![]() To fulfill the need of vetting cleaning professionals, Handy maintains a feedback system for their cleaners and a ranking system, which is a function of the quality and quantity of cleaners’ appointments. ![]() Handy’s bookings do come with insurance however, the need for insurance is eliminated mostly if customers plan to be at home during the cleaning appointment. Once customers find a great cleaner via the platform, there is nothing stopping them from getting the cleaner’s information directly and disintermediating Handy in the future. I would argue that the business model is fundamentally flaw as it is subject to the leaky bucket issue. Their valuation ballooned as a result, reaching $500 million for a 3-year-old company. The result is that Handy is now in 28 cities, including Canada and the UK, schedules more than 1 million bookings with 10,000 cleaners. At its peak growth phase, it onboarded between 300 and 400 cleaners a week, spending $200 to onboard each cleaner. On the employment side, it takes advantage of the economic downturn producing high number of cash-crunched, underemployed people and offers them starting hourly wage of $15 and the allegedly easy way to turn spare hours into wages. To attract new customers, Handy offers $25 for two-hour cleaning visit, a great deal in most cities. Handy claims the model is subject to the “network effect”, the more cleaners it has, the easier it is to schedule cleaning appointments last minute, at odd hours, the more customers it will attract, in turn, the more cleaners it will attract to the platform, and so on. It claims to maintain a 20% profit margin, in line with other “Uber for X” companies. Depending on customer’s zip code and cleaning frequency, Handy charges its customers between $30-$40 an hour and pays its cleaners between $15-$22 an hour. It aims to solve the problem of vetting cleaning professionals and scheduling cleaning appointments with a user friendly app and a subscription model. Handy was founded by two Harvard Business School students in 2012, to solve their problem of unassembled furniture and messy apartments they didn’t have time to clean. Thirdly, the way it treats its cleaner contractors has caused a lot of dissatisfaction, even class action lawsuits and could explode to destroy the platform’s financial sustainability. Secondly, Handy’s insistence on its subscription model, and providing little leeway around it, makes for an annoying customer experience. Firstly, as a platform connecting cleaners and customers, it has little power to prevent disintermediation. Handy, the “Uber for handy tasks” such as cleaning and handyman, is an example of ineffectiveness for three reasons.
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