Business

TaskRabbit Business Model | How Does TaskRabbit Make Money?

TaskRabbit is a company that connects businesses with experts. For example, a plumber can be easily found through TaskRabbit if your plumbing system is broken. 

You may be able to find someone online who can assist you if you’re moving furniture into a new home.

You can search for tasks based on the price you are willing to pay. Once they know how much they are willing to pay, TaskRabbit can connect them with taskers looking for work in that range.

Furthermore, if you are looking to perform tasks for a client (referred to on the website as a “tasker”), you can specify your desired pay rate. You will then receive a notification of new requests matching your expected payment.

What is TaskRabbit?

TaskRabbit is a marketplace that connects local service providers with customers to facilitate all kinds of service transactions (like cleaning, home repair, and data entry).

TaskRabbit connects TaskPosters with TaskRabbits through a bidirectional marketplace.

TaskRabbit earns money from three sources: service fees, trust and support fees, and registration fees. Based on a marketplace model, the business operates.

Users can utilize Taskrabbit for daily tasks such as planting, cleaning, caring for pets, and plumbing.

TaskRabbit was founded in 2008 and is one of the first service-based online marketplaces. The Ikea Group purchased the company in 2017.

TaskRabbit Business Model

The TaskRabbit Business Model matches those in need of assistance with those ready to work for some extra cash. As a result, these applications generate a supply of services. 

Additionally, the company offers many options for clients to ensure that they can choose the individual they prefer without compromising because there are too few options available. 

Taskers and posters alike will appreciate the variety of options provided by the software.

As the business owns no physical assets or inventory, it is commonly referred to as the aggregator model. Connecting people is its primary function. 

Through TaskRabbit, you will find the best taskers to complete your task as soon as possible. 

TaskRabbit is a market leader in domestic tasks and has been for some time. The app’s primary  purpose is to:

  • Serving as an aggregator between parties.
  • Assists clients in making their selections.
  • Provides an online payment interface and manages the parties’ cash flow.
  • Expand the app’s taskers and create a network.
  • Maintain the app so that it reflects changing demands.

In my opinion, TaskRabbit does an exceptional job of keeping its app current. For example, when task requests first arrived, taskers accepted them and then performed the work later. 

As the need for efficiency and real-time work increases, TaskRabbit enables taskers to complete tasks as quickly as possible.

How Does TaskRabbit Work?

TaskRabbit connects consumers looking for local services (known as Taskers) with suppliers of these services.

Various professions and services are available, including home repair, delivery, gardening, and cleaning.

It’s easy to use TaskRabbit. Visitors may access the company’s website or download one of its mobile applications, which are available for Android and iOS devices.

Then you provide the type of job they want to do, the estimated duration, and their ZIP code.

TaskRabbit Business Model

TaskRabbit will then display a list of available Taskers and their hourly rates for completing the job request. In addition, the Elite Taskers option allows users to refine their search further.

Furthermore, customers can utilize a rating system and read customer reviews in support of their decision-making process.

The user just pays for the service after choosing a date and time. Furthermore, TaskRabbit allows users to communicate with Taskers directly from within the app and call them directly.

TaskRabbit carefully screens its service providers for criminal history before partnering with them.

You post your needs and information on TaskRabbit and wait for parties to express interest in your task. Let’s have a look at how this process works.

Select a category.

As soon as the customer opens the app, this is what they will see. A wide variety of work can be submitted, and they are required to select one of these categories to submit it. 

Packing and moving, handyman services, cleaning, and personal support are among these categories.

Add a Description

Once you’ve chosen a category, you’ll need to provide more details about your work. Among these data is the type of task, the date and time of the work, the place, the required skills, and so forth. Your job will be posted once you have completed all of the required fields.

Compare Available Taskers

Once you place your task, you’ll be able to see various taskers in your area who have the skills you desire. Check out the freelancers’ contact information and the list of their abilities. 

You can compare the hourly prices and previous reviews of these taskers before select. Then, click. Click on the images to view their details. You will then be able to select the tasks once they are completed.

Chat With The Selected Tasker

You can click the confirm and chat buttons once a tasker is complete. This is a place where you can share information and communicate with the tasker. Based on their availability, the tasker must decide whether to accept or reject your work request.

Completion Of Task

Once a tasker is selected, they will show up at your address at the indicated time to complete the work. After completing the transaction, you can finish it directly within the app.

This is also an example of how the tasker works. Taskers register using a separate interface by entering their personal information. 

A background check is then conducted, and after the interview procedure is completed, the profile of the tasker is updated on the app. 

Users provide details about their hourly rates, location, and other relevant details and then wait for tasks to be posted. Additionally, the app allows taskers to accept or reject a task.

How Does TaskRabbit Make Money?

TaskRabbit earns money by charging booking fees. As a result, taskers represent the supply side of the organization, while clients represent the demand side.

The company charges both its customers and its Taskers different fees. However, the majority of the money generated by TaskRabbit comes from the service fee charged for each booking.

There is a 15% service fee. However, in June 2018, TaskRabbit surprised the market by reducing this cost by half. (from 30 to 15%).

TaskRabbit additionally charges a trust & support fee on all hourly billing. The charge funds operational and safety measures (including background checks) and customer service and training. The trust and support of respondents are expressed in 7.5% of responses.

Last but not least, TaskRabbit charges its users $25 per registration. But, again, all of these payments are processed by Stripe.

Success Story of TaskRabbit

TaskRabbit, founded in 2008 by husband-and-wife team Leah and Kevin Busque, and Brian Leonard, is a web-based task management application.

They met in high school and married after they graduated college.

Upon graduation, Leah and Kevin both went to work for IBM as software engineers and system administrators, respectively.

When Leah and her husband were trapped inside on a cold day in 2008, a lightbulb moment struck her. 

Due to the lack of a vehicle or someone capable of carrying a bag of dog food, they could not get dog food. 

Leah questioned whether any services enabled people to outsource errands, which inspired her to found TaskRabbit easily.

Kevin and Leah spent the next few months coding the platform’s first iteration. TaskRabbit was founded in late 2008 as RunMyErrand. 

They relocated to San Francisco before the launch to participate in Facebook’s FBFund incubator program.

RunMyErrand was founded during a time when millions of people were unemployed due to the Great Recession. 

Thus, many of them were forced to earn some extra money out of economic necessity. Boston was the first city to implement the service, where it was extensively tested.

The team raised $1 million in startup capital in October 2009. 

TaskRabbit launched concurrently in San Francisco and was officially rebranded as TaskRabbit in April.

During the early years of TaskRabbit, the company was linked to the on-demand economy. As a result, the company established the mobile era even before Uber and Airbnb.

It raised $5 million in its first multimillion-dollar round of funding in May 2011. TaskRabbit launched its iPhone app two months later. 

An unexpected announcement was made later that year, in October 2011.

Leah Busque stepped down from her position as CEO and was promoted to Chief Product Officer. During her absence, Eric Gross, the former CEO of Hotwire, took over. 

A month later, TaskRabbit raised an additional $17.8 million in Series B capital. The TaskRabbit service was operating in five cities at the time.

The year 2012 was undoubtedly more exciting than 2011. London was TaskRabbit’s first international market, with it launching in November 2013. Our company started preparing for this market in May 2012. 

Leah Busque reclaimed her position as CEO the following month. 

Due to the emergence of rival services such as Postmates and Zaarly (TaskRabbit launched a delivery service in June 2012), the change was deemed necessary.

In addition, the company completed its first two acquisitions in 2012. A competitor, SkillSlate, and an e-commerce site for children’s clothes, One Jackson, were acquired. 

TaskRabbit acquired One Jackson, and former CEO Anne Raimondi was named Chief Revenue Officer. Stacy Brown-Philpot, who joined Google as COO, completed the roster of female executives.

Later that year, TaskRabbit announced its business-to-business (B2B) offering, through which other companies could hire Taskers (formerly known as Rabbits) to do work. 

The Tasker program attracted more than 16,000 participants within weeks.

A blemish on the otherwise spotless record of the company appeared in July 2013. The company announced the layoff of 20% of its 65 employees as part of a reorganization plan. 

TaskRabbit launched its Android version in June 2014, over three years after it was launched on iOS.

A significant setback occurred for the company during the same month. TaskRabbit announced that it would move away from an eBay-style auctioning model (Tasker’s bid on work) and toward a direct booking model. 

Customers no longer have to wait hours or days for auctions to conclude before engaging personnel immediately at a fixed rate.

A change in the TaskRabbit business model resulted from its London launch, which was based on bookings. 

The London model outperformed the US-based auctioning system in every metric the company considered essential (gross bookings and booking completion time).

Unfortunately, not everyone approved of the changes. Taskers in the United States objected, claiming the new approach would reduce their earnings significantly. 

According to Busque, the adjustment improved the company’s revenue run rate (at least according to him).

The remainder of 2014 and 2015 was dedicated to expanding the company’s market coverage and  Tasker base. 

Taskrabbit announced an important milestone in March 2015, when it partnered with Amazon to offer Local Services.

Kevin Busque, co-founder and long-serving Head of Engineering at TaskRabbit, has left the company. 

The goal of Guideline Technologies is to make 401(k) plans more affordable for employees of small and medium-sized businesses.

A disappointing turn of events eventually led to the enterprise’s demise. Leah Busque’s (second) departure from the company was announced in April 2016. 

After three years, the company’s COO, Stacy Brown-Philpot, succeeded her.

There were quick reports that the company was financially struggling, unable to live up to the expectations of its investors. 

The competition was catching up fast with services like Thumbtack. At the same time, its marketplace competitors, such as Airbnb, Lyft, and Uber, were becoming some of the world’s most successful startups.

The company’s slow expansion was a significant error. By May 2017, TaskRabbit had expanded to ‘just’ 30 cities. 

As a result, rumors of a sale began to circulate quickly.

These rumors came true in September 2017. Ikea acquired TaskRabbit in an undisclosed deal. There would be no change to the platform’s functionality.

Ikea’s control over TaskRabbit accelerated the company’s growth. In 2018, it was launched in over 15 cities, including Canada. 

Since the United States is TaskRabbit’s second-largest market (after Germany), more resources have been invested in the company. 

As a result, Ikea could now advertise furniture assembly services directly on TaskRabbit, a significant synergy.

Data breaches in April 2018 were the only blemish of an otherwise successful year. An unidentified individual accessed Customer-sensitive data.

TaskRabbit, unlike many other technology companies, did not benefit from the Coronavirus outbreak. 

The country’s lockdown and efforts at social distancing have caused many services to be suspended.

Brown-Philpot will also step down as CEO in June 2020. During her tenure, Airbnb, UberEats, CNN, and other companies hired her as their successor.

TaskRabbit employs over 1,000 people across the United States and the United Kingdom.

Also read, BlockFi Business Model.

How to Become a Tasker for TaskRabbit?

To become a tasker, you must apply online/create an account on the app. You can complete the registration process by using your LinkedIn or Facebook profile. 

Once a tasker has created an account and filled out the required information, they can wait for their profile to be approved. 

TaskRabbit Business Model

The next step involves conducting a background check and verifying the information entered is accurate. 

The tasker is also expected to fill gaps in his or her abilities and interests. The information is used to match him/her with jobs that match his/her abilities. 

Whenever a tasker completes a job, this information is stored in the app’s database. The task poster can then view these facts before selecting a tasker.

What is the Funding, Valuation, and Revenue of TaskRabbit?

TaskRabbit has raised an estimated $37.7 million from venture capital firms in seven rounds, according to Crunchbase.

There are several notable investors, including Founders Fund, IT Ventures, Allen & Company, 500 Startups, Baseline Ventures, and Floodgate.

The company makes no mention of its valuation or revenue at the moment. However, if income reaches a certain level, the furniture giant may be able to start doing so during an earnings call.

Checkout, How Does Ripple Make Money?

Facts about TaskRabbit

  • Leah Busque founded TaskRabbit in 2008.
  • The IKEA Group acquired TaskRabbit in 2017. 
  • As of July 2015, the company had raised approximately $38 million in funding.
  • Every IKEA store in the US has it and key stores in Canada and the UK.
  • Over 140,000 Taskers are registered on the network (60% of whom are millennials). 
  • Taskers in the U.S. earn an average of $35/hour (5X the minimum wage).
  • Taskers earn an average wage of £24/hour in the UK (3X the federal minimum wage).

Also read, How Does Glovo Make Money?

About the author

Madhav

Hey Folks, I am Madhav! I lead a team of Marketers at Tech Startup based in Australia. In my free time, I dissect the business models of various businesses. And if there's any free time, I cook some new Dish!