5 ms·

"The steady leak of its best workers to direct employment arrangements with its own (now former) clients." This is a huge hurdle in any direct services market.

"The steady leak of its best workers to direct employment arrangements with its own (now former) clients." This is a huge hurdle in any direct services market. While you're not likely to hire your own private driver and thus end your working relationship with Uber, you're probably very likely to find a cleaner that you like a lot and who does a great job cleaning your house and go on to form an exclusive working relationship with them instead of continuing to use a service that sends you random cleaners from a wider pool. Same with services of the same type- babysitters, dog walkers, etc.

IgorPartola 11y ago
I actually did this once with Move.com. I have moved a lot over the past decade and used them pretty extensively to hire movers. Since two consecutive moves were local and I told the movers that during the first one, they told me to contact them directly for the second one. I got a discount, they got to keep more of the money.
- lhc- 11y ago
  I was involved with another company that used to operate in the same space, and they had a big problem with that. Movers would show up, offer the client a slightly lower rate if they paid cash, then both parties would cancel with the company and just work it out directly. Finding reputable contractors who wouldn't just cut the service out turned out to be a very hard problem.
ChazDazzle 11y ago
I've done this several times with TaskRabbit and i'm actually surprised the same thing hasn't happened to them.
- jusben1369 11y ago
  tbh it might be. I don't get the sense TR is doing very well these days. Very quiet out of there.
saalweachter 11y ago
I think it's an important question any entrepreneur has to answer: what value do I add to the business? If you're providing some expertise or startup costs to purchase expensive investments (buildings, machinery...) or creating some sort of efficiency of scale, you've probably got a viable business. If your business plan is to skim money off of workers who could do their jobs and get paid without you, your workers are going to eventually figure that out and cut you out of the equation.
- prostoalex 11y ago
  > If your business plan is to skim money off of workers who could do their jobs and get paid without you Lead generation is a viable business, as demonstrated by Yelp (and previously Yellow Pages), it's just not hot and fast-growing.
  - saalweachter 11y ago
    Yeah, I agree. There's going to be a huge difference between businesses where customer acquisition is needed regularly (eg, taxis; it makes sense to take a different taxi with a different driver, based on whichever is closest to you) and where customer acquisition is needed infrequently (eg, cleaners; it makes sense to use the same cleaner over and over, on a fixed schedule).
    - shostack 11y ago
      Cleaners, and some other industries, still need lead generation as they lose customers but also seek to expand their businesses. If they are spending time cleaning, they are not spending time marketing other than through the resulting word of mouth.
  - morgante 11y ago
    Thumbtack is also a lead gen business, and they actually are quite hot (just raised at a $1B valuation).
  - marcosdumay 11y ago
arxpoetica 11y ago
Seems like there might be a model that works better by focusing on managing relationships-- not necessarily a home cleaning service--
- hvs 11y ago
  It's called Angie's List.
TheCondor 11y ago
Taxis have been tampered with. There are medallions and monopolies and such, the fair market hasn't reigned. Uber can change that, there is room to wiggle. Has cleaning been unionized or tampered with? If anything, I'd almost think it's shifted further to the other side, there might be undocumented workers and more cash businesses than taxis have, even less regulation if you will. If the market is working, then what's the value? They help customers find cleaners more efficiently? More efficiently than Craig's list and the other sources?
- sageabilly 11y ago
  The initial value is the piece of mind on the customer side plus ease of use/scheduling. With maid service, you're letting someone in your house unsupervised for long periods of time, so it becomes extremely important to have accountability built into the transaction. I have considered getting a monthly maid service and I live in the DC metro- somewhere with a ton of choices on that front- and I have not quite pulled the trigger on it because I am pretty freaked out by paying someone to have unfettered access to my house. I don't even have anything expensive to steal or break! There is zero chance I would trust a maid from Craigslist.
  - aianus 11y ago
    Couldn't you get someone to clean while you're home watching football on Sunday or something? I don't see why it has to be totally unsupervised.
    - sageabilly 11y ago
      That's an option- issue is that if you get someone who's being paid cash they're not licensed or insured in any way and if they break something or are injured on your property then you don't have any legal recourse to rectify the situation and, in fact, might be violating labor laws depending on how much you pay them/ how much they work.
  - VLM 11y ago
    >I don't even have anything expensive to steal or break! That creates a peculiar Venn diagram of people paid too much to clean and simultaneously don't own anything. This limits growth potential. The customer pool is always going to be extremely small. On the other hand "everybody needs a taxi" sooner or later for some reason.
InAnEmergency 11y ago
I've noticed this even with Groupon. Walk into place with a Groupon, they offer you the same price but just bypass Groupon. They get a new customer in the door, the customer is fine with it because it's the same price, but the business makes more money because they don't have to pay Groupon their cut.
- aamar 11y ago
  How would that work? Groupon takes their cut when the the customers pay for the deal itself, days or weeks ahead of them showing up at the business.
  - michaelt 11y ago
    Walk in and say "I'm here for the groupon deal but I haven't brought it yet. Can you sort that out for me, or is it easier for you if I buy it on groupon now using my phone?"
    - irl_zebra 11y ago
      Additionally, Groupon has a three day return policy. So go to the business and just return the groupon if the business wants to bypass.
  - deleted 11y ago
    [deleted]
geomark 11y ago
That's a problem even in B2B businesses. I used to run a design center where we often contracted out teams to work onsite at a client's place. Clients sometimes offered one of my guys to go direct, even though there was a big nasty clause in the contract forbidding that. But then we didn't want to start suing our clients so they usually got away with it. It must be way worse in a B2C business. I just don't see how this had any legs.
- sib 11y ago
  The best solutions that I've seen for that is an explicit charge / fee for doing so, in the original agreement, rather than a prohibition.
Retric 11y ago
Backfill is a useful feature that an app like this can provide. The problem is it's a small fraction of initial sales and has high customer acquisition costs. It might work as a platform where they only take a cut of the first transaction. But, you’re still stuck with high customer acquisition costs and minimal repeat business. The other option is to directly higher the cleaners so they don't defect. But, then you’re just running a cleaning business and competing with those who have minimal documentation.
venomsnake 11y ago
Non circumvention agreement solves that beautifully. And I think it is more enforceable.
- s73v3r 11y ago
  How? Keep in mind that most jurisdictions take a VERY dim view of a company trying to prevent someone from working.
  - venomsnake 11y ago
    Depends. They take very dim view because of the broadness of the non compete clauses. Here is extremely specific - you cannot clean that specific house unless you give me 30% of your earnings.
- jmngomes 11y ago
  That's usually too taxing for startups to enforce, and suing customers isn't really positive for your reputation.
dllthomas 11y ago
"While you're not likely to hire your own private driver and thus end your working relationship with Uber" Not likely to end your relationship with Uber entirely, but Uber doesn't do pre-planned trips; an individual driver may.
- qq66 11y ago
  Uber does pre-planned trips in some countries.
Pxtl 11y ago
Imho, this is why a generalized system of home-services might work better. I mean, Uber's success is that it connects where you are with nearby drivers. The map. We could similarly have a "map" not geographically, but thematically, of nearby service providers. I need a foundation guy who does green technology. Or a cleaning lady who knows how to work with antique mahogany. Of course, this kind of map is far harder to do than a simple GMapps GPS system. So you'd need more human overhead both walking new service-providers and new customers through the tagging system of describing a service. But still, there's room for that: a complex recommendation engine where you describe the kind of job you need done and it links you up with local experts in that kind of work, combined with Uber-style ratings. Google sucks for this. You target a high price-point because you shoot for the one-offs, which means they may need human arbitration. Anything repeating and you'll lose them to direct personal relationships anyways - you add value and get profit from the first-time use of a new service-provider. Something in-between Uber and Yelp, "do stuff at my house".
Animats 11y ago
If the service employed the cleaners as straight employees, they wouldn't have that problem. The service's value add for employees should be good scheduling and steady work. Merry Maids, the big company in the field and a unit of Servicemaster, does have their people as employees. Their problem, from reviews, is that many of their local managers are disorganized.[1] What they need are better tools for their people. But you don't get to be a billion dollar unicorn by developing an in-house app for a house cleaning company. [1] http://www.indeed.com/cmp/Merry-Maids/reviews?fcountry=US http://www.indeed.com/cmp/Merry-Maids/reviews?fcountry=US

IgorPartola 11y ago

I actually did this once with Move.com. I have moved a lot over the past decade and used them pretty extensively to hire movers. Since two consecutive moves were local and I told the movers that during the first one, they told me to contact them directly for the second one. I got a discount, they got to keep more of the money.

lhc- 11y ago
I was involved with another company that used to operate in the same space, and they had a big problem with that. Movers would show up, offer the client a slightly lower rate if they paid cash, then both parties would cancel with the company and just work it out directly. Finding reputable contractors who wouldn't just cut the service out turned out to be a very hard problem.

ChazDazzle 11y ago

I've done this several times with TaskRabbit and i'm actually surprised the same thing hasn't happened to them.

jusben1369 11y ago
tbh it might be. I don't get the sense TR is doing very well these days. Very quiet out of there.

saalweachter 11y ago

I think it's an important question any entrepreneur has to answer: what value do I add to the business? If you're providing some expertise or startup costs to purchase expensive investments (buildings, machinery...) or creating some sort of efficiency of scale, you've probably got a viable business. If your business plan is to skim money off of workers who could do their jobs and get paid without you, your workers are going to eventually figure that out and cut you out of the equation.

prostoalex 11y ago
> If your business plan is to skim money off of workers who could do their jobs and get paid without you Lead generation is a viable business, as demonstrated by Yelp (and previously Yellow Pages), it's just not hot and fast-growing.
- saalweachter 11y ago
  Yeah, I agree. There's going to be a huge difference between businesses where customer acquisition is needed regularly (eg, taxis; it makes sense to take a different taxi with a different driver, based on whichever is closest to you) and where customer acquisition is needed infrequently (eg, cleaners; it makes sense to use the same cleaner over and over, on a fixed schedule).
  - shostack 11y ago
    Cleaners, and some other industries, still need lead generation as they lose customers but also seek to expand their businesses. If they are spending time cleaning, they are not spending time marketing other than through the resulting word of mouth.
- morgante 11y ago
  Thumbtack is also a lead gen business, and they actually are quite hot (just raised at a $1B valuation).
- marcosdumay 11y ago

arxpoetica 11y ago

Seems like there might be a model that works better by focusing on managing relationships-- not necessarily a home cleaning service--

hvs 11y ago
It's called Angie's List.

TheCondor 11y ago

Taxis have been tampered with. There are medallions and monopolies and such, the fair market hasn't reigned. Uber can change that, there is room to wiggle. Has cleaning been unionized or tampered with? If anything, I'd almost think it's shifted further to the other side, there might be undocumented workers and more cash businesses than taxis have, even less regulation if you will. If the market is working, then what's the value? They help customers find cleaners more efficiently? More efficiently than Craig's list and the other sources?

sageabilly 11y ago
The initial value is the piece of mind on the customer side plus ease of use/scheduling. With maid service, you're letting someone in your house unsupervised for long periods of time, so it becomes extremely important to have accountability built into the transaction. I have considered getting a monthly maid service and I live in the DC metro- somewhere with a ton of choices on that front- and I have not quite pulled the trigger on it because I am pretty freaked out by paying someone to have unfettered access to my house. I don't even have anything expensive to steal or break! There is zero chance I would trust a maid from Craigslist.
- aianus 11y ago
  Couldn't you get someone to clean while you're home watching football on Sunday or something? I don't see why it has to be totally unsupervised.
  - sageabilly 11y ago
    That's an option- issue is that if you get someone who's being paid cash they're not licensed or insured in any way and if they break something or are injured on your property then you don't have any legal recourse to rectify the situation and, in fact, might be violating labor laws depending on how much you pay them/ how much they work.
- VLM 11y ago
  >I don't even have anything expensive to steal or break! That creates a peculiar Venn diagram of people paid too much to clean and simultaneously don't own anything. This limits growth potential. The customer pool is always going to be extremely small. On the other hand "everybody needs a taxi" sooner or later for some reason.

InAnEmergency 11y ago

I've noticed this even with Groupon. Walk into place with a Groupon, they offer you the same price but just bypass Groupon. They get a new customer in the door, the customer is fine with it because it's the same price, but the business makes more money because they don't have to pay Groupon their cut.

aamar 11y ago
How would that work? Groupon takes their cut when the the customers pay for the deal itself, days or weeks ahead of them showing up at the business.
- michaelt 11y ago
  Walk in and say "I'm here for the groupon deal but I haven't brought it yet. Can you sort that out for me, or is it easier for you if I buy it on groupon now using my phone?"
  - irl_zebra 11y ago
    Additionally, Groupon has a three day return policy. So go to the business and just return the groupon if the business wants to bypass.
- deleted 11y ago
  [deleted]

geomark 11y ago

That's a problem even in B2B businesses. I used to run a design center where we often contracted out teams to work onsite at a client's place. Clients sometimes offered one of my guys to go direct, even though there was a big nasty clause in the contract forbidding that. But then we didn't want to start suing our clients so they usually got away with it. It must be way worse in a B2C business. I just don't see how this had any legs.

sib 11y ago
The best solutions that I've seen for that is an explicit charge / fee for doing so, in the original agreement, rather than a prohibition.

Retric 11y ago

Backfill is a useful feature that an app like this can provide. The problem is it's a small fraction of initial sales and has high customer acquisition costs. It might work as a platform where they only take a cut of the first transaction. But, you’re still stuck with high customer acquisition costs and minimal repeat business. The other option is to directly higher the cleaners so they don't defect. But, then you’re just running a cleaning business and competing with those who have minimal documentation.

venomsnake 11y ago

Non circumvention agreement solves that beautifully. And I think it is more enforceable.

s73v3r 11y ago
How? Keep in mind that most jurisdictions take a VERY dim view of a company trying to prevent someone from working.
- venomsnake 11y ago
  Depends. They take very dim view because of the broadness of the non compete clauses. Here is extremely specific - you cannot clean that specific house unless you give me 30% of your earnings.
jmngomes 11y ago
That's usually too taxing for startups to enforce, and suing customers isn't really positive for your reputation.

dllthomas 11y ago

"While you're not likely to hire your own private driver and thus end your working relationship with Uber" Not likely to end your relationship with Uber entirely, but Uber doesn't do pre-planned trips; an individual driver may.

qq66 11y ago
Uber does pre-planned trips in some countries.

Pxtl 11y ago

Imho, this is why a generalized system of home-services might work better. I mean, Uber's success is that it connects where you are with nearby drivers. The map. We could similarly have a "map" not geographically, but thematically, of nearby service providers. I need a foundation guy who does green technology. Or a cleaning lady who knows how to work with antique mahogany. Of course, this kind of map is far harder to do than a simple GMapps GPS system. So you'd need more human overhead both walking new service-providers and new customers through the tagging system of describing a service. But still, there's room for that: a complex recommendation engine where you describe the kind of job you need done and it links you up with local experts in that kind of work, combined with Uber-style ratings. Google sucks for this. You target a high price-point because you shoot for the one-offs, which means they may need human arbitration. Anything repeating and you'll lose them to direct personal relationships anyways - you add value and get profit from the first-time use of a new service-provider. Something in-between Uber and Yelp, "do stuff at my house".

Animats 11y ago

If the service employed the cleaners as straight employees, they wouldn't have that problem. The service's value add for employees should be good scheduling and steady work. Merry Maids, the big company in the field and a unit of Servicemaster, does have their people as employees. Their problem, from reviews, is that many of their local managers are disorganized.[1] What they need are better tools for their people. But you don't get to be a billion dollar unicorn by developing an in-house app for a house cleaning company. [1] http://www.indeed.com/cmp/Merry-Maids/reviews?fcountry=US http://www.indeed.com/cmp/Merry-Maids/reviews?fcountry=US