9.1. The consumer as a source of revenue

There are some clear advantages (at least on paper) for an LBS company to charge the end consumer directly—it’s more immediate, it’s a more scalable mass market, and there may be fewer barriers to entry compared to the business-to-business sector. The disadvantages are that the consumer is more fickle and unpredictable (and more likely to respond to fads, for example) and also tends to cut down on discretionary expenditures if circumstances are unfavorable.

Today, many of the new LBS startups target the consumer directly, in some cases exclusively. The more common way to make money out of providing the service to the end consumer can be referred to as gateway charging and is discussed next.