Wag's new TOS charges users $1000 for going off Wag • Hacker News Board

Post by tvjunky » Mon, Sep 09, 2019, 6:40 PM UTC

caseymarquis wrote: post #109

tvjunky wrote: post #108

Earlier quoted context omitted.

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…

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?