The On-Demand Economy Is Growing, and Not Just for the Young and Wealthy

The On-Demand Economy Is Growing, and Not Just for the Young and Wealthy

The on-demand economy is large, and getting larger. Economic activities centered around online platforms, where independent sellers can offer goods or services to customers, are attracting significant consumer attention and spending, according to new data from the National Technology Readiness Survey* (NTRS), which has tracked technology behaviors and beliefs in the U.S. since 1999. The most recent study, conducted in October 2015, surveyed 933 U.S. adults sampled at random from a consumer research panel.


To estimate on-demand spending, respondents were queried about whether they purchased on-demand products and services in a monthly period, the categories of the purchases, and the amount spent. Results were projected to the U.S. adult population (18 years and older) with internet access in the home, based on data from the U.S. Census Bureau’s American Community Survey. Here’s what the numbers show:

What’s more, the on-demand economy is beginning to attract a diverse group of consumers. The NTRS data shows that while men are still the most prevalent consumers of the on-demand economy (55%), 45% are women. Unsurprisingly, almost half (49%) of on-demand consumers are millennials (age 18-34), but 30% are between 35 and 54, and 22% are age 55 or older. However, the majority of on-demand consumers are still white (63%), followed by African American (17%), Asian (12%), and Hispanic (9%) consumers. The on-demand economy is attracting more than 22.4 million consumers annually and $57.6 billion in spending. The largest category of on-demand spending is online marketplaces (e.g. Ebay, Etsy), with 16.3 million consumers each month spending almost $36 billion annually. Transportation (e.g. Uber, Lyft) comes in second with 7.3 million monthly consumers and $5.6 billion in annual spending, followed by food/grocery delivery (e.g. Instacart) at 5.5 million monthly consumers and $4.6 billion annual spending. Other on-demand services including home services (e.g. TaskRabbit), freelancer services (e.g. Elance), and health and beauty services (e.g. StyleSeat) account for $8.1 billion in spending each year, and all other on-demand activity comes in at $3.8 billion.



The data shows that the on-demand economy isn’t just for the wealthy, though; 46% of on-demand consumers have an annual household income of less than $50,000, and only 22% have an annual household income of $100,000 or more. It’s also reaching a diverse geographic spread in the U.S., with 39% of on-demand consumers living in rural areas or small towns, 30% in outer suburbs, and 31% in close-in suburbs and cities.

NTRS also groups consumers into segments based on their technology readiness. “Explorers” are the most innovative and optimistic about technology and are early adopters; they make up 41% of on-demand consumers. “Pioneers” have a love/hate relationship with technology and make up 29% of on-demand consumers “Hesitators” are optimistic about technology but are a little uncomfortable and scared; they represent 16% of on-demand consumers. “Skeptics” lack passion about technology and make up 11% of on-demand consumers. “Avoiders” are true laggards who see no benefit to technology; they – not surprisingly – make up just 4% of on-demand economy consumers, which is much lower than the 18% incidence of “Avoiders” found the in the U.S. Population at large.