Already being a widespread industry worldwide, a considerable section of the global population is still unaware of the term – “on-demand economy.” It can be easily explained using two names – Instacart and Uber. A form of economy where service providers connect with service seekers to offer services temporarily.
Casting aside the notion of a 9-5 job, the on-demand service providers work when they wish to. Today, different service providers and seekers are inclining towards the on-demand economy, making the categories go beyond cab and grocery delivery. The pandemic has also inspired many individuals who lost their jobs to get creative in terms of income opportunities.
Types of Services Marketplaces
Let’s have a closer look at the types of services marketplaces.
- Traditional freelance platforms like Upwork and Fiverr
- Influencer marketing platforms like Grin
- Home services marketplaces like Thumbtack and TaskRabbit
Investing in a platform like TaskRabbit requires knowing some insights into the platform before investing.
TaskRabbit – Brief Introduction
Connecting two user segments (task posters & taskers) seamlessly, TaskRabbit allows its users to outsource many household errands, simplify their lives, and earn money. Being a popular name in the on-demand service industry, TaskRabbit has more than 45 task categories listed on its platform.
From minor home repairs like drilling, garden cleaning, salon services, babysitting, food delivery, TaskRabbit has almost everything covered on its platform. Right from its inception, the platform was considered to have great potential because of which it received massive amounts of funding from the very beginning. So let’s have a look at the journey of TaskRabbit.
- Available in Atlanta, Austin, Boston, Houston, LA & OC, Phoenix, Portland, San Antonio, Washington DC, Chicago, Dallas, Denver, Miami, New York City, Philadelphia, San Diego, Seattle, SF Bay Area, and one international location as London for now.
- Crowdsourced Marketplace model with service seekers willing to outsource petty tasks connected to TaskRabbits willing to do those tasks.
- Over 50 full-time employees working in the San Francisco office and about 50,000 runners signed up on the platform.
How Platforms Like TaskRabbit Offer Value to Its Users?
- Offers customer support throughout the day
- Connects with the service providers in the local area
- Collects complete information about the work to be done to make sure the actual delivery is smoothOffers a pool of service providers with a thorough background check
- Saves time
- Enables cash-free payments/In-app payments
- Provides Insurance of every task
- Reliability of work completion
- Working at own convenience
- Opportunity to earn extra money
- Jobs available in the local neighborhood
- Instant wages after completion of the task
- Service providers can accept/decline the service request as per their choice
- Can set hourly rates
Working Model of TaskRabbit
The working of TaskRabbit can be explained in 3 simple points.
- A service seeker posts a job, and the platform suggests three contractors, along with their hourly rates, who represent a range of prices and experience levels.
- A service provider can accept or cancel the job at his convenience and availability.
- The service provider completes the job, and the payment is processed through the app.
After a thorough background check, all the service providers in TaskRabbit’s database are fully talented and verified. After completing the task, the service seeker can review and rate the service.
Revenue Stream of TaskRabbit
The platform receives a cut on every transaction conducted over the app. Earlier TaskRabbit opened its business portals for local businesses to hire workforce and charged 26%; however, soon, the business portal was shut down.
Why Investing in an On-Demand Services Marketplace is a Good Idea?
The on-demand economy is getting wings and is going to soar higher. Below are some reasons why investing in this industry is a wise decision.
No Infrastructure Required
On-demand services marketplace can perfectly run without any equipment and inventory. All you need to do is to connect service providers with service seekers.
Easy to Scale
No inventory required means the business is easier to scale. The business owner can develop and evolve the resources as per the requirement and scale the business as per the choice.
Coveted Network Effect
Once the network of the service providers and seekers reaches a critical scale, it becomes difficult for any competitor to encroach. There will be no need to advertise the platform, and word of mouth will be sufficient for promoting the platform.
Future Trends in On-Demand Services Industry
From changing consumer expectations to increasing use of technology, let’s discuss the upcoming trends in the industry.
Increasing Number of People Will Join the Sphere
The popularity of on-demand services is only increasing. As a result, more and more people are likely to join the workforce in the coming years and offer their services, knowledge, and skills through online platforms. Another reason for its growing popularity is the regular and reliable source of income and simplified client search.
More Industries Will Turn to Providing On-Demand Services
Along with the increasing workforce, many industries are also expected to join the on-demand service domain. For example, Healthcare, transportation, delivery services, personal services, automotive, babysitting, etc., are some new services entering the world of on-demand services.
Background Check Within Platform Will Become More Prevalent
With the increasing diversity in the types of services offered like tutoring, construction, babysitting, and many more, the service seekers are required to check the service provider’s history. The platforms through which customers look for service providers offer background checks, which helps customers maintain user trust.
Business Analytics Will Become Increasingly Important
The on-demand platforms will require business analytics and data mining at a crucial level to find out:
- Services in demand
- Results of marketing strategies
The initial research will help the business face increasingly stiff competition.
On-Demand Platforms Will be Using AI
The implementation of AI into the on-demand service sphere seems promising. It can provide business owners with a lot of information and help them make important decisions to improve user experience. Some ways in which AI can help are:
- Optimizing the search within platforms
- Providing users with targeted and personalized options after studying patterns
- Providing 24*7 customer support using chatbots
Over to You
On-demand services platforms are undoubtedly a “green dot” business model and a great idea for potential investments. They have highly recurrent revenues, enormous addressable markets, scale profitably, and enjoy strong network effect competitive advantages once at scale. This is a great place to go fishing for attractive investment opportunities.