As we have reported extensively, the marketplace of talent called the “on-demand” or “gig” economy is tapping unmet needs that many economists, analysts, and even participants, aren’t yet fully grasping. However, yesterday’s news that Ikea has acquired TaskRabbit could help a mainstream audience learn what’s going on — and perhaps even convince them to participate. (Note: At SmallBusiness.com, we have a big-tent definition of “small business” that includes participants in the gig economy. We also have shared how small businesses are emerging from the on-demand economy. In other words, we believe the 60,000 independent contractors who get jobs via TaskRabbit represent a major wave of small businesses that we will continue to follow for the users of SmallBusiness.com.
Two trends that led Ikea to buy TaskRabbit?
Trend #1 | The Do It For Me (DIFM) customer
Ikea is not only a furniture and home furnishings juggernaut, it is a cultural icon and lifestyle business (to some) that is so pervasive, stand-up comics can get chuckles just by mentioning its name. It has spawned websites like IkeaHackers.net, communities of Ikea lovers who are devoted to the endless ways that its products can be reconfigured (or “hacked”) into creative uses.
However, for some, the directions for putting together something purchased at Ikea, while creative and easier than similar instructions from other companies, is still somewhat daunting for those who don’t care to be do-it-yourselfers. Many, if not most, customers want someone else to put the “flat box” product together.
Many companies have recognized there is a massive “Do it for me” (DIFM) group that prefers spending a little extra money instead of spending an afternoon spreading out nuts and bolts across the kitchen floor and making a couple of trips to a hardware store. Established companies and startups have stepped in to create an on-demand marketplace for “DIFMers” and those who can do it. One of the earliest and most successful, at least at raising venture capital and reaching more cities, has been TaskRabbit.
Trend #2 |The on-demand economy is going mainstream
As you are reading this in a section of SmallBusiness.com called, “The SmallBusiness.com Guide to the On-Demand Economy,” you can look on the right side of the screen (or bottom of this article if you’re reading this on a phone) and note several years of articles about the on-demand economy (or gig economy). As we’ve observed, there’s an Uber for everything. You can find startup companies that will do your laundry, bring you booze, walk your dog, and give you a massage.
If the growth of the number of Americans working in the on-demand economy continues its predicted growth, by 2021 it will represent a 23 percent compounded annual growth rate, according to our regular contributor, Steve King. And, as Steve recently wrote, two-thirds of the on-demand economy participants say they are satisfied with their work.
On the downside, however
As we have noted, there are threats to the gig economy. The most obvious one is the legal question regarding the definition of “employee.” With the growth of the on-demand economy, there also could be a talent war. For example, we there already being a high demand for talent in the construction field, the fees that can be charged for certain home services talent are increasing.