I have posted a related question, but it seems the thread of that question has taken a different direction from what I originally intended. The thread mostly discusses the merits of the startup and why investors see it as attractive, which is interesting, but not what I needed.
My (original) question is a bit more micro. Why should I, as a tutor, work for a tutoring agency when they take a cut? I could just put an ad on gumtree or "ebay for tutoring".
Let me explain my reasoning.
The company (GoStudent)'s model is like Uber for tutors. The company pairs you with students and handles payment but takes a cut from every tutoring session. The difference is that Uber has a strong premise. As a taxi driver, I have to keep finding new customers, so I am happy to have a cut taken to "pay" Uber for finding each new customer.
As a tutor, clients generally order a continued service. It will reoccur every week e.g. Friday 4PM. Thus, I don't need to spend much time finding customers - it might happen a few times per year, at most, when existing clients drop out. The only value this company gives me is once per student (to find them). Yet I have a reoccurring cost every lesson. This doesn't seem worth it. I'd rather just pay eBay/gumtree/Craigslist $10 as a one off fee (if not $0).
Wouldn't every "rational" actor (in this case tutor) simply post an ad on gumtree themselves? Yet the company has thousands of tutors. There are 5 reasons I can think of as to why someone would work for them:
Your credentials and skill is so low that outside of this company, you would fetch a lower price. E.g. I failed school and am very rude, but this company is still willing to hire me as a tutor. I normally would fetch $0-5/hr but now I can get $20/hr. Thus, I don't see how this company could attract high quality tutors, unless they fell into any of the following 4 buckets. A high quality tutor could get paid much more than $20/hr privately.
I don't know that gumtree and these tutor versions of gumtree exist. However, this lack of information seems transitory. Eventually I will meet friends/colleges at University who would know about these sites.
You're not very good at marketing yourself on gumtree etc. This is plausible, say if you got great grades and are very sweet but are not good at communicating it on gumtree
You don't know how to tutor. Starting out, people may want some guidance on how to tutor and materials to support their tutoring. However, I'm not sure if this company provides that. In any case, there isn't a strong case to stay with them for a long time, as over time you become a proficient tutor and can list with gumtree etc.
You want a "guaranteed stream of students" as the company puts it. Whilst this is nice to have less down time if a student quits, I would only be missing 1 out of several clients for a week or so as my ad on gumtree churns. It seems like a very expensive insurance policy.
Are there any other reasons as to why I should work for them? Ultimately my question is: why should I work for this company given that I could make more doing the same thing by myself? Am I missing something obvious to these other tutors?
(... really this thinking could be applied to other services like management consultancy, psychotherapy but anyway)