13. TaskRabbit: Hop Online and Pull a Rabbit out of Your Service Network
On a cold night in 2008, when 28-year-old Leah Busque and her husband Kevin ran out of dog food for their Labrador retriever Kobe, an idea was born. Leah and Kevin were on their way to dine out, when they realized Kobe’s dinner was not ready. There was no way to contact anybody else to get it for him too. That made Leah thinking, “Wouldn’t the world be a better place if there was a platform for contacting people to help you run your errands?” A few months later, Leah quit her engineering job at IBM to focus on creating a viable solution to this problem. Runmyerrand Inc, later known as TaskRabbit,1 was thus born in September 2008. It was the first location viable, two-way platform for “service networking,” a term Leah coined for the activity whereby people and information are brought together online to fulfill a collective business objective.
1The name was changed mainly because the word “errand” in Runmyerrand was much too restricting.
The company matched people who needed an extra hand to take care of their errands with people who were ready to lend a hand in exchange for money. It was launched in Leah’s community of Charlestown. Within 6 months, they had expanded it all the way through Boston and into Cambridge. They participated in fbFund Rev, a seed fund and incubator program by Facebook, Founders Fund, and Accel Partners. They raised $15,000 in funding which Leah used to commence their activities in San Francisco. In May 2008, the company closed a $5 million Series A funding run by Menlo Park, Calif.’s Shasta Ventures. It also raised $1.8 million in seed-round funding. 500 Startups, Lightspeed Venture Partners, and Baseline Ventures are some of the other companies that backed TaskRabbit. In 2011, with a new funding round, TaskRabbit expanded to New York City, Los Angeles, and Chicago. San Francisco, Orange County, and Boston joined the list later on. By 2014, TaskRabbit had over 1.25 million new users, with over 25,000 taskers working on the platform, and 10 percent of them doing it as a full-time job. The task-posting volume has grown by 50 percent since then. Approximately $4 million of economic activity is requested monthly through the platform. The taskers do a variety of jobs ranging from getting dog food to helping people relocate. This generalist approach is earning the company both fame and criticism at the same time.
Following the “TaskRabbit”—How Does It Work?
By March 2008, there were 100 “runners” (“taskers” as they would be called afterward), the number increasing to more than 2000 within just 3 years. Initially it had an auction house model, where task senders (users) and the taskers negotiate with each other through TaskRabbit’s online platform. The senders could declare the maximum amount they are willing to pay for getting a task done. The taskers bid on the task by stating the minimum amount they are willing to accept. The senders then choose from among the bids. Taskers, who are rated highly or available immediately for an urgent job, can insist on substantial premiums. Users could also opt for “TaskRabbit Elites,” who are taskers consistently providing best services with proficiency. TaskRabbit takes 12 to 30 percent cut off from each transaction, depending on the value of the jobs. Lower value jobs incur a higher percentage cut off.
At this stage, TaskRabbit had employed game mechanics to keep the taskers from scurrying away. The top taskers were ranked and the level achieved by each tasker was displayed in a leaderboard. The average customer review was also included. The taskers could see their progress bar and know how many additional points they would need to jump to the subsequent level. Points were awarded for accurate bidding, quick bidding, and for recommending TaskRabbit to friends via e-mails.
On July 2014, TaskRabbit changed its model to an “invitation model” also known as “BookerT,” by building a computer algorithm that automatically matches customers with available taskers that have the right skills. Each tasker’s ratings and hourly rate are displayed and the customer can choose his own rabbit. They also changed their customer model to accommodate businesses. Through TaskRabbit “business portal,” companies could outsource work to temporary staffers.
TaskRabbit is guaranteed and has proven to extremely useful for people from homemakers to understaffed companies, from doing grocery shopping to assembling desks for new employees. The taskers are assessed through a four-step process. Initially, upon receiving the application form, an automated phone or video interview is conducted to identify lazy bunnies and reject them. Additionally, a federal criminal background check is done on each prospective tasker by the database company Axiom. Lastly, a social security number tracing is done before making the final selection decision. As Leah Busque says, “it is not an open marketplace where anyone can just sign up.” Upon selection, some of the taskers treat the service as a full-time job and earn as much as $5000 per month. A few self-promote themselves via blogs, Google voice accounts, etc., to better their chances.
The taskers hang out together and share their tasker experiences over snacks once a month during “Rabbit Rallies.” Majority of the jobs on TaskRabbit involve real work. Improper or “unusual” posts are reviewed and removed by the Operations Manager. An example being the task which requested the tasker to bring an “Attractive/Successful Male, Some Water + Juice,” which was taken down 10 minutes later by TaskRabbit.
Apart from connecting the users with the taskers for getting chores done, TaskRabbit is also creating an impact on society by helping people who are looking for jobs but have trouble finding them. People from different backgrounds (ex-military, former medical scientists, and retired handymen) have all benefited from the TaskRabbit project. The taskers praise the company for its positive psychological impact on the job seekers.
WOW: From Hired Hands to Peer Labor?
TaskRabbit is one of the pioneers in the peer-to-peer labor sector. It was brave enough to enter a new space—the peer-to-peer commerce or “do it for me” economy. A lot of companies in our time are more evolutionary than revolutionary. In this scenario, TaskRabbit took the chance to be truly disruptive. The core idea behind this company is motivating many other start-ups, most of them specialist companies, to enter the space. This is proof for the appeal and novelty of TaskRabbit. After all, imitation is the sincerest form of flattery.
With the smart combination of work and gaming in its initial model, TaskRabbit had developed an independent mode of employment and a new kind of entrepreneurship. A particularly remarkable aspect of TaskRabbit made it successful: the competitive dynamics at play. The point system, the review process, etc., created an energetic cadre of taskers who were willing to exchange their services to other people like themselves, for carrots. It also helped in dodging costs associated with inventory, overhead, and hiring full-time employees. The newer fee-based business model was able to maintain these advantages and at the same time, become more straightforward and easier to understand for rabbits and users alike.
The feedback scheme of TaskRabbit has also been quite effective in bringing about constructive adaptations. When Runmyerrand.com was renamed as TaskRabbit in 2010, many new modifications were incorporated as per the suggestions received from members. These involved alterations with respect to the services offered, the networking platform, etc. One such example is “autoposting,” by which the service platform could help the user to schedule a task to occur episodically. The user can set it once and would not have to do a manual periodical update.
TaskRabbit introduced its new app in 2011, which made it easier for assigning tasks for people while they are on-the-go. The interface helps to choose the task, indicate the location of the task, estimate the expenses, set the price, and write a description of the task. The user can even include a photo or create a 1-minute voice memo for the task. The app also lets the users browse the profiles of taskers and hire a specific user for the task that needs to be completed. The taskers meanwhile can use the app via the “Browse Tasks” feature. A map of tasks in a particular area is shown and the taskers can choose from various tasks in his locality. The app also has Facebook connectability options. The “Net Promoter Scores” of the company,2 which were comparable to those of Google and Amazon, is proof enough for its phenomenal success.
2Campaign which asked users whether they would recommend this service to a friend.
SO WHAT: How Is TaskRabbit Different from Other Job Agencies?
TaskRabbit is quite distinctive from the incumbent companies and the very many adjacent companies that are mushrooming. A temp agency which contracts out temporary workers would be an excellent example of such an incumbent. Unlike such agencies, TaskRabbit helps job seekers to develop their own business model, aggressively pursue suitable jobs afterward, and build their own reputation. It is also relatively cheaper.
TaskRabbit has sound strategic differences when compared to its many adjacent companies as well. For instance, Angie’s List offers services similar to that of a business directory, Lyft provides affordable riders by connecting people to reliable community drivers, Getaround lets people rent their cars to strangers, Yerdle offers a platform for giving away/lending stuff. Unlike all these companies, TaskRabbit provides a wider network with people from all walks of life, and a wider range of services. Table 13.1 includes some more suitable examples of companies (with even more similar service offerings).
Challenges
Like any new start-up company in a not-yet-fully-developed arena like peer-to-peer labor, TaskRabbit has also confronted many challenges. In the summer of 2013, the number of tasks posted online started going down drastically. Upon investigating the issues, the auction model of the company was found to be the culprit. Users were not able to decide what starting price to set and had to wait too long for the taskers to start bidding. Rabbits meanwhile had to spend a lot of time scrolling through pages of open tasks, to find one interesting to them. TaskRabbit was able to overcome this challenge by changing its business model to the on-demand “invitation model,” automatically matching users with appropriate taskers. This was a replication of what its competitors had done. On the other hand, during this realignment phase, TaskRabbit was forced to lay off employees, which has caused bad publicity.
Likewise, another issue is the fact that the sections of the society whose needs TaskRabbit could cater to is quite small. The upper class has such tasks taken care of for them already and the lower class might not be able to afford it. This leaves only the middle class users. Similarly, the service is now solely focusing on urban areas. For reaching its full potential, it may need to extend outside the urban market. TaskRabbit has also not yet scaled up enough to become a practicable option for a sizable fraction of the workforce.
Identity is another challenge faced by companies like TaskRabbit. The type of jobs TaskRabbit provides (odd jobs) is too broad and fuzzy a category. This “personality fit” is unappealing to many users. As it had been mentioned in the earlier sections of this case study, many new companies with narrower focus are entering the marketspace that once solely belonged to TaskRabbit. These more-focused adjacent companies are in a better shape comparatively too. Ironically, TaskRabbit in a way is the incumbent when compared to these companies. It is possible that TaskRabbit may need to have a look at its (initially disruptive) idea and decide whether it is sustainable in the long run, with more disruptive companies entering its area.
Another challenge TaskRabbit faces is the increasing number of competitors who are entering the market. Many companies are providing similar or better services, when compared to TaskRabbit. TaskRabbit may have lost its first mover advantage because of the same. For instance, Zaarly, Fiverr, and Needto provide exactly the same services as TaskRabbit. Compared to other similar service providers, TaskRabbit also lacks control over pricing. Other similar platforms provide more consistent and transparent pricing.
On top of all these, TaskRabbit has not raised any capital in the last 2 years. Regardless of all these challenges, it is quite laudable that TaskRabbit is adaptable and have made changes to support its key business opportunities, namely mobile, geographic expansion, business services, and marketplace operations. Eric Grosse, the new CEO of TaskRabbit, says that the data points are indicating that TaskRabbit is “huge” and still making an impact on the society.
Outlook
TaskRabbit was a pioneer in creating a “neighbor helping neighbor” virtual community. The core idea behind was brilliant, with the current situation of the economy and unemployment. Apart from its business potential, TaskRabbit was also quite successful in connecting people to others in the community, whom they would never have gotten acquainted with otherwise. It has shown remarkable flexibility and has recognized its hitches, rectified them, and are still moving forward in a space which is presently getting crowded. The company has even managed to expand its business to 19 cities (including cities abroad, like London), proving that the fittest can always survive. A feasible way to carry on being “the fittest” would be to decide whether to maintain the generalist identity or constrict the focus to more specific areas of activity. Following the latter path would assist TaskRabbit to sell its services better, make more revenue, streamline the work processes, and most importantly, beat the competition. After all, latecomers can win the race, if and only if the rabbit is asleep.
From the Perspective of Lakshmi B. Nair and Inês Peixoto, Unaffiliated “Taskers”
The following discussion draws on the Financial Times article by Sally Davies, February 18, 2015, and other published sources. It was compiled, in a true TaskRabbit fashion, by two unaffiliated Taskers.
1. The purpose on which company was founded; what is TaskRabbit’s passion?
The main purpose was to create an on-tap workforce, with the benefits and stability of traditional employment. Also to make our daily lives smarter by spending time focusing on what matters and leaving the errands with people we can trust will take care of them.
TaskRabbit is supposed to make everyone’s life easier—just one text message and TaskRabbit takes care of everything that you can’t or don’t want to take care of. It allows you to focus on what really matters for you. At the same time they created a flexible work model for people seeking for additional income.
2. Its difference relative to incumbents; why is it strategically no?
Compared to incumbents, TaskRabbit offers personalization to its customers. The “taskers” (previously known as “rabbits”) can thus build a profile based on the quality of services they provide. In addition, incumbents tend to be specialized by type of service or limited to a geographical area. TaskRabbit provides a web of taskers that offers an urban twist to the good old practice of neighbors helping neighbors.
3. A quick tour of history; how did the founders get here in terms of doing something differently? (What rules did they break, etc.?)
TaskRabbit exists because current hectic daily lives work more smoothly with the help of taskers doing routine or exceptional work. Yet it confronts the barrier of interpreting the practice of contracting errands to taskers as drudgery and exploitative work.
It was actually a Friday night when they ran out of beer and wanted Chinese food. They thought “Why isn’t there someone, we can call for that?” So what they did was easy—they set up a number, spread it over the Internet, and waited for people to text. That actually didn’t take long. Maybe it was the immediate soft-launch without overthinking, what made them have a good start.
4. Future intent; what is the next opportunity and related challenges?
TaskRabbit plans to expand to Paris, Zurich, Dublin, and Munich. It aims to double its revenue by August 2015. While the next opportunity is expanding to new geographies, the challenge remains in how to reconcile worker protection and fair rewards with taskers bidding against each other in a race to the bottom. In addition, TaskRabbit should be able to respond on demand to an increasing number of same-day services supported by mobile platforms.
As a first step they plan to expand in Germany, afterward Austria and Switzerland. It doesn’t make any sense to plan any further before being established in the home markets. It actually doesn’t take too much—a solid back office and proper IT landscape is the company’s backbone. Since anyone can be a rabbit, they mostly need funding for marketing to hire these people and spread TaskRabbit’s mission online.
5. Looking back from the future; why did what you have done matter more broadly?
TaskRabbit created an arena for peer-to-peer marketing, which provided flexible job opportunities to a lot of people. In this arena TaskRabbit offers work opportunities for skilled people who cannot find opportunities for selling their skills in the conventional job market.
I wouldn’t go that far and say that the business model really “matters” in the social context. TaskRabbit is simply a platform that brings together two groups of people: (1) the ones, that are willing to pay for more time, and (2) the ones that have some spare time and are eager to make some extra money—that’s it. Fairly simple but at the same time economically spoken very efficient.
6. How have you amplified the change, which the company stands for? Or how did you punch above your weight to make impact?
Through the company, the founder tries to revolutionize global workforce by making it more flexible. The change in the labor market that TaskRabbit is enabling is magnified by taskers’ talent in promoting their skills and the quality of service they are able to offer. TaskRabbit taps into the opportunity created by a pool of resources out there in the form of talented and available individuals who possess underutilized, valuable assets such as demanded skills, resources, and free time.