In what could be the first of several shakeups in the "on-demand" / "gig economy," San Francisco-based startup Homejoy is calling it quits on July 31. The primary reason: It's fighting four lawsuits over whether their independent contractor house-cleaners should be considered employees. It's the same problem Uber, Lyft, Instacart, Caviar, and a host of other companies are likely to be facing in the coming months or years, but Homejoy CEO Adora Cheung tells Re/Code that the recent decision against Uber by the California Labor Commission "was blown out of proportion" in the eyes of investors, and among other press about the employment law problem it has made raising funds for the company all the more difficult.
As of May, Homejoy, which provides both cleaning and home repair services, was looking to get bought, as the Chronicle reported, but it looks like a deal to get acquired by bigger rival Handy, based in New York, fell through.
On the Homejoy blog, Cheung says, "We’re proud to be the pioneers of this space... Although we succeeded in many ways, we also faced obstacles. There are still many unresolved challenges in the home services space."
In three short years Homejoy raised $38 million in startup funds and expanded to 35 different cities. The company has 100 employees and employs over 1,000 independent contractors.
Who'll be next?!