'Arbitrage' The simultaneous purchase and sale of an asset in order to profit from a difference in the price[0]. They take information that they purchased from

'Arbitrage' The simultaneous purchase and sale of an asset in order to profit from a difference in the price[0]. They take information that they purchased from their previous company, and also collect information presumably, and sell it. Their profit is based on the difference in that informations value to a different buyer. A service worker submits background info, how much they are willing to work for, logistics of what they'll do and other info. This is free for homejoy because that person wants to work and this will let them do that. They take that information and sell it to a buyer. The buyer pays: cost = [workers specified rate] + [ informations value] So homejoys profit is presumably something like the value of that information - opex as they likely have no assets. I am not saying there is anything wrong or unethical about this, just that there are no barriers to entry, high competition and high ability to substitute this for many things. This is sort of like the yelp model, except that yelp, despite some of the hits to its reputation, has a massive data set that is relatively complete and very difficult to replicate now in magnitude and completeness, it is also more broadly useful. While eating out is, to some extent, a luxury, people do need food. So more people, I would baselessly assert, eat out in some capacity on the monthly basis than have their home professionally cleaned. [0]http://www.investopedia.com/terms/a/arbitrage.asp http://www.investopedia.com/terms/a/arbitrage.asp