- With the acquisition of a local jobs marketplace Zaarly, Australian startup Airtasker is poised to enter its biggest market yet with an expansion to the US.
- As the industry sees real pushback and growing regulatory efforts, founder and CEO Tim Fung told Business Insider Australia he’s not concerned about threats to his company’s business model.
- “People talk about things like a race to the bottom, we want the opposite of that,” Fung said.
- Visit Business Insider Australia’s homepage for more stories.
Founder and CEO of Australian startup Airtasker says he doesn’t necessarily consider his company to be part of the sprawling gig economy.
“We see ourselves as being very, very different,” Fung told Business Insider Australia.
After taking the Australian-based jobs marketplace public in March of this year, it’s now forging into the US market, propelled by the acquisition of the US services marketplace Zaarly for $3.4 million.
The news, announced on May 21, comes as the company continues its expansion in the UK following its entry in 2018, which Fung said has grown by 100% this year alone.
He said the company’s recent acquisition of the local marketplace, which has operations already set up in two US cities (Kansas and Dallas) came at the perfect moment.
With a marketplace of 597,000 existing registered users and 900 service providers, “it gives [us] a leg up in the US marketplace,” he said. “It’s a jump start.”
Fung said he’s been a fan of the US startup since it “exploded with virality” in 2011.
“Ashton Kutcher came on as an investor, they had Kleiner Perkins, the venture fund, put in $15 million,” he said.
More recently, the company transitioned to a smaller, “more curated” marketplace based solely in the two US cities.
Fung said another benefit of entering the market through an established company was having a logistics operation already set up.
Zaarly had already “cracked the rebooking concept through their platform”, not to mention having established teams in these cities.
Founded in Australia in 2012, Airtasker provides a platform that matches users seeking assistance with tasks or services with workers willing to provide them, and boasts around a million paying customers in Australia.
Contrary to expectations, Fung said the company actually faces few direct competitors in the US market.
“Marketplace experts are few and far between,” Fung said, a factor he said leaves the door wide open for Airtasker.
While there are a number of active job directories, he says there is very little offering what Airtasker does, which is much closer to an e-commerce experience.
Airtasker won’t face the gig economy’s legal reckoning, Fung says
Expanding amid global pushback against growing threats to the gig economy could be considered risky, as legal challenges are forcing many of the big players to change how they engage with workers.
In recent months, several landmark decisions have challenged service platforms that rely on a base of ‘flexible’ workers on the basis they avoid providing proper entitlements.
In Australia, The Fair Work Commission (FWC) made a landmark ruling that a Deliveroo worker was more like an employee than a contractor in an unfair dismissal case.
The UK has dealt out a similar ruling through its Supreme Court, compelling Uber to pay its UK drivers minimum wage and grant them a host of new rights.
Fung said Airtasker’s business model precludes it from the issues the rest of the gig economy faces.
The way Airtasker functions is “very different” from the food delivery or ride-sharing platforms, where the platform defines the scope of the work that’s going to be done, he claims.
“Those platforms are providing vertical services, and they’re commoditising those services,” he said.
Fung said while he welcomes regulation across such platforms, the way workers relate to customers on Airtasker is different, with the scope of the work defined by the customer and accepted by the contractor.
“They determine the price they want to be paid for doing that work,” Fung said, in a way that is “really similar…to what exists right now in any freelance or trade industry.”
Airtasker earns a percentage of income from tasks, which means that setting prices at or above market rates is in the platform’s best interests.
“People talk about things like a race to the bottom, we want the opposite of that,” Fung said.
“If there’s a race to the bottom, that is the worst thing for Airtasker,” he said.
He said part of the company’s data analysis is around understanding what its customers believe is a fair price for a plumber, for example, and ensuring this standard is applied.
“Airtasker is building up this amazing bank of data which talks to ‘what are people happy to work for, what should the price be?’”
He said that the company’s data shows that when the company sets a recommended price, the final payment generally comes in 20% higher.
“Our data shows that our taskers are able to drag up that price and get paid fairly.”
Now operating in three markets, Fung said he welcomes the regulation which seeks to make the gig sector a place that provides fair compensation for its workers.
“Our task is to empower people to realise the full value of their skills,” he said.
“It’s not just to provide services to our customers, it’s actually to create jobs.”