Is there a pile of laundry or dirty dishes waiting for you at home? Now you can skip the hassle of chores and outsource that work instead. By leveraging the social connectivity of the internet, new service-on-demand companies like TaskRabbit, Handybook and Alfred Club make it easy to outsource your chores.
While the outsourcing of chores certainly benefits the individual ridding themselves of the work, will this mass redistribution of labor mean that chores can be completed with greater collective efficiency? To evaluate this question, we want to consider how companies are positioning themselves to reap the benefits of operational advancements like global task optimization and continuous learning in the new service-on-demand framework.
With a mindset toward operating efficiency, a breakdown of the business models behind TaskRabbit, Handybook, and Alfred Club provides a powerful narrative of why first-mover TaskRabbit should be worried about the growing Handybook, and why both of them should take a second look at recent upstart Alfred Club.
TaskRabbit and the Open Platform Model
If you know how eBay works, than the open platform model should be familiar to you. The strategy is simple: facilitate connections between buyers and sellers and then collect a fee on transactions that take place. TaskRabbit adopted this open platform model and applied it to the service-on-demand market between clients and service providers. Now with over 30,000 freelance service providers in 19 cities, TaskRabbit has become the go-to destination for ad hoc service needs.
On the TaskRabbit platform, clients are free to post any task they like. While typical tasks center on common household chores like clean my kitchen or help assemble furniture, TaskRabbit also attracts slightly more unusual tasks like, “bring me spare car key after I jumped in a lake”. When a connection is made on its platform, TaskRabbit simply collects a 20% surcharge on the agreed upon rate.
The key benefit to the open platform model for TaskRabbit is the simplicity of its operations. After TaskRabbit facilitates a connection, its job is done. TaskRabbit leaves the responsibility of task execution to its service providers.
While TaskRabbit succeeds by eliminating the overhead of managing its service providers, its open platform model fails in two major ways:
- Global Task Optimization – Because services providers act as individually motivated agents, TaskRabbit cannot assign a sequence of nearby tasks all to the same worker to be completed more efficiently.
- Continuous Improvement – In a typical manufacturing or service environment, full-time employees hone their craft over time, thereby reducing costs and improving quality. However, TaskRabbit’s freelance workers do not reincorporate learnings to the greater organization and although they may individually improve, the organization as a whole does not.
Handybook and Alfred Club both tackle global task optimization by taking firmer control of their operations, while only Alfred Club has a model in place that also targets continuous service improvement.
Handybook and the Curated Platform Model
Like TaskRabbit, Handybook makes money by facilitating connections between clients and service providers via a platform architecture. However, unlike TaskRabbit, Handybook inserts itself as a middleman between the two halves of the market. From this central position in the market, Handybook curates the service offerings to the clients and takes a proactive approach in the operations of its service providers.
Whether Handybook consciously designed its business model with improved operations in mind is unclear, but the following features of the Handybook platform allow it to employ task optimization methods to deliver a better experience more efficiently:
- Limit the Service Options – Handybook currently only offers the service categories of Handymen, Plumbing, Electrical, and Cleaning.
- Defer Task Assignment – When booking a task, the client only selects the desired service but not the exact service provider. This allows Handybook to defer assignment and easily replace service providers if necessary.
- Recurring Tasks – Instead of all tasks being ad hoc, Handybook allows for recurring events, greatly enhancing its ability to forecast and optimize task execution.
- Peak Pricing – Handybook attempts to shape the demand for services to match the supply of service providers by using peak pricing to drive consumer behavior for certain tasks.
By sacrificing the unlimited flexibility of the open platform in favor of a curated experience, Handybook has been able to leverage these four features to win clients and service providers. At only 2.5 years old and already serving 31 markets, Handybook has eclipsed even TaskRabbit in the speed and breadth of its growth.
So how does upstart Alfred Club build on Handybook’s curated platform and once again advance the service-on-demand model?
Alfred Club and the Membership model
The Alfred Club pitch is a bit different from that of TaskRabbit or Handybook, but also quite simple. Sign up for $99 per month and you get a personal butler, an Alfred, to help you out once a week. You tell your Alfred what you need help with and he or she runs your errands and does your chores for you. While there are small upcharges for major home cleanings or non-standard errands, the simple dry cleaning, grocery pickup, and package dropoff tasks are included.
By providing a single point of contact for all of your service needs, Alfred has effectively abstracted the work away from you and given itself an opportunity to truly control the delivery of services. This benefits you by offering a streamlined interaction with a sole individual and benefits Alfred by allowing them to recoup any of the financial gains generated from efforts to increase operational efficiency.
In pursuit of this elusive combination of enhanced client experience and financial gain, Alfred attacks the issues of global task optimization and continuous learning through the following mechanisms:
- Forecasting of Services – By working with you each and every week, Alfred can begin to, “observe things about your life and then anticipate products or services that you can use.” Alfred gains a tremendous advantage in optimizing service delivery by utilizing forecasts of future demand instead of reacting to ad hoc demand.
- Full-time Service Providers – By converting service providers to full-time employees once they reach 20 hours/week, Alfred is able to reincorporate learnings from the field into better processes in the future. This approach to service provider employment can fuel a culture of continuous improvement and increased efficiency.
- Intelligent Task Assignment – Alfred utilizes a “cluster and scheduling algorithm” to assign service providers to clients. This optimization scheme is possible because Alfred possesses future knowledge of both client demand (1) and service provider availability (2).
Alfred adopted this membership model because it believes that, “the natural successor to on-demand is automatic”. While this is a lofty and admirable ambition, Alfred seems poised for success with a strong foundation in service operations that can deliver on its promises.
The Future for Chores
While giving up chores entirely might still be a reach for most people, TaskRabbit, Handybook and Alfred Club are laying the framework for chores to be redistributed on the open market. The company that can combine a winning customer experience with efficient service operations will be in a position to capitalize on this opportunity and become a leader in the service-on-demand economy. So the next time you come home to a pile of laundry or dirty dishes, think twice before doing your own chores.