I've used just about every one of the on-demand cleaning startups (and many of the other on-demand startups), because I'm a disorganized oaf and personally find them very, very interesting. Apparently the VC community has too, with over $4 billion going into the on-demand sector alone. People want to bring things to their location with their smartphones, and the opportunity at first seemed perfect. However, customers (myself included) began to notice in some cases, especially in businesses like cleaning, that one cannot simply demand anything and expect the business to be flawless.
That, problematically, is exactly what customers expect from cleaning, which is why once-hot startup HomeJoy, which raised nearly $40m in venture capital, ran into difficulties that eventually led to its closure this July.
HomeJoy's fall from grace was one that was, like many startups, borne from a series of lawsuits relating to the classification of workers as contractors or employees. If you're an employee, that means that the company is responsible for costly things like insurance, overtime, wages and payroll that one can avoid through contract classification. As Uber and many of the major on-demand economy startups fears, if this classification ever is forced upon them, the costs will skyrocket. While some may say this is a justified expense - in that they're hiring actual real, living beings, employing them if you will, it's frightening when you've built a multi-million or billion business on the back of a potentially breakable classification.
Then there's the overgrowth problem - expanding too fast in a business of unbelievable variables, quality of staff, quality of cleaning, differentiation of cleaning space - a horrifying proposition. And yet the home services industry, which includes but isn't limited to just cleaning, is growing at an alarming pace, with an estimated size in the hundreds of millions. Handy, a competitor to HomeJoy that also offers handyman services, allegedly has over 10,000 cleaners in its system and is potentially raising more money at a $500m valuation, despite HomeJoy's failure to do almost exactly the same thing.
That being said, there are startups still surviving in the space by doing things a touch different. TaskRabbit, which actually pivoted into the on-demand economy last year, now provides bookings in advance but also charges a premium for more "available" cleaners or workers. The result is that you can usually find someone quicker, but at a price, versus relying on the inventory of a consistently-available service force and mass-expansion. TaskRabbits opt into the system, but can just as quickly opt out, and at $50/hour for a cleaning (compared to many of Handy's offerings, this is remarkably expensive), they could potentially bring the company back from some not-so-great times.
Another company, Kleanapp, is entering the space this fall focused on green cleaning, simple pricing and focusing more on the consistent clean. When I was a HomeJoy customer, I found myself never able to lock down the same person, with the same issue with Handy. In Forbes' Ellen Huet's piece on HomeJoy, she mentioned that only 15-20% of customers re-booked, which suggests to me that no relationship was established between the cleaner and the house owner. That's where Kleanapp's trying to move things around. "We decided to move forward and enter the market anyway as we would take a different approach through differentiating ourselves by looking at the entire cleaning experience from a holistic perspective, with more long term potential to earn better income, reduce commuting times, and eliminate all the pain points that the competitors aren't addressing for their cleaners," says Justin Torbati, their CEO.
It's a logistical nightmare to organize a liquid cleaning business with inconsistent inventory - it's a time-consuming job that's different every time, and the only way to bring down those variables is a consistent client base that remains happy. Torbati has met with over 400 active cleaning professionals and companies (think more along the lines of the ones you'd find on Angie's List over on-demand startups) to understand how their businesses survived where HomeJoy didn't, learning their pain points (lack of support, response times and horror stories you'd probably find vomit-inducing) and building the company to fight them. Torbati also found that combating HomeJoy's model, one that would hire anyone who was willing to clean the floor (versus an experienced cleaner with 2 years of experience, background checks and training like theirs), with a slower, screening-based experience model would make for better economics. As a result Kleanapp pays cleaners starting at $12-15 an hour, progressing them to $30 an hour over time based on results.
Cleaning is ultimately a business that is built upon trust and consistency, which is where companies like HomeJoy, Handy and TaskRabbit have issues with. Though he did a good job, when I recently hired a last-minute cleaner from them, TaskRabbit sent me a guy with one review. There would be no relationship built there by the nature of their business - a one-and-done operation - but in the cases of HomeJoy and Handy (in particular, which pushes for weekly, bi-weekly or monthly cleans), their focus was on explosive growth versus gestating trust. That's why the (and lord, do I feel bad for them) cleaners I use are local, know my house, know my dogs and know my needs and work with me consistently. It's not like driving a car from point A to point B - a house never gets dirty the same way twice. It's more demanding, which makes the on-demand economy very difficult to apply.