What kind of risk/liability does these "employees" generally take? Like washing someone's unlocked car, is the employee liable for any damages or the company? If I'm do carpenting work distributed from TaskRabbit and hurt myself so badly I get disabled, do TaskRabbit have insurance for me? What is the standard for this? One reason why buying services is expensive is that the service provider takes risk and needs to insure their workers, I very much doubt that these TaskRabbit-type companies do that... Or am I wrong?
I hired a TaskRabbit to pick up a large amount of IKEA and deliver it to my house. The TaskRabbit proceeded to show up an hour late with the furniture...because she dropped the furniture on her foot, breaking multiple bones.
Once I heard this, I realized "Shoot, I contracted her. Am I legally liable for her injuries?" (Fortunately for me, she shrugged it off, and seemed to be covered under some insurance of her own.) And if she had not delivered the furniture due to her broken foot, would TaskRabbit make me look like the bad guy for asking for my money back? (Fortunately again for me, she made the delivery, amazingly.)
While things turned out OK in the end, suddenly the whole service felt much riskier, for both the employee and the consumer - and I felt irritated at TaskRabbit for subjecting me to that risk without some sort of a safety net in place. (Heck, I would have paid extra for one, some sort of "TaskRabbit Insurance.")
I have to say, as much as I dislike the idea of tight regulations on workers, and can see directly how much cheaper my services are removing those regulations...I think next time I'll pay the premium for a more legitimate furniture move, at least, until the law catches up to services like TaskRabbit.
This is a huge point. A single uninsured mistake with an expensive car could potentially wipe out carwashing earnings for months. (See http://news.ycombinator.com/item?id=4492619)
This could be mitigated by TaskRabbit cooperating with an insurance provider and selling "insured" work. There are great margins on insurance as we all know. In their TOS TaskRabbit basically says "TaskRabbit.com Only Provides a Venue" (check it out: http://www.taskrabbit.com/tos). Why don't some retail-insurance megacorp approach them? This could be TaskRabbits no1 source of income instead of their no1 problem...
I'm not sure about the US legal situation but here in Sweden there is so much legislation to protect workers that a TaskRabbit kind of service becomes hard to achieve.
IANAL, but I'm almost positive they don't have to do this in the US.
In the US, hiring contractors exempts you from many of the taxes and liabilities of hiring employees, and they are also exempt from most benefits (their right to litigation against the company is also limited).
US readers will certainly be familiar with Vector (ie, Cutco knives) - they get away without providing any benefits/insurance, without reimbursing for expenses such as gas/phone bills, and with paying what often amounts to minimum wage because all of their salesmen are college students who are hired as 'contractors'[1].
Don't think I'm saying that contracting is bad - the same laws allow others to make very large sums of money working as contractors. It really just depends on what the setup with the company is.
[1] I may be confusing some of the details with other similar companies, but I know Vector engages in at least some of these practices, all of which are commonly practiced.
Thanks for your reply. Talked with some more informed friends about the situation in Sweden and their conclusion is that work like TaskRabbit probably could exist in some kind of grey area (especially when it's one private individual working for another private individual for a small amount). However when the service grows the unions will try everything to make your workers "unionized" implying that either the service company (e.g. TaskRabbit) or the buyer needs to pay insurance and minimum-wage for the work being performed - basically hiring the individual.
I guess this is not interesting for must of you US readers but it could be telling of what could happen to your TaskRabbiters.
legally they operate as entrepreneurs providing services for customers sourced through a website.
This exempts them from many of the worker protections.
However, at least in Belgium this kind of micro-entrepreneurship is actively discouraged.
Contractors require an accounting-certificate or academic degree in order to setup a company (or sole tradership).
Skipping the basic step of registering as a company can leave you or the customer liable to all sorts of fines, depending if a court thinks the customer or the worker is at fault. The issue is sensitive because it involves manual labour, and there is a huge incentive to utilize black labour as labour costs are very high.
This renders a service like TaskRabbit a legal hazard for customers and workers, but the service itself can operate legally.
> I call Chris Mok, a top-ranked local TaskRabbit who earns up to $1,500 a week. Mok was laid off from his job as an art buyer at Macy’s (M) in 2009 and now spends most days, including weekends, on handyman assignments such as assembling Ikea furniture.
Sorry to say but there is no such thing as underemployment. Clearly there are less need for art buyers (or he wasn't good enough to do the job) than there were in 2009, so he has to do something else.
People grossly overuse (and abuse) the term unemployment like this.
First, an unemployment rate of 0% is bad. This is because not all unemployment is bad.
Frictional unemployment is actually a good thing (to a certain extent), because the alternative is having people stuck doing jobs they don't want when better jobs are available.
Structural unemployment is what happens when $old_industry dies because $disruptive_tech_company changes the market. It's definitely bad for the unemployed (who will never be re-employed in the same field), but it's usually the result of positive improvements to society at large. The 'solution' is that those people losing their jobs need to be retrained to work in another field, which is admittedly difficult, or retire.
Cyclical unemployment is undeniably bad. That's the result of boom-and-bust economies - people over-hiring during bubbles, and then having to lay off en masse when the market contracts. (The problem is largely that the people are being dumped into the jobs marketplace all at once, creating a glut, instead of being more evenly distributed).
The rest - someone who's employed but at a salary lower than what they'd like, or someone who retires because they're laid off... that's not unemployment. Someone may dislike it and they may think it's a 'problem' that needs to be 'fixed', but they need to realize that they're talking about something completely different from unemployment.
As for real unemployment, the ideal value is a point of debate amongst economists because it is tricky to measure, but somewhere in the ballpark of 5% is a commonly accepted value for the target 'natural rate' of unemployment.
That is, a sustained, unwavering value of 5% unemployment is actually the target for a healthy economy.
Please take the time to read through my comment, and you'll see that I address this - 'underemployment' is a misleading term that not only conflates several distinct concepts but also implies a connection with something that it's not.
It's like using the term 'intellectual property' when discussing the Pirate Party vs. MPAA. Aside from the fact that patents and copyrights are completely different legal concepts, the word 'property' already implies a right to ownership[1] that one side asserts doesn't exist to begin with.
[1] '...inalienable rights... Life, Liberty, and Property' - Declaration of Independence (first draft).
You forgot about unemployment because of bureaucracy and red tape making hiring way more costly than it could be. I.e. somebody might be able to contribute 50 Euro a week to the economy, but the overhead alone of employing somebody legally at all in a specific country might be higher than that.
There is such a thing as underemployment, but I don't think it means what the gp and you are claiming. Actually I think that like unemployment, there are 2 forms of it...
1. voluntary - a person is capable of doing a job, that job is available and fits into that person's life, but (s)he chooses to work at a less demanding job not utilizing his/her skills. I don't see this as a problem, personal choice is OK.
2. involuntary - this is a case where a person or workforce has capacity to produce more, get higher wages, or otherwise be "better" employed, but market inefficencies[1] prevent the best employment. Again, this may not be a problem for the individuals - they may not be bothered by this, but it is a valuable measure for opportunity. If a company can employ these people for $fewer than the going rate, but $more than they are making and gain profit, they should, because it helps overall market efficiency - it helps lower the cost of employees overall, and helps raise the wages of the people who provide value. Everyone wins. Just like finding new sources of any raw material in demand, or using previously "too expensive" sources because the market price has shifted.
For a real example: company A had a systems office in my town employing some pretty good graybeards. A decided that they didn't want/need to be in that business anymore, and closed the office. For the large part, the graybeards were happy in town, and chose to stay and not work at as well paying jobs, for reasons outside of salary. The thing is - systems graybeards are in demand and expensive (usually). For a while they were underemployed, not making the money they should. But company B heard of this, and realized that they could pay cost-of-living adjusted salaries that saved them a lot of money on a pool of systems people with a proven track record. They opened an office hiring most of the underemployed graybeards and everything was in balance again.
Of course that example is almost the text-book ideal case of how efficiencies, indicators, and such should play out. There are harder cases of this. Finding ways to take advantage of the underemployed metric is more difficult.
Anyway -- that is the long way around of saying: underemployment may not be a good or even valid measure at a personal level, but at an aggregate level it is a good measure of where efficiency can be sought. Disbelieving it speaks more of personal/political biases than of a market understanding - probably because it is term associated often with jobs programs and other things many dislike.
[1] Like algorithms, just because a perfect theoretical algorithm has an efficiency of $X, a given implementation my only be able to achieve $Y efficiency (where $X > $Y).
The national median household income is around 45k. The third quintile starts just under 35k. Are you really going to say that half of the US population is "underemployed"?
I don't think egypturnash or grueful are saying that; rather, they're questioning how many TaskRabbit workers come close to that.
Let's look at Chris Mok, mentioned in this article as a top-ranked TaskRabbit who makes "up to" $1500 a week, but a Reuter's article from February describes him as making about $3500/month, which works out to 42k per year[1], far far below that weekly "up to" number. And so when TaskRabbit's Leah Busque says people make "up to" 60k a year, my assumption is that most are making much less, especially when a "top ranked" guy appears to be about 18k below that.
I'd love to know mean and median figures, at the least, but haven't been able to turn them up—which doesn't do anything to alleviate skepticism about the "up to" numbers.
Obviously if someone can make even 20-30k from this in a market where they can't find anything else, then it's a good thing they've got TaskRabbit, but I wouldn't really call that enabling entrepreneurship in line with the TaskRabbit PR message.
Location also makes a huge difference; in San Francisco (where he lives), median household income is over $65k and the median rental price for a 1 bedroom apartment is over $2k. If Mok makes $3.5K / month, that probably qualifies as underemployment.
I had a bad experience as a TaskRabbit buyer. There was a dispute between me and the task worker as to whether the task was complete. The worker went ahead and marked the task as complete and TaskRabbit deducted my credit card. The dispute resolution process was a convoluted and manual process which I didn't have time for (which is why I was using TaskRabbit in the first place). It wasn't a huge amount of money so I let it slide.
I can see why TaskRabbit might be biased towards paying for the task automatically after the agreement has been entered, the alternative would be to make it easy for the buyer to screw the workers over, but it seems like they probably need an easier dispute process or they'll lose the buyers, I know I'm not using them again. I guess the worker ratings is supposed to help with this but I couldn't quickly figure out how to rate the worker and TaskRabbbit didn't make it easy by sending me an email about it or something like that, so I just gave up.
At Airtasker (an Australian competitor) we take the approach that it'ds an open marketplace and both sides need to confirm that the task is complete before money exchanges hands. We've found it's very, very rare that the buyer will "screw over" the runner.
Also it seems much easier for us to scale up new runners than it is to get more task posters.
It's super fun working for a startup that is focused on real-world interactions. Situations like the one you describe are difficult to deal with and definitely highlight the value of good community management and customer service. It's a shame that TaskRabbit let you down. Maybe in the future if Airtasker expands to the US you can give us a try :P
Disclaimer: if it wasn't obvious I work for Airtasker.
My view on this is this is another example of a free market system of supply and demand. If you have an individual willing to spend money on having their lunch delivered or their car washed without moving a muscle, and on the other side you have someone that is willing to do the work, then it is win win.
I became a task rabbit almost three weeks ago. I have bid on at least thirty jobs. I have spent a total of 5 hours checking the site for jobs. I have not been assigned one task. I have applied for several graphic design gigs. Most people want a logo designed for thirty to fifty dollars. Some people want ebooks created from word documents for under a hundred dollars. The hard labor tasks is where the money is. Those jobs depend on bidding low and fast.
It is an interesting place. There are many companies that use TaskRabbit as their recruiting agency. They post jobs that require to sign up on their websites.
Overall, I have to stop wasting my time on it. I intern(unpaid) at a startup that was planning on using TaskRabbit as delivery service. I thought it would be good (could be fun) income.
Most people want a logo designed for thirty to fifty dollars. Some people want ebooks created from word documents under a for hundred dollars.
I would expect those prices too if I went through TaskRabbit. I wouldn't expect the designer to be a top professional. I'd be looking for a deal.
My advice (and I've been working freelance for about 7 years) is to brand yourself as a top shelf designer and never offer your services on outsourcing websites. Go hyper niche instead in a category where you have some contacts and can get work fast.
If your designs are amazing, word gets around. Pretty much all new business I get is from word of mouth.
The one thing I have always wondered -- how would these companies scale ? These models work well in areas with a high population density (eg: SF, NYC, major city downtowns etc.). How well will they work when they spread out to the suburbs ?
courier services (aka postmates) is definitely difficult to scale in the 'burbs. And that's because of the distances, traffic etc. involved. Certain tasks on Taskrabbit could work in the suburbs, but not all. How many times do you see these kind of jobs on Craigslist ? Ikea delivery, assembling etc are fine -- but when instant gratification (Postmates, Zaarly etc.) is concerned, scaling to the suburbs will be extremely difficult.
My response to this was... essentially... "so what?" They do not need an instant gratification task runner available for every door to have scaled to a large, very profitable company.
This is no different than the scaling limits of many online media companies, in fact. 83% of the US population is in an urban center. 81% of the US population has access to broadband internet (and not all of them take advantage of that access). Netflix's addressable US market for streaming is smaller than TaskRabbit's for tasks.
Are you seriously comparing scaling these businesses with scaling online media companies ?
If dealing with logistics issues at scale would have been easy, your grocery store would have been able to deliver to your home. Do they ? No -- because its not cost efficient due to the logistics involved.
I don't think you're reading these comments in context. I'm arguing that even if they only reach the major urban areas, they'll still be a large, profitable company. You're responding that reaching beyond them is logistically difficult -- again, "so what?". If you want to answer my comment, you have to say something as to why TaskRabbit has to be available in the 'burbs to scale.
The purpose of the comparison to Netflix was to emphasize that the addressable market for your product or service need not be "every household in the nation" to be considered "at scale". It's OK for TaskRabbit to never offer all its services in every suburb -- because it's logistically difficult or impossible -- they still have the potential to be a large, profitable company without doing so. I never made a comparison between how easy or difficult it would be to grow.
When you sign up as a hiring person, they only have a few major cities you can sign up in. I don't reside in any of those cities, so despite having work for people, I have no use for the service, at least not yet.
Considering that others have used it for graphics work, scaling to that in the suburbs wouldn't be that difficult.
But I imagine they either don't scale to the suburbs at all, or if they do, it will be more expensive to hire people in the suburbs, reflecting the higher cost of providing the services.
It's for the same reason I doubt they will ever came to rural areas. It's okay though, not all services have to be everywhere.
that's where majority of the US population lives -- the sprawl if you may. If you simply restrict to SF/NYC and downtown areas (which in a lot of the US cities are mainly office buildings and not housing), you're not going to able to expand your business.
The "urbanized areas" referred to by that article are mostly subsurbs.
'According to the Census Bureau, a place is "urban" if it's a big, modest or even very small collection of people living near each other. That includes Houston, with its 4.9 million people, and Bellevue, Iowa, with its 2,543'
That counts all 4.9 million people in the Houston Metro as being "urban", which is a joke. Maybe a few hundred thousand tops live in what you might characterize as a real city environment-the vast vast majority of is suburbs
Urbanized areas contain 50 000 or more people while urban clusters have 2 500 to 50 000 people. The 71.2% figure I presented is for urbanised areas, i.e. 50 000+; including the 2 500 - 50 000 urban clusters it rises to 80.7%.
>"Maybe a few hundred thousand tops live in what you might characterize as a real city"
Manhattan alone contains 1.6 million people; your few hundred thousand tops estimate for the U.S. urban population is very short.
