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How TaskRabbit Works: Insights into Business & Revenue Model

By Rashim Sethi 10th August 2015

What is TaskRabbit?

TaskRabbit is a two-sided marketplace that connects ‘TaskPosters,’ people who need help, with ‘TaskRabbits,’ a network of pre-approved and background checked individuals, who have the time and skills needed to complete the listed task. Hailed as godsend to people with more money than time, it allows people to outsource small jobs and tasks to others in their neighbourhood. TaskRabbit aims to help people take back their lives, be their own boss, help people out, and make some money.

Founders, Funding Received, Salient Features, and Facts

It was a cold stormy night of February in the year 2008 when Leah Busque realised she has run out of dog food for their 100 pound labrador. It was that ‘apple on the head’ moment she thought of a platform where people could outsource petty tasks to others and save on time. Built on the principles of community building, it’s hailed as a revolutionary platform that brings neighbours closer and extend a helping hand for a price people in need want to pay.

Currently active in about 19 cities, TaskRabbit has received a massive funding from over a dozen investors and has made a mark in the on-demand industry with its innovative concept of outsourcing simple tasks. It’s seen as a life saviour to people short on time, and a gold rush to people unemployed of under employed. Following are some facts about TaskRabbit:

  • Founded by Leah Busque in 2008 as RunMyErrand and later named as TaskRabbit in April 2010
  • Has raised around $38 million funding as of July 2015
  • Company valued at $150 million as of December 2012
  • The company makes around $5 million monthly as its revenue as of Dec 2011

The following graphic will give you a clear insight about its growth over the years.


The amount of funding received by TaskRabbit is the sign that investors find a huge potential in the business. Zipcar CEO, Scott Griffith was so amused by the idea that he offered a small space in his office to Busque in the initial days of TaskRabbit. On the other hand, Tim Ferris, the famous American author, entrepreneur, angel investor, and public speaker became an informal advisor to help Busque conceptualise her idea.

To understand what makes TaskRabbit a promising business, let’s have a look at the other segments of the business.

Salient Features of TaskRabbit

  • Available in Atlanta, Austin, Boston, Houston, LA & OC, Phoenix, Portland, San Antonio, Washington DC, Chicago, Dallas, Denver, Miami, New York City, Philadelphia, San Diego, Seattle, SF Bay Area, and one international location as London for now.
  • Crowdsourced Marketplace model with TaskPosters willing to outsource petty tasks being connected to TaskRabbits willing to do those tasks.
  • Over 50 full-time employees working in the San Francisco office and about 50,000 runners signed up on the platform.

Value Proposition

  • Saves time
  • Easy to get help
  • Taskdoers with a clean background
  • Insurance (every task is insured upto $1,000,000)
  • Cash free payment
  • Local jobs in and around the neighbourhood
  • No schedule job, work at your own convenient time
  • Instant money- wages immediately after the task
  • Better return on reputation as the level increases

TaskRabbit’s 2 Customer Segment Explained:


  • People who want to outsource errands can post their job on the platform and TaskRabbit connects them to qualified Taskers available to help.
  • People who are on the go can post the task through the app and have the work taken care of by the time they return.
  • People can pay through the app after the task has been accomplished


  • People who are underemployed or unemployed or those who want to make some extra money can sign up to be the TaskRabbit.
  • The background is checked and an aspirant is interviewed following a quiz to get selected as a Tasker.
  • In the previous business model, Taskers would bid for a job, but since June 2014 Taskers are automatically assigned a job. They can either accept it or reject it.


The 3 step model about how TaskRabbit Works:

  1. A TaskPoster posts a job and TaskRabbit suggests three contractors, along with their hourly rates, who represent a range of prices and experience level.
  2. A Tasker can accept or cancel the job as per his convenience and availability.
  3. The job is completer by the Tasker and the payment is processed through the app.

All the taskers in the TaskRabbit’s database are fully talented and verified after a thorough background check. After the task is complete a taskposter can review and rate the service.

How TaskRabbit earns Revenue:

  • The only way TaskRabbit earns its revenue is by taking a cut on every transaction that happens over the app.
  • Previously when TaskRabbit opened its business portal for local businesses who could hire workforce from TaskRabbit, company would charge about 26% from the local business. However, TaskRabbit very soon shut its business  portal.

How TaskRabbit finds customers:

  • Word of Mouth Advertising
  • Internet Marketing
  • Free First Delivery
  • Various Offers

The Process of Recruiting Taskers:

  • People who want to be a Tasker have to apply online. They can log in with Facebook or LinkedIn and complete their application.
  • The background is thoroughly checked which is followed by an in-person interview.
  • After shortlisted, Taskers specify their skills and interests, and are accepted into the database of TaskRabbit.

What changed in the new business model:

When TaskRabbit first started out, the approach was more favourable towards the TaskPosters. They could post a job and assign the price they were willing to pay and a network of pre-approved contractors would bid to win the job. In the new business model, however, the approach is much Tasker centric.

On June 17, 2014, reportedly as a result of declines in bids and completed and accepted tasks, TaskRabbit announced and began rolling out a complete reboot from its original task of posting and bidding model to a direct hire only model.

Along with the reversal in marketplace direction (from task-doers looking for posts to bid on to task-posters directly assigning random task-doers tasks without their consent or approval), various other changes came along with the July 2014 reboot or pivot, namely:

  • Taskers were assigned (company lingo: “invited”) to Tasks instead of choosing those in their fields of expertise.
  • Taskers were asked to wear a uniform (TaskRabbit shirt).
  • Taskers must use the Tasker mobile app for scheduling, chatting, and booking tasks.
  • Taskers must use a tasker calendar for availability and scheduling.
  • Taskers must respond to all assignments within 30 minutes, even if it is not in the tasker’s chosen area.

Formerly independent contractor freelance TaskRabbits may effectively become de facto employees of TaskRabbit, raising potential income tax issues as well. It was declared by TaskRabbit that all tasks will be paid on an hourly basis, instead of on a per project basis.

Key Problems and Solutions

  • In the earlier business model where TaskPosters would post a job, they would quote a price which was generally lesser than the minimum wage. In a war to win a bid Taskers would accept all kinds of jobs irrespective of difficulty level. Thankfully, in the new business model Taskers could specify their hourly rate and skills and would be auto assigned without having to go through the bidding process.
  • Initially TaskPosters would often lie about the amount of work they need done. Often the amount of work portrayed on the platform would contradict the one on the site. The Taskers would thus feel underpaid. In the new business model the TaskPosters had to pay a charge based on the hourly rate.
  • While every task is insured upto $1,000,000 in case something goes wrong, there’s no provision for insurance or even safety for the Taskers in the event of mishap. This is something that hasn’t been taken care of yet.
  • The bidding that took too long earlier is now catered by automatic suggestion that would offer 3 options to choose from. A Tasker would have about 30 minutes to respond to the ‘invitation’.
  • While there’s a review and rating system to rate a Tasker and his service, there is no such criteria where a Tasker could review and rate the TaskPoster which has been a rising concern as some of the TaskPosters have been found to mistreat the Taskers.

The Future of TaskRabbit:

Over the past 20 years, we’ve evolved from trusting people online for information to trusting to handing our credit card information, and we’re entering the third trust wave— connecting trustworthy strangers from all kinds of people-powered marketplaces. Reputation is thus the measurement of how much a community trusts one.

Based on the same principle of trust and letting strangers or neighbors helping each other, TaskRabbit surely promises a great future. With a total funding of about $40 million till date, TaskRabbit is expanding really fast to new cities and has even touched international locations like London. Currently, with about 2 million users online it boasts of over 50,000 Taskers in its database. No surprise, but TaskRabbit has given a whole new reason to ‘love thy neighbor’.

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