The practical sense of P2P service marketplaces

First of all I would like to thank you for all the encouragement and support received after the release of LinkingPositive. Since the feedback has been really good at the moment and some have liked the “style” of my first post, in this second one I will again start with a real life story.

Around a year and a half ago 2 bathrooms at our family home required full renovation so we needed a plumber to do the work. It turned out that my dad, who isn’t really tech savvy, randomly googled for plumbers around the area, contacted them by telephone and exchanged emails where they attached photos of their work. After a quick meeting with a team of 2 plumbers and some bargaining, he chose them to do the work. They drank a lot of beer but their work was efficient, impressive and hassle-free, which was quite an achievement taking into account that my dad is a very demanding and perfectionist customer.

To all of us in the family it was shocking that my dad used the internet as a resource to find these workers instead of the usual word of mouth or recommendations from other people. Trust was seen as a concern, and many people’s reaction was: “but how can your dad trust someone just like that? after just googling it?”. In many ways they were right, nowadays you can’t trust anything that shows up on the internet and it’s a fact that we were lucky to come up with responsible and skilled plumbers.

But this situation showed a clear market opportunity that didn’t occur to me at the time – the need for a place where you can access trustworthy and skilled people to deliver the services you need, at a given place and at the right time. For instance in our case it would have been ideal to have a website where you could browse all the different plumbers around the area, view photos of their work and most importantly read customer ratings and reviews. The same would also apply to many other services that people require every now and then.

Nowadays there are many peer-to-peer marketplaces arising around the globe, some of them cover a wide range of services while others target a more specific service sector. Probably one of the most remarkable ones is TaskRabbit in the US, which allows people to outsource different tasks or errands through their online marketplace. Customers post their tasks on the TaskRabbit website and trustworthy people from the same city (the so called “rabbits” – who have gone through an application process with TaskRabbit) can then bid on them. So the client benefits by getting the service done and saves time.

Taskbox is a startup that has developed the exact same concept in Australia, with some minor changes in their business model – for instance, anyone can signup and become a TaskRunner as there is no application process. Other websites like Skillshare and Myguidie allow anyone to signup, post a class or activity and earn some extra cash. Customer reviews and ratings are a crucial factor behind these online marketplaces, as they motivate people to offer a good service while building trust among the community at the same time.

Some people even suggest that doctors should have an accurate public rating according to the quality of their work. In my opinion anything that adds value to peoples’ health and safety should always be welcome, but health professionals are fully correct in arguing that patients don’t have the sufficient understanding to judge whether a doctor or nurse is doing their work correctly or not. A patient may well point out whether they were attentive or friendly, but without having the correct knowledge the information would never be accurate enough.

The true fact is that it’s ever more common to see employed people short of time due to excessive work pressure on them and the need to deliver many working hours, but at the same time there’s an increasing amount of unemployment in many developed world countries. Whereas some people tend to have spare time others are short of it, so we can say that such P2P marketplaces make plenty of practical sense – they give users a chance to earn extra cash for their time and skills while others can outsource certain tasks, gaining more time for themselves and their families.

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4 thoughts on “The practical sense of P2P service marketplaces

  1. Hi Kunal!

    What a great article! I read it with pleasure and interest. As you know I’m really into the concept of Collaborative Consumption, so I’ll come back here often.

    I’m sure that 2012 will be dominated by marketplaces. I’m only curious which ones will gain popularity across the world, as AirBnB did. Hopefully, we’ll soon find out 🙂

    • Thanks Paulina! Best of luck with your start-up, it’s always great to hear positive feedback coming from entrepreneurs in the Collaborative Consumption world. I’ll keep my best efforts on the blog from this end.

  2. Kunal,

    Great work on the blog! While we all have heard of companies using this model(AirBnB, Netflix etc.), I wasn’t quite aware of the extensive research and thought being put behind the concept

    Thinking more about it, it seems people are happy to share their resources provided it doesnt impact or inconvenience them in anyways.
    For example – I have lived in Los Angeles for quite a bit – and its a well known joke there that on the main 405 (four ‘oh’ five) freeway – you cannot drive more than 4 or 5 miles per hour due to traffic. Even with carpool lanes(2 or more per car), incentives to carpool by companies and various NGO campaigns – it was impossible to get people(me included) to share a ride to work. The ‘freedom’ to be in control of my time was worth the pain of finding parking, paying for gas and doing my bit to ease traffic.

    I love this concept – and its application to solve real world problems (e.g. crowd based funding – seedcamp for new entreperneurs seeking angel investors)

    I’d like to see more on the monetization of CC and social psychology behind it(i.e what drives people to share and when they rather not e.g. hotel vs. airbnb)

    Good work!! I’ll be reading up lot more on this…..

    • Thanks Ashwin! I’m glad to hear that you like the blog and the concept of Collaborative Consumption.

      I think people will increasingly acknowledge the benefits of sharing their resources, the main issues I see are time, trust between strangers and the big change in behaviour that it involves. The carpooling that you mentioned is a good example, if it were successful the likely result would be less traffic and a shorter commuting time for everyone – till there it’s a win-win situation. But although drivers may even earn some extra cash in this way, it all comes at the cost of having to deal with the inconveniences of sharing their car with other people – as you well pointed out.

      The whole concept as such is very broad and I believe still in its early stages. For most startups, their core income is from a percentage fee per each transaction that is made through their system. Airbnb is a massive success story, with an extensive range of places on offer and well over 5 million nights booked through their platform since it was founded in 2008. Their customers tend to be attracted to the “local experiences” offered by Airbnb hosts, as opposed to “tourist experiences”. In addition, we all know that hotels are often ridiculously expensive in some of Airbnb’s main “hubs” such as NYC or London, so their customers are surely getting good value for money at the same time.

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