HomeHero started up in California in 2012 and there was a great deal of promise with this company. The focus was connecting those clients who needed some type of support with the caregivers willing and able to work with them.
However, there has been a great deal of pushback against the company (along with several other similar operations in a variety of sectors) trying to force them to convert independent contractors (caregivers) into employees. Now the company is closing its operations and will be focused on some other endeavor in the future that hasn’t yet been made clear.
The main issue that some people have with companies like this is they claim HomeHero (among others) takes advantage of men and women looking for work and instead of hiring them as employees, they use them as independent contractors. Those independent contractors are going to incur extra costs while not reaping some of the benefits that full-time employees would receive.
As reported by Silicon Beat, in the blog, The death of a hero … a ‘HomeHero,’ that is, written by Marisa Kendall:
“Almost exactly one year ago, HomeHero lost its core identity when we were effectively forced to terminate our working relationships with 95% of our 1099 caregivers and required to adopt an inferior employment business model,” Founder and CEO Kyle Hill wrote in the blog post published on Medium. “In the process, HomeHero also lost a majority of its competitive differentiators in price, speed and scalability that allowed us to be so disruptive in 2014 and 2015, and it had nothing to do with competition.”
Fair labor advocates have been fighting against this independent business contractor model for a long time, and it has placed a great deal of pressure on these types of companies. HomeHero isn’t the first in California to shutters its operations when faced with being forced to change its business model. Homejoy was an on-demand cleaning company that almost closed down after it was forced to convert its contractors into full-time employees. They had been sued by those contractors.
Homejoy received a last minute bail out by another company in order to stay in business.
In an industry that is trying to find ways to become more streamlined and cost-effective, there continues to be enormous pressure from outside forces. However, those ‘outside’ forces offer no solutions that would help companies like HomeHero stay in business and remain lucrative. Now one more small, independent provider is turning away those who need support the most.
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