TaskRabbit reboots with new business model

TaskRabbit announced on Tuesday plans for a new business model that discards the old auction-style website and aims to do a better job matching people who want to run errands and perform tasks for cash, and those who need tasks done for them.

The startup, a San Francisco-based website and mobile app that offers a place for users to outsource small jobs and tasks to people nearby, was one of the hottest sharing economy companies when it launched in 2008. TaskRabbit uses personal assistants to perform a wide range of tasks — anything busy people with not enough time and some discretionary income need done — from picking up dry cleaning to assembling Ikea furniture.  But recently, business has dropped. While the number of users grew to 1.25 million, and more than 25,000 people earn money by performing tasks through the site, the total number of tasks being completed had declined. The site wasn’t doing a good job connecting people who want others to do their chores with all the people looking to earn some cash by doing another person’s chores.

Now, TaskRabbit is aiming to turn things around. The company said on Tuesday it had discarded its auction house, in which workers bid on jobs they wanted to do, and instead built a computer algorithm that automatically matches customers with the “taskers” who have the right skills and are available to do the job. By the end of July, when the new model is rolled out, customers will be able to enter into the website the errand or task they want performed, and will be presented with a variety of workers who are able and qualified to do the job, the company said. The new website will also show each worker’s ratings and hourly rate — popular tasks such as grocery shopping or handyman jobs range between $35 to $85 per hour – and the customer gets to choose which worker he or she wants to do the job.

The company is also launching next month a new iOS and Android app that lets the customers and the workers chat without disclosing their phone numbers or other personal information. The goal is to make sure that more tasks get completed, so more satisfied customers return to to the site and TaskRabbit makes more money. The company takes a 20 percent cut of each transaction on the site.

Since TaskRabbit was founded six years ago, the so-called sharing economy — businesses that use mobile apps and websites that connect people who have a skill or a thing, such as a house to rent or car to pick up passengers, to people who want them — has exploded. More of these sharing economy companies have a marketplace format that gives both sides — the customer and the person offering the service — the freedom to choose who they want to do business with and how much they want to pay or earn. Sidecar, for instance, a San Francisco-based app for ordering car service, overhauled its app recently to let riders choose their driver, car and fare for each ride they order.

TaskRabbit has raised about $38 million and is backed by Shasta Ventures, Founders Fund, 500 Startups, Lightspeed Venture Partners and Baseline Ventures, among others. Leah Busque founded TaskRabbit in Boston before moving the company’s headquarters to San Francisco.

Image from TaskRabbit

Heather Somerville Heather Somerville (236 Posts)

Heather Somerville is a business reporter covering venture capital and startups for the Bay Area News Group.