Business
Task Rabbit Falling Just Short of Startup Success
NEW YORK—TaskRabbit was founded in 2008 with a big idea. On the company’s website and app, people make money by assembling strangers’ Ikea furniture or cleaning their bathrooms. There’s nothing particularly exciting about other people’s chores, but Leah Busque, a former IBM engineer who started the company, had grand ambitions. “Our mission is to revolutionize how people work,” she told Bloomberg TV last year.
TaskRabbit showed up on the heels of the iPhone, when a generation of online platforms were emerging to allow people to sell access to their cars, apartments and power drills. Their creators said this had the potential to be better for customers, but also for workers, because it gave them more flexibility. TaskRabbit quickly grabbed a place alongside Uber, Airbnb and Lyft as a symbol of what was being called the sharing economy — and would later be known as the on-demand economy, gig economy or, simply, the Uber economy. Its peers have grown into the biggest startups in existence.
TaskRabbit’s own reality has been much more modest. By March 2015, Uber drivers were handling 70,000 rides every day in New York City alone. That same month, Taskers — the company’s current name for its workers — were completing about 550 jobs per day, according to Bloomberg’s analysis of previously unreported documents TaskRabbit shared with potential investors. TaskRabbit was telling its backers it could be profitable in the near future but needed more money. To raise a new funding round last summer, it significantly lowered its valuation and also took the unusual step of raising some of the money through a crowdfunding website.
Competitors had less buzz but more business: Thumbtack, which also connects handymen to prospective clients, did $1 billion in gross bookings last year, making it about 30 times TaskRabbit’s size.
TaskRabbit declined to make executives available for interviews. But Tod Francis, a managing director at Shasta Ventures, one of TaskRabbit’s investors, said that what looked like the company falling behind was actually a decision to improve the health of its business, even it meant forgoing maximum growth. “We proactively retrenched,” he said. According to Francis, TaskRabbit has doubled its business over the last year, even without the subsidies that ride-hailing and delivery companies have used to increase volume. TaskRabbit executives have said repeatedly over the last 18 months that the company would be profitable by the end of 2016. They’ve backed away from that claim but insist it will get there soon.
Despite TaskRabbit’s setbacks, policy-makers, academics and journalists regularly include it on the short list of the industry’s major players. When a U.S. congressional committee called a hearing this spring about tax policies for on-demand workers, TaskRabbit’s vice-president of marketing testified. Health and Human Services officials recently deputized the company to help spread the word about Obamacare.
Saif Benjaafar, who runs the Sharing Economy Initiative, a research project at the University of Minnesota, credits TaskRabbit with helping create a movement. “It certainly pioneered this business model built around the flexible workforce,” he said. Its problem, he said, was that it tried to give its users too much freedom over the type of services and the prices it charged. The most successful companies exerted as much control as possible to create more focused services. “There are some natural limits to the TaskRabbit model,” Benjaafar said.
Busque founded TaskRabbit with her husband, Kevin. One evening, the couple was going to dinner, then realized they needed dog food. They would have been happy to pay someone to run the errand. Busque left her job at IBM to create a company to make that possible.
Busque ran TaskRabbit out of her house, then Zipcar’s office in Cambridge, Mass., then from San Francisco, where the company became an object of fascination to the media. Busque spoke compellingly about how TaskRabbit wasn’t just a business but a way to use the Internet to create a version of old-fashioned neighbourliness on a massive scale. At first, customers would post a request, and Taskers would bid on the job. Busque wanted to create a flexible marketplace for workers, where customers could go to find all kinds of services.
TaskRabbit was tantalizingly close to some huge opportunities. In its early days, a good amount of the traffic on TaskRabbit’s website was requests for rides to the airport. But building a ride-sharing service required singular concentration to match riders to drivers in real time. Also, the questions about insurance and regulation were complex. TaskRabbit never nurtured the business. So Lyft, a company whose founders Busque was friendly with, started recruiting drivers from TaskRabbit. Their company took off faster than TaskRabbit ever had.
TaskRabbit began to stagnate. In 2013, it laid off a significant chunk of its workforce. In 2014, the company scrapped the auction process and conceded it needed to focus on a few categories: house cleaning, handyman services, moving and delivery. The quirkier stuff still exists — the Chicago Tribune highlighted the funniest TaskRabbit jobs posted by Cubs fans during the World Series, including a request to go around Chicago, buying newspapers when the team won. But the site’s design downplays everything but its core services.
The changes were painful. It generated $2.1 million in revenue in 2014, losing $8.6 million. In the presentation it showed investors in early 2015, it said it could bring $6.5 million in revenue in 2015 and $25 million in 2016. It was a hard sell.
TaskRabbit raised money from existing investors, while also selling some shares through DreamFunded, an equity crowdfunding website. According to documents circulated by DreamFunded, the company was asking for a $40-million valuation. TaskRabbit has not made its previous valuations public. But the DreamFunded transaction valued each share at less than a third of their value from a previous fundraising round in 2012, according to an analysis of financial filings by research firm CB Insights.
According to TaskRabbit, its underlying problems were solved by the 2014 changes. But many people who work in the on-demand economy said the company seems to have downgraded its ambitions.
Busque stepped down as chief executive officer this spring after having a baby, and Stacy Brown-Philpot, the company’s operating chief, took over. Brown-Philpot, a former Google executive, has been vocal about sustainable growth and maintaining the company’s unit economics — how much it makes per transaction. In September, she described the sharing economy as “sort of an old term,” in an interview with Recode. “We’ve moved from, you know, neighbours helping neighbours to being a business where you can get home services on demand,” she said.
TaskRabbit sees several paths forward. The majority of its business is in four cities — San Francisco, Los Angeles, New York and London. It wants to expand its smaller markets. The company has also made a big deal out of a partnership with Amazon.com. The e-commerce giant includes Taskers among the providers listed on Amazon Home Services, which is essentially Amazon’s version of TaskRabbit. The startup declined to provide any details about the performance of the Amazon deal. If Amazon wanted to buy the company, Brown-Philpot said at a conference last month that she’d consider it.
Tom Erickson, one of Busque’s early advisers, is convinced that TaskRabbit’s big idea is still alive. The outsized success of other companies doesn’t take away from what Busque has achieved, he said. “When you start a business, you try a bunch of different things, and you don’t know which is going to work,” he said. “The public is fickle.”
It is that time of the year for you to renew your mortgage and all you want to do is sign the papers and get done with it. However, you shouldn’t be in a haste to renew your mortgage without doing a little research.
A good fraction of Canadian homeowners—about 27 per cent of them—who carry a mortgage have automated their renewal process, according to a survey by Angus-Reid. While the aim is most likely to avoid any penalties or stress that comes with missing a renewal, this approach can prove costly. Automatically renewing your mortgage means you lose out on great opportunities to save money and take further advantage of any new products and features on your mortgage that may be advantageous to you.
Typically, mortgage renewals occur at the end of your existing mortgage term and the most popular period is usually 5 years—though it can range from 1 to 10 years. Depending on your mortgage type, with a fixed rate mortgage calculator, you can easily estimate your monthly mortgage payment and know how much you’re due on your next payment.
However, before you make your next mortgage payment, here are some important tips that would help you get the most out of your mortgage renewal.
1. Review your current goals
It is possible that your financial needs must’ve changed since you first applied for a mortgage. Therefore, before your sign that renewal slip, you may want to take another look at your financial goals.
For instance, if you’re currently on a five-year fixed mortgage, your renewal would likely come with another five-year fixed mortgage. If you’re certain you would be staying in your home for that amount of time, then renewing it would be great. However, if you have plans of relocating to a different city in a couple of years, then a shorter mortgage term would be best.
Other financial goals that you may want to consider is whether you want to refinance your mortgage or access some equity with Home Equity Line of Credit (HELOC).
2. Ask for better rates
Before your mortgage renewal is due, your current lender would most likely try to get you to renew early. Typically, you will receive a renewal letter from your lender 6 months and 4 months before your renewal date. While they may offer you a rate that is lower than what you currently pay, it is often not the best rate you can get.
The renewal offer given to you by your lender is often not the best deal and in an increasing rate environment, negotiating your renewal rate is even more important. Signing the renewal letter right away because of some discount offered by your lender might seem tempting but you are potentially losing out on a lot of savings by not considering other available options.
3. Shop early for better rates
Rather than just accepting your current lender’s renewal offer immediately, you can start searching early for other providers and comparing their rates to see which one is most favourable for you. If you begin at least four months before your renewal due date, you will be giving yourself enough time to make a switch, if necessary.
While there are no major penalties if you choose to switch providers, there are some charges incurred that are typically covered by your new mortgage provider. You may not be able to change your mortgage provider until the actual renewal date, but this would give you enough time to find the right product and sort out every required paperwork.
4. Take advantage of a renewal rate hold
A mortgage renewal rate hold allows you to lock in a particular mortgage rate before your renewal is due. Normally, rate hold can last for about 90 to up to 160 days, protecting you from increases in interest rates.
During this time, you can comfortably compare rates months before your renewal date just to find a better deal. If the interest rates increase during your rate hold period, you would have nothing to worry about. Also, should the interest rates decrease, you can still negotiate for a new lower rate with your lender.
5. Switch mortgage lenders
Cutting ties with your current lender can be difficult—at least that’s the impression most lenders give to home buyers. But don’t be afraid of switching lenders, especially when you’ve found a better rate elsewhere.
Remember, getting a better deal on your mortgage can save you few thousands of dollars. Switching providers might mean you have to go through requalification but that is not a problem as long as you begin the process early enough before your renewal date.
6. Add some extra on your principal
If you’re looking for the best time to make a bigger payment on your mortgage, then renewal time is the best since there are no limits on pre-payment.
Making a lump-sum payment can put a huge dent in your mortgage amortization and you would be saving a lot of money on your total interest cost.
7. Consider switching to a broker
If you’re not already using a mortgage broker, then renewal time might be the best time to consider making the switch. According to a study by the Bank of Canada, most homebuyers who used a broker got a much lower mortgage rate than those who used one of the big banks.
Mortgage brokers are a better alternative because they have access to several lenders who offer different competitive rates, unlike the bank. Therefore, if you’re looking to get the best deal on your mortgage, switching to a broker might be a great move.
The path to buying a house isn’t the cheapest nor the easiest. Since the COVID-19 pandemic began last year, there has been several opportunities and challenges for first-time home buyers in the Canadian real estate market.
For some, sudden changes to their lifestyle created better opportunities to improve their savings plan while for others, such plans were halted due to the economic impact of the pandemic and rising home prices in real estate markets across Canada. According to the Canadian Real Estate Association, over 550,000 properties were sold in Canada last year, a new record for the country’s real estate market and a huge boost for the Canadian economy.
If you are a prospective buyer, looking to purchase a home within the year or just planning for the future, having access to the right information, resources and support can be crucial during your home-buying process. Many people—especially first-time home buyers—easily fall into home debt due to a lack of proper research into the market.
There are some important factors to consider in ensuring that your mortgage works best for you by not only saving you time but money. However, before you start searching for a home to buy, you should have a good idea of just how much you’re able to afford for one.
Checking your credit score using a Canadian mortgage calculator before applying for a mortgage, would give you a realistic price range and equally inform you of your chances of getting your mortgage approved.
Here are some important mortgage tips to help you save time and money while house hunting:
1. Know the penalties on your mortgage
There are several reasons why anyone would want to sell their property. From changes in your financial or marital status to getting transferred to a new location due to either school or work. However, these circumstances could lead to you selling your home and breaking the terms of agreement on your mortgage.
If you’re on a variable-rate mortgage with one of the major banks in Canada, to successfully break your mortgage, you would need to pay about 3 months’ worth of interest. For a fixed-rate mortgage, the cost is much higher than 3 months of interest and there’s also the option of an interest rated differential (IRD). This is typically based on your remaining mortgage balance and current mortgage rates.
To avoid penalties on your mortgage, apply for a portable mortgage that allows you to transfer your existing mortgage to a new property and even combine it with another loan, if necessary. There’s also the option of an assumable mortgage, where you can transfer the mortgage to a qualified buyer instead of breaking it.
2. Inquire about pre-payment privileges
When buying a home, you need to understand how rising interest rates would affect your mortgage. Without having any pre-payment privileges, the larger portion of your monthly mortgage payment would go towards the interest against the principal—making it harder to complete your mortgage.
Once you have pre-payment privileges, you’re offered enough flexibility to repay a percentage of the principal on your mortgage before the amortization period is over—and without any penalty. In fact, some lenders may even offer you their best rate to avoid giving you the option of pre-payment over a fixed period of time. Therefore, it is important to ask your lender the specific kind of pre-payment privileges you enjoy on your mortgage.
The amount of money you save by taking advantage of pre-payment privileges is quite substantial. For example, if you took a $300,000 mortgage at a fixed rate of 3.29% over five years and is amortized over 25 years. By making a pre-payment of $2,000 annually, you would save about $21,787 in interest and finish paying off your mortgage almost 4 years faster—assuming the interest rate was fixed throughout the amortization period.
You can always use a mortgage calculator to check much you would be saving by making extra mortgage payments annually.
3. Know the benefits of making a less than 20% down payment
Typically, when house hunting, the recommended amount of down payment you need to make is 20% of the property cost. However, you mustn’t always pay that high to get the best deal.
Surprisingly, lenders offer the best interest rates to those who want high-ratio mortgage because they have less than the recommended 20% down payment. This because a high-ratio mortgage borrower has a low risk against losses.
Default insurance makes it a lot cheaper for lenders to easily fund the mortgage loan, allowing them to transfer some of the savings—in form of lower rates—back to the borrower.
It is important to always carry out thorough research before applying for a mortgage to know what the best rates are, if a broker is more advantageous than a bank, or simply how you can get the best credit scores.
BENGALURU (Reuters) – The outlook for major global housing markets is brighter than previously thought due to expectations for a broad based economic recovery and easy monetary policy, with only a low risk that a COVID-19 resurgence will derail activity, Reuters polls showed.
Over 100 million people have been infected by the coronavirus, leading to a healthcare crisis and deep economic recessions, but fiscal and monetary stimulus, and the rollout of vaccines, mean the global economy is set to recover this year.[ECILT/WRAP]
While already high unemployment caused by the pandemic is expected to rise further, the Jan. 15-Feb. 1 poll of over 130 property market analysts showed average home prices would rise this year and next in most countries polled.
That compares to largely pessimistic predictions made in September.
An economic rebound, loose monetary policy, government stimulus, pent-up demand and tight inventories were expected to boost housing market activity to varying degrees in Australia, Britain, Canada, Dubai, India and the United States.
“A solid economic recovery bolstered by more fiscal stimulus, still-low mortgage rates, and unmet demand should continue to prop up home sales and construction in 2021,” said Gregory Daco, chief U.S. economist at Oxford Economics.
“We expect some gradual moderation in price growth over the course of 2021 as home sales cool, but sparse inventory will keep a solid floor under home prices.”
Reuters Poll: Major housing markets outlook https://fingfx.thomsonreuters.com/gfx/polling/bdwvkybkqvm/Reuters%20Poll%20-%20Global%20housing%20markets%20outlook%20-%20Feb%202021.PNG
Three-quarters, or 77 of 102 analysts, said in response to an additional question that the risk of a COVID-19 resurgence derailing housing markets this year was low.
Although the U.S. economy on average contracted last year at its sharpest pace since the Second World War due to the pandemic, it had little bearing on housing market activity, an immunity the sector was expected to carry this year.
Despite the recent surge in coronavirus infections and renewed restrictions imposed in the United States, house prices there were forecast to rise over the next two years and activity was expected to continue on a strong course. [US/HOMES]
“The recent COVID-19 surge has not had any noticeable impact, with transactions near record high levels despite record high case growth,” said Brett Ryan, senior U.S. economist at Deutsche Bank.
“Pent-up activity from COVID-19-shutdowns earlier in the year will soon start to wane and transactions will likely normalize. More housing supply will come online as vaccination picks up at the same time that base effects will start to roll off.”
Reuters Poll: Global house prices outlook – Feb 2021 https://fingfx.thomsonreuters.com/gfx/polling/xklpylyqbvg/Reuters%20Poll%20-%20Global%20house%20prices%20outlook%20-%20Feb%202021.PNG
When asked about the primary driver of housing market activity this year, over 55% of respondents, or 57 of 101, chose an economic recovery and easy monetary policy.
Of the remainder, 20 analysts named a desire for more living space and 18 said a successful vaccine rollout, while six chose fiscal stimulus.
Australian and Canadian house prices were expected to rise significantly this year and next, helped by low mortgage rates and massive fiscal spending. [AU/HOMES][CA/HOMES]
When asked what was more likely for housing market activity, 58 of 100 respondents said an acceleration. The others expected a slowdown.
Those views were swayed by a somewhat modest outlook for the British, Dubai and Indian housing markets compared to the rest.
Indian house prices were expected to barely rise this year despite an economic recovery and supportive policies, and Dubai house prices were predicted to fall at a slower pace this year and next compared to the previous poll. [IN/HOMES][AE/HOMES]
British house prices were forecast to flatline this year.[GB/HOMES]
“While we expect a strong start to the year, we expect momentum to wane following the end of the stamp duty (property sales tax) holiday in April. Towards the end of the year the housing market should settle,” said Aneisha Beveridge at estate agents Hamptons International.
