Leah Busque, founder of TaskRabbit, explains how on-demand marketplaces fight gray markets by building trust through integrated payments, insurance, and ratings. She argues that staying focused on one vertical like home services beats spreading across multiple categories, and sees untapped opportunity in payment-focused and food preparation platforms.
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So let's say I use TaskRabbit and I thought the person did a fantastic job. Rather than use the application again, I'll just contact them directly.
So how do you deal with that?
Customers just deal directly with the tasker rather than using your application again.
Yeah, so it's a great question. And in any marketplace business, one of the key things that you have to think about is the disintermediation, or gray market some people call it. eBay has dealt with this. Many other marketplaces have as well. So it happens. You can't be so naive to think that it's never going to happen. But what you have to do is you have to create enough value on the platform for people to want to be there. So on the client side, some things that we do are we handle all payments, including any reimbursement expenses. So if you send a tasker to Whole Foods to pick up $50 worth of groceries, you don't have to have cash or check on hand. You can just pay them right through the platform, which is just Really convenient, we hear from our clients. We also have a million-dollar insurance guarantee for every single task that goes through the site. So it's a nice sort of trust and safety measure as well. On the tasker side, every time they complete a job, they get a rating and a review. And so they're building up their reputation for every single job that they complete. And what they've learned is that as they build up their reputation, they're actually able to command more money. We see taskers come onto the platform at an hourly rate, let's just say $25 an hour, and 4 months in they're at $50 an hour. And it's because they've been able to build up that reputation over time. We actually incent our taskers to get rehired for the same job from the same client again and again. We make it really, really easy on the platform for that to happen. And we actually take down our service fee. Every time it does. Because we know that that relationship and that trust that they've built is really important to the client and to the tasker. But we also know if the client stays on the platform with that tasker, we can cross-sell them into other categories and to other areas of work as well. So we actually encourage it. We think it's a good thing. We try to make it as easy as possible for them to have those relationships and then just You know, add as much value as possible on the platform for both sides.
Yeah. So, you know, I see TaskRabbit being awesome because it's kind of like the first pioneer in on-demand services. But I think in the past few years there's been a little bit of expansion where there's focus on specific verticals, right? I think there are companies that do food deliveries, nannies, handyman, and so on. So what do you see the future of on-demand services going to be like, and if there are any areas that are still ripe for disruption currently?
Yeah, great question. So, I mean, there's so much happening in the space right now, and so much has happened over the last 2 years. I mean, when I started TaskRabbit in 2008, the word the sharing economy didn't exist yet, and now it's become this major trend. And so I think there are some verticals and some categories where it makes sense sense to focus on a single vertical, areas like transportation, food. I think that there are certain categories like that that have their own user experience that really has to be built in properly to the model. What we hear from our clients on TaskRabbit is for help around the home, which is our area of focus, people don't want to have 20 different apps on their phone to manage. And because the trust barrier is so high when you're inviting someone into your house, if you can build that trust between a single brand and that consumer, then you've won. And so our model is help around the home, a handful of categories that we focus on and that we do really well, and then we really focus on the quality and reliability and the trustworthiness of our Tasker community. And that's a really big, important piece of the model to us. And so that's just kind of our philosophy on a single vertical versus many. I think going too broad and doing too many is also a problem. It's just dangerous. People don't really know what you do when you try to do everything. So I think a more narrowed focus around a theme has been really good for us. But I also think there's certain categories, again, like transportation, that can be verticalized and are big enough markets that will work really well.
What are these verticals that no big players have gone into yet?
Wow.
Hmm. You want your next startup idea, don't you? Yeah. Okay. Well, I see some early things emerging in payments. Some early— Marketplaces emerging around food. Not necessarily like Grubhub, like food delivery, but more around chefs and preparation of food. I think those are still very early but very interesting. Those are probably the 2 areas right now that I see kind of as nascent but have potential.
