If you have any Homejoy deals in your hopper, you might want to book that appointment stat.
According to Re/Code, the company is shutting down July 31. The cause? Fighting worker classification lawsuits, the kinds that other companies in the share economy are currently battling, especially Uber.
CEO and co-founder Adora Cheung told Re/Code that the “ ‘deciding factor’ was the four lawsuits it was fighting over whether its workers should be classified as employees or contractors. None of them were class actions yet, but they made fundraising that much harder.”
Cheung also told Re/Code that “a lot of this is unfortunate timing,” citing the recent California Labor Commission’s Uber decision which stated that the company’s drivers should be classified as employees and not independent contractors. Companies do not have to pay payroll taxes, social security benefits or offer benefits to contract workers.
Cheung posted the news on Homejoy’s blog, writing that despite the fact that they “grew a global network of exceptional home service experts, and served hundreds of thousands of homes in 35 cities in the US, Canada, UK, Germany and France” the “unresolved challenges” in the space led to the decision.
Despite some significant funding, Re/Code reporting that Homejoy raised $40 million from sources including Y Combinator, PayPal founder Max Levchin, and Google Ventures, it was apparently not enough to keep operating and fight the lawsuits.