TaskRabbit Business Model

How Does TaskRabbit Work? Let’s find out…

A two-sided service based marketplace business model is proving itself one of the most promising business ideas in the on-demand economy. Why? Because it serves the needs of modern-day consumers in the best possible way.

The services on-demand apps like Taskrabbit, Urbanclap, and Homejoy provide are commendable and are taking the on-demand home service market to a whole new level.

SThe market that the home service economy is making for itself has prompted various entrepreneurs getting keen on entering the space with the intent to rule the same. However, it isn’t that simple.

A number of times, we simply look at the applications like Uber, TaskRabbit and Airbnb and think how profitable a simple two-sided marketplace business can be, however, don’t let the apparently easy achievement of such businesses fool you. 

Starting a business and building a customer base is never a simple task. Then again, working on building up two separate consumer bases simultaneously is an even bigger challenge; but this is the task that organizations using the two-sided marketplace business model must do.

If you are also planning to make a two-sided service based marketplace app like Taskrabbit, you should pay attention to every minute detail of how these apps work and bring money to the table. The intent of this article is to make you understand the same.

To study the entire market, we will see how apps like Taskrabbit work. But, first, let’s put some spotlight on What exactly is Taskrabbit and how it was founded.

What is TaskRabbit and the Idea Behind it?

TaskRabbit is a two-sided marketplace that helps connect TaskPosters and TaskRabbits.

By Task Posters here, we mean people who require help with their regular tasks and by TaskRabbits, we mean people who have skills and time needed to help others in their regular tasks in return for some money.

Utilizing Taskrabbit, people can find help for finishing their everyday tasks like planting, cleaning, pet care, plumbing, and more. 

It was a chilly stormy night of February in the year 2008 when Leah Busque – the founder of TaskRabbit – acknowledged she has come up short on food for her 100-pound labrador. 

It was an ‘apple on the head’ moment when she thought of a platform where people could outsource such tasks to other people and save some money as well as time. Based on the principles of community building, it’s known as a revolutionary platform that brings neighbors closer by helping each other and earning money at the same time. 

As of now active in around 45 cities of 3 nations, TaskRabbit has gotten enormous funding from over twelve investors and has made an imprint on the on-demand industry with its innovative idea of redistributing simple errands. 

It’s viewed as a life savior for people who have a busy schedule, and a gold mine for people who are jobless. Let’s see a few facts and stats of TaskRabbit and then we will understand its operations.

TaskRabbit Stats and Facts: Funding and Major Milestones

  • TaskRabbit was founded in 2008 by Leah Busque.
  • It was acquired by the IKEA Group in 2017. 
  • It has raised around $38 million funding as of July 2015
  • It is in every IKEA store in the US, in key markets of the UK and Canada.
  • There are more than 140,000 Taskers on the network (60% are Millennials). 
  • On average, Taskers in the U.S. earn $35/hour (5X of the federal minimum wage).
  • In the UK, Taskers earn an average of £24/hour (3X of the federal minimum wage).

Have a look at Taskrabbit’s Journey:

How Does TaskRabbit Works: The Business Model

The TaskRabbit app is basically divided into two parts. One is for users or Task Posters and another one is for Service Providers or Taskers. These apps are proving as a boon for people who are super busy in their life and don’t find time for doing simple household chores. 

It is an on-demand app that connects local demand with freelance labor. The app lets users find instant help for everyday chores like moving, cleaning, delivery and handyman work.

If you are impressed with the potential of the on-demand economy and are planning to make an app like TaskRabbit, you must get an idea of how such apps work. To help you out, here is a brief analysis of how does TaskRabbit works:

TaskRabbit Business Model Canvas

How Does Taskrabbit Work for Users or Task Posters?

  • Taskrabbit lets users find help for household chores locally. Its customer segment includes people who want others to perform the household tasks for them because of their busy schedule and elderly or disabled people who need help in performing their own tasks.
  • To start using TaskRabbit, users have to register in the app by entering their name, contact number, email address, and area code. After that, they need to fill their payment details in-app to enable transactions.
  • After registration, users can start searching for the perfect taskers. To post a job, users need to enter a description of the task, the address where they want to get the job done and other details depending on the type of tasks.
  • After entering the details of tasks, users are shown a list of taskers. Out of that list, the users can filter taskers by date and task frequency. Users can also sort taskers on the basis of price, positive reviews and number of completed tasks. 
  • The app uses Geolocation information to provide users the available taskers in the shortest possible time. This is the USP of TaskRabbit. Taskers receive the request and accept the task. For further information, users can contact the tasker via in-app chat.
  • After the completion of the task, the users can rate and review the taskers depending on their experience.

How Does Taskrabbit Work for Taskers or Service Providers?

  • Just like users or task posters, taskers also need to create a profile in-app. TaskRabbit needs taskers to enter information like social security number, home address, area where they can work, contact number, etc to build trust among users and to stop scams. 
  • Also, taskers are asked to enter their credit card details to get paid easily.
  • The app takes some time to do a background check on taskers and then approve their profile keeping the user’s security in mind.
  • Once the profile of taskers gets approved, they start getting requests for the type of tasks they are experts in. A tasker can either accept or reject the task request depending upon his/her availability.

TaskRabbit maintains a high quality of service to ensure the safety of users. The app analyzes the profile of taskers and rewards them with badges and tags depending upon their performance. 

Keeping in mind that building trust among users is the biggest challenge for marketplace apps, Taskrabbit ensures that its taskers are qualified. Now that we know all about how does TaskRabbit works, it’s time to see the inspiring story behind TaskRabbit’s success to learn something from it.

Also Read: How To Develop An eScooter App Like Bird Or Lime?

The Shift in TaskRabbit’s Business Model: An Inspiring Story 

TaskRabbit’s business model which we just discussed above is its present business model. However, when it was launched, it was used to operate using an auction-based business model just like eBay. At that time, the auction-based business model was well-tested and popular because of the famous businesses like eBay using it. 

Prior to the new business model, TaskRabbit used to operate its business using a website. Requests via task posters were used to get confirmed on the same day but were completed in the near future. Task Posters used to post the tasks and set an amount for the tasks and then taskers used to bid on it to get the job done. The bid with the least cost used to get selected by users.

After continuing the same way, for years, the founder of TaskRabbit – Leah Busque – realized that the auction-based model is proving to be less efficient. The reason behind this feeling was peer-to-peer marketplaces like Uber, Airbnb, and lyft getting enormous growth with a time-efficient and simple fee-based model that was easier and faster to understand for all the stakeholders. 

At the same time, a few executives of the team noticed a similar problem. The percentage of the completed tasks on the platform started declining. The tasks started getting fewer bids which resulted in the frustration of users. 

The founder said in one of her interviews that at that time supply and demand both were as big as they have ever been – but the way they used to connect it, started showing problems. The innovative minds behind TaskRabbit kept on analyzing the problem until they found the culprit.

And, finally, they were able to find it. It was the auction model that was unsatisfying for both the parties involved. Users who posted tasks said that they struggle to decide what should be the starting price to set for the task and it took too long for contractors to bid on their jobs. 

The contractual workers (which the organization presently calls “taskers”) complained that it was taking too long to find the jobs on the platform — on average, they were spending two hours every day while just scrolling through endless pages of the website looking for matches.

It was the time when the founder realized that something is needed to be changed and that was nothing but the business model of the platform. She decided to stop using the auction-based model and start using a model that looks like Uber, not eBay. The goal of the new model was to make sure that users can book and schedule a task in the shortest possible time.

They chose to make a model that uses algorithms to instantly match users with a list of taskers. They began building the mobile app prototype for the same.  After the complete development, the company launched its prototype in London with a new business model, which was also its first international market, in November 2013.

A few employees of TaskRabbit moved to London for months to get ready for the launch. Just after a few weeks of the spectacular launch, the data on the new app looked encouraging. The number of users grew multiple times quicker than it did in New York and San Francisco where the platform was initially launched. 

The number of individuals who utilized TaskRabbit more than once was 50% higher than in the United States, and the time taskers used to spend on one task was decreased. Also, the percentage of completed jobs doubled — turning around the condition that had driven TaskRabbit to take the crucial action. 

“The investment truly paid off,” said Stacy Brown-Philpot, TaskRabbit’s head working official, who managed the London venture. 

To people who are now habitual to get a taxi on a single tap, none of that is impressive and revolutionary. However, to TaskRabbit, this revolution was a challenge. Its story offers a lesson to learn for all the budding entrepreneurs to see how quick user’s desires for online services are changing — and how quickly those services need to evolve to meet them.

So, if you are an entrepreneur who is planning to develop an app like TaskRabbit – you must learn one thing from the story of TaskRabbit and that is:

“If you want to be successful, you need to evolve continuously to meet the demand of modern-day consumers which keep on changing. And, if you are doing that, nothing can stop you from being the next TaskRabbit.”

Now that we know how TaskRabbit works and the entire story behind its success, let’s see how you can earn money from an app like TaskRabbit.

Also Read: How To Build Food Ordering Apps Like Postmates And UberEats?

How Apps Like TaskRabbit Earn Money: Revenue Model Explained

The only way using which TaskRabbit earns its revenue is by taking a cut on each transaction that occurs over the application. However, if you are planning to build an app like Taskrabbit, there are many revenue sources that you can utilize to bring the desired money to the table. If your platform like TaskRabbit provides value to the users, you can get profit from the following sources:


The most widely recognized approach to get profits from this sort of service is to take the commission from the deal. It can be a percentage from the payment or a fixed charged from every closed deal. For instance, TaskRabbit takes 15% of the total price received by the Taskers for their completed services.


You may use a freemium model by providing free basic features to the users and then enabling users to upgrade services for advanced functionalities. 


A few apps of the same niche give their matching services for free to both the stakeholders involved. And, to earn money, they charge for advertisements and from service providers who want to get listed on the top of the user’s search results.


Having associations with certain brands like Ikea, Amazon, or eBay, you can get an affiliate commission from purchases. Simultaneously, you will provide a ‘one-stop-shop’ experience to users, sparing their time and increasing satisfaction from utilizing your platform.

Wrapping Up

So now that you know all about TaskRabbit – How does TaskRabbit work, earns revenue and the inspiring story behind its success, this is the time when you should start building your own app like TaskRabbit. The only thing that you need to do is to get in touch with an on-demand app development company that can help you in converting your dream app into reality. So, what are you waiting for? Go ahead and crack the deal.

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