It’s 7:45 a.m., and 4-year-old Cheyenne skips out the door of her squat apartment complex in Southeast Washington, D.C., stamping her feet to make the lights in her sneakers twinkle. She has to go to day care on this morning in July, because for the past few weeks — unlike the months and months before — her father, Anthony Walker, has a job.
It’s just a two-and-a-half-hour shift: Some busy professional on the other side of the city had requested housecleaning from an online start-up called Homejoy. After dropping off Cheyenne, Walker lugs his rolling suitcase full of cleaning supplies to the bus stop. Scanning through Homejoy’s app on his phone, he pulls up the appointment, which says it will pay $51. String enough of those together, and it adds up to real money.
“These are all ‘ifs.’ If I get two jobs a day, that’s $2,000 a month,” says Walker, 35. That’s a whole lot better than nothing, which is what he’d earned since he was laid off from his job at a moving company last year, after which he and Cheyenne ended up spending time in a homeless shelter. But a full day of work is unpredictable; today his afternoon appointment had canceled. “This is the shortest week I’ve had in a minute,” he says.
The bus chugs into downtown, slowing to a crawl as it hits the morning rush hour. At 8:52 a.m., it passes the White House. By the time it gets to the West End, Walker is 20 minutes late, and he races the last few blocks, past flocks of suited diplomats and conference-goers, starting to sweat into his gray Homejoy-logoed polo shirt. He picks up the key from the concierge in a granite-and-marble lobby, and heads up to the room to get to work.
At the end of a five-hour trip back and forth, averaged out, he has made $10 an hour, without any taxes being withheld, as they would be if he were an employee. What’s more, he doesn’t get workers’ compensation, unemployment insurance, time off or retirement benefits — all the perks and protections of working for a traditional business.
That’s the tradeoff in moving toward independent contracting in the service economy, where people order services online just as they would order batteries or a pair of shoes. Homejoy is pitched toward younger people with disposable income who may feel awkward about using domestic help; clients don’t have to interact with the cleaner if they don’t want to, which makes it feel as though they’re ordering a product, not human labor.
The question for Walker and thousands like him is: Can these new kinds of jobs support the type of life they might have lived with the old ones?
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Every start-up has an origin story, and Homejoy’s is classic. Adora Cheung and her brother Aaron, then both 20-something engineers in San Francisco, wanted their home cleaned. They found the existing routes to find cleaners maddeningly old-school: Either go to an expensive maid service, or try your luck on Craigslist.
To them, that was an opening. Adora went to work for a cleaning service herself, she told the San Francisco Business Times, and found many inefficiencies in how the industry runs: Cleaners typically go to a central location before being dispatched, for example, which requires a central office staff and therefore additional overhead.
The main inefficiency, however, is the workers themselves. Under the old model, when they’re full-time employees, they’re much more expensive — both in the extra taxes they incur, and the potential legal damages if they do something wrong.
The solution, like many other “sharing economy” start-ups, is to create a frictionless Web interface that connects service providers with people who will pay for them. Technically, Homejoy is not a cleaning business at all, as it makes clear at the top of its extensive terms of service:
“THE COMPANY DOES NOT PROVIDE CLEANING SERVICES, AND THE COMPANY IS NOT A CLEANING SERVICE PROVIDER. . . . THE COMPANY OFFERS INFORMATION AND A METHOD TO OBTAIN SUCH THIRD PARTY CLEANING SERVICES, BUT DOES NOT AND DOES NOT INTEND TO PROVIDE CLEANING SERVICES OR ACT IN ANY WAY AS A CLEANING SERVICE PROVIDER, AND HAS NO RESPONSIBILITY OR LIABILITY FOR ANY CLEANING SERVICES PROVIDED TO YOU BY SUCH THIRD PARTIES.”
The upshot? If you’re a cleaner and you’re injured on the job, you’re out of luck. As an independent contractor, you’re not entitled to workers’ compensation; a Homejoy representative says its cleaners are “responsible for themselves.” Likewise, while Homejoy says it has a $7 million insurance policy to cover damages if a cleaner accidentally sets fire to a client’s house, or makes a client sick by using a bathroom rag on plates, or spills bleach on expensive carpet, the terms of service make clear that Homejoy can’t be taken to court.
What’s more, to maintain its relationship with employees as independent contractors, the company can’t train them or provide much in the way of material assistance. Theoretically, Homejoy is just organizing the masses of people who already offer their cleaning services independently — people who didn’t have the benefits of full-time employment — and taking a cut in exchange for access to an attractive marketing platform. (Walker had no professional cleaning experience when he applied to Homejoy but still cleared the bar.)
With that lightweight model, Homejoy has expanded to more than 30 cities and attracted $40 million in venture capital from the likes of Google Ventures. But at the same time, in large markets such as New York City, the company is having a hard time finding people with enough cleaning experience to pass the tests.
“Finding qualified talent, individuals who have experience working in this industry, bringing them in to interview and onboarding them — all that takes more time than it takes for a client to go online and book,” says Danny Rueda, the manager of the company’s northeast division. He says that only 30 percent of applicants make it through to become cleaners, but declined to disclose any of the company’s other metrics, such as the average wage earned by its cleaners in a week or the distance they travel to jobs.
Homejoy also loses people — like Samantha, a 25-year-old New York City-based cleaner, who asked that her last name not be published in order to preserve relationships with her friends who still work there. She says she joined as soon as Homejoy started two years ago, thinking that it would be an easier way to book clients than finding them on Craigslist, which she had done before.
Homejoy charges customers $25 to $35 an hour, and cleaners now make between $14 and the low-$20s, depending on experience. But Samantha found that giving the company a cut of those proceeds wasn’t worth it, especially because she felt that managers were unavailable when she had problems, and that the company didn’t give anything back in the form of insurance, time off or retirement plans.
“The pay rate was great,” Samantha says. “But I should be getting paid way more, because taxes are really hard to keep up with.”
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The older cleaning service industry, meanwhile, is on high alert. Many businesses, from the larger chains to the single-city independents, have noticed movement in their client and employee bases when both Homejoy and a similar site, Handybook, set up shop. And mostly, they insist that managing a traditional staff of full-time employees is better both for the clients and the workers.
Take Alison Palmer, who has built up her cleaning business in Virginia Beach, Va., for 29 years. She has 35 employees who clean three or four homes a day in teams of two. They get paid a percentage of each customer’s check, which she says evens out to $12 to $15 an hour.
Homejoy hasn’t showed up in Virginia Beach yet, but Palmer knows life will change when it does, and she’s counting on the older generation’s preference for personal interaction to keep her client base from switching over to the lower-cost service.
“The difference between me and Homejoy is they’re hiring me. My integrity, my know-how, my caring. They’re not hiring a computer,” she says. “To have someone in my house who I have no relationship whatsoever with would make me uncomfortable, and so would 90 percent of my clients. Or at least that’s what I’m hoping.”
For a business with a more nationwide footprint, consider Maidpro, which started in 1991 and has franchises nationwide. Maidpro compensates its employees through the other industry-standard model: an hourly pay rate, including all travel time. The wage varies by an employee’s experience, but chief executive Mark Kushinsky says that only 5 percent of the staff makes less than $10.10 an hour (the national average wage for maids and housekeeping cleaners is $10.64, according to the Bureau of Labor Statistics). On top of that, he pays payroll and Social Security taxes, worker’s compensation and some benefits such as paid time off, which differ across franchises.
The other part of the expense comes in the form of training. Maidpro instructs every new hire in a standardized, particular cleaning method, and Kushinsky thinks a cleaning service can’t make promises about the quality of its staff’s work without maintaining that level of control — and if it is, then maybe the worker isn’t truly an independent contractor. The Department of Labor has been cracking down on “misclassification” in other industries, and Kushinsky thinks “virtual maid services” such as Homejoy could be next.
“Even if you’re going to call yourself a ‘platform,’ and in your terms and conditions say, ‘We are not a cleaning service,’ people believe you’re going in to clean their home,” Kushinsky says. “The problem is, when you’re going into someone’s home and laying down chemicals, that just changes the game.” (Homejoy says it doesn’t train anyone, but does provide a checklist for cleaners to follow.)
It’s not just the cleaning industry, of course. Lots of other businesses, including taxis and hotels, have had to face the challenge of online platforms that marshal thousands of independent contractors that pay them fees for access to a potentially vast client base. Some of them also are facing legal scrutiny: Uber, for example, is facing a class action lawsuit over a number of issues, including allegedly misclassifying drivers as independent contractors under California law.
Shannon Liss-Riordan, the lawyer handling that case, says she’s considering a case against Homejoy as well. The outcome will depend on laws in different states, but she thinks the company’s model is vulnerable in Boston, where she’s based. “In a state like Massachusetts, it’s pretty clear cut that would not pass muster,” Liss-Riordan says.
In the meantime, while banking on their higher-touch model to keep customers, the traditional cleaning services aren’t standing still. Many have adopted various forms of scheduling software that keep cleaners bouncing smoothly from appointment to appointment, or apps that help customers book from their phones. The Association of Residential Cleaning Services International’s convention in Orlando in November will include a “disruptive innovation summit,” which executive director Ernie Hartong says will focus on “megatrends and seismic shifts.”
“Certainly the millennials and young folks like that, that’s the way they want to do business, and you have to do business with them,” Hartong says.
But ultimately, if Homejoy survives and thrives in the marketplace — and particularly if its relationship with independent contractors stands up to regulatory scrutiny — even traditional businesses could be fast followers.
“I think you’d see a pretty significant shift in that direction, because the cost associated with doing business in that way are materially less,” says Tom Stewart, the publisher of Cleaning Business Today. He devoted two publisher’s notes to the quandary, exhorting the old guard to “raise the professionalism” of their services in order to “start shaping public opinion on the importance of professionally delivered house cleaning.”
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Finished with his morning job, Walker is tired. He hasn’t eaten anything yet, besides a sugary soft drink, but he doesn’t stop as the downtown lunch rush begins; fast food is too expensive. For the long trip back, he hauls his suitcase onto the Metro. He gets transit refunded through D.C.’s welfare programs, although it took some doing to prove his employment status, as Homejoy doesn’t give traditional pay stubs.
It all seems a long way from the six-figure salaries and perks that Homejoy advertises for its software developer and marketing jobs. Instead, Homejoy cleaners are in competition with one another: On its internal system, cleaners can see how they rank by customer rating. Walker sits at 13 out of D.C.’s 42 cleaners with a 4.6; almost all 5s, except for a woman who complained that he hadn’t gotten the mildew entirely out of her shower grout.
Walker likes feeling as though he’s part of something new, and is rooting for its success. He has seen Handybook’s posters in the Metro, and felt like tearing them all down, so that more clients would flow to his quasi-employer rather than another.
“They just started. I feel like I’m in at the beginning,” Walker says.
Eventually, though, he’d rather be in the position of the bright young staff on laptops whom he had met when he was taking his cleaning test, one of the last times he’d see anyone from Homejoy in person.
“I sidled up to them and said, ‘How do I get to where you are?'”