by Megan Santosus

Why Don’t Online Service Marketplaces Work?

Mar 01, 20017 mins
BPM Systems

A LOT OF DOTCOMS are in the business of bringing buyers and sellers together. These electronic marketplaces promise to ease the lives of both parties by facilitating and streamlining the processes of introduction and transaction.

Generally, electronic marketplaces work well when the things being bought and sold are tangible. Looking to off-load I Dream of Genie memorabilia or artwork of questionable lineage? In the market for assorted geegaws, gimcracks and whatchamacallits? Then eBay and the like are where you want to be. But this happy marketplace model falls flat when the items in question are services. The reason for that is that most marketplaces that proffer services today don’t have to compete for customers. In this overdrive economy, it’s a seller’s market. And instead of making a buyer’s life easier, electronic marketplaces that deal in services often have the opposite effect; they’re clunky, time-consuming and frustrating.

Of course, I discovered this unpleasant truth about service marketplaces the hard way. For example, no other category of enterprise is as ripe for Internet streamlining as is the home improvement industry. Try finding a good plumber. (Good meaning one who returns your phone call within a month and actually shows up during the eight-hour window as promised.) Go ahead, try. Unless you’ve got an in-law in the business who owes you a favor, chances are you won’t get anyone to even bid on a job within six months.

No Help Wanted

When I settled into my new home, I listed 10 projects I wanted to complete before paying off my 15-year second mortgage. After six months of living amid stacked boxes, bare walls and a naked yard, I’ve managed to get exactly zero projects started, to say nothing of contracted. So I turned to a couple of home improvement websites promising quick responses and accurate estimates from reliable, prescreened contractors licensed to work right in my neighborhood.

I logged on to one site and spent about 15 minutes filling out four screens of information. I described the tiling I wanted done in my kitchen, complete with a rough estimate of the linear feet involved and what I was willing to pay. I fessed up in that I would go higher for anyone who would schedule the job before my Social Security benefits started to roll in. I pressed enter and was immediately cheered by a confident reply promising that my request would be answered promptly.

But before my request was answered promptly, I received a curt voice mail message from Dorothy, my own personal “project adviser,” informing me that by submitting a job proposal, I was duty-bound to abide by the site’s honor system. Essentially, I was obligated to call any contractor who responded to my request; if I ended up hiring a contractor referred to me through the site or one I found on my own, I had to let Dorothy know.

Dorothy’s snippy tone made me feel as if I’d already done something wrong, like that time in high school I decided to spend the night in Manhattan and didn’t call my parents because I just didn’t feel like it. Barely 24 hours old, my relationship with this website was already making me feel like a sulky adolescent. I didn’t like Dorothy, and I didn’t like having to deal with her. After all, isn’t the Web supposed to shield you from having to deal with unpleasant tradesfolk and their ilk?

The next day, I got a curt e-mail informing me that the cost estimate I provided was woefully low. I got the impression that Dorothy felt I should’ve known better, even though getting an accurate estimate was one of the reasons I was using the site in the first place.

During the course of two weeks, a grand total of one contractor called to express interest in tiling my kitchen. We scheduled an appointment. He canceled at the last minute. I called him back to reschedule. I never heard from him again.

I wouldn’t have minded the brush-off so much except that Dorothy kept peppering me with e-mails, reminding me of my moral obligation to keep her informed on the status of my project and urging me to deal with contractors referred to me through the site in a forthright and equitable manner. I e-mailed back that I was disappointed with the service. The number-one criteria on my initial request was reliability, I explained, and the one and only guy who responded?supposedly prescreened?demonstrated an utter lack of it.

Dorothy’s response? The site would remind the contractor of his obligations. (Ooh, a reminder. That’ll make him change his evil ways.) And, by the way, if I ended up hiring a contractor on my own who proved to be reliable, she’d appreciate it if I could let her know so that the site could sign him up.

Now the burden of finding reliable contractors had been shifted to me. Now I was being asked to work for a website I found totally unhelpful and even annoying.

Unluckily for Dorothy, locating good help in the home improvement area is not my forte. (Nor apparently is it the forte of the company she works for.) So, hopeless optimist that I am, I opted to try another home improvement website advertised in my local paper.

I went through a similar process. I spent 15 minutes filling out information including my name, address, project description and hoped-for budget. I was again encouraged by a cheery message telling me I could expect a response within a few days.

One week went by. Then three. Then I got a voice mail message. Unfortunately, the service didn’t have any tile guys working in my area?although that didn’t stop it from advertising to that effect in my local paper. In the future, the site did plan to expand its coverage to my neck of the woods. At that time, perhaps I’d be willing to give them another try?

The Party of the Third Part

Let’s see. I can spend 15 minutes filling out a few screens worth of information, or I can flip through the phone book, pick out a contractor at random and spend 20 seconds leaving a voice mail message. The end result of either effort is that I still don’t have anyone to tile my backsplash. And that’s the problem inherent with service marketplaces: The people they try to hook you up with don’t work for them. Therefore, there’s no redress if the people they hook you up with turn out to be unreliable. It’s not as if the website can fire them. And why would a good service provider need to use a third-party website to get referrals anyway? If it’s good, word of mouth is the only advertising it needs.

What’s a homeowner sitting in a shell of a house to do? The sanest strategy may be to sit tight and wait until the demand for projects falls in line with the supply of home improvement contractors. Then we can turn to the Yellow Pages and let our fingers do the walking for contractors. Reliable ones, only, of course.