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

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

#101

Post by manfredo »

palunon wrote: post #99
manfredo wrote: post #89

Earlier quoted context omitted.

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.…

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.

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

#102

Post by tvjunky »

jdeibele wrote: post #100

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 wen…

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.

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

#103

Post by tvjunky »

bedros wrote: post #36

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

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.

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

#104

Post by tvjunky »

goldcd wrote: post #15
goldcd wrote: post #9

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"

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…

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?

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

#105

Post by tvjunky »

irjustin wrote: post #80

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. W…

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?

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

#106

Post by tvjunky »

caseymarquis wrote: post #69

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 co…

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.

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

#107

Post by caseymarquis »

tvjunky wrote: post #106
caseymarquis wrote: post #69

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 co…

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 tha…

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.

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

#108

Post by tvjunky »

caseymarquis wrote: post #107
tvjunky wrote: post #106

Earlier quoted context omitted.

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 tha…

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 o…

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...

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

#109

Post by caseymarquis »

tvjunky wrote: post #108
caseymarquis wrote: post #107

Earlier quoted context omitted.

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 o…

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…

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.

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

#110

Post by goldcd »

bryanrasmussen wrote: post #24
colmvp wrote: post #11

Earlier quoted context omitted.

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.

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" t…

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.

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