TaskRabbit, hoping for growth, lowers service fees
In another sign of shifts in the gig economy, Ikea-owned TaskRabbit has trimmed prices as it seeks to find more clients for the household services offered by its network of independent contractors.
“Since Ikea bought us, we’ve positioned the company to scale,” said CEO Stacy Brown-Philpot in an interview, pointing to a doubling of headcount since the October acquisition. “Our goal is to grow TaskRabbit into a very large business.”
Handymen, furniture assemblers, movers and house cleaners set their own hourly rates on TaskRabbit, which then adds a service fee on top before showing the rate to potential clients. TaskRabbit is cutting that service fee, previously 30 percent, in half, to 15 percent.
“We want to make TaskRabbit an affordable service for everyone to use,” Brown-Philpot said.
Eric Calande of Newark does handyman work on TaskRabbit so he can pursue fine-art painting. He charges $65 an hour. But the effective rate clients would see previously, including the service fee, was $84.50. With the lower service fee, his rate will now appear as $74.75.
TaskRabbit actually lowered the fee in April, but is only formally announcing the change now. Calande said he hasn’t seen a spike in new jobs but he was already pretty busy: He’s built up lots of positive reviews after three years on the website.
“Someone who wasn’t getting hired as often would notice (the change) for sure,” he said. “It’s always great when TaskRabbit can lower a fee that gets passed along to clients. Obviously it will drum up more business.”
TaskRabbit also eliminated its premiums for jobs that are booked and completed the same day. These “on-demand tasks” are available in the Bay Area, New York, Los Angeles, Washington, Chicago and Boston.
San Francisco’s TaskRabbit was among the earliest gig economy companies and raised some $50 million in venture backing but didn’t seem to enjoy the massive growth in users and valuation that later entrants like Uber and Lyft saw.
Ikea, the world’s biggest furniture retailer, bought TaskRabbit last fall for an undisclosed amount and now offers TaskRabbit furniture assembly in all of its stores, including Emeryville.
Ikea kept TaskRabbit as an independent entity based in San Francisco, with its own governance structure, board and financial books. It had 65 employees when Ikea bought it and now has 137, with 90 in San Francisco and the others in offices in New York, London and one soon to open in Austin, Texas.
Besides expanding TaskRabbit, Brown Philpot said her other major goal is to help Ikea transform into a digital company by adding more mobile and Web services for customers.
In addition to the lowered fees, TaskRabbit has launched an advertising campaign on radio, billboards, bus wraps and social media called “Do away with to-do” to highlight that it can help with nagging household chores.