Instahelp, the budget-focussed service offering launched by Urban Company earlier this year, must significantly increase its average order value (AOV) to achieve financial sustainability, according to a report published by The Economic Times under the title, “Instahelp must double average order value to break even: Urban Company.”
Currently billed as a low-cost alternative to Urban Company’s flagship home services platform, Instahelp caters to price-sensitive consumers in major cities by providing standardized services such as cleaning, electrical repairs, and appliance maintenance. With a core proposition of affordability and fast response times, Instahelp has seen growing adoption, particularly in metro areas. However, despite promising demand, executives acknowledge that the model’s profitability remains in question.
According to the article, Urban Company CEO Abhiraj Singh Bhal emphasized that Instahelp would need to roughly double its current AOV—from about ₹250 to ₹500 per order—in order to break even. This economic threshold considers variables ranging from technician compensation and transportation costs to platform overheads and customer acquisition expenses. “There is no fixed timeline. But for this model to be sustainable, the AOV has to increase,” Bhal said during an earnings call referenced by The Economic Times.
In its pilot phase, Instahelp has been operated only in select cities and services, with Urban Company currently assessing unit economics before contemplating a broader rollout. The company believes market education and customer trust will be critical levers in driving up AOV, possibly through bundled services or repeat usage from satisfied clients.
Analysts suggest that the challenge lies partly in the platform’s tight margin structure. Given that many Instahelp services are priced below ₹300, any increase in operational costs—driven by rising fuel prices, higher minimum wages, or competitive technician payouts—can disproportionately impact margins. In contrast, Urban Company’s premium services typically see higher AOVs and are better positioned to absorb such variabilites.
The company’s strategy reflects a broader trend in India’s gig economy, where service platforms attempt to broaden market reach while maintaining cost efficiencies. Urban Company appears to be betting that Instahelp can become an entry point into home services for millions of consumers who have traditionally relied on unorganized labor.
Urban Company reported growth in total service volume in the last quarter but has flagged profitability across newer verticals as an ongoing focus. The company’s high-value categories such as beauty and specialized repairs continue to deliver healthier per-order margins. However, scaling a low-cost offering like Instahelp requires new operational efficiencies or customer behaviors to shift significantly.
Should the AOV hurdle be met, Instahelp could serve as a model for high-volume, low-margin service delivery in emerging urban markets. Until then, Urban Company executives remain cautiously optimistic, signaling a commitment to long-term viability over short-term expansion.
The company’s challenge underscores a broader question facing India’s digitally-enabled service sector: how to balance scale, affordability, and sustainability in a landscape where consumer price sensitivity remains high and labor costs are gradually rising.
