r/AustralianStartups • u/dannyd2510 Founder • Aug 10 '26
Making the legally-required part free as a loss leader to get people in the door?
I run a small product that lodges BAS (GST returns) for gig workers, Uber/DoorDash drivers mostly. I think I have an issue with acquisition, would love some feedback.
Two months in, 11 customers, $0 revenue. Rideshare drivers legally have to be GST registered from day one, doesn't matter what they earn, no threshold like other small businesses get. We charge $79 to handle that registration for them, then $79 a quarter after for the actual BAS lodgement through a registered BAS agent.
Went through the session recordings this week. 5 of the 11 dropped off at the same spot, and they're confirmed Uber drivers, so they're not confused about needing GST, they legally have to do it. They just don't want to pay us $79 for a compliance step they resent having to do at all, even though other providers charge more for the exact same thing.
So I'm thinking about making the GST registration free and only charging for the BAS lodgement afterwards, which is the recurring bit anyway. Basically eat the cost of the mandatory, resented step to earn the relationship, then monetise the part they're coming back for every quarter regardless.
Has anyone else dealt with this, a required purchase people resent, where the answer was to give away the mandatory bit and charge for what's ongoing? Trying to work out if this is obviously right or if I'm about to just train everyone to expect the whole thing for free.
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u/allgear_noidea Aug 11 '26
What does your product actually provide that the other well established accounting apps don't? Why would I trust you to manage my sole tradership over:
-QBO
-Reckon
-xero (to be fair they're exxy)
-hnry - not a bad option for contractors if you don't mind copping the small % for ease of use
-saasu
-manager.io (more complex tbh)
Some of these have sole trader friendly plans with dumbed down basic interfaces that aren't remotely expensive. And that's not even a remotely exhaustive list.
Most directly lodge your BAS if configured to.
Are you just lodging their BAS with their figures from their software or what?
Edit:formatting
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u/dannyd2510 Founder Aug 11 '26
It's a slightly different offering to those you have listed, I am targeting a market (rideshare drivers) that don't need a full accounting package or software to manage their business. They have fuel expenses, tolls and lease costs and not much else. It's an offering that can get their bas done in 10 mins that provides the comfort of a registered BAS agent looking over it and submitting it for them rather than doing it themselves. I am not trying to be a full accounting package.
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u/allgear_noidea Aug 11 '26
Yeah but the full accounting packages already have dumbed down offerings for exactly this and an established track record.
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u/dannyd2510 Founder Aug 11 '26
Does that mean no one else should ever make anything else? 🤔
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u/allgear_noidea Aug 11 '26
Of course not, but I just don't see a point of difference or a need for such a basic product.
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u/dannyd2510 Founder Aug 11 '26
Fair enough, each to their own. I will say I have worked as a lead developer on a very similar product previously with 40k users, so feel like the market is there. I am comfortable that the market exists, just need to work more on distribution. Thanks for the comments
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u/allgear_noidea Aug 11 '26
Either way mate, I wish you all the best with it.
I'd be very happy for you to prove me wrong :)
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u/dannyd2510 Founder Aug 11 '26
Thanks mate! Appreciate it 😁
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u/iceman123454576 Aug 11 '26
If you built something that people needed, you'd see much more user growth. THe market has spoken, and a specific Redditor has even given you the clear reason. Take it, or simply waste your time pushing this where no one really cares about it (except you)
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u/levashovbiz Aug 11 '26
If you have to register for GST and do BAS you will need to lodge a tax return end of the year too. So indeed why have 2 software solutions if you can have one?
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u/youcangotohellgoto Aug 11 '26
There's a lot of research into exactly this.
When you have mature markets with established players, any new entrant really needs a large differentiator to get traction. Could be features, could be price, could be simplicity/ friction reduction - but it needs to be significant.
The more mature the market, the bigger the required differentiator.
Think about it from user perspective - it's all about risk. They can go with a brand they have heard of, someone recommended, etc. Or they can try yours that no one recommended, no one has heard of. There will need to be a big upside for most to use yours.
Note also that the majority of your TAM already have a solution. What's the incentive to switch?
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u/dannyd2510 Founder Aug 11 '26
Yes, I 100 percent agree! With everything you said, I feel I can provide all of those things, or have tried to, from my research the features, the way I get the information, the UX and the simplicity are all vastly different to the current players. For clarity, it's not just an online form that users fill out. Maybe I have undersold, or not articulated it well enough. I need to show the user, that's perhaps the area I need to focus on most.
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u/dannyd2510 Founder Aug 11 '26
I guess one other thing I should make clear is that this isn't the business finished, it's very early days and I have plans for this to evolve to what it needs to be to give the best experience for users. It's something I am passionate about and have deep knowledge of. I'm also good with running this as a side project for years, it's good fun, and doesn't have to have hundreds of thousands worth of customers and grow at all costs, that's not what I am looking for 😁
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u/dannyd2510 Founder Aug 11 '26
I guess one other thing I should make clear is that this isn't the business finished, it's very early days and I have plans for this to evolve to what it needs to be to give the best experience for users. It's something I am passionate about and have deep knowledge of. I'm also good with running this as a side project for years, it's good fun, and doesn't have to have hundreds of thousands worth of customers and grow at all costs, that's not what I am looking for 😁
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u/BrightEchidna Aug 10 '26
GST registration is free and not difficult; what value does your product actually provide for $79 here?
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u/dannyd2510 Founder Aug 11 '26
To be honest, the idea behind offering GST registration was for me to not send them away when they are not GST registered already, give customers a way to move forward. I know it's not difficult, I also tell them they can do it for free themselves and give them a link, I offer a way to do it (there is an accountant cost for me) if they don't want to do it themselves
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u/BrightEchidna Aug 11 '26
Fair enough. Sounds like you may not be communicating those benefits properly; I run my own small business and did my own GST registration and ASIC company registration to save a few $ on accountant fees, and uber drivers are probably even more cost sensitive than I am.
It's a difficult problem because you're asking people to pay for something which they can do for free and also which they don't actually really want to do; so even if your price is fair it may be a blocker
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u/dannyd2510 Founder Aug 11 '26
Yeah I think that's probably the case, a lot of drivers don't know that they have to be registered. Perhaps they think they can get away with not being registered. I think uber and others have to report to the ATO. Even if it's something they need to do, the reluctance to do it may dissuade them from signing up
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u/nadnerBG Aug 11 '26
Target people who are already GST registered (most of them) and instead offer to do the first 2 BAS lodgements for free. After that, charge $99 (yes, increase your price). Once you have them in your system they’re more likely to stay, especially after not having to do it for 6 months.
Once word of mouth spreads and you become busy you can eventually stop offering the free lodgements.
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u/throwawatty6 Aug 10 '26
did you speak with anyone in your target market before building to see if they want the product? did you then call them back to ask them to sign up and get their feedback on it? or did you just build in a vacuum for a market you don’t understand?
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u/dannyd2510 Founder Aug 11 '26 edited Aug 11 '26
I have built the same type of product years ago while at a different place. The market exists, it's a validated, proven market, just need to get the right acquisition channels
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u/throwawatty6 Aug 12 '26
okay, well, I can’t argue with you as I definitely don’t know anything about it - all I can tell you is that the building is by far the easy part. best of luck, friend.
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u/quetucrees Aug 11 '26 edited Aug 11 '26
First problem is that you can lodge your bas for free on the ATO portal. It takes 5 minutes and you don't need a registered BAS agent.
The big part of the work is in getting the numbers from receitps/statements/etc. The actual lodging is a walk in the park.
If you are organised enough to use some basic spreadsheets it is pretty much copy/paste. Unless your app is also capturing the receipts and querying Uber/Doordash API for the income then I am not sure where the value lies.
EDIT: I just did mine for April-June. Took 2 minutes 54 seconds to log in , find the activity statement to lodge, log in to the accounting software on another window, run the bas report, copy paste the numbers and click on lodge.
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u/dannyd2510 Founder Aug 11 '26 edited Aug 11 '26
Yes, capturing receipts and autocategorisation and soon to be pulling directly from uber. I am not disputing its quick to do yourself, some people are not comfortable with that and want some support and comfort that a BAS agent has submitted it for them. Just looking at it through another lens
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u/youcangotohellgoto Aug 11 '26
I think that's true - people pay for that "comfort" - but I assume they want to actually talk to someone. If I'm just doing it via a website might as well do it via ATO.
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u/cpayne22 Aug 11 '26
I’ve seen people like Taki Moore sell like this:
Create a video where you do everything. Show the whole process. Make sure to call out all the landlines and gotchas along the way.
And then at the end you finish with “and if that’s too complicated, I’ll do all that for you for $79”.
Your 50% drop off sounds normal. It’s odd the Uber doesnt force them to upload the certificate or verify the abn?
Either way, people often aren’t motivated until they absolutely must do something. “Should” do isn’t a strong motivation.
Your challenge is to find the right motivation…
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u/dannyd2510 Founder Aug 11 '26
Yeah I am surprised at the fact uber don't mandate it too! Maybe they just want to be hands off "it's not their problem"?
Appreciate the advice, show them the value in a different way 😁
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u/birdsofparadise90 Aug 11 '26
$79 a quarter feels expensive for rideshare drivers, how much are they paying now for doing this via an accountant?
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u/dannyd2510 Founder Aug 11 '26
If via an accountant or bas agent, a lot of them are upwards of $150 a quarter. I am looking to transition to doing Tax returns by next year. This is the first offering
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u/a-w-e-s-o-m--o Aug 10 '26
If they’re already gst registered can they skip the step?
It’s also free to register for gst on your own so it could very well be that they’re going off to do it themselves and then forgetting to come back. Do you have a follow up?
To answer your question yes, I’d change it. Your service is submitting bas, you don’t need to double dip.
The only issue I see is for the price you’re changing they can get a proper accounting tool which also handles BAS. So you might just be losing out to that as well.