
Wag's new TOS charges users $1000 for going off Wag - moonka
https://www.reddit.com/r/legaladviceofftopic/comments/cwe79d/does_this_seem_like_wag_is_trying_to_get_around/
======
caseymarquis
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 contracts/payments for owners and
walkers. The business would be worth X to XX million dollars and everyone
would be happy.

Wag, however, has over 300 million dollars in funding. So they're probably
@#$%ed.

<s> Here's an idea for a startup, 'Uber for Uber for X'.

How many times have you acquired 300 million dollars in funding only to
realize you missed a silly detail that will bankrupt your overvalued Uber for
X startup? Never again!

Now anyone can easily build their own Uber for X in days! Use our centralized
customer network for immediate network effects! As the network was the only
real value your sheisty middleman-ware provided anyway, you're obviously now a
contractor. If it turns out we don't add value to your Uber for X experience,
taking on customers directly will of course result in a hefty fine. It's
buried in the TOS because it's legally unenforceable, but we'll still try to
bill you anyway!

Uber for Uber for X. Overvalued since 2019. </s>

~~~
strictnein
I thought you were joking about the $300 million, but nope:

[https://news.crunchbase.com/news/wag-need-300m-softbank-
walk...](https://news.crunchbase.com/news/wag-need-300m-softbank-walk-dogs/)

~~~
yumraj
Jeffrey Housenbold, of Vision fund and Hilary Schneider, CEO of Wag both went
to HBS.

Maybe they knew each other from before. Connections do work...

------
ShroudedNight
Here is the clause in Section 11:

As a Pet Owner, you acknowledge that Wag! is in the business of connecting Pet
Owners and Pet Care Providers, and that said business is how Wag! earns its
income. As a result, Pet Owner agrees that if Pet Owner solicits a Pet Care
Provider to provide off-platform pet care services to Pet Owner whom Pet Owner
first met and/or learned about through the Wag! platform, Wag! is entitled to
charge both the Pet Owner and the Pet Care Provider a referral fee. This
referral fee will be charged once per specific Pet Owner/Pet Care Provider
services relationship utilized outside of the process provided for within the
Wag! platform. Pet Owner’s referral fee will be $1,000. Pet Owner will first
be notified in writing of Pet Owner’s obligation to pay the referral fee.
Thereafter, Pet Owner hereby authorizes Wag! to charge any of your payment
methods for the referral fee.

~~~
jammygit
I’ve been waiting for this sort of thing. Naturally, since a TOS represents
informed consent and is somehow a legally binding contract, then the next
innovation is to add financial terms to them.

Hopefully, such a company will push the boundary so far that the entire world
of TOS will be overturned by some court decision.

Imagine walking into a mall and ending up consenting by accident to the tos
nonsense we have now.

~~~
gridlockd
> a TOS represents informed consent and is somehow a legally binding contract

Not necessarily. If you bury surprising stuff like this in the TOS, it's
likely not enforceable. The court knows that nobody reads these endless TOS
anyway and would likely rule the clause "unreasonable".

However, it can still work as a means of intimidation. Also, let's imagine Wag
actually tried to collect those 1000$, some people may not even fight it.

I think this is a case of "there is no such thing as bad publicity". I don't
use Wag, but like most "gig economy" platforms, I would expect it's already
thoroughly despised.

~~~
judge2020
My understanding is that TOS clauses are only binding when they're things
users generally know when they sign up, such as "don't hack our systems", "you
dont own our stuff by using it" and other CYA clauses. The only thing I don't
think this would work for is binding arbitration, but those are joined by a
"this agreement contains a binding arbitration agreement you must read" line
at the top of the TOS and is valid under case law.

------
Nextgrid
For reference, Wag is the same scummy company which can't even handle
accidents in a professional way and required an NDA to be signed before they'd
compensate the victims[1] so this new twist is no surprise.

[1]: [https://nypost.com/2019/01/22/wag-killed-our-dog-and-
tried-t...](https://nypost.com/2019/01/22/wag-killed-our-dog-and-tried-to-buy-
our-silence/)

------
goldcd
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"

~~~
colmvp
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.

~~~
bryanrasmussen
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" that will also be "patent-able, someday"

~~~
goldcd
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.

------
DannyBee
It's really interesting to watch how much of HN armchair lawyers this and
assumes it will not hold up for, well, no apparent legal reason that i can
see.

With my actual lawyer hat on, I'll place my bet on the other side -

This is not a non-compete, and these clauses are quite commonplace in almost
all placement agencies (IE nannies, employees, etc). Charging a fee to
facilitate two people meeting and making a transaction is perfectly normal,
and I'm not aware of any court striking them down. In fact, the opposite - i'm
aware of plenty of court cases of employers recovering placement fees, etc,
from employees, for example.

The only prohibition i'm aware of in california is payment of fees to
unlicensed real estate agents for things licensed real estate agents would
normally do.

The only interesting restriction you will find on recovery is whether the
agency (wag here) was compliant with relveant licensing/etc statutes, and
whether the two people actually met using wag.

If they did, ...

Folks are welcome to meet through other means, and it does not restrict anyone
working for anyone.

~~~
manfredo
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. The result is that the fee effectively
becomes optional.

~~~
DannyBee
Err, plenty of these agencies have enforced against their customers.

They won't end up in court, but binding arbitration. They will make an example
of a few people and the rest will fall in line or run away, as per usual.

They are more likely to enforce against the dog walkers than random customers.

The customers will not care about that enforcement, it will be relatively
effective in achieving their goal, etc.

In practice, they will most likely use this clause to prevent organized abuse,
etc.

Remember also that you agree upfront to let them charge you. So it is going to
be _you_ who has to try to get the money back. (You will not likely win a CC
dispute here)

~~~
manfredo
A customer blocks all charges to their credit card from Wags and cancels their
service. Wags issues a fine to a customer. The customer doesn't pay. Wags
tries to bring the customer to arbitration. The customer gives no response.
What happens then?

Wags could use a collections agency, but they'll only get a fraction of that
money back. Not to mention arbitration usually costs hundreds of dollars per
hour, with usually one hour (or longer) minimum, so I'm dubious they'll even
bother going to arbitration.

------
BooneJS
If I recall correctly, when an employer signs up with a headhunter service to
bring resumes, you're also agreeing to a 1 year term of exclusivity. Often
resumes are shared without a name or other basic identifying information until
you agree to meet with them. If you end up hiring them anytime from then to 1
year out, you pay the headhunter their fee. Seems fair, only because the
headhunter needs to make a buck.

Based on neighborhood traffic on Nextdoor and Facebook, dog walking is still a
"hire your neighbor's kid" market, and Wag seems to be trying to elevate it to
the gig economy where dogs are walked by those that need to put food on their
own table.

Headhunters don't profit forever from every job they connect their clients
with, and it seems Wag is trying to get away with changing those rules.

~~~
chrisseaton
> Seems fair, only because the headhunter needs to make a buck.

Seems like a relationship built on deep mutual mistrust!

I spoke to a recruiter once who wouldn't tell me the company she was hiring
for, presumably to stop me going directly. But it was a ludicrous situation
because of course I'm not going to agree to spend my time interviewing with an
unknown company!

~~~
rwmj
I'm wondering how that would even work. Do they blindfold you and take you to
a mystery location!?

~~~
peteretep
I’m a recruiter. The contract is with the hiring company. Once I’ve submitted
your resume to a company, with your permission, the company can’t hire you
without paying me. So as long as I have your permission to put you forward for
a role, and submit you to the client, you can cut me out of the process as
much as you wish ... I’m still getting paid if you take the role.

~~~
chrisseaton
Why can’t everyone operate with a bit more trust? Am I too hopeful and in
reality people would try to screw you over if you were more open?

~~~
peteretep
I've found generally I can operate with almost complete trust, but there are
always some bad actors AND people fuck up. Of the latter: programmer contacts
me about a job I'm advertising. I tell them about the role. They want me to
represent them but decide the best course of action is to apply directly to
the client on their website (?!). When I find out, I contact the client and
try and explain the situation.

First time I've worked with the client, and after some emails, they grudgingly
accept that I have the emails to prove the situation, but the candidate fucked
it all up ... however, this has engendered enough shitty feeling that they
decide they don't want to continue working together.

I don't get paid for most of the candidates I put forward for roles (employers
want 4-5 applicants per person they hire, at least), as they don't get the
roles, and can't afford to just forgive a $20,000 commission because the
candidate managed to gum up the workings.

~~~
crankylinuxuser
TBH, the few times Ive worked with a few recruiters, they misrepresented the
position they were recruiting for. Now, I'm not sure if it was a recruiter
packaging the job to be 'ideal' or if it was HR having absolutely no clue what
they were doing.

Never the less, when I walked in and sat down, it was nowhere near what I was
expecting and what was conveyed to me.

Of course that's the worst situation. The recruiter doesn't get paid and spent
time, the company wasted time, and the potential employee wasted time. But I
have no issue in leaving money on the table for you if you do a good job about
recruiting. And once you're paid after a year, I'll ask for a raise equal to
what you got :) That tells me what they're _really_ willing to pay for me.

------
crankylinuxuser
Sigh.

Did it take this long to realize that "gig economy" was all about employee
arbitrage and the destruction of the bottom 1/5 of employees to 'day laborer
with requirements of employees'?

Uber steals tips by 'lowering pay' of a ride. Same with Lyft. Same with that
food delivery service. They're all alike: 'abuse the worker cause they're here
- they don't have other choices'.

And all the while people "agree" to these abortions of contracts. Contracts
usually have to be agreed to by someone of sound mind. So why isn't the threat
of being hungry, homeless, medical care-less, and such not considered a
invalidation of contracts? It's akin to a gun pointed at your head; it instead
leads to poverty and homelessness.That has longer and just as severe
ramifications.

~~~
smallgovt
The more direct solution to helping those in tough situations like you
describe is enforcing stricter employee labor laws. Messing with contract law
is another can of worms. There are plenty of situations between corporations
or wealthy people where parties have no other reasonable choice (e.g. a fire
sale of a company). That shouldn’t make contracts void.

~~~
crankylinuxuser
Why "Messing with contract law", especially when it concerns a corporation to
an individual, so terrible?

A company has piles of money and piles of lawyers. What do you, an individual
have? You likely have a few thousand in the bank, more money locked away for
old age, and can google a list of lawyers.

Point being; there is a significant power imbalance between an individual and
a corporation. So absolutely yes, we as a society should be legally preventing
and stopping many contracts, ToS, and other legal and quazi-legal instruments
for abuses of all sorts.

That should apply from shitty Valley upstarts all the way to banking and old
businesses.

------
rwmj
I'm certainly not defending it, but these clauses can also be found in UK
rental contracts made by estate agents. The clause will usually state that if
you continue in the house after the term of the contract without renewing
through the agency (and paying their exorbitant annual fees again) they will
charge you a "finders fee" on the basis that you found the landlord through
them originally.

No idea on the legality of it, but I guess it's likely legal since rental
contracts are things that you read through and can even negotiate and amend,
quite unlike the "contracts" that you click through when you sign up to a dog
walking service.

~~~
Silhouette
_I 'm certainly not defending it, but these clauses can also be found in UK
rental contracts made by estate agents._

Probably not any more. Letting agents, at least here in England, got so
abusive with their terms and associated fees that it resulted in the Tenant
Fees Act 2019, which came into effect in June this year. It isn't quite a
professional death sentence for any agency that even thinks about charging a
tenant for anything ever, but it isn't far off.

------
bedros
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

~~~
smallgovt
A platform isn’t destined to fail just because there’s a high rate of
disintermediation.

Generally, the root cause for these sorts of businesses failing is when their
customer acquisition cost exceeds their customer ltv.

Disintermediation causes customer churn which results in lower customer
lifetime value. But, it’s only one of many important levers that determine the
health of a platform business.

------
crispyporkbites
Do people really let strangers walk their dogs?

It’s crazy, my dog is my best friend, there’s no way I’m trusting a random
person with his life. If I can’t find someone to take care of him, I change my
plans. If you can’t prioritise your dog you shouldn’t have one.

~~~
sokoloff
When we both worked, we had a dog walking service. It was the same walkers
over and over (changing rarely), vetted by the agency, but essentially
strangers to us.

I think it’s extremely common.

~~~
megaremote
I don't understand? Walking a dog is not a fulltime job. Not sure how you
could work, and still not have time to walk a dog?

~~~
sokoloff
I’m not sure what’s not to understand.

We would leave for work in mornings and return in the evening and didn’t feel
it was appropriate to leave our dog home alone for 8-9 hours without a walk
(social contact and the bathroom as well).

------
jdeibele
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 went private. He's got magnetic signs advertising dog
sitting on his truck. He charges the same rate as when we booked through
DogVacay but we pay him in cash, not via credit card on the website. I text
him to see if he's available and so far he has been. I think he's less busy
than he was using the website but the flip side is that he's not paying a fee
so I bet he nets out better or the same. Plus he's dealing primarily with
repeat customers - dogs that he's familiar with, dogs that are familiar with
him.

The matching has some value. It's too bad there isn't a fair way that he could
have us as a repeat customer - which is due to him being somebody we think is
trustworthy - but pay less to Rover. Something like 25% (or whatever they
charge) for a first-time stay, 10% for repeats.

~~~
tvjunky
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.

------
michaelmrose
Brought to you by the morons whose employee killed someone's dog and offered
to pay for the dogs final expenses only if they agreed on pain of lawsuit not
to talk about it.

Can they go bankrupt already?

------
SamReidHughes
The title should be fixed, it’s for using a provider you met through Wag.

------
breeny592
This falls back to the classic thing - if your market is commoditised, then
your product needs to be an experience to drive your revenue. And in all
likely-hood, dog walking is not an industry "ripe for disruption" with
enhanced experiences. Ride sharing took off because the experience of cabs was
(in my experience) pretty much universally abysmal across the globe, and
Uber/Lyft etc. actually provided a service that gave you a better experience.

The reality, as the commenters said in the linked reddit discussion, is that
Wag has no real way to enforce this. Unsure on laws in the USA, but that
provision would be highly illegal under Australian competition laws as
exclusive sourcing is a finable offence, so have to assume similar provisions
exist over there too in one way or another.

------
whoisjuan
Pff. I don't know what lawyers they have but they are shitty as fuck. Of
course, this is 100% unenforceable. If I was hit with one of these I would
immediately sue in a small claims court. Those walkers are contractors. If
they want to do this type of shit and have at least a small chance to earn
those fees, start by hiring them as W-2 workers with benefits. This is just
hypocritical.

~~~
smallgovt
Why sue them? Seems like a waste of time when you can dispute the charge with
your credit card company.

~~~
whoisjuan
That’s not the issue. Even if my credit card company reverses the charge, Wag
could still seek for payment and send the charge to a collections agency,
possibly affecting my credit score.

If you sue and win they have to annul the charge. You also create precedence
which is crucial in American Law jurisprudence. $1000 USD is a significant
amount of money for many people.

------
irjustin
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.

Wag is fighting a capitalistic force. Beyond the initial
discovery/relationship build - once the end user and dog walker has found
someone they really like, what value is being added by staying on platform?

They're just taking money...

~~~
tvjunky
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?

------
paultopia
I actually don't think this is all that bad. (I'm not sure if it would be
_enforceable_ \---the classic common law rule is that liquidated damages
clauses have to actually be a genuine estimate of the party's damages, not
punitive... but it's also been a while since I've done contract law.)

It seems like the defense of this is fairly simple.

(1) People ought not to be able to use their matchmaking services without
giving them a cut, that's shitty, and why not use contracts to enforce it---
just the same as other kinds of matchmaking services, like job placement
agencies, do.

(2) Also, it's probably safer for consumers to use their platform to have
things like built-in verification of transactions, maybe(?) insurance(?) etc.
anyway. Same reason it's a bad idea to take the AirBnB or Ebay or whomever
transaction off-platform, because that's how crooks siphon away recourse for
their frauds.

So why not use a little bit of coercion for everyone's good?

------
pbecotte
I mean, if I hire a contractor that I got through a staff augmentation agency,
I have to pay a fee. That is part of the agreement with the agency. This seems
the same?

------
jimmaswell
I'd never let strangers walk my dog anyway. Heard too many bad stories. Put
out pads if they really need to go during the day.

------
microtherion
IANAL, but this sounds like tortious interference to me.

------
Simon_says
It's like if Tinder tried to charge for every time I fucked my girlfriend.

------
deogeo
It's time to stop viewing contracts as an inherent good that must be obeyed,
and instead as merely useful tools to help society. Until (more) limits are
placed on them to protect individuals, we will continue descending deeper into
a "well you agreed to it when you clicked OK" dystopia.

~~~
luckylion
This certainly wouldn't be legally binding in Germany, is that actually
different in the US?

