TaskRabbit Provides Livelihood for Some

In February 2008, Cambridge, Massachusetts–based Leah Busque struck gold when she came up with an idea of an online marketplace that one could visit to run her errands. The site began under the name RunMyErrand.com, with funding from angel investors. It was created as an eBay-like service where users could put up tasks that they wanted done, and service providers could bid for those tasks.

TaskRabbit’s Financials
The site was soon named TaskRabbit, and it began to develop the principles of service networking. TaskRabbit uses social, mobile and location-based technologies to help people meet with runners who could get their errands performed. Errands range from smaller tasks such as making a beer run or assembling IKEA furniture to bigger ones such as moving homes or offices.

Users post the tasks they want done and define a maximum amount that they are willing to pay for the completion of the task. Registered runners then bid for these tasks and are paid a fee post the completion of the task. TaskRabbit charges a 12%-30% commission on each transaction. Unlike eBay though, users can select whichever bids they want to accept, keeping in mind the amount bid by the runner and other subjective basis such as the runner’s reviews and experience.

Today, TaskRabbit has more than 1,500 runners who fulfill more than 3,000 tasks per month in Boston, Austin, Chicago, LA, Orange County, New York City, Portland, San Antonio, Seattle, and San Francisco. Some runners claim that TaskRabbit is their sole source of income and they are able to earn as much as $5,000 a month, although these stories would be the exception and not the rule.

TaskRabbit realizes the importance of keeping its runners engaged and has done so by devising a gaming leaderboard-like review mechanism. Runners are able to achieve a rank based on skills such as bidding accurately and quickly on a task. Runners move across multiple levels based on the number of points they have and are able to win freebies such as TaskRabbit T-shirts or business cards.

TaskRabbit’s financials are not publicly known. But analysts believe that last year the company tripled its revenues and has grown its customer base sevenfold. TaskRabbit is still venture funded and has received funding of $37.7 million from investors, including fbFund, Baseline Ventures, FLOODGATE, Shervin Pishevar, First Round Capital, Michael Powers, Shasta Ventures, Collaborative Fund, Lightspeed Venture Partners, Allen & Company, and The Tornante Company. The latest round of funding, held in July 2012, helped the company raise $13 million from Founders Fund.

TaskRabbit’s Growth
TaskRabbit plans to use the newly raised funds to expand internationally. It is eying growth in London and Vancouver, and is expected to reach these two locations by the end of this year.

TaskRabbit is also planning on verticalization of offerings. Earlier this year, TaskRabbit made its first acquisition by adding service provider directory, SkillSlate for an undisclosed sum. SkillSlate was founded in 2009 and lets people search for local businesses providing the services that they are searching for. SkillSlate will complement TaskRabbit because of its focus on skill-based and artistic tasks such as personal training and tutoring. Through the acquisition, TaskRabbit will be able to offer these niche services to customers.

Recently, the company launched Deliver Now, anytime delivery service for couriers. The service has been launched in San Francisco. It is an extension of TaskRabbit’s iPhone app and lets users get on-demand delivery of anything within the city on weekdays between 9 a.m. and 7 p.m. Initially, the service will cost a flat rate of $10 per delivery. The app also lets the users track their courier’s progress and location real-time. The service will soon be rolled out in other locations as well.

Although TaskRabbit may have become a source of employment for a few runners, analysts aren’t convinced that it will ever be able to scale up to become a viable option for a reasonable fraction of the workforce. For now, though, the organization is creating a new independent mode of supplementary employment. Given the hole that the U.S. is in, any experiment that helps people earn a living is welcome!