Seattle’s App Gap:
How marketplace apps like Rover, TaskRabbit, & Handy control access to work, restrict flexibility, & drive down pay
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Marketplace platforms like TaskRabbit, Rover, and Handy often describe themselves as simple booking services that connect workers with customers. But while their business models are different from on- demand delivery companies, they don’t operate like community bulletin boards or listings sites like Craigslist either. Most critically, marketplace platforms are deeply enmeshed in intermediating the relationships between customers and workers, generally forbidding workers from engaging directly with their customers and instead requiring all communications and payments to happen through the platform.
They take 20% - 68% of total customer payment, use a range of algorithmic tools to oversee the type and quality of services provided, and both directly and indirectly engage in a variety of practices which act to lower pay.
Further, as these types of platforms consolidate their market share, their impact on the broader labor market continues to grow.
While most of these platforms technically allow workers to set their own rates within particular limits, they also engage in a variety of practices which tend to lower the rates workers can charge. First, these platforms generally recommend specific rates for specific services, and penalize workers who charge more than those recommended rates. Second, these platforms list available workers according to algorithms which take into account what the worker charges; workers with lower rates will be presented more frequently to customers. TaskRabbit even retains the ability to remove workers from customer search results if their rates are outside the range TaskRabbit suggests. Third, by imposing a substantial mark-up on worker charges, they create customer price resistance at lower pay rates than might otherwise be experienced if performing the same services off-platform. For example, customers may become less willing to pay for a particular service at a rate over $30/hour, but workers performing those services may be paid $20 - $24 after the company’s cut. And finally, by maintaining complete control of customer relationships and barring workers from booking work directly with customers they find on the platform, they maintain ongoing control over rates charged and the manner in which services are performed.
Notably, each of the major marketplace platforms sets floors for what rates can be charged; however, these floors ($15/hour for all jobs on TaskRabbit, $16/hour for dog walks on Rover) are set without reference to the local minimum wage, let alone the additional expenses borne by workers treated as contractors or additional work time required outside of direct work time, such as communicating with customers and transit time.
Further, the charges assessed on customers using these platforms have changed repeatedly, with varying percentages of charges taken from what is paid to the worker, what is charged to the customer, or even both. These changes to pricing models can have a substantial impact on what workers are effectively paid, but are determined solely by the platforms themselves.
Current marketplace app revenue shares of customer payments are approximately 20% on Rover, 26% on TaskRabbit, and up to 68% on Handy.
Key Findings
⚠️ Suggested pay on marketplace apps is as low as $13.92/hour on TaskRabbit, $15.03/hour on Rover, and $15.31/hour on Handy.
⚠️ Minimum net pay rates are as low as $10.44/hour on TaskRabbit and $11.14/hour on Rover.
⚠️ Companies take as much as 68% of customer charges, and all apps take at least 20%+
⚠️ Access to work is determined in part by how little workers are paid—the apps incentivize workers to keep pay rates low and undercut other workers.
TaskRabbit
“TaskRabbit controls the market rates by suggesting what you should charge for your work, and warning you if your rate is “too high.” New “Taskers” are strongly encouraged to charge $18/hour for skilled work. After expenses, this is far below minimum wage. Even before expenses, this is far below a living wage. I’m not doing this to save up for vacation. I’m doing this to pay rent, buy food, buy medicine — survive.”
A 2021 email from TaskRabbit to workers warned them that if the rate they select for a given task is “well above market rate,” their profile may be hidden from customer searches for that task.
While TaskRabbit does not require workers to set a specific rate, they do require workers to set a specific rate per task type, and forbid workers from negotiating different rates with different customers. TaskRabbit also strongly encourages specific rates for each type of “task” when workers sign up to perform these tasks:
TaskRabbit’s app interface provides a default “suggested” rate for each type of task, and also gives workers a warning if the rate they’re attempting to set is “too high” for a given task.
TaskRabbit instructs workers that their placement in search results is based in part on how closely workers follow TaskRabbit’s suggested rate guidelines.
An example of TaskRabbit’s suggested rates for delivery tasks is below:
The default suggested rate for delivery in Seattle on TaskRabbit is $21/hour. Although the description of the delivery “skill” mentions that travel expenses such as gas and parking should be included in the hourly rate, TaskRabbit does not offer any way for workers to account for mileage in this rate; in fact, as noted above, workers are expressly forbidden from negotiating individual rates based on the customer or job, sharply limiting workers’ ability to factor mileage costs into their hourly rate. After factoring in mileage at the IRS rate and accounting for other basic expenses covered by contractors, a rate of $21/hour for delivery work is likely to fall below minimum wage. For example, a 60-minute delivery job at this rate would only pay minimum wage after expenses if the required driving for the job was less than two miles.
However, neither of these rates account for the additional time associated with each job that factors into independent contracting work. Even if a TaskRabbit worker spent only 15 additional minutes outside their work time reviewing the offer, communicating with the customer, and performing other required work for the job, accounting for this additional time would bring the net pay per hour on a TaskRabbit senior and disabled care job down to $13.92 per hour, well below Seattle’s minimum wage.
The result of TaskRabbit’s “suggested” rate interface is that workers are likely to set rates that fall below minimum wage after expenses. To get an impression of how likely it is for real rates to fall below minimum wage, we ran a search on TaskRabbit’s customer-facing website for a hypothetical “errand” task requiring a car to pick up items.
After factoring in the cost of expenses for this job, including mileage compensation for 15 miles of driving, the rate required to achieve net pay of minimum wage would be $29/hour. The majority of rates presented in the search were above this minimum wage threshold.
However, 28 of the 68 offers fell below this threshold, with the lowest rates presented amounting to $9.77/hour net pay after expenses.
In addition to suggested rates for each type of work, TaskRabbit sets a “floor” for rates, preventing workers from selecting rates below $15/hour in Seattle. This minimum floor applies across every “skill” listed on the TaskRabbit app. After accounting for basic expenses (not including mileage or transportation), TaskRabbit’s current pay floor in Seattle results in net pay of $13.05 per hour.
Rover
“Rover encourages workers to always maintain a low pay threshold in order to undercut other Rover workers. This base pay isn’t enough to sustain a livable wage, let alone to deal with medical bills. Rover takes 20% of each and every job I do, in addition to the service fees they charge the client.”
Rover’s rate setting works slightly differently; rather than setting their pay rates, workers set the rates their customers will be charged, and Rover takes a 20% cut of the displayed rate, leaving workers with 80%. The default rate for a 30-minute dog walk on Rover is $20, which results in $16 of worker pay. Rover’s default rate for a 60-minute dog walk is an additional $11 — a total of $31 charged to the customer, $24.80 of which is paid to the worker, for an hour-long walk.
After accounting for basic worker expenses, this suggested rate would result in net pay of $21.58 for an hour-long dog walk. When taking only time spent on the dog walk into account, this rate is well above Seattle’s minimum wage. However, workers must spend additional time outside of direct work time in order to complete each job — for example, communicating with the customer, transportation, and even unpaid “meet and greets” recommended by Rover.
If the worker spent any more than 15 additional minutes on these required tasks for the job outside of direct work time, their effective net hourly pay would come out to less than $17.27/hour.
While Rover’s default rates can result in pay above minimum wage when associated work time is not accounted for, their very low rate floor still has the effect of facilitating a great deal of subminimum wage work. A search on Rover’s website for workers available for a hypothetical dog-walking task in Seattle generated a list of more than 80 workers with customer rates of $15 per walk or less, which amounts to $12 in pay after Rover’s cut.
Net worker pay at these rates after factoring in basic expenses would be $10.44.
For a half-hour walk and a conservative estimate of 10 minutes of time for the worker to communicate with the customer and travel between jobs, the resulting net hourly pay for all of these workers amounts to $15.66/hour, well below Seattle’s minimum wage.
Additionally, there is no floor on the additional pay Rover dog walkers set for a 60-minute walk; Rover allows rates as low as $10 for an hour-long walk, resulting in worker commission of $8 and net pay of $6.96/hour.
Handy
“Handy determines the time needed to complete a job. Handy determines what I am paid for the job. Handy holds control over customer service.... Yet, I am expected to cover the cost of my business license, state taxes, federal taxes, liability insurance, surety bond, equipment and supplies, along with mileage and phone expenses. This is a broken relationship that is not healthy for any independent contractor. ”
Handy’s customer-facing prices are not directly linked to what they pay workers for a given service;
customer rates may vary based on factors like committing to regular bookings and promotions, but worker rates are set unilaterally by Handy. Worker pay for house cleaning, Handy’s core service, is set at $22/hour in Seattle, with a “repeat rate” of $27/hour for customers who choose to book with the same worker again. 34
Given these rates, the typical four-hour cleaning job on Handy in Seattle pays just $88 in gross pay. Handy offers a sliding scale of customer rates depending on how frequently the customer books services; in Seattle, these rates range from $199 per four-hour cleaning for weekly cleanings, and $279 per four-hour cleaning for a one-time booking. However, these variable rates are not reflected in workers’ pay, as shown in the sample booking below:
In this example, the total gross pay offered to the worker represents just 32% of the rate charged to the customer. Handy’s cut of the customer fee comes to about 68%, a total of $191 in revenue for a single booking.
This pay rate of $22/hour is likely to result in subminimum wages after accounting for workers’ expenses and time.
Subtracting 13% of pay to account for additional expenses borne by contractors leaves workers with net pay of $19.14/hour. 35 A conservative estimate of time required to perform the work — 15 minutes of associated time spent on reviewing offers, communicating with customers, and procuring and transporting equipment, for every hour of direct cleaning time — leaves workers with net pay of just $15.31/hour.
Handy workers’ pay is further reduced by costs of business unique to the platform, and significant fees charged by the app. Handy workers are responsible for providing all their own cleaning products and tools.
Handy also charges workers a range of fees for cancellations, late arrivals, early departures, and other reasons:
These pay deductions can substantially reduce workers’ earnings. For example, if a worker reschedules a booking with less than four hours’ notice, regardless of whether the reason is related to an emergency or illness, they are charged a fee of $40. This fee would leave the worker with gross pay of $48 for a four-hour job, or $12/hour in gross pay — about $8.35/hour in net pay after expenses and associated work time are accounted for.
In fact, Handy has been investigated by Seattle's Office of Labor Standards for violating the Seattle’s Domestic Workers Ordinance, in part due to how these fees can drive down workers’ pay below minimum standards.
A May 2021 letter to Handy’s CEO signed by the Director of Seattle’s Office of Labor Standards explained that: “While the listing price of most Handy jobs may meet the minimum wage requirement for the hours working at the job site, the numerous fees imposed by Handy, travel time, time spent working off the clock, and other costs significantly reduce a worker’s actual earnings, causing the actual pay to fall well below the minimum wage requirement. Handy does not account for the minimum hourly wage required by Seattle’s ordinance when setting compensation levels.” 38
Handy sets pay rates without regard to expenses borne by contractors, and maintains extensive control over customer relationships, even going so far as to charge workers a $100 fee if they engage with customers to provide services off-platform. Handy’s rates in Seattle amount to well below minimum wage in net pay, while the company retains up to two-thirds of customer fees as corporate revenues
