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Comment by smt88 | Hacker News Reader

Many stories about their problems, but here's one: http://fusion.net/story/142578/homejoy-uber-for-x-startups-m...

And maybe the main one: http://recode.net/2015/07/17/cleaning-services-startup-homej...

If Homejoy cleaners were going to be classified as employees, entitled to minimum wage and subject to being verified as citizens or legal residents, then this seems like the right move. I can't see how they would ever be able to compete on price with all of the independent outfits out there that employ undocumented workers.

It's one thing to sell your services at a loss while you're growing. In the home-cleaning business, though, there will never be a shortage of undocumented immigrants willing to work for less than minimum wage, quite possibly at a higher quality level. There would be no way to ever raise prices to fully cover costs without immediately losing out to that competition.

Wow. Lots of doublespeak from the founder in the Re/code piece. While it's true that "The [California Labor Commission’s] Uber decision...was only a single claim", I'm not so sure it was "blown out of proportion." You could also see it as the tip of a big iceberg. Presumably, that's what the investors they were courting thought.

If Uber have had defend their case and employee classification, perhaps HomeJoy may get their next round of funding and not have to close...but year, the timing sucks.

thanks, I had missed this

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