Video Link: https://www.youtube.com/watch?v=Ub5xCzEuG6U
Have you ever dreamed of being your own boss? Well, this dream might be closer than you realize, and to some extent out of your own hands. A fundamental shift is happening in the worldwide workforce of today. Hiring contingent workers known as freelancers and contractors is becoming an ever increasing trend. In the US 43% of the working population is estimated to be contingent workers by 2020. To find the right jobs for all these workers, companies like Taskrabbit and Upwork are providing innovative solutions.
TaskRabbit is an online and mobile marketplace that matches freelance labor with local demand. Consumers can get help with everyday chores, such as cleaning, delivery, and handyman services. The buyer posts a job, and TaskRabbit suggests three contractors, of which the buyer can then choose according to hourly rates and experience level. A contractor can accept or decline the job on depending on convenience and availability. When the job is completed, payment is handled through the platform. TaskRabbit makes revenue by charging a 30% service fee.
Below we summarize the strengths and weaknesses of Taskrabbit.
Strengths
- Clean backgrounds (interviews for contractors)
- Insurance (up to $1,000,000)
- Secure payment
- Local jobs, and work at own convenience
- Easy to use
Weaknesses
- Prices below minimum wage
- Time indications not accurate
- No reviews of buyers
- Commission is high
Upwork is a global freelancing marketplace where businesses and independent professionals connect and collaborate remotely. Clients post a job project on the Upwork marketplace. Freelancers interested in the job submit a cover letter and profile link, covering skills, experience, and previous client feedback. Freelancers bid on the job, and the client can choose the strongest candidate based on not only price, but also expertise. To be sure of the choice, clients can use Upwork chat tool to interview before hiring their favorite. Upwork handles all payments from client to freelancer securely. Freelancers are charged a sliding fee based on lifetime billings with each client (20% first $500 billed, 10% between $501-10,000 and 5% exceeding $10,000). Clients are charged a payment processing fee of 2.75%.
Below are the strengths and weaknesses of Upwork.
Strengths
- Extensive job categories
- Large global network of users
- Fast hiring process
- Secure payment processing
- Mechanisms to foster trust
Weaknesses
- Large global network of users (competition)
- The human factor increases risk
- Poor customer service
- New pricing model too high for one-off work
Comparing Taskrabbit and Upwork, several key similarities and differences are seen. Both are online labor marketplaces, where buyers can choose freely among alternatives and through recommendations. Sellers work as freelancers and there is an initial testing process involved. To foster trust and reduce uncertainty between participants there are mechanisms, such as reviews in place. TaskRabbit offers low-skill offline tasks mostly to consumers locally, while Upwork offers knowledge-intensive online jobs to businesses globally. Additionally, the pricing models differ.
Future outlook of the industry
Firstly, we envision that online labor marketplaces, like Upwork and TaskRabbit, will be a major part of our everyday lives soon. With the development of information technology they become more efficient at matching demand and supply of knowledge, skills and experience. Second, we expect that labor platforms will provide more tools to create collaborative freelancer teams, who are able to work on large projects together. Third, competition on the platforms will be fierce. Outsourcing to developing low-wage countries is already driving down prices at Upwork. To stand out, workers need to develop specialized skillsets and deliver high-quality work consistently. Finally, we think that regulation will make or break the industry.
Sources
Malone, T.W., Yates, J., and Benjamin, R.I. 1987. Electronic Markets and Electronic Hierarchies. Communications of the ACM 30(6) 484-497.
Dimoka, A., Hong, Y., and Pavlou, P.A. 2012. On Product Uncertainty in Online Markets: Theory and Evidence. MIS Quarterly 36(2) 395-426.
Bakos, Yannis. “The emerging role of electronic marketplaces on the Internet.” Communications of the ACM 41.8 (1998): 35-42.
JPMorgan Chase Institute, “Paychecks, Paydays and the Online Platform Economy: Big Data on Income Volatility” https://www.jpmorganchase.com/corporate/institute/document/jpmc-institute-volatility-2-report.pdf, (February 2016)
https://www.taskrabbit.com/how-it-works
https://support.upwork.com/hc/en-us/articles/211062538-Freelancer-Service-Fees
https://www.comparakeet.com/best-freelance-websites/upwork-review/
Proudly presented by Group 77
