Selling the Rabbit
Errand platform TaskRabbit, a poster child of the sharing economy, can’t really call itself a start-up after nine years in the business of one-off-job trading, and it may be about to be swallowed up by an acquirer, according to reports. The valuation is unlikely to be that high given the classic “gig-economy” outfit has suffered from competitors offering more targeted jobs offerings.
San Francisco-based TaskRabbit has to date picked up around $37 million in VC funding but there doesn’t seem to be a great deal of appetite among investors for pumping in more cash, while some serious heavy money has gone into financing those gig-style rivals. It sounds like the mooted acquirer might well be a strategic buyer.
The company did raise some cash last year but supplemented that with a crowdfunding initiative, suggesting that it wasn’t able to persuade investors to stump up the money it needs to fund an expansion programme to cover more US cities. TaskRabbit had also long signalled that it would finally turn a profit in 2016, but that failed to materialise.
Saif Benjaafar, who runs the Sharing Economy Initiative research project at the University of Minnesota, told Bloomberg that while TaskRabbit can be credited with pioneering the model for the ‘flexible workforce’, it gave its users too much freedom over the type of services and the prices it charged.
Unfortunately for the firm, TaskRabbit is part of a cohort which is good at creating bad news, thanks in large part to Uber. A Pew Research survey finds that gig economy workers tend to be poorer than the rest of the US population and also tend to be minorities. Most say the money earned from sharing economy activities is key to their families well-being, belying the freewheeling nature of employment often portrayed by companies operating in the sector.
A New York Times editorial earlier this week was sceptical of the benefits of such work, pointing out that “experience with these companies shows that without the legal protections and ethical norms that once were widely accepted, workers will find the economy of the future an even more inhospitable place”.