A lot has happened since we last checked in with TaskRabbit, a fast-growing San Francisco-based company whose users hire their underemployed neighbors to execute tasks they don’t have the time or inclination to do.
Last October, Leah Busque, the former IBM engineer who founded TaskRabbit in 2008, was replaced as CEO by Eric Grosse, who cofounded the discount travel site Hotwire. In December, TaskRabbit announced $17.8 million in fresh funding led by Lightspeed Venture Partners. (The company — whose service is currently available in San Francisco, Boston, New York, Chicago, L.A., Austin, Seattle, and Portland — has raised nearly $25 million to date.) And in January, TaskRabbit announced its first acquisition, of SkillSlate, a marketplace like TaskRabbit that specialized in connecting users with professionals like handymen and movers.
This morning, I talked about with Busque about some of those changes. We also talked about why TaskRabbit is going after the small business market, why some TaskRabbits may be accepting less than minimum wage for some tasks (while most average more), and what happens when someone is asked to pick up something, um, illegal. Our conversation has been edited for length.
Your business is a kind of economic indicator. What are you seeing right now?
Recently, with the small business market, we’re seeing them take advantage of TaskRabbit as a temporary workforce. That tells me that in the last six to nine months, small businesses are bouncing back.
What sort of tasks are your runners doing for them?
There have been a lot of small cupcake shops that have opened in the last six to nine months that are using us for deliveries. Other companies use us to help promote their business, by handing out fliers, or working events. They’re also hiring TaskRabbits for administrative work or to do accounting. It’s interesting, because they used to perhaps find someone on Craigslist or hire someone full-time, but we give them this flexible on-demand labor force that they can scale up or down.
We also acquired SkillSlate, which is more focused on professional service providers, like carpenters and yoga instructors, and we acquired that team and company to help move upstream into more skill-based tasks and services because we started to see more skill-based tasks get posted.
The acquisition pits you even more directly against Zaarly, a well-financed competitor that’s also now targeting the small business market. What’s the biggest distinction between you?
The main differentiator between us and the many competitors who’ve recently popped up is our dedication to trust, safety and security. One hundred percent of TaskRabbits go through a vetting process that involves a video interview as well as a social security and federal criminal background check, after which they have to pass an online quiz. We also have a robust reputation engine that allows users to rate and review TaskRabbits; we feature profiles with real pictures. TaskRabbits can ‘level up’ with points and badges. So you can choose who you want to work with [based on these elements].
Obviously, price is also a factor. Is there a minimum wage on TaskRabbit? I’ve read complaints by those who say they were offered below minimum wage for a service, as well as concerns by users who worry that runners are accepting low wages in some cases.
Task Rabbits keep all the money they want to earn, and that’s typically between $12 and $15 an hour. Our service fees are paid by the task poster, so whatever they bid on the job [if someone is willing to do it for that price, it’s the runner’s prerogative]. We don’t have anything set up. You’re bidding on a job as you see fit. And all our TaskRabbits are independent contractors.
What if one of those jobs turns out to be illegal [such as the transfer of uniquely strong-smelling package]? Does that happen? How do you police it if so?
We haven’t seen anything posted that’s flat-out illegal. People can flag things as inappropriate that are immediately reviewed by an internal operations team. We also have 24 x 7 operations team that might review tasks that are inappropriate or [address a situation] if a Rabbit has a question while on the job.
Regarding your fees, for each task, you tack on between 13 percent and 30 percent to generate a total “ask price.” When and why do you charge job posters the upper end of that scale?
On average, it’s 15 percent, but the larger the task size, the lower percentage we take. If you’re paying $100 for a task, we might take 12 percent. But if you’re posting a job and want to pay $5, you might see a higher percentage taken.
How much of your business is now coming through mobile?
It’s growing. When we launched [our first iPhone app] last July, it was 5 percent of our business. Now it’s grown to a quarter.
The whole idea was to allow people to post a task in 30 seconds without every typing anything. So when you open up the app, you spin through a carousel, pick off the type of task you [want executed] off a wheel, then you voice record a description of what you need, which is then uploaded to the TaskRabbit Website.
There was a some disappointment when you stepped down last fall, given how comparatively few women are founder CEOs at startups. What can you say about that transition?
Everybody is different. For me, I have zero ego about the whole thing. I knew what I wanted to focus on and what I’m passionate about, and with my background in engineering, that’s product. When I thought about bringing on a partner, I knew I wanted someone who was as passionate about the business piece as I am about products. I knew I would be the only one I’d trust to run the product side. We did a full executive search. I wasn’t looking for a CEO. But at the end of the search, there were three final candidates. Two were COO candidates; Eric was [a] CEO candidate. I chose him because he was absolutely the right person.