Amazon and Google are vying to become the Uber for handymen and capitalize on the growth of the on-demand services industry. A recent Intuit survey estimates 7.6 million Americans will be working in the so-called "gig" economy by 2020, more than double the current total of 3.2 million people.
"This is a multibillion-dollar market, and clearly the incumbents have not done an effective job in providing a seamless, safe and positive experience for users," said Mizuho Securities analyst Neil Doshi. "Just looking at stock prices of Angi and Yelp, there seems to be an opportunity for larger players or new start-ups to disrupt this space."
Amazon is diving head-on into delivering on-demand services. The e-commerce giant launched Amazon Flex on Tuesday, enabling delivery drivers in Seattle to sign up for shifts through an app. In March, it rolled out Amazon Home Services, powered by service marketplace start-up TaskRabbit.
"In less than 60 seconds, customers can browse, purchase and schedule tons of professional services from wall mounting a new TV to installing a new garbage disposal to house cleaning, directly on Amazon.com," said an Amazon spokesperson.
Amazon also recently expanded Home Services, which offers more than 900 professional services, to 15 cities in the US. The company guarantees all purchases, so if customers are not satisfied, they get their money back. "People are always afraid that a plumber or contractor might rip them off, so the platform that can provide transparency in price and recourse for quality will be the winner. We like Amazon's approach this far. And Amazon has deep pockets and a lot of patience," said Doshi.
In contrast to Amazon, Google is dipping its toes into the space, quietly beta-testing a new AdWords Express product in the Bay Area over the past several weeks. Home Service Ads invites plumbers, cleaners, locksmiths and other providers to advertise and manage customer inquiries, correspondence and appointments, all through Google. Home Service Ads are displayed as sponsored search results above organic search results. Homeowners can browse profiles, reviews and ratings, and contact up to three people at once to compare quotes. The company declined to comment.
The search giant is touting the new ad product on its website: "Google will show your ads on our platform, and we'll help customers find you and set up appointments. The rest is up to you." Google screens businesses and requires background checks, proof of insurance and licenses, but does handle transactions. The search giant also warns contractors: "Serious or repeatedly negative customer feedback may result in lower ad rankings (including your ad not showing at all)."
First Analysis Securities Corp. analyst Todd Van Fleet is bullish on the opportunity: "I think Google and Amazon are both well positioned to address the home-services market. The question is whether there's a multitude of players. The obvious answer is yes. It's a huge marketplace."
But Doshi is skeptical about Google's ability to win this battle: "Google has always had issues on the local side, and Amazon is coming at this market with a unique value proposition (high quality and guaranteed price)."
Both Google and Amazon are entering a crowded marketplace, competing with well-funded and established start-ups: "We think Home Advisor, Thumbtack, TalkLocal or some of the other unique start-ups could be in a position to take share," said Doshi.
Six-year-old Thumbtack is building a war chest to fight the rising competition, and CEO Marco Zappacosta says growth is strong. His biggest challenge is keeping up with demand: "We're actually supply constrained; we have more demand than we can fulfill." The company announced on Tuesday that it had raised $125 million at a valuation of $1.3 billion from investors that included Baillie Gifford, Tiger Global, Sequoia Capital and Google Capital.
More from Entrepreneur
Terry's digital marketing expertise can help you with campaign planning, execution and optimization and best practices for content marketing.