As you all have noticed, the on-demand economy is currently going through a zone of turbulence. More and more companies we use everyday and appreciate are struggling with labor regulations. Last week, we even witnessed the end of one of the most famous and acclaimed company in the sharing economy space. Homejoy is not operating anymore because of these issues.
Of course, Homejoy is not shutting down only because of the worker classification lawsuit they are facing. However, it definitely scared their potential investors involved in the C-Serie they were preparing for. And I assume that most of VCs and private investors will add contingencies, related to the workforce classification, to their requirements list, when they consider pouring dollars into the new uber for X or Handy-like startups.
I am dubious: While politics encourage the on-demand scene and praise these startups for the numbers of jobs created, and the dollars injected in the economy, lawyers and regulators are increasingly getting frenzy on workforce classification. I totally understand and support any initiative aimed at clarifying and streamlining the workers classification. All this new workforce should be rewarded fairly for their work. However, I’m pretty sure that all these current lawsuits will damage, more than improve, their working conditions. Homejoy’s shutdown will simply leave thousands of home cleaners unemployed.
I relate to what Simon Rothman said at a conference I attended in SF and strongly believe in a 3rd classification of the workforce. We should all strive to find a solution. But right now, I am just shocked to see how a whole business model and industry are faltering, when they are supposed to be growing
Uber is facing lawsuits, Homejoy is shutting down, Instacart is rethinking its model, Shyp is using a part of its investment to internalize its contractors. I do not see these hasty moves as good signs.
However, I am relieved that we have chosen another path for Washos. At the very beginning, probably like any other entrepreneurs in this industry, we hesitated over our model: hiring our own detailers, hiring part-time contractors as 1099, or working hand in hand with experienced detailers on a full time schedule. We chose this last option. And the main reason is not only because of regulation barriers.
One thing, that was really important, convinced us to take that path: skills and knowledge.
From the very first day, we were sure that Washos’ success or death was tied to quality. To be more specific, Washos will be a profitable business only if our customers come back 3 or 4 times a year (which is definitely not a lot) and it’s obvious that our app or any part of the digital experience will never be enough to retain a customer, if the wash or the detailing fails in terms of quality.
If Handy can have thousands of professional to clean houses, why not have the same to wash cars?
First of all, the techniques needed to wax, clay, shampoo or restore are very specific and they require years of experience. On every booking, we noticed, the attention to details it requires and we were amazed by the tricks used by some of our partners to remove stains and decontaminate our customers’ car.
Then, clients appear to be way picky when it comes to their car. They inspect every inch of the bodywork or interior to see if the job is perfectly executed. That requires a lot of precision and rigor.
Last point, supplies. Only a true professional knows what supplies to use for which situation or which part of the car. In an industry where you can find 30 different types of wax, you have to know your job!
All these reasons made our choice easy and we accepted all the impediments it implied.The Mobile auto detailing industry is very dynamic, not very organized and definitely not mature. The vast majority of detailers are one man show companies. In Los Angeles for example, we work with 50 different detailers. 45 of them are sole entrepreneurs.
At Washos, we want to disrupt an industry that is not yet mature. But we have decided to do so from within, by leveraging and improving what works, and by bringing digital assets to make up for limitations.
Our relations with our partners -and I insist on the word PARTNERS- are the core of our business and we strive to improve it everyday. 3 months after our launch, we decided to change our policy, and most of our vendors accepted it because they now have integrated Washos in their daily business as a trusted partner that increases their activity, brings them new customers everyday and applies respectful and efficient rules. It’s an obvious win-win. Then we can set up the second phase of our relation with them: make them expand and grow their team. As a matter of fact, the more bookings we send them, the more technicians they need, the more loyal they are because they now rely on us to keep their guys busy and profitable. By doing this, we create the most virtuous cycle for them and for us.
This model has also another key benefit. It’s the best way to tap in new cities and rapidly expand our activity. When we decided to open Orange County, 3 months after our launch in LA, we spent 2 days meeting the best detailers in this new area. We learnt so much in 2 days that we were able to adapt our strategy to this new market and launch our advertising and communication campaign. This knowledge and the agility it gives us is priceless.
In a couple of months, we will open more cities in Southern California and we are extremely confident in our success, mainly because our structure is very flexible. Our processes allow us to easily expand and also - thanks to our partners - to quickly assess the specificities of a new market, and to deliver hundreds of bookings every weeks, within the first few days.
Indeed, this model has a lot of drawbacks and may not be the most scalable. It implies a long phase of screening, negotiating and support. We have already prepared a second phase where in-house detailers could increase or replace our current partners. Once again, our vision is to collaborate with our detailers to train these new washers and help them understand and deliver the Washos experience.
But as long as we can handle the volume with our partners, we will carry on focusing on improving our product, educating the market, delivering the best support and try to disrupt this industry from within.
Bertand
Co-Founder at Washos
