Which means the price might not be sustainable once the venture capital funding runs out, and would have to be raised to cover the company's real expenses.
Think about it:
- Prim is probably paying as much as anyone else would for the laundry services. (Why would a well-rated laundry service give Prim a discount from their usual rates? A laundry business probably has pretty slim margins, and a good one probably can get plenty of customers without offering discounts.)
- Can the extra $5 pay for the cost of the person who is picking up and delivering the laundry (a truck driver probably gets much more than minimum wage), the fuel and maintenance of the trucks, insurance, office space, computers, etc. and still provide profit for Prim?
Do the people running this business know anything about actually washing clothes? What makes you think they could set up and operate a commercial laundry themselves and make a profit doing it? These are a couple of young Stanford grads who originally wanted to do an "in-video advertising platform".
"discounted rental space..."
Why would someone rent them commercial space at a discount?
"and hybrid or electric cars to further cut down costs..."
I don't think cars are economical for doing laundry pickups. How many 20 pound laundry bags can you fit into a car before having to go back to the laundry to drop them off? That would waste a lot of driver time, which is probably much more expensive per hour than gas.
Funny, isn't it?
Look, I applaud anyone out there hustling for business. And in that sense, this is a very interesting small business idea. But I'm not sure how it needs (deserves? earns?) VC funding. It isn't terribly novel (there are 4 or 5 SF competitors listed in the article), there's no barrier to entry and I don't fully understand how $25 can cover all courier/labour costs without it using minimum wage labour.
Yet, somehow people are making the leap that the path leads from from here to replacing all home washers and driers with large, centralized, industrial laundromats, with hybrid electric logistics, all run by solar power? Interesting.
I think this is a tough thing to scale. But I've been wrong before.
And they definitely couldn't be doing something clever to increase profits.
They must not know anything about "actually washing clothes".
I think the SV deadpool is rife with founders who spent too little time thinking about operational costs and margins.
I mentioned HCs and ECs as a way to save gas. They can have their own solar charging station, completely becoming independent until Tesla releases an e-truck.
That would depend on how many different pickups/dropoffs the drivers can get per units of time/fuel.