Service marketplace business models

Hi everyone,

I’m developing a local services marketplace using Sharetribe, and the biggest hurdle is not even the tech, but the business side of things. I would love to get some help on the business model.

There are a couple of different models for service marketplaces:

  1. Fiver/Upwork: The client posts a project and professionals bid on them. Once client accepts a proposal, transaction occurs and the platform gets a %.
  2. Thumbtack: The client posts a project for free and professionals pay to bid. Once client chooses one, the transaction occurs off-platform.

The way I see none of them are really valuable for local service providers specifically. Say, a solo plumber, not a plumbing company. Here’s why:

  1. Local service providers, such as plumbers, are not really tech-savvy people, and will not be online applying for plumbing jobs, even if the bidding is for free. These suppliers usually only have internet access on mobile devices (based on my previous research).
  2. The idea of having to pay to bid for a job that you don’t even know you’ll get seems outrageous to most of these professionals. It’s basically the problem faced on the above model but with a boost of having to pay for the bidding. This works well with different kinds of service providers, such as marketers, developers, etc.

The way I’d like to do it is more similar to what TaskRabbit does.

  1. Client needs a professional and searches on the platform
  2. A few different professionals will appear on specific area (say, within 10km)
  3. The client compares professionals and chooses the best fit
  4. Client presses “book professional”, choose a time slot, amount of hours needed and insert credit card info
  5. Professional receives the request, accepts it and, once the job is done, has the money transferred to their account

The only problem I’ve been having with the model above is that most of these jobs are not as simple as “how much per hour”. Some of them need budgeting, which means they need to know more about the project before specifying the price, and even if a job is applicable to the “price per hour” situation, I can’t figure out how to get the client to insert the correct amount of hours before getting charged since we will have different categories, thus changing the usual amount of hours per service.

One possible solution would be to allow users (professionals and clients) to communicate prior and agree on a specific number of hours before paying, but that would also bring lots of platform leakage (people going around the platform).

Anyone would have ideas? I’d love to get some input.

Sorry for the long message, but not all problems can be explained in 200 characters or less.

Thanks!

//Marco