I got an exclusive early look at TaskRabbit's new business model, which does away with its old auction-house model in favor of an on-demand service marketplace.
As the company grew, the original model came to feel less and less efficient. Peer-to-peer marketplaces like Airbnb, Uber, and Lyft saw enormous growth with a simple fee-based model that was faster and easier to understand for buyers and sellers alike. Meanwhile, TaskRabbit attracted house cleaners, handymen, and other blue-collar professionals used to working at hourly rates. For those workers, the auction model could leave them feeling underpaid. "There was sometimes this discrepancy on how long something would take," Busque says. They would tell her: "I feel like I would have gotten paid more fairly if it had been by the hour."
The company's revenues continued climbing even as its product showed signs of strain. But by last summer, it had become clear to Busque that something needed to change.