​I want to build a marketplace for blue-collar labor in the US. Tell me why it’s a bad idea.

The current US market has four main marketplaces:

Thumbtack – $3.2 billion valuation in the last round TaskRabbit – Acquired by IKEA in 2017 Yelp – $2.4 billion (publicly traded company) Angi – $1 billion (publicly traded company)

These companies were all created 16+ years ago. They each have a minimum of 700+ employees, with high salaries and cool offices, resulting in significant overhead.

I have worked for two of these companies (Thumbtack, TaskRabbit) and know their commission structures well. For example:

TaskRabbit charges clients an additional 42-48% on top of the contractor’s bill. For example, if a contractor receives $100 from a client, TaskRabbit charges the client an extra $45 (final bill $145) Thumbtack charges contractors $20-$100 per lead, with a conversion rate of only 20-30%. This means contractors typically end up paying a 40-60% commission to Thumbtack for small and medium-sized tasks.

Here’s why I think it might make sense to start a labor marketplace in 2024:

Lower Commissions: Offering lower commissions could attract both contractors and clients App Development Costs: With current technology, apps can be developed for only $15-20k (I have experience in app development) Customers are now very familiar with using apps for services Many contractors have experience with Thumbtack, TaskRabbit, Yelp, or Angi and understand how to handle leads

My plan is to start in New York (where I live), gain market share, and expand to other cities. Initially, I will focus on the most popular categories (furniture assembly, handymen, moving, cleaning) and expand from there.

Let me know your thoughts on why this idea might be flawed or why it might be the right move.

Admin, please delete this post if you find it irrelevant. I chose this subreddit because there are many knowledgeable people here who understand this industry and can provide valuable insights.​