Online Jobs Marketplace Freelancer.com Moves Into Home And Local Services

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Make way for one more company trying to carve out a business in local and home services. Following in the footsteps of Amazon and Google in their race after the likes of Angie’s ListTaskRabbit, Thumbtack and Handy, Freelancer.com is launching a marketplace for local plumbers, cleaners, cooks, couriers and others to offer their services on demand in their vicinity, starting first in its home market of Australia before expanding globally this quarter.

Freelancer.com’s CEO Matt Barrie describes the new local services business as “Uber for local jobs,” the idea being that those looking to find someone for an offline job can use their location to find relevant and available people close by either on Freelancer.com’s site or mobile app.

The new services will sit alongside Freelancer’s existing business, a platform that connects freelancers with those looking to hire people for online work, competing against the likes of Elance-Odesk. That business has racked up 15 million registered users covering 73,000 cities, with 2 million people bidding on jobs at any given time, Barrie says.

Barrie says that Freelancer.com had been eyeing up a move into local services for years, but the company “held back because the business lacked global liquidity.” By that, he means Freelancer.com did not think it had enough coverage to make it a viable business. “Even though the market for local services is ten times bigger than the one for online work, the average job size is smaller,” he says. The average TaskRabbit job is around $100, while Barrie says a Freelancer.com online gig averages at $200.

Barrie says that while Freelancer.com has been doing some recruiting, it’s not partnering with other providers to expand its network (which is one route that Amazon, for example, has taken in its Home Services).

Instead, he the company is taking another approach. Barrie believes the company has reached a large enough size of its own in its online network for that workforce to populate the local services business. In other words, many of the same people who are on the network for online work can transfer their skills offline. That could be a photographer or designer who can attend and shoot an event, or something less obvious, like a copywriter staffing a reception desk at a party or delivering a parcel in his or her spare time.

“We have a lot of coverage so we thought it was a great time to get going on this,” he says.

It remains to be seen whether a workforce of online freelancers is transferrable to a selection of offline jobs. In the meantime, Freelancer.com has made 17 acquisitions to date, most of which have been done to build out its online jobs marketplace. But Barrie says that the company does not intend to follow this same route for growing its local jobs business.

Offline jobs boost online businesses

The market opportunity for using an efficient online platform to find people to do offline jobs is huge — $100 billion in the U.S. alone, Barrie estimates, with that figure ballooning when considering the rest of the world’s local services needs.

The rush to provide a platform for local services also plays into a bigger trend we are seeing for on-demand-everything, with cars, groceries, prepared grub, clean laundry, doctors and everything else brought to you with the tap of your finger in a smartphone app (or perhaps soon with a quick voice command).

The opportunity in filling one-off jobs local to you, however, is a big one that has not yet been “owned” by any one company. That is partly why so many different kinds of companies are vying to play a part here: there are many advantages to having a healthy online marketplace for offline jobs.

Just as Freelancer.com sees this as a way of giving its freelancers another way of filling their hours and making money, others also see advantages in expanding into local services.

For Amazon, it could be to help supplement purchases of products on its e-commerce platform. For Google, it could be to open is advertising platform to more small businesses who would use such a service to promote their services. Ebay has also dabbled with local services, also to complement the goods it sells online.

Alongside these, there are more established services focused just on the local services market alone. Angie’s List and the many startups like Handy, Thumbtack and TaskRabbit that are also offering platforms to those looking to connect with local people for jobs, and people looking to fill those requests.

All of this is both a sign of the growth of the market, but also of just how competitive it will be for Freelancer.com. Even with online jobs, it’s not always a given that the opportunity is a sure sign of success. Witness Google’s online training/services business Helpouts, which coincidentally is closing down tomorrow after Google said it failed to grow “at the pace we had expected.”

What the Aussie company has going for it as a differentiator is its global reach for online jobs today. Compared to many of these other businesses working either solely or primarily in the U.S. there are people from Kenya, the Philippines and many other places both seeking workers and answering work requests on the platform. While half of the jobs today on Freelancer.com come from the U.S., another 12% come from India, and 10% from the UK, and 5% from Canada and another 5% from Australia. India is currently the number-one market in terms of fulfilling job requests.

Freelancer.com will use the same commission structure with its local services that it has established for its online jobs: 10% of any transaction goes to Freelancer.com. That helped the company, which went public in 2013 and currently has a market cap of approaching $400 million, post sales of $26.7 million Australian dollars (US$20.4 million) in 2014, up 39% on 2013.

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