eBay Hire Enters the Busy Local Service Marketplaces Space to Compete with TaskRabbit

By | February 3, 2014

The giant may quickly grow the market with strong pressure on incumbents

The local services marketplace space has grown rapidly over the last few years. TaskRabbit was the first significant player in the space and has raised $37.7 million, with other players such as Zaarly entering the space in the US, with local competition in other countries coming from the likes of Airtasker in Australia and Sorted in the UK.

Local services focus on tasks that require someone to be present to perform the tasks, such as cleaning, delivery, gardening, and so on. As such the market is distinct from the global services marketplaces such as Odesk and Freelancer.com, on which almost all tasks are location-independent.

eBay has just launched eBay Hire which appears to be a direct competitor to TaskRabbit and the others in the space. It is encouraging uptake by initially offering no fees:

“It’s free to sign up. Also, we will not charge fees* or commissions during the promotional period. After the promotional period we expect to charge fees per booking similar to the fees charged when you list and/or sell an item on eBay.com.”

The value of local service marketplaces has been demonstrated over the last few years, and all conditions seem right for them to grow further. However we are early in their development and uptake, so the existing players are not well enough established to own the space, with the possible exception of TaskRabbit in the San Francisco Bay Area and a few other US cities. TaskRabbit has only just begun international expansion plans with a small beginning in London.

As such eBay is in a very strong position to dominate in local services markets, particularly internationally if it chooses to take that route, as it will be the first significant player in most cities around the world.

It is a very different situation in the global services marketplaces, where the likes of Odesk and Freelancer.com are often described as “eBay for services”, yet eBay has not chosen to enter this market. By now these incumbents are well enough established that it would far harder for eBay to challenge them. From the other side, the local services market is very unlikely to be a priority to the global services marketplace providers, given the extraordinary potential for their primary service.

Arguably eBay’s brand and positioning is far better suited to local services than global services. It has existing relationships with many people who are likely to be offering or buying local services.

It will be very interesting to see how eBay Hire develops. The most likely scenario is that it helps the local service marketplace space to grow rapidly and quickly, building a more flexible, fluid world of work around the world.

[Hattip for the eBay Hire launch to Lisa Gansky]

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