Sydney startup Airtasker has been slammed by consumer advocate Choice over its claim that workers on its platform are earning “up to $20,000 a month” through the company.
Choice has called on the Australian Competition and Consumer Commission to investigate Airtasker if it does not “substantiate” the claim.
Airtasker is a two-sided marketplace for local odd jobs and was launched in 2012 and since added nearly 25,000 new users each month.
In an email sent to members, Airtasker claimed that numerous Australians are earning “good money” on the platform and some are earning “up to $20,000” per month, as Fairfax reports.
Choice spokesperson Tom Godfrey told Fairfax that claims like this could be in breach of consumer law if they aren’t backed up.
“We think that Airtasker should substantiate its impressive claim that multiple Australians using the platform are earning up to $20,000 a month,” Godfrey told Fairfax.
“If the company refuses, the Australian Competition and Consumer Commission can order it to substantiate its claim. It’s worth remembering that it is a breach of the Australian Consumer Law to make false and misleading claims.
“If you can successfully use a company like Airtasker to supplement your income, that’s great. However, not everyone who sues this site is going to make the big bucks.”
But Airtasker founder and chief executive Tim Fung says a “small number” of people are earning more than $20,000 per month on the platform and that this the gross figure before Airtasker’s 15% service fee and other charges are deducted.
“There definitely are case studies of people earning more than $20,000 per month – that’s a factual piece of information,” Fung tells StartupSmart.
“But we’ll be more conservative with how we make claims like that in the future.
“We’re not going to share individual peoples’ private information but we do have multiple case studies of that. If the ACCC or any consumer advocate wants us to provide information on a different basis we’re pretty open to that.”
Fung says Airtasker strives to operate with complete transparency and he was “humbled” by the comments made by Choice.
“Our business is driven by transparency as a core value,” he says.
“Everything we do is about showing workers and posters all the information – the more info they have the more transactions can happen. That’s what drives our revenue model.
“We’re definitely not interested in being cagey or anything like that and we want to maintain transparency as a core value.”
According to Airtasker, the average cost of a task completed through the platform is $113, and the maximum is capped at $2000.
Fungs says that all stats provided by Airtasker in promotional material and emails to members are in gross terms before other charges are deducted.
“We think that’s less confusing and more transparent,” Fung says.
“But if people are saying that’s really confusing and that they want to see it with Airtasker’s fees taken out then we could attempt to do that too.
“But this is the amount that person does earn legally – they do get the full amount and then the 15% is deducted.”
While the majority of workers on Airtasker are completing a handful of small tasks, Fung says that there are a number of people making a significant income on the platform.
“It’s definitely a mix, there’s a whole spectrum,” he says.
“There are people earning $5, 10, 15 grand a month but they make up a small number of people. Then it slides all the way down to people doing one task a month for $15. It’s a long tail.
In contrast to startups like Uber and Deliveroo, Fung says that Airtasker gives its users full control of how much money is transacted, making the entire process more transparent and accountable.
“We’re very much like an open marketplace platform,” Fung says.
“The worker and the customer decide how much is going to be traded, what the person is doing and how much to pay for the service.
“Some other platforms are driven by the companies themselves and when that happens it’s harder to be fully transparent and may take some actions driven by commercial intent rather than the users of the platform.
“We just say, ‘here’s a platform, talk about it and do whatever you want and we’ll take the same fee’.”
StartupSmart has contacted Choice for comment.
This article was first published by StartupSmart.