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So the gist is laws were upheld protecting homecare givers - minimum wage and overtime pay - and new mandated increased minimum wage, ultimately led to their de

So the gist is laws were upheld protecting homecare givers - minimum wage and overtime pay - and new mandated increased minimum wage, ultimately led to their decision to abandon their supposedly successful model. Their own internal "surveys", if we should even consider that, supposedly indicate these laws are not good for homecare. Maybe their business model just depended on exploiting cheap labor? Or maybe they went the way of Homejoy and are saving face, as many speculated, former employees coming forward, etc. with Homejoy that their customer retention was just really bad.

scardine 9y ago
I guess sites like Homejoy have a fundamental problem: professional/customer meet face-to-face, so when they find a good fit they have an incentive to cut a deal off the site books. The platform ends up littered with bad professionals, abusive customers and lots of complaints to manage.
alanfalcon 9y ago
I aould certainly like to hear the caregiver perspective on this. Is it truly just that the "low end" of the market hs moved away from legal status to "cash under the table"? Are caregivers overall happier (or better off) working fewer hours for less pay and dealing with the increased issues brought about by constant change when caring for a dimensia patient?
SparkyMcUnicorn 9y ago
Nobody likes having their costs more than doubled and having no choice but to pass that on to the customer. I'm all for fair pay and I also think people should be able to afford in-home care for those that need it. It seems evident that the latter is no longer the case. It's a hard line to walk. Caregivers are getting paid more, but demand is much lower.
Shivetya 9y ago
or maybe the SEIU exploited their power over politicians to force this state into a similar mess in Illinois (2009) by not only setting wages for private workers but also force compulsory unionization of all such workers. It took a 2014 Supreme Court ruling to stop the forcing of these care givers, which included people merely taking care of family, from paying union dues. Never expect actions taken by government are always to protect the workers, especially when they start hitting heart strings on the phrasing. This is about supporting their campaign base, unions push a lot of money into politics and getting such laws passed are their means of getting more into their coffers. Look at the prison story we had on the front page, the costs are almost all due to employee wages and those are driven by the most powerful union in the state . this was about protecting political interest, they don't care about care givers. this startup simply got caught in the middle.
justboxing 9y ago
> Maybe their business model just depended on exploiting cheap labor? How do you say that they were exploting cheap labor, when they claim that their business model enabled them to pay their caregivers 25% higher than industry average. > The 1099 independent contractor model, below, is very attractive as it removes excess cost and restrictions for employers. We were charging clients 30–40% less than industry average, and we were paying caregivers 25% higher than industry average. Both sides were winning. To me, it looks more like the Union Bosses at SEIU made a calculated -- and eventually successful - move to pull strings and get laws passed that would stifle HomeHero as they seem to be disrupting that Industry the same way Uber or AirBnB distrupted a different industry. > On Oct 15th 2015, the entire home care industry got rocked. The Department of Labor upheld a federal ruling stating that over 2 million home care workers would qualify for the Fair Labor Standards Act —essentially requiring all home care workers to be treated as W-2 employees and receive overtime benefits. This was viewed as a huge win by the controversial and outspoken labor union SEIU, as well as the “Fight for $15” crowd in California. Not saying it's the right (or ethical) thing to do, but if they'd had the funds, they should've gotten in front of that Act (before it got signed into law) and poured resources -- lobbyists, ads -- into killing it. They could've also asked the people receiving the service to write to their reps / senators / congressmen stating the Bill / Act would increase costs to them. Just like Uber and Lyft have done so in the past. Last year, when state officials tried to roll out a regulation the company didn’t like, Uber emailed their drivers and customers telling them to oppose it. The response flooded regulators’ inboxes and the state backed down. > In just the last month, the ride-hailing giants have secured a string of victories at the Capitol, killing or delaying legislation and regulations they didn't like and shepherding in new rules favorable to the industry. SourceL http://www.latimes.com/politics/la-pol-sac-why-uber-is-winning-in-california-20160507-snap-htmlstory.html http://www.latimes.com/politics/la-pol-sac-why-uber-is-winni...
- gnicholas 9y ago
  > How do you say that they were exploiting cheap labor, when they claim that their business model enabled them to pay their caregivers 25% higher than industry average. When I read this figure I wondered if they're looking at it on a pre-tax basis. 1099 workers have to pay employment taxes that W-2 workers do not shoulder (because they are paid by the employer). This wouldn't add up to 25% — probably more like 15%. So while I don't think they were "exploiting cheap labor", I think it's possible that the win-win scenario they claim wasn't as big a win for workers as it might seem.

scardine 9y ago

I guess sites like Homejoy have a fundamental problem: professional/customer meet face-to-face, so when they find a good fit they have an incentive to cut a deal off the site books. The platform ends up littered with bad professionals, abusive customers and lots of complaints to manage.

alanfalcon 9y ago

I aould certainly like to hear the caregiver perspective on this. Is it truly just that the "low end" of the market hs moved away from legal status to "cash under the table"? Are caregivers overall happier (or better off) working fewer hours for less pay and dealing with the increased issues brought about by constant change when caring for a dimensia patient?

SparkyMcUnicorn 9y ago

Nobody likes having their costs more than doubled and having no choice but to pass that on to the customer. I'm all for fair pay and I also think people should be able to afford in-home care for those that need it. It seems evident that the latter is no longer the case. It's a hard line to walk. Caregivers are getting paid more, but demand is much lower.

Shivetya 9y ago

or maybe the SEIU exploited their power over politicians to force this state into a similar mess in Illinois (2009) by not only setting wages for private workers but also force compulsory unionization of all such workers. It took a 2014 Supreme Court ruling to stop the forcing of these care givers, which included people merely taking care of family, from paying union dues. Never expect actions taken by government are always to protect the workers, especially when they start hitting heart strings on the phrasing. This is about supporting their campaign base, unions push a lot of money into politics and getting such laws passed are their means of getting more into their coffers. Look at the prison story we had on the front page, the costs are almost all due to employee wages and those are driven by the most powerful union in the state . this was about protecting political interest, they don't care about care givers. this startup simply got caught in the middle.

justboxing 9y ago

> Maybe their business model just depended on exploiting cheap labor? How do you say that they were exploting cheap labor, when they claim that their business model enabled them to pay their caregivers 25% higher than industry average. > The 1099 independent contractor model, below, is very attractive as it removes excess cost and restrictions for employers. We were charging clients 30–40% less than industry average, and we were paying caregivers 25% higher than industry average. Both sides were winning. To me, it looks more like the Union Bosses at SEIU made a calculated -- and eventually successful - move to pull strings and get laws passed that would stifle HomeHero as they seem to be disrupting that Industry the same way Uber or AirBnB distrupted a different industry. > On Oct 15th 2015, the entire home care industry got rocked. The Department of Labor upheld a federal ruling stating that over 2 million home care workers would qualify for the Fair Labor Standards Act —essentially requiring all home care workers to be treated as W-2 employees and receive overtime benefits. This was viewed as a huge win by the controversial and outspoken labor union SEIU, as well as the “Fight for $15” crowd in California. Not saying it's the right (or ethical) thing to do, but if they'd had the funds, they should've gotten in front of that Act (before it got signed into law) and poured resources -- lobbyists, ads -- into killing it. They could've also asked the people receiving the service to write to their reps / senators / congressmen stating the Bill / Act would increase costs to them. Just like Uber and Lyft have done so in the past. Last year, when state officials tried to roll out a regulation the company didn’t like, Uber emailed their drivers and customers telling them to oppose it. The response flooded regulators’ inboxes and the state backed down. > In just the last month, the ride-hailing giants have secured a string of victories at the Capitol, killing or delaying legislation and regulations they didn't like and shepherding in new rules favorable to the industry. SourceL http://www.latimes.com/politics/la-pol-sac-why-uber-is-winning-in-california-20160507-snap-htmlstory.html http://www.latimes.com/politics/la-pol-sac-why-uber-is-winni...

gnicholas 9y ago
> How do you say that they were exploiting cheap labor, when they claim that their business model enabled them to pay their caregivers 25% higher than industry average. When I read this figure I wondered if they're looking at it on a pre-tax basis. 1099 workers have to pay employment taxes that W-2 workers do not shoulder (because they are paid by the employer). This wouldn't add up to 25% — probably more like 15%. So while I don't think they were "exploiting cheap labor", I think it's possible that the win-win scenario they claim wasn't as big a win for workers as it might seem.