Wag's new TOS charges users $1000 for going off Wag | Hacker News Reader

Wag's new TOS charges users $1000 for going off Wag

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216 pointsmoonka106 comments

This points to a basic issue with Wag's business model. If 'contractors' have an incentive to take on clients directly and cut out Wag, then they will do so. You can't stop that with an unenforcable TOS, because they're contractors. What a normal business would do at that point is admit Uber for dog walking was a bad idea, implement a reasonable finders fee system and pivot to connecting/reviewing/vetting/handling contracts/payments for owners and walkers. The business would be worth X to XX million dollars and everyone would be happy.

Wag, however, has over 300 million dollars in funding. So they're probably @#$%ed.

<s> Here's an idea for a startup, 'Uber for Uber for X'.

How many times have you acquired 300 million dollars in funding only to realize you missed a silly detail that will bankrupt your overvalued Uber for X startup? Never again!

Now anyone can easily build their own Uber for X in days! Use our centralized customer network for immediate network effects! As the network was the only real value your sheisty middleman-ware provided anyway, you're obviously now a contractor. If it turns out we don't add value to your Uber for X experience, taking on customers directly will of course result in a hefty fine. It's buried in the TOS because it's legally unenforceable, but we'll still try to bill you anyway!

Uber for Uber for X. Overvalued since 2019. </s>

I thought you were joking about the $300 million, but nope:

https://news.crunchbase.com/news/wag-need-300m-softbank-walk...

Jeffrey Housenbold, of Vision fund and Hilary Schneider, CEO of Wag both went to HBS.

Maybe they knew each other from before. Connections do work...

Then many more business are equally bad. ETF on your phone contract? Why? Because number portability. Lots of other businesses have implemented something similar. WAG has investment to protect on each customer it acquires. Just adding the thought of additional cost might reduce customer churn. Contractor or not, why is it not thought of as theft if a service provider contacts the customer directly? It seems to me that Wag is providing all the services you describe. In return for that investment they are trying to discourage customers from thinking they can save a buck and contractors from thinking they can build their own businesses on Wags dime.

The amount of funding Wag has is (I'm guessing) too high for just a match-making service. They need to own the continued services or they risk severe devaluation (still guessing).

It's not really about right and wrong at the end of the day (though I'm obviously biased on what I think is right/wrong). It's about the contractors doing what is best for themselves. Because dog walking is personalized, local, and occurs on a regular schedule, it benefits contractors to use Wag to build up a trusted client base, and then start their own business and cut out Wag. This is the issue with making Uber for 'Traditional Service'. There are a million gotchas which can tank things. While I'm sure there are more services than just ride sharing which check all the right boxes, I really don't think dog walking is one of them.

I actually work for a services firm, and employees starting their own businesses is something we think about. We have a one year non-compete, but it doesn't mean all that much. Instead, it's really up to us to make sure our employees feel they are paid and treated fairly, so they don't have a reason to break out on their own.

That said, we have employees. Wag has contractors.

If we worked with a contractor (we do) and they stole one of our customers, we would certainly stop working with that contractor. That said, if they were able to steal our customer, then we clearly weren't adding enough value, which is on us.

That's the real issue. If contractors can just up and leave Wag with their client base, then Wag isn't adding enough value. Even if they win the legal battle, they still have a failed business model.

Edit: Well, failed business model for the amount of funding they have. If they only had a couple million dollars in funding, they could just pivot as I'd stated above.

In my view theft is the same contractor or not. Both has an obligation to the company providing the work. I agree that a happy employee is less likely to try to steal customers but, the ethics gets a bit muddy for some. In those cases (in my own experience) the threat of a big stick is often enough. This applies to any business that puts trust in it's workers to handle customers or customer information.

With respect to your "enough value" statement, I understand. It also requires regular reminders about the level of service the customer gets from the company, not the individual. But that can't be all. Seriously, lots of businesses are like this. They need to trust their team to hold up their side of the basic work agreement.

Take a bar for example. If the bartender starts skimming cash through one of the various means, that's clear theft and depending on the amount, can be a felony. The threat of getting caught might be enough for most but, it still happens. It's messy dealing with people and we unfortunately need to do things that protect the company.

I'm not sure what valuation and funding have to do with a business model. Walmart looses more than 300mil in in theft per year. Should they be looking to get out of retail? This is just one problem every business has to deal with in one way or another.

source from 2015 but reported shrink is still around 1%: https://www.reuters.com/article/wal-mart-stores-theft/correc...

In my state (US), you can't legally tell a contractor when to work, or who to work with, unless you've specifically drawn up terms around those things and the contractor has agreed to them (and typically been paid extra for them). By doing these things by default without compensation, you've effectively made someone an employee, and must comply with the associated laws (ie healthcare). Much of the gig economy debate is about this 'contractor by default' gray area.

It's usually bad practice for contractors to take customers on directly, but it's very different from theft. In the case the match making firm is providing no value, I think most contractors would eventually decide to take a customer on directly. Most real contractors also negotiate every single deal, and have a significant voice in the terms of the deal.

Basically, if you want to treat someone like an employee, you need to fulfill the legal obligations for employees.

You can't hire a contractor to skirt regulation, treat them like an employee, then complain when they make the right move for a contractor.

State specific rules are all trumped by IRS rules when federal withholding is involved (always). The reason companies use contractors is to make the contractor responsible for federal withholding as it provides higher cash flow. There is a clear IRS test that almost all of these companies fail. Is the contractor wearing a company branded T-shirt? Yep: Employee. It's not all that grey, it's about enforcement and risk tolerance. However, I'm not arguing the FTE vs. contractor point. It doesn't apply here.

For reference: https://www.irs.gov/newsroom/understanding-employee-vs-contr...

I'm saying, at the most basic level, unless the company is specifically offering a "match making" service, the service provider is stealing from the company by cutting the company out of revenue they expected to collect. None of these services advertise as match makers. Examples of match makers in this space are yelp, angies list, thumbtack, home adviser. They each have a clearly different busines model from Wag.

Like I said though, this applies to any company. If a company has made the effort to attract and close the customer with some expectation of LTV, that value can be realized in a couple of ways. 1. Providing service to that customer in perpetuity. 2. Selling that customer to a service provider at a price that provides a profit. If the service provider cuts the company out without compensation, the provider has taken unfair advantage by being on both sides of the transaction, having nothing invested and being compensated for the work completed before stealing the customer.

*"In the case the match making firm is providing no value, I think most contractors would eventually decide to take a customer on directly."

I think you are applying the idea of value in the wrong place. The company has no obligation to provide anything except agreed upon financial compensation to the service provider. It's the break down in value to the customer where many of these services have fallen. In that case the customer can shop for a new service. It does not mean that the service provider can use their unfair advantage and build a business from the unhappy customer. Because in that case, the "match maker" did provide value. It provided the LTV of that stolen customer to the service provider. This, again, is why Wag is also applying a fee to the service provider. For the provider, stay on the platform, get paid or pay for the customers to build your own thing. What's wrong with that?

Here is the clause in Section 11:

As a Pet Owner, you acknowledge that Wag! is in the business of connecting Pet Owners and Pet Care Providers, and that said business is how Wag! earns its income. As a result, Pet Owner agrees that if Pet Owner solicits a Pet Care Provider to provide off-platform pet care services to Pet Owner whom Pet Owner first met and/or learned about through the Wag! platform, Wag! is entitled to charge both the Pet Owner and the Pet Care Provider a referral fee. This referral fee will be charged once per specific Pet Owner/Pet Care Provider services relationship utilized outside of the process provided for within the Wag! platform. Pet Owner’s referral fee will be $1,000. Pet Owner will first be notified in writing of Pet Owner’s obligation to pay the referral fee. Thereafter, Pet Owner hereby authorizes Wag! to charge any of your payment methods for the referral fee.

There's no way this is going to hold up in any kind of court. A 50-100$ fine might have flown under the radar, but 1000$ is enough incentive for taking this to a small claims court.

> There's no way this is going to hold up in any kind of court.

The terms of service also include a binding arbitration clause. In my limited understanding (Not a lawyer), how the arbitrators come to their conclusion need not have any basis in law, and in the vast majority of cases, and will not get reexamined by a real court.

I fear there is a real possibility for someone to be forced through a Kafkaesque nightmare before this gets resolved.

> The terms of service also include a binding arbitration clause.

Also wouldn't hold up.

In the US, it's legal: https://www.wsj.com/articles/supreme-court-sides-with-busine...

Wasn't that ruling about class action suits, though?

As I understand it, that's a very specific status that must be explicitly sought, and while it doesn't seem to be unusual under the US legal system, plenty of other places don't have a direct equivalent.

Interesting... the arbitration clause includes a clause that might (if I recall correctly) be a response to a case where the person making the complaint ran out of money (Arbitration filing fees (and the arbitrators hourly fee) tend to be much more expensive than regular court). A higher court eventually ruled that requiring excessive fees to resolve a disagreement wasn't constitutio9nal (equal protection?), and the case was allowed to restart in regular court. Basically you could agree to arbitration, but you couldn't agree to terms that completely blocked any path to justice.

Which, again if I recall correctly, is why companies started adding clauses like this to their arbitration agreements:

> If the arbitrator finds that you cannot afford to pay AAA’s filing, administrative, hearing and/or other fees and you cannot obtain a waiver from AAA, Wag! will pay them for you.

The company doesn't have to worry you might fall back to the regular court if they ensure the fees are paid. This couod keep you in arbitration, but this is a double-sided weapon: the company agreed to pay potentially many thousands of dollars in arbitration fees. Even this stupid $1000 termination fee wouldn't justify paying for arbitration. The company would be very strongly incentivized to settle quickly, before they are required to pay $2k filing fees and $400+ per hour arbitrator fees..

(I am not a lawyer, this is not legal advice. Talk to an actual lawyer about the specific TOS for proper advice!)

Also, some interesting language right after that promise to pay arbitration fees:

> In addition, Wag! will reimburse all such AAA’s filing, administrative, hearing and/or other fees for proceedings involving claims totaling less than $10,000 unless the arbitrator determines the claims are frivolous. Wag! will not seek attorneys' fees and costs in arbitration unless the arbitrator determines your claims are frivolous.

An interesting case of a company shooting itself in the foot via forced arbitration is Chipotle. They convinced a court to exclude employees who agreed to arbitration from a class action, so those employees each filed individually (helped by the class action lawyers), which has turned out to be vastly more expensive for Chipotle.

https://www.latimes.com/business/hiltzik/la-fi-hiltzik-chipo...

Also, of course, Uber:

https://www.reuters.com/article/legal-us-otc-uber/forced-int...

https://www.latimes.com/business/la-fi-uber-ipo-arbitration-...

Arbitration is still not great since the arbitrator doesn't have to be anyone with a legal background (most of the time it's a retired judge though) and has a huge incentive to rule in favor of the people paying them (especially if there's a big chance wag comes back to the arbitrator for future arbitration cases)

I am also not a lawyer, and wonder how far arbitration stretches: If an anbiter determines that damages are owed, and the person doesn't pay, does that dealing with that revert to the courts? Who enforces the arbitration -- The police? If an arbiter makes a decision which is clearly illegal, will a court refuse to enforce it?

IANAL but my understanding in my state is that the prevailing party will go to court and file a petition to confirm the arbitration award. The result of that is a judgment that is legally enforceable. Or conversely the loser can petition the court to vacate the arbitration award if they believe it to be unreasonable.

It's worse, apparently they also try to charge the walker (=contractor).

Which is a wholly different bowl of trouble. Charging the pet owner is anti-competitive unenforceable nonsense, charging the pet walker means a lawsuit for back pay and taxes given the obvious misclassification as contractors.

Exactly, IANAL but I'd guess that limiting a contractor like that (telling him who he can and he cannot do business with) would immediately classify him like an employee in quite a few states, unless wag is paying a $1000 dll exclusivity fee.

So any Wag "contractors" in a few employee protective states might be able to make a case.

Just a side comment: this is one reason why I love virtual credit cards.

In this way, you can create rules for businesses who levy overzealous extra charges and price increases.

What’s a good service for this?

One of more of my credit cards (issued by a major bank) provides this. However, I decided to use it one day and was greeted by the message...wait for it...

"This content requires the Adobe Flash Player."

I just checked and it still does, so I have yet to try it out.

Privacy does exactly this: https://privacy.com/

I’ve been waiting for this sort of thing. Naturally, since a TOS represents informed consent and is somehow a legally binding contract, then the next innovation is to add financial terms to them.

Hopefully, such a company will push the boundary so far that the entire world of TOS will be overturned by some court decision.

Imagine walking into a mall and ending up consenting by accident to the tos nonsense we have now.

> a TOS represents informed consent and is somehow a legally binding contract

Not necessarily. If you bury surprising stuff like this in the TOS, it's likely not enforceable. The court knows that nobody reads these endless TOS anyway and would likely rule the clause "unreasonable".

However, it can still work as a means of intimidation. Also, let's imagine Wag actually tried to collect those 1000$, some people may not even fight it.

I think this is a case of "there is no such thing as bad publicity". I don't use Wag, but like most "gig economy" platforms, I would expect it's already thoroughly despised.

My understanding is that TOS clauses are only binding when they're things users generally know when they sign up, such as "don't hack our systems", "you dont own our stuff by using it" and other CYA clauses. The only thing I don't think this would work for is binding arbitration, but those are joined by a "this agreement contains a binding arbitration agreement you must read" line at the top of the TOS and is valid under case law.

People would fight $1000.

If they wanted to hide a surprise fee like that, and hoped folks would let it slide, they should have kept it under $100.

When I was six I put up a sign saying my sister was stupid and then added a clause at the end, “$5 fine for touching this sign.”

She ripped the sign down and I never got my $5.

Suppose Alice does dog walking for both Wag! and Rover. A bit of Googling suggests that many walkers are on both, similar to the way many people drive for both Uber and Lyft.

Suppose Wag! sends Alice to walk Bob's dog.

Later, Rover also sends Alice to walk Bob's dog.

It Wag! going to try to collect $1000 from Bob for this? Or will they not consider this a violation of their terms because Bob did not actually solicit Alice for walking services. Bob solicited Rover, who sent Alice.

What if Bob specifically asks Rover to send Alice?

I don't think it is enforceable...

Also how would Wag know that you privately made an arrangement with Alice?

If the company has an industry-disrupting feature whereby they are able to locate and follow a canine (or its owner) wherever it might go, they could name that feature “Tail”.

This would mean they could get proof of referral by Wag tailing the dog…

It's an interesting setup. Wag sort of "owns" that relationship in a way....

This looks analogous to the terms you sign when engaging an employment recruiting agency to find you employees. Those terms have existed for ages and there's settled law behind them. Why is finding a person to walk your dog any different?

Disclaimer : I don't have a dog in this fight though we do have a couple of cats and a small gecko.

Ahh and this from the good burghers that want you to sign an NDA if they kill your dog[1]

I think their business model is wrong in more than one respect.

[1] https://nypost.com/2019/01/22/wag-killed-our-dog-and-tried-t...

For reference, Wag is the same scummy company which can't even handle accidents in a professional way and required an NDA to be signed before they'd compensate the victims[1] so this new twist is no surprise.

[1]: https://nypost.com/2019/01/22/wag-killed-our-dog-and-tried-t...

I'm just imagining one of the wag investors asking "What's to stop your walker who lives nearby the dog's owner, just doing the walk independently with the person they've built trust with?"

And the answer is "you have a shitty business model and this should have killed it years ago"

I don't know. Both Wag and Rover have fund-raised $300M from investors. I would think they'd have responded to that line of questioning at least once.

It's from SoftBank. It's raining funds from them atm

the answer would have to be that doing so would benefit the walker short term but over the long term would lead to them losing business because Wag would track the lost business and as such disqualify the walker from any more Wag business, thus walkers would not cheat on wag because wag would catch them doing it - probably by using something that they would call "machine learning" and "suspicious behavior tracking" that will also be "patent-able, someday"

There's limited demand on both sides of this though.

To take the Uber model - you are going to take n trips, in m cities, for y duration. Uber and their users want unlimited drivers, riders, cities piled into their app.

Wag is completely different. Your dog is in your home. It needs walking say once a day. I'd have thought the user would want the same reliable person doing it each day - and the walker would ideally want to build a stable of local dogs that need walking each day. Once both sides are happy and stable, you don't need the app.

They probably waved it off.

Since their solution is to sue their customers and affiliates in increments of $1,000, sounds like a pretty dumb business model.

> I would think they'd have responded to that line of questioning at least once.

Errm. You'd be surprised. Let's just leave it at that.

More seriously, the 'matching industry' has two flavours currently that can make money. There's the geographically diverse Uber model (I want the single nearest transport wherever I am) and the Tinder model (I want all the orifices near me).

For a dog-walking app (or many others, such as say house-cleaning) - you want an introduction to people locally, repetitively. Once you're happy with what you got through the app, you don't want the app.

Maybe what "Wags" should focus on is the broader scope of "I want a local tradesman to do something repetitively".

Provide introductions, take a nominal fee, allow end-user to change if they're unhappy (and take a very low fee for all the happy people)

I see this "match making" idea come up a lot. Why do you consider Wags in the same way as Tinder? If a dog walker (let's call him Bob) was doing well and wanted to scale his business. Bob hires 10 dog walkers by sharing his customer pool and adding more customers. Is it "match making" when Bob sends one of his employees to a new job?

It's really interesting to watch how much of HN armchair lawyers this and assumes it will not hold up for, well, no apparent legal reason that i can see.

With my actual lawyer hat on, I'll place my bet on the other side -

This is not a non-compete, and these clauses are quite commonplace in almost all placement agencies (IE nannies, employees, etc). Charging a fee to facilitate two people meeting and making a transaction is perfectly normal, and I'm not aware of any court striking them down. In fact, the opposite - i'm aware of plenty of court cases of employers recovering placement fees, etc, from employees, for example.

The only prohibition i'm aware of in california is payment of fees to unlicensed real estate agents for things licensed real estate agents would normally do.

The only interesting restriction you will find on recovery is whether the agency (wag here) was compliant with relveant licensing/etc statutes, and whether the two people actually met using wag.

If they did, ...

Folks are welcome to meet through other means, and it does not restrict anyone working for anyone.

I think it won't hold up. Not for legal reasons, but for economic reasons.

Say they don't pay the $1,000. What is Wag going to do? Sue the customer? Wags has no collateral that they can repossess. Taking the customer to court will almost certainly cost more than $1,000. If the cost of collecting this fee is greater than the fee itself then it's not in the company's interest to enforce it when customers refuse to pay. The result is that the fee effectively becomes optional.

Err, plenty of these agencies have enforced against their customers.

They won't end up in court, but binding arbitration. They will make an example of a few people and the rest will fall in line or run away, as per usual.

They are more likely to enforce against the dog walkers than random customers.

The customers will not care about that enforcement, it will be relatively effective in achieving their goal, etc.

In practice, they will most likely use this clause to prevent organized abuse, etc.

Remember also that you agree upfront to let them charge you. So it is going to be you who has to try to get the money back. (You will not likely win a CC dispute here)

the rest will fall in line or run away

Not a lawyer, not an economist, but this feels like the law of unintended consequences writ large: Sue your customers and they run away means you have no future customer and your business tanks.

A customer blocks all charges to their credit card from Wags and cancels their service. Wags issues a fine to a customer. The customer doesn't pay. Wags tries to bring the customer to arbitration. The customer gives no response. What happens then?

Wags could use a collections agency, but they'll only get a fraction of that money back. Not to mention arbitration usually costs hundreds of dollars per hour, with usually one hour (or longer) minimum, so I'm dubious they'll even bother going to arbitration.

Threaten both sides with expensive litigation if they don't stop, hoping that one of them will get cold feet, forcing the other to find another customer/dog walker.

Just having the term there is enough to act as a chilling effect, which is all they need.

They might also occasionally take a customer to court, at a loss, to scare others.

Can't they also sue for legal fees ? (Non US non lawyer here, but in my country awarding lawyer and court fees is pretty much automatic if you win)

I'm no lawyer either, but my understanding is that the defendant can try and get the plaintiff to pay for legal costs if they can prove that this was a strategic lawsuit (as in, the plaintiff sued for the primary purpose of coercing the defendant).

Since Wag! would be the plaintiff here, I don't think they could recoup any fees.

If I recall correctly, when an employer signs up with a headhunter service to bring resumes, you're also agreeing to a 1 year term of exclusivity. Often resumes are shared without a name or other basic identifying information until you agree to meet with them. If you end up hiring them anytime from then to 1 year out, you pay the headhunter their fee. Seems fair, only because the headhunter needs to make a buck.

Based on neighborhood traffic on Nextdoor and Facebook, dog walking is still a "hire your neighbor's kid" market, and Wag seems to be trying to elevate it to the gig economy where dogs are walked by those that need to put food on their own table.

Headhunters don't profit forever from every job they connect their clients with, and it seems Wag is trying to get away with changing those rules.

> Seems fair, only because the headhunter needs to make a buck.

Seems like a relationship built on deep mutual mistrust!

I spoke to a recruiter once who wouldn't tell me the company she was hiring for, presumably to stop me going directly. But it was a ludicrous situation because of course I'm not going to agree to spend my time interviewing with an unknown company!

I'm wondering how that would even work. Do they blindfold you and take you to a mystery location!?

No I presume they tell you after you’ve committed to interviewing. But who would commit to interviewing with someone (a day of your time) that you don't know?

I’m a recruiter. The contract is with the hiring company. Once I’ve submitted your resume to a company, with your permission, the company can’t hire you without paying me. So as long as I have your permission to put you forward for a role, and submit you to the client, you can cut me out of the process as much as you wish ... I’m still getting paid if you take the role.

Why can’t everyone operate with a bit more trust? Am I too hopeful and in reality people would try to screw you over if you were more open?

Yes.

I've found generally I can operate with almost complete trust, but there are always some bad actors AND people fuck up. Of the latter: programmer contacts me about a job I'm advertising. I tell them about the role. They want me to represent them but decide the best course of action is to apply directly to the client on their website (?!). When I find out, I contact the client and try and explain the situation.

First time I've worked with the client, and after some emails, they grudgingly accept that I have the emails to prove the situation, but the candidate fucked it all up ... however, this has engendered enough shitty feeling that they decide they don't want to continue working together.

I don't get paid for most of the candidates I put forward for roles (employers want 4-5 applicants per person they hire, at least), as they don't get the roles, and can't afford to just forgive a $20,000 commission because the candidate managed to gum up the workings.

TBH, the few times Ive worked with a few recruiters, they misrepresented the position they were recruiting for. Now, I'm not sure if it was a recruiter packaging the job to be 'ideal' or if it was HR having absolutely no clue what they were doing.

Never the less, when I walked in and sat down, it was nowhere near what I was expecting and what was conveyed to me.

Of course that's the worst situation. The recruiter doesn't get paid and spent time, the company wasted time, and the potential employee wasted time. But I have no issue in leaving money on the table for you if you do a good job about recruiting. And once you're paid after a year, I'll ask for a raise equal to what you got :) That tells me what they're really willing to pay for me.

There's hundreds of people working in the same space, everyone with a time horizon no farther than the next quarter. Of course they'll rip you off.

>The contract is with the hiring company. Once I’ve submitted your resume to a company, with your permission, the company can’t hire you without paying me. So as long as I have your permission to put you forward for a role, and submit you to the client, you can cut me out of the process as much as you wish ... I’m still getting paid if you take the role.

But isn't it the same for Wag?

The point is that you have two counterparts:

1) the company that could deny having actually employed your candidate but that cannot because there are records about the hiring

2) the candidate that (since he/she has nothing to loose) has no reason to deny being hired

What have Wag to actually prove that someone got again the same dog walker and that they met for the first time through Wag?

My favorite one is just typing the stuff they asked for into google and finding the original job posting and going 'so it's Chewy?'

Ask what industry the client is in. The recruiter will often give you that, which ought to tell you enough to identify them. Or if you sound self-assured and confident, they'll just tell you the name of the client. If you can't even get the industry out of them, pull your resume and terminate your relationship with the recruiter. "Not confident in your firm placing me with a quality firm"

As a contractor, I worked with the same group of recruiters for well over a decade. They were always forthcoming with who and what. I had only one problem in all that time and that was, in effect, my stuff-up. I had my resume in for the same position via my normal process and also via one directly to the company in question. I hadn't taken notice of this and when I found out, I apologised and withdraw my direct application. In that particular case, I didn't get the work. But I attributed that to my failure.

Otherwise, I found that working with the specific recruiting company to be beneficial to myself with them getting their ongoing cut of the business.

I usually am not given the identity of the company from a recruiter, but 95% of the time, I can find who it is with just a minute of searching, based on the language in the job description. It's pointless to take the id off when you don't rewrite the rest - and nobody has time for that.

If you have this rule:

> If you end up hiring them anytime from then to 1 year out, you pay the headhunter their fee.

why do you need to do this:

> Often resumes are shared without a name or other basic identifying information until you agree to meet with them.

Reduces the set of people covered by this to those that the company actually paid attention to through the headhunter, reducing the space for conflict.

Otherwise either the company can reach out directly and claim they didn't rely on the headhunter for that, or alternatively the headhunter has reasons to throw as many resumes as possible at the company just to "claim" more people.

You don’t, the latter is part of candidate marketing where you send resumes to companies to tempt them to sign a contract. Scummy practice imo, as the candidates are rarely told.

Sigh.

Did it take this long to realize that "gig economy" was all about employee arbitrage and the destruction of the bottom 1/5 of employees to 'day laborer with requirements of employees'?

Uber steals tips by 'lowering pay' of a ride. Same with Lyft. Same with that food delivery service. They're all alike: 'abuse the worker cause they're here - they don't have other choices'.

And all the while people "agree" to these abortions of contracts. Contracts usually have to be agreed to by someone of sound mind. So why isn't the threat of being hungry, homeless, medical care-less, and such not considered a invalidation of contracts? It's akin to a gun pointed at your head; it instead leads to poverty and homelessness.That has longer and just as severe ramifications.

The more direct solution to helping those in tough situations like you describe is enforcing stricter employee labor laws. Messing with contract law is another can of worms. There are plenty of situations between corporations or wealthy people where parties have no other reasonable choice (e.g. a fire sale of a company). That shouldn’t make contracts void.

Why "Messing with contract law", especially when it concerns a corporation to an individual, so terrible?

A company has piles of money and piles of lawyers. What do you, an individual have? You likely have a few thousand in the bank, more money locked away for old age, and can google a list of lawyers.

Point being; there is a significant power imbalance between an individual and a corporation. So absolutely yes, we as a society should be legally preventing and stopping many contracts, ToS, and other legal and quazi-legal instruments for abuses of all sorts.

That should apply from shitty Valley upstarts all the way to banking and old businesses.

I'm certainly not defending it, but these clauses can also be found in UK rental contracts made by estate agents. The clause will usually state that if you continue in the house after the term of the contract without renewing through the agency (and paying their exorbitant annual fees again) they will charge you a "finders fee" on the basis that you found the landlord through them originally.

No idea on the legality of it, but I guess it's likely legal since rental contracts are things that you read through and can even negotiate and amend, quite unlike the "contracts" that you click through when you sign up to a dog walking service.

I'm certainly not defending it, but these clauses can also be found in UK rental contracts made by estate agents.

Probably not any more. Letting agents, at least here in England, got so abusive with their terms and associated fees that it resulted in the Tenant Fees Act 2019, which came into effect in June this year. It isn't quite a professional death sentence for any agency that even thinks about charging a tenant for anything ever, but it isn't far off.

These (at least a few years ago) are also in some landlord-agency contracts. One I've seen stated they were entitled to 10% of the rent if the tenant stayed after the end of the original tenancy without a gap in the tenancy, even if you are no longer using their management services.

I never pursued it to see if it was actually legal - a strongly worded letter indicating that there _was_ a gap in the tenancy (a day, but it satisfied the strict wording of the contract), that the tenant was considering leaving due to the agency not fulfilling its contractual obligations, and that other properties would be removed at the end of their tenancy if this was the case, settled the issue without having to go that far.

Illegal in Wales since today.

Landlord letting fees banned in Wales to help tenants https://www.bbc.co.uk/news/uk-wales-politics-49542333

Homejoy the house cleaning startup has a very similar business model to Wag. and as Homejoy failed because clients would directly hire the cleaners vs going through Homejoy; Wag will be destined to the same failure unless they use scare tactics to block clients from hiring contractors directly

Damned if they do and damned if they don't.

Hopefully.

A platform isn’t destined to fail just because there’s a high rate of disintermediation.

Generally, the root cause for these sorts of businesses failing is when their customer acquisition cost exceeds their customer ltv.

Disintermediation causes customer churn which results in lower customer lifetime value. But, it’s only one of many important levers that determine the health of a platform business.

Then Wag will suffer the same fate as the rest of the gig economy companies: proprietors with skills/means don't need Wag to land clients, and they aren't about to give Wag the rights to their relationships with new clients, and those without skills or means will flood Wag's pool of workers.

I think Homejoy failed for more reasons than Disintermediation. One major issue all the early versions of this model missed is that a service like this are not a car ride. One time service volume doesn't cover customer acquisition. Logistics and customer service plays a huge role as well. Homejoy had a hard time handling not normal situations like: cleaners not showing up, substandard work (subjective), or locked doors. It appeared to me that scale was the main mission.

BTW, how do you justify cutting out the company in these services? Because they are contractors? If they were FTE's would it be different? Seriously asking because I want to understand.

Do people really let strangers walk their dogs?

It’s crazy, my dog is my best friend, there’s no way I’m trusting a random person with his life. If I can’t find someone to take care of him, I change my plans. If you can’t prioritise your dog you shouldn’t have one.

When we both worked, we had a dog walking service. It was the same walkers over and over (changing rarely), vetted by the agency, but essentially strangers to us.

I think it’s extremely common.

I don't understand? Walking a dog is not a fulltime job. Not sure how you could work, and still not have time to walk a dog?

I’m not sure what’s not to understand.

We would leave for work in mornings and return in the evening and didn’t feel it was appropriate to leave our dog home alone for 8-9 hours without a walk (social contact and the bathroom as well).

We board our dog with somebody we used through DogVacay before it merged with Rover.

To me, there's definitely some value was added by the service by doing some screening. I didn't ever pick somebody who had no reviews. But that's valuable for the first time, worth much less afterwards. We've used 6 or 7 different "sitters" because the first, first 2, first 3, etc. were booked or not available.

Our primary sitter went private. He's got magnetic signs advertising dog sitting on his truck. He charges the same rate as when we booked through DogVacay but we pay him in cash, not via credit card on the website. I text him to see if he's available and so far he has been. I think he's less busy than he was using the website but the flip side is that he's not paying a fee so I bet he nets out better or the same. Plus he's dealing primarily with repeat customers - dogs that he's familiar with, dogs that are familiar with him.

The matching has some value. It's too bad there isn't a fair way that he could have us as a repeat customer - which is due to him being somebody we think is trustworthy - but pay less to Rover. Something like 25% (or whatever they charge) for a first-time stay, 10% for repeats.

Not trying to be rude, but have a real question. Why do you feel that it's ok for you to cut Rover out of the deal? Disintermediation is always mentioned in these sorts of conversations. I'm interested to understand how people justify it.

Brought to you by the morons whose employee killed someone's dog and offered to pay for the dogs final expenses only if they agreed on pain of lawsuit not to talk about it.

Can they go bankrupt already?

The title should be fixed, it’s for using a provider you met through Wag.

This falls back to the classic thing - if your market is commoditised, then your product needs to be an experience to drive your revenue. And in all likely-hood, dog walking is not an industry "ripe for disruption" with enhanced experiences. Ride sharing took off because the experience of cabs was (in my experience) pretty much universally abysmal across the globe, and Uber/Lyft etc. actually provided a service that gave you a better experience.

The reality, as the commenters said in the linked reddit discussion, is that Wag has no real way to enforce this. Unsure on laws in the USA, but that provision would be highly illegal under Australian competition laws as exclusive sourcing is a finable offence, so have to assume similar provisions exist over there too in one way or another.

Pff. I don't know what lawyers they have but they are shitty as fuck. Of course, this is 100% unenforceable. If I was hit with one of these I would immediately sue in a small claims court. Those walkers are contractors. If they want to do this type of shit and have at least a small chance to earn those fees, start by hiring them as W-2 workers with benefits. This is just hypocritical.

Why sue them? Seems like a waste of time when you can dispute the charge with your credit card company.

That’s not the issue. Even if my credit card company reverses the charge, Wag could still seek for payment and send the charge to a collections agency, possibly affecting my credit score.

If you sue and win they have to annul the charge. You also create precedence which is crucial in American Law jurisprudence. $1000 USD is a significant amount of money for many people.

Wag is sitting in the exact same space as Homejoy which has the same fundamental problem - there is a natural relationship between both sides.

Beyond discovery there is no reason to keep the relationship on the platform.

Comparisons to Uber or AirBnB don't really work here as there is no natural relationship with your Uber driver and the lack of repeat visit to the same destination keeps repeats/relationships down.

Wag is fighting a capitalistic force. Beyond the initial discovery/relationship build - once the end user and dog walker has found someone they really like, what value is being added by staying on platform?

They're just taking money...

Lots of mention of disintermediation here. What about the relationship between the customer and the company? There are many ways a company with many employees provides value over the initial "discovery". What if schedules need to be adjusted? What if the service provider is sick? What if the service provider breaks something or worse? The business is offering a service not service provider. Take this another way. What about a smaller version of this business? "Bobs dog walking" grows to more customers than Bob can walk in a day. Bob adds employees. Is Bob just a match maker now?

I actually don't think this is all that bad. (I'm not sure if it would be enforceable---the classic common law rule is that liquidated damages clauses have to actually be a genuine estimate of the party's damages, not punitive... but it's also been a while since I've done contract law.)

It seems like the defense of this is fairly simple.

(1) People ought not to be able to use their matchmaking services without giving them a cut, that's shitty, and why not use contracts to enforce it---just the same as other kinds of matchmaking services, like job placement agencies, do.

(2) Also, it's probably safer for consumers to use their platform to have things like built-in verification of transactions, maybe(?) insurance(?) etc. anyway. Same reason it's a bad idea to take the AirBnB or Ebay or whomever transaction off-platform, because that's how crooks siphon away recourse for their frauds.

So why not use a little bit of coercion for everyone's good?

I mean, if I hire a contractor that I got through a staff augmentation agency, I have to pay a fee. That is part of the agreement with the agency. This seems the same?

I'd never let strangers walk my dog anyway. Heard too many bad stories. Put out pads if they really need to go during the day.

IANAL, but this sounds like tortious interference to me.

It's like if Tinder tried to charge for every time I fucked my girlfriend.

It's time to stop viewing contracts as an inherent good that must be obeyed, and instead as merely useful tools to help society. Until (more) limits are placed on them to protect individuals, we will continue descending deeper into a "well you agreed to it when you clicked OK" dystopia.

This certainly wouldn't be legally binding in Germany, is that actually different in the US?

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