely on functionality and animation complexity. You will find a detailed estimate below for the development on iOS, developing on Android will cost roughly 30% more:

4. Website Estimates

Having a website is vital for every business. Your website is the face and voice of your company online. It tells the world your story and is the first call of for the majority of your prospective clients before downloading and using your app.

Deciding what kind of website to build will depend on your business needs. This can , if you simply need lead generation then it’s a pretty straightforward job, but if it’s an ecommerce website then you’re looking at a complex build.

If you’re pressed for time and still testing your app it may be enough to have just a simple landing page where uses can download the app. If you’ve already launched and tested your app and are currently scaling your business, it’s best to opt for a solid website with 5-10 pages, complete with a blog to help your clients and promote your work on social media.

Below you will find a rough estimate for developing both a simple landing page and a fully built-out website:

You may need to build a web portal if your customer base is using your service primarily via the website or functionality is growing at such a rate that mobile cannot handle. A web portal provides a client with web based bookings history, payment methods, profile, reward, discounts, and a place to leave feedback. Below you will find the time estimates for developing a web portal, bare in mind that adding another customer role will likely double the development time:

Read also how to develop a custom nursing home management software.

5. Post Launch Expenses

Once you’ve created your mobile app you need to set aside a budget for additional costs including marketing, server support and feature updates.

You came up with a great idea and now have a shiny new app but it’s no use to anyone if the world doesn’t know about it. They are millions of apps out there and competition is fierce so it’s no wonder that a lot of your budget is plowed into marketing.

The amount you spend on marketing your mobile app will depend on the target market. Fiksu research estimates that it can take up to $200,000 in ad spend to position an app in the top 25 iOS app ranks in the United States. In Germany it comes out at about $65,000, $45,000 in the UK, $30,000 in France, $35,000 in Brazil, and $10,000 in Thailand.

Depending on the platform and market you want to advertise in, the Cost Per Install (CPI) will be anywhere between $1 and $5. If you are looking for monetization, keep in mind, that usually only 1 of 20 or even 50 users will buy anything through your app. Here is a nice digest that shows the average cost per app install.

Cost per app install, March 2016, Globally

Most startups can't afford to cough up the likes of $200K so instead opt for other marketing strategies like video, blogging, and social media promotion. At the very least, it is recommended that your marketing efforts take up about 60-70% of your total post-launch budget.

You’ll want to invest around 5% of your total post-launch budget on server support for your app to keep your app online. You should put aside 25-30% of your post-launch budget to improve on your product and take advantage of user feedback to provide new features.

6. Hourly Rates for App Development Around the World

Outsourcing your app development work will cut down on costs. Mobile app costs vary significantly around the world. Rates will also depend on whether you hire a freelance developer or opt for a medium or big mobile app development company.

The average iOS app developer hourly rate in the US is about $150 compared to the average hourly rate in India at around $20-30. These hourly rates rise slightly for Android, with the average US hourly cost coming in at around $160-70 compared to $25-35 in India. Eastern European countries charge around $50-70 an hour for mobile app development and provide expertise at a lower rate compared to the US.

Outsourcing will save you money but there are disadvantages in outsourcing web design and development work to other countries. Bigger web development countries are better equipped to develop a complex app because they can afford to hire niche developers.

Total Uber like app development cost

Demigos charges an hourly rate of $50 for uber like mobile app development. Based on this price range we will look at the cost of development for three mobile app categories: a basic MVP option, a fully functional business app, and a premium app.  

 1.Cost and Scope of Developing a MVP

A MVP is launched for a single platform (in this case iOS) and has all the important features and functionalities you need, along with a landing page for marketing purposes. The total cost for a MVP mobile app is $15,000 with the minimum time take, but this could cost up to a max of $24,000. The scope, time, and costs are broken down as follows:

Scope of work:

Product Requirements

• User stories

• Impact mapping

• System requirements

Backend with core functionality

• Database design

• Core business logic design

• Admin panel access

• Security connection

• Payment system integration

• REST API ( for mobile and web clients data exchange )

• Documentation

iOS app with core functions and simple design for a landing page

 2. Cost and Scope of Fully Functional app

The total cost for a fully functional mobile app is $53,500 with the minimum time take, but this could cost up to a max of $128,600. The scope, time and costs are broken down as follows:

Scope of work:

• Detailed Product Requirements, including business impact mapping

• Mobile & web design analysis and UI/UX development

• Backend & API development

• Solid iOS and Android apps

• Good-looking corporate website with mobile adaptation

• Web portal for one role

• Everything, that was included in the “MVP option” above

 3. Cost and Scope of Premium App with Marketing

The total cost for a premium mobile app and marketing is $78,600 with the minimum time take, but this could cost up to a max of $180,600. This price range includes a complete QA process, including automation, load and stress testing. It also includes marketing activity. The scope, time and costs are broken down as follows:

Cost and Scope of Premium App with Marketing

Scope of work:

Enterprise-level app & business strategy development is

• Business Analysis

• Business model investigating

  • Client portraits investigation

  • Distribution channels investigation

  • Customers support

  • Resource planning

  • Monetization options choosing

• Product Requirements development

• Full backend, frontend, UI/UX, iOS and Android, QA services providing ( including automated and load testing )

• Marketing strategy development

• Marketing campaigns set up and management

• Technical support providing

Summary: The Cost of Uber like Mobile App Development

This article showed you the likely costs involved in developing a mobile app like Uber. Every project is unique and it will have its own set of unique factors to take into consideration. The above is designed to provide an estimate of timeframes and costs for each stage of production in mobile app development.

Demigos has been developing mobile apps based on the Uber model for many years. We take on projects we believe in and take pride in our work. Please get in touch with us to discuss your app idea and find out how we can cater for your individual needs.

*About the Author

The author of this article is Ivan Dunskiy. Ivan is the CEO of Demigos, a mobile and web development company for healthtech and agetech. Ivan founded Demigos several years ago and ever since has been building apps based on the Uber business model. The company has applied the Uber model to other industries including logistics. Ivan was CTO of Wendy’s Team, an app developed for senior care, and the company has seen an average growth of 20% every month.