
Amazon Takes Fresh Stab at $16B Housekeeping Industry - prostoalex
https://www.bloomberg.com/news/articles/2018-03-28/amazon-takes-fresh-stab-at-16-billion-housekeeping-industry
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2_listerine_pls
Amazon and Google will end up being the middle men for everything.

You simply can't compete with a company that has all the data, all the money,
the best engineers, the patents, etc... Once they like your business model,
you are out of business. This is happening at an increasingly faster pase.
There will be an Amazon AirBnB, and Amazon Uber, Amazon Food, Amazon Freight,
etc... the future of free markets is not free. They will own every slot in the
monopoly game and we will receive a basic income to keep the game going.

~~~
mseebach
> Amazon and Google

A couple of weeks ago, your list would have included Facebook. The future is a
lot less deterministic than you think.

~~~
castis
Yes, but does this make OPs forecast any less possible?

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mseebach
The OPs forecast is predicated on an understanding of companies like Google
and Amazon being so big and powerful that they are immune to the ebb and flow
that define normal market conditions and allow new entrants to prosper and old
companies to whither when they no longer create enough value for consumers.

My argument is that when Facebook, a company until a few weeks ago commonly
understood to be every bit as immortal as Google and Amazon, can be so deeply
upset by a scandal that isn't even predominantly their own making (I don't
mean to imply that FB isn't culpable, but CA did the bad stuff and explicitly
and broadly broke terms in doing so), this immortality is a lot shallower than
it seems. Facebook isn't dead, and won't be for a long time, but the idea that
Facebook moving into Airbnb's space will immediately monopolise it for the
detriment of consumers seems rather more of a silly fantasy than a "forecast".

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mabbo
> The online retailer is swapping the low cost of contract workers for the
> greater control of employing its own people. Doing so puts it on the hook
> for things like minimum wage, workers compensation and overtime pay. But it
> also lets Amazon determine how the workers are trained, which cleaning
> products they use and how they organize their schedules.

As an Amazon employee, I very much hope this trend continues. Amazon logistics
has gone the industry standard route of contractors hiring contractors and no
one seems to be happy with it at all. When Amazon is the employer, Amazon can
control quality better. Customer obsession means more than just lowest
possible price.

(My own personal opinion and of course I don't speak for the company)

~~~
Eridrus
I think the fact that cleaning services are a lot less standardized is what
drives the need to hire people. There's very little difference in logistics:
its both easy to do an average job (just take the route google maps suggests)
and its easy to monitor if contractors are doing a reasonable job.

The impression I get for cleaning services from people who have hired them is
that the person doing it will generally do the smallest/easiest amount of work
possible in the allocated time, which leads to poor customer
satisfaction/retention, so exercising more control as an employer is
necessary.

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Dowwie
Does anyone remember HomeJoy? See [1] and [2] below.

Amazon isn't necessarily using this business model so that it may
differentiate itself from hands-off matching services. In this case,
regulation and legal battles that have destroyed entrepreneurial enterprises
like HomeJoy are guiding Amazon. Improved customer experience is a side
effect.

[1] [https://www.forbes.com/sites/ellenhuet/2015/07/23/what-
reall...](https://www.forbes.com/sites/ellenhuet/2015/07/23/what-really-
killed-homejoy-it-couldnt-hold-onto-its-customers/#59188c4e1874)

[2] [https://www.recode.net/2015/7/17/11614814/cleaning-
services-...](https://www.recode.net/2015/7/17/11614814/cleaning-services-
startup-homejoy-shuts-down-after-battling-worker)

~~~
mdasen
Aaron Cheung, co-founder of HomeJoy, launched Homeaglow which seem like the
same business model as HomeJoy. Xiao Wei Chen, COO at HomeJoy, is also a co-
founder of Homeaglow.

I'm not saying it'll succeed this time, but two execs at HomeJoy have decided
to dedicate another 3 years of their lives to the idea with Homeaglow.

I know that the articles mention the lawsuits over classification of
independent-contractor vs employee, but nestled in there is a huge customer
acquisition cost against a low lifetime value. Offering an initial $19
cleaning means very high acquisition costs and you're getting customers who
probably won't return with $100 a month later. The Forbes article notes that
Handy has a much better customer retention rate and recurring revenue is so
important.

It also sounds like HomeJoy might have been over-staffed. Re/code notes that
20 employees of HomeJoy would be joining Googles product and engineering
teams. That seems like a lot of salary. I don't know what HomeJoy's site was
like, but Homeaglow's seems simplistic - some PHP just meant to handle the
booking/matching/reviews. Even small things like the forms are the kinda
simplistic looking ones where the zip-code box takes up the full width of the
form on a new line (the way it would if you grabbed Bootstrap and didn't want
to customize anything) rather than having a form with a more natural City,
State, Zip layout. But it gets the job done and looks like it can be
maintained with minimal effort.

If you have 20 employees of Google-caliber, you have to imagine a lot of
salary cost. From LinkedIn, it looks like Homeaglow is a 2-person shop.

It could just be that while it's a large industry, they had trouble retaining
customers and had a high run rate at HomeJoy. With a lower run rate and some
alterations, Homeaglow might be a happy business. They don't seem to discount
first cleanings hugely. It looks like they offer a free half hour on a 3 hour
cleaning for first-time users, but that means that someone is willing to spend
a hundred compared to someone that just sees a deal at $19. They also only
allow recurring plans that you can cancel, but it gets you into the mindset
that this should be a weekly/bi-weekly/monthly recurring expense.

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yesiamyourdad
Data point: I just moved and Amazon sent me a $20 off cleaning offer, which I
used to clean out my old rental this past weekend. They did a nice job (I
think, haven't gotten my deposit back yet). I was talking to the cleaner and
she said she used to work through HomeAdvisor exclusively but has put HA on
hold because Amazon takes less commission and keeps her just as busy.

The price was OK with $20 off, I know you can do better if you search out the
right service, but I imagine that you can already ask Alexa to schedule a
house cleaning, so the integration & convenience would have to be pretty
compelling for me to make it a regular thing.

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yellowstuff
The general problem with "Uber for X" is that mostly consumers don't want one-
time anonymous services. It works for cabs and probably for one-time cleaning,
but if I'm going to have someone clean my apartment every week I want the same
person there every time, and I think that's pretty typical.

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koolba
> A weekly cleaning of a 1,500-square-foot home runs about $156.

It doesn’t say what’s included but off hand that seems 2-4x expensive for a
weekly house cleaning of that size.

That (relatively) high pricing may be specific to Seattle though as they’ve
got a high ($15/hr) min wage laws there that would apply. Combined with non-
contractor employees, FICA, and benefits, they’re easily looking at $20+/hr in
labor costs.

~~~
ghaff
I have housecleaning every few weeks. It's about $100 and takes 2-3 hours for
about the same square footage.

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sokoloff
> "Any products that require additional services beyond opening a box, Amazon
> doesn’t do well," Kalyanam said.

Well, there’s AWS, which smashes that mold.

~~~
pjc50
How's AWS human customer service?

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sokoloff
Quite good for us. We have a team from AWS on-site every other Thursday (and
subject matter experts from AWS that we can call in as/if needed).

AWS started out as a REST-services-only take-it-or-leave-it business. They've
expanded quite substantially their human-provided sales, service, success
operation in recent years.

Even on my personal account (spending <$50/month), I get quick and sensible
email replies to my account-related inquiries.

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neogodless
I'm in the weird position where, we are family planning, but (to our
knowledge) unsuccessful, but started getting a series of emails from Amazon
congratulating us and offering up suggestions like vitamins, baby registry
and, of course, housecleaning services w/ discounts available.

(The first email was, to put it lightly, premature. Now we got one that says
"week one", and it could be right, or not. We don't know yet.)

These emails puzzle me, because I pored over my shopping history, and I can't
find any indicator that would tip off their algorithm.

But I do get the idea of trying to sell things to expectant mothers. Such as
convenience services.

~~~
mabbo
We may not be there yet, but there's certainly going to be a day where online
advertisers know a woman is pregnant before she does based on the changes in
her behavior.

I'm not sure if that counts as a dystopia or not. Is there a good word for
"Weirdtopia"?

~~~
AndrewKemendo
Helpful?

I mean honestly, the whole point of computing is to do things we as humans
can't do with data to make our lives easier. Now that it's actually doing
those things, people think it's creepy and scary.

If a computing system knows you are pregnant before you do then maybe it can
help you take steps (like taking pre-natal vitamins, abstaining from heavy
drinking/smoking, starting a savings account etc...) weeks before you would
have normally. How is that dystopian?

~~~
kaybe
I can't help but think about how it would give you more time to consider
carrying to term vs abortion, since there is a hard time limit and earlier is
better in terms of stress on the body and ethics.

This would make it a target for anti-choice groups as well as internal company
ethics, however, so it's a complicated issue.

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hownottowrite
Cached Version: [https://archive.is/SdQas](https://archive.is/SdQas)

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yalogin
They have the keys to your house through Ring and others. So now we see their
conquest of our homes coming to a completion.

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noemit
as a customer, I think it's great. Few purchases make me as happy as the
amazon house cleaning.

