I struggle to see how/why a customer/supplier can't just cut out rover in this arrangement over time if it is a recurring service they are providing? It seems like a good source for new leads but once they get that direct relationship why not just be like hey can you just pay me directly instead of through the platform. what am i missing?
It does happen but nowhere near at the rate you'd think. It has to do with incentives.
Consumer uses the app 1-3 times a year, when they go on trips. Saving 10% on booking value is not worth the hassle + risk if something goes wrong. There's also the issue of your sitter not being available, because most sitters have very limited space = need to find someone else.
Sitter *needs* Rover for leads. Unless you have 50+ clients that exclusively use you, it's not worth it for you to risk getting kicked off the platform to earn ~10% more. It also "helps" that most are not doing this as a job - it's just a nice source of extra income, so they're not fighting for every last dollar. Plus the booking / communication tools etc making your life much easier = incentive is to stay on the platform.
Hope that makes sense. Happy to hear any pushback.
Disintermediation risk is a function of take rate, and my hunch is that this isn't a big problem with where it is right now. But if they try to hike this to say, 40%+, then probably becomes a bigger problem.
I would argue that the more sophisticated/professional/successful service providers might even be *less* inclined to try to go off platform. Because the app is so embedded into their routine and workflow that trying to get off it just doesn't make sense. Everything is going well for them and they will need a much bigger incentive than just ten something percent to ditch the platform. They are also smart enough to understand the hidden risks of doing that (e.g. what if a dog bites another dog while under boarding - is the sitter going to foot the $5000 vet bill out of pocket without Rover's protection?)
it would not take that much effort to build a personal app for the serious sitter, maybe even less to repurpose an existing calendar-type app.
but can they convince :
- all their android\apple\desktop users to install and use it?
- get paid in cash and track it?
my guess is that the few (lucky!) sitters for the wealthy have an informal understanding on terms&conditions, and dont use anything other than text\email requests.
thanks everyone for your responses. If anyone hasn't seen it slide 22 from feb 2023 slide deck seems to suggest there are generally repeat bookings and average value seems to grow over time after that initial booking. I guess the thing to really monitor will be what that take rate evolves to over time/balancing that with the value proposition. EBAY if I recall correctly saw headwinds from this after multiple years of increases. https://investors.rover.com/static-files/8c94df67-2ec1-41ae-81b9-7b37543a923dhttps://fourweekmba.com/ebay-take-rate/
This implies that you are using the same service provider every time. Perhaps, it would be useful to you if I share my experience.
I have a cat and travel occasionally with my wife. A couple years ago we first hired a woman to feed the cat twice a day through Rover. She did a great job her first two visits. When we went to hire her again she had moved to another city. We tried a new service provider through Rover that my wife did not like. Next time, we hired a woman who did a good job who we re-hired one time. After that, she graduated from college and stopped doing Rover work. Next, we hired a lady who was four hours late. Whenever we travel next, we'll be hiring a new person to check in on our cat.
The point is, I've been a customer for years with zero opportunity to cut out Rover.
Not to dismiss it as a risk completely but their customer cohort chart would disagree.
With any marketplace leakage is a fact of life. It's like retailers and shrinkage. The q that matters is.not "is it happening" but "is it bad enough that the marketplace doesn't work?"
I struggle to see how/why a customer/supplier can't just cut out rover in this arrangement over time if it is a recurring service they are providing? It seems like a good source for new leads but once they get that direct relationship why not just be like hey can you just pay me directly instead of through the platform. what am i missing?
It does happen but nowhere near at the rate you'd think. It has to do with incentives.
Consumer uses the app 1-3 times a year, when they go on trips. Saving 10% on booking value is not worth the hassle + risk if something goes wrong. There's also the issue of your sitter not being available, because most sitters have very limited space = need to find someone else.
Sitter *needs* Rover for leads. Unless you have 50+ clients that exclusively use you, it's not worth it for you to risk getting kicked off the platform to earn ~10% more. It also "helps" that most are not doing this as a job - it's just a nice source of extra income, so they're not fighting for every last dollar. Plus the booking / communication tools etc making your life much easier = incentive is to stay on the platform.
Hope that makes sense. Happy to hear any pushback.
Disintermediation risk is a function of take rate, and my hunch is that this isn't a big problem with where it is right now. But if they try to hike this to say, 40%+, then probably becomes a bigger problem.
I would argue that the more sophisticated/professional/successful service providers might even be *less* inclined to try to go off platform. Because the app is so embedded into their routine and workflow that trying to get off it just doesn't make sense. Everything is going well for them and they will need a much bigger incentive than just ten something percent to ditch the platform. They are also smart enough to understand the hidden risks of doing that (e.g. what if a dog bites another dog while under boarding - is the sitter going to foot the $5000 vet bill out of pocket without Rover's protection?)
it would not take that much effort to build a personal app for the serious sitter, maybe even less to repurpose an existing calendar-type app.
but can they convince :
- all their android\apple\desktop users to install and use it?
- get paid in cash and track it?
my guess is that the few (lucky!) sitters for the wealthy have an informal understanding on terms&conditions, and dont use anything other than text\email requests.
thanks everyone for your responses. If anyone hasn't seen it slide 22 from feb 2023 slide deck seems to suggest there are generally repeat bookings and average value seems to grow over time after that initial booking. I guess the thing to really monitor will be what that take rate evolves to over time/balancing that with the value proposition. EBAY if I recall correctly saw headwinds from this after multiple years of increases. https://investors.rover.com/static-files/8c94df67-2ec1-41ae-81b9-7b37543a923d https://fourweekmba.com/ebay-take-rate/
For sure. Marketplaces are tricky to manage, especially as they mature and liquidity pool splits.
This implies that you are using the same service provider every time. Perhaps, it would be useful to you if I share my experience.
I have a cat and travel occasionally with my wife. A couple years ago we first hired a woman to feed the cat twice a day through Rover. She did a great job her first two visits. When we went to hire her again she had moved to another city. We tried a new service provider through Rover that my wife did not like. Next time, we hired a woman who did a good job who we re-hired one time. After that, she graduated from college and stopped doing Rover work. Next, we hired a lady who was four hours late. Whenever we travel next, we'll be hiring a new person to check in on our cat.
The point is, I've been a customer for years with zero opportunity to cut out Rover.
I feel the same way. Build a relationship and cut the cord.
Not to dismiss it as a risk completely but their customer cohort chart would disagree.
With any marketplace leakage is a fact of life. It's like retailers and shrinkage. The q that matters is.not "is it happening" but "is it bad enough that the marketplace doesn't work?"