These days you see and hear all sorts of ads declaring that services, products, or platforms are “free.” This is nothing new, of course, and most savvy consumers know that nothing is ever really free. The recent Facebook/Cambridge Analytica data scandal has once again brought home the point that “free” really means that the consumer is making some kind of trade-off--known or not--for the use of a product or platform. In the case of Facebook and CA, over 80 million people (at the latest count), all using Facebook for “free,” had their data improperly shared.
The gig economy has its own share of companies offering services or platforms for “free.” Employment services, task services, gig matchers, freelance marketplaces, and home improvement services platforms commonly seduce the users who seek services with a no-cost proposition. In reality, most of these platforms end up costing the hirer a considerable sum—it’s just hidden in the rates they’re charged on their invoice. When companies charge service providers high fees to access their platform, those costs naturally get passed along to the hirer... and suddenly you’re paying a dollar a minute for someone to walk your dog.
Charlotte Culina, CEO of The Urban Helper, observed that this kind of invisible distortion of market rates leads not just to companies faltering or failing, but it also gives both service providers and the people who hire them ample reason to jump ship at the earliest opportunity. “This kind of fee structure might make the platform a lot of money at the beginning,” she says, “but greed has tendency to backfire when it comes to sustainability. Plus, it doesn’t seem fair for the worker or transparent for the hirer—I think companies should be held to a higher standard than that.”
The Urban Helper keeps costs for service providers at $0, so they don’t have to artificially raise their fees in order to get paid their regular rates. “In the midst of all of the excitement about ‘disruption’ or ‘unicorns’ and the like,” Culina says, “it seems like entrepreneurs can lose sight of the fact that their company needs to serve people. It needs to be helpful, useful, and human—or else it’s not going to last. If using The Urban Helper for cash transactions our service providers pay the cost of moving the money they’ve earned from the hirer to their bank account, but we don’t make a profit off of that transaction. We charge a small per transaction fee to hirers -and they know what that cost is up front. Our time bank fees are never a burden to the service provider--the whole point of the time bank is to increase access and remove financial obstacles to people who are normally priced out of this market and ignored by entrepreneurs.. We feel that our transparent, equitable business model is the way of the future for entrepreneurs. Profit is obviously part of the equation—we are a business after all—but we feel that in order to be truly sustainable we must be honest and fair with all of our users. It shouldn’t be revolutionary to think this way, but it is!”
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