Babysitting 2.0: credit-card payments and online bookings

For young, urban smartphone owners, there are few areas of life that haven’t been changed by the mobile and Internet revolutions. We can book restaurant reservations through OpenTable, take a cab without swiping a credit card on Uber, or crash at someone’s house in a foreign city through AirBnB. Life has moved online, and commerce is moving with it.

So when 30-year old Erica Zidel started looking for babysitters for her three-year old son around 2009, the young mom was frustrated. Accustomed to booking things and paying for them online, she found the babysitter search process incredibly archaic by comparison. Zidel found herself calling friends and neighbors, looking at Craigslist, and browsing generic online classified ads.

“I was shocked by how inefficient the whole process was,” she said. “It seemed like it hadn’t really evolved since when I was a kid and my mom was finding sitters for me.”

The experience inspired Zidel to found SittingAround, one of a few growing startups in the digital babysitting space that allow parents to book, review, and often pay babysitters online. While subscription-based classified sites such as SitterCity have existed slightly longer, SittingAround and its close competitor, UrbanSitter, represent two recent investments in digital babysitting-booking sites that target young, tech-savvy parents with a free sign-up process and a social networking aspect unlike the older models.

“I just thought it was kind of ridiculous that you could go to OpenTable and book a restaurant, but when you actually go to find a sitter, it would take you hours and days,” said Lynn Perkins, co-founder and CEO of UrbanSitter.

The market for babysitting startups

While both sites are about a year old, they’ve seen significant traction so far with young parents. Sites measure “active users” differently, but parents have scheduled more than 3,000 babysitting jobs on SittingAround, and more than 15,000 have interviewed or requested a sitter through UrbanSitter. In January UrbanSitter raised $1.75 million in early funding led by First Round Capital, with participation from Rustic Canyon Partners, Menlo Ventures and several angel investors. Zidel said SittingAround will probably be taking funding soon.

It’s hard to measure the exact market potential or revenue generated by babysitting in the United States, on account of the nature of its under-the-table, cash-based economy. But IBSWorld placed babysitting and nannying as a $5 billion a year business in 2010, outside of formal childcare facilities or preschools, and it’s easy to see this might be a lucrative market to target.

The basic process

There are slight variations in how UrbanSitter and SittingAround function, but the ideas are very similar. Both sites allow parents to create a profile, post babysitting jobs, review sitter profiles, and book sitters online. Both use Facebook Connect to allow parents to see sitters their friends have used, building a social element into the site and adding the kind of trust parents might look for in offline bookings. SittingAround also specializes in babysitting co-ops, which allow parents to share childcare among a group of families with children.

Both protect user privacy until the actual babysitting job is booked between a client and sitter. On SittingAround, parents can advertise babysitting jobs specifically to their “trusted sitter” list. On UrbanSitter, babysitters can’t view specific information like a family’s address or location until both parties express interest in a booking. Both Zidel and Perkins emphasized the importance of user privacy and security on their sites.

“The constant feedback I get is that if a friend has used that sitter, it makes me feel better about using them,” Perkins said. “So it’s basically a faster way to get a sitter and leverage that trust.”

The sites also work for babysitters, who can build a profile, specify when they’re free to work, lists references, and provide a background check to potential employers.

Revolutionizing the payment process

While the online booking and recommendations of babysitters are important components to both UrbanSitter and SittingAround, one of the most compelling features is the digital payment option.

Heading home from a night out with your spouse and need to pay the babysitter when you get home? Say goodbye to stopping at the ATM.

With UrbanSitter, parents can enter their credit card information and direct deposit the payment into the sitter’s bank account. UrbanSitter takes a $7.50 flat fee, which ends up being about 15 percent of an average transaction, Perkins said.

SittingAround has partnered with Square to provide all babysitters the option of using a Square reader device, allowing parents to swipe their credit card on a sitter’s smartphone. SittingAround clients can also pay the sitter with cash or a check, but Zidel said the Square option has been really popular with clients, who appreciate the convenience factor of booking and then paying with a credit card.

“It’s a huge market where for about 15 years there just hasn’t been a lot of innovation,” she said.