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Comment by jkyle | Hacker News Reader

> Effectively, from transaction #1 you're in a perfectly replicable pattern - Cleaner X comes to your house every Y weeks and works for Z hours.

This is the key failure.

Anyone's whose regularly procured cleaning services knows the dance. You find a reputable cleaning service, they send out a cleaner. If you don't like them, you keep asking for a different one. When you find one you like, you ask them what they'd charge if you deal with them directly.

Why should they pay an app developer (or cleaning service) a cut of their profit when they can just show up and earn it themselves?

Most of the house keepers I've known did this until they'd built up enough of a consistent clientele that they could break out on their own....eventually building their own "crew".

Cleaning services are only good for businesses who require a paper trail for tax deduction purposes and who aren't as price sensitive as individuals.

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So, is a "one time referral fee" business model the key to success?

This is effectively the yellow pages model, where cleaners pay for leads via advertising placements, and own the long-term relationship with the customer.

Is it working for http://www.angieslist.com/ (assuming thats their model)?

Seems to?

I dunno. My success rate was 25% at best. Found a few contractors I really liked and kept contact info for. And had a half dozen that only used the "deals" to try to land big remodeling jobs.

Probably, and for far more than just cleaning. For example, tutoring companies do all sorts of ridiculous things to try to prevent "disintermediation," but they take such massive cuts of a tutor's fees that a compatible student and tutor can split the difference (i.e. each take half of the company's 20% cut) and both benefit. Why on earth wouldn't they?

Yep. But then you've got to ask yourself whether you've really got a business model that supports a big global company, as opposed to a business model that works best when you're one person in an office who has personal relationships with every cleaner in town and a flyer on every lamppost.

Yep, thats what Thumbtack.com does.

The business model was articulated above. You join a successful crew and scrub toilets with them for a couple of years until you know the business and have people who trust you enough to employee you directly. The they spread the word among their friends and you get more clients. Eventually you get more than you can handle yourself and find some people you trust to help you out.

Basically for every category you have to really try and figure out what the customer needs are, the service dynamics, how to put together a proposition, etc.

Office By Q is a good example of really trying to understand customer needs and putting a compelling proposition into the marketplace.

For in-home cleaning, there might be a middle-ground. I could see trying out a few cleaners to be useful and selecting a favorite. Or maybe 2 different cleaners with different specialties rotating. But for just scheduling the same person at the same time, you can't really count on taking an ongoing cut.

My dad is a cab driver. I myself have a lot of experience managing cab business, I can tell you cab business works pretty much the same way. You can sign up with as many cab drivers you like and offer them as much business they can handle. Sooner or later they will find permanent paying customers and move on. Especially among elderly, kids and women.

Its the standard in every industry. Once you've built your ground, you never like to go through a third party.

That's one big reason it's hard to scale a service business. Why maybe a fraction of X when you can make X?

Its not just paying commissions to the third party. If you are a good taxi driver, who keeps their car clean, provides bottled drinking water to customers, are punctual, polite, trustworthy etc you will get many people who would like to call you directly instead of going through a service like Uber. And along the way you would have met many customers who are exactly like you- polite, trustworthy and nice.

It becomes a natural fit.

Uber kind of services work because they are currently burning millions of investor money to subsidize your travel. Once they run out of money, you are back to the same thing again.

Which is why some times you must do extra work for free, because it keeps people around you happy and in return they are indebted to do something in return for you(Recommend you, tip you, hire you etc)

Taxi services are different though - you might be nowhere near your valued customer when they call. And they might be more inclined to take an "OK" driver rather than wait 30 minutes for you to get to them.

>>you might be nowhere near your valued customer when they call

Traveling adhoc without planning is only for single 20 year olds start up techies. People with families, elderly etc generally have to plan in advance if they decide to do something.

And even then there's an advantage to getting a ride from an app. You can track your driver.

I can't count the times cabs just no showed when I was living in DC. Nearly missed a few flights.

Wrong. On a gross margin basis, Uber is wildly profitable.

No, that's wrong everywhere I've lived and traveled. With non-recurring trips (pretty much everything except commuting), you almost never migrate to a single provider. The advantages of tapping into a pool of providers is too great. In house-cleaning, there are no advantages to tapping into a pool, and in fact people are leery of it.

Consider the single largest market for limousine services: businesspeople traveling to and from airports. These people absolutely will pay extra for a reliable, no-surprises ride from a person they know, plus they know in advance exactly when they will travel. Uber offers little to no advantage for this group.

Uber's advantage comes from catering really well to ad-hoc, short-hop travel, but this is a different market.

Right. The person said "taxis". And the limo market is tiny compared to the Uber opportunity.

Works for taxis too. An acquaintance of mine has regularly (once or twice a week) had to travel from his home to the airport, about a $100 fare each way. He's used the same taxi driver for about 10 years - knowing that either this driver (or someone the driver vouches for) will be on time every time.

(taxi expenses are covered by his work but personal car travel is not, so he doesn't drive, go figure)

I also know a good number of people who have a "regular" taxi driver. Mostly in southern Europe specifically, though. Sometimes it's because they have some connection to the driver (relative / friend-of-a-friend / friend-of-a-relative) so they want to give that person their business rather than a random driver. Other times it's just someone they got a recommendation for and like. Even some tourists do, if they're the kind of tourist who goes to the same place every summer (e.g. the same town in Crete).

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