2018-07-26

From carrot to stick: Fees, discipline, and debt on the Handy platform

From carrot to stick: Fees, discipline, and debt on the Handy platform

While there is now an increasing amount of public discussion and research on how labor platforms use various types of incentives to nudge workers toward preferred modes of conduct (e.g. logging onto the app to work, staying on the app for a little longer, or moving toward an ostensibly “hot” area), much less attention has been given to the role that fees play in workforce management and “quality control”. In other words, gig economy research has mainly been concerned with the carrot, much less with the stick. Yet during my study of app-based cleaning work in New York City I have talked to quite a number of cleaners who over the past months, if not years, have accumulated a significant amount of fees while operating through Handy – the biggest house cleaning and handyman service in the US. By most accounts these fees are easy to incur, can be hard to avoid, and seriously destabilize the income stream these cleaners – whom Handy calls “Pros” – are trying to establish and maintain. Here I want to dedicate a research note to this topic, to be elaborated on in future notes and publications, in order to show how fees function as a disciplinary tool that punishes Handy Pros for a variety of “offenses” that are often beyond their immediate control. Moreover, as these fees accumulate in the accounts of some Pros, they create a situation of debt bondage in which these cleaners spend periods of time working solely to pay off their debt to Handy, which deducts all outstanding fees from their earnings.

Before I get into the questions of 1) how these cleaners got into this situation and 2) why they do not just delete their account and leave Handy, it is important to first have a closer look at the kinds of fees Handy sanctions and their respective functions. If we look on the “Payments and Fees” page of Handy’s Professional Help Center, we see first off that the company charges its prospective cleaners a “background check fee” that will be deducted from a cleaning Pro’s first few payments. While this is interesting in itself, given that other gig platforms (e.g. Uber or Postmates) do not charge their workers for background checks, it is not the kind of fee I want to focus on here. The fees central to this research note each serve a disciplinary, punitive function – something that Handy implicitly acknowledges in their article titled “How to avoid fees on the Handy Platform?”. Fees exist as an instrument to regulate and correct the behavior of cleaning Pros marketing their services on the Handy platform (one could also argue that these cleaners work for Handy, but that’s another discussion). One can thus learn about the kinds of behavior Handy aims to regulate and deter by looking at the different types of fees it has chosen to create. Currently, the company charges the following disciplinary fees:

  1. Cancellation fee: intended to avoid “last-minute” cancellations that “erode customer trust and prevent other professionals from claiming the job.” In the US and Canada, Handy charges a $10 fee when a Pro cancels between 24 and 48 hours before the scheduled job, a $20 fee when the cancellation is between 4 and 24 hours beforehand, and a $40 fee when the Pro cancels 4 hours or less in advance.

  2. Missed job fee: If a Pro does not show up at all, s/he is charged a $50 fee (at minimum – I have been told it can go as high as the full payment for the job). This is to underscore the fact that “Handy has a very low tolerance for missing jobs.” If a Pro misses another job within 28 days, s/he will be permanently deactivated from the Platform.

  3. Late arrival fee: Since late arrival “causes customer displeasure”, Handy Pros are charged a $15 late arrival fee when they show up past the scheduled start time of a job without “promptly communicating with the customer”. What exactly counts as late arrival (15 minutes? 20? 30?) does not become clear from the website.

  4. Early departure fee: Handy informs its Pros that if they leave a job “before completing the entire service, and without the customer’s explicit approval”, they will be charged an early departure fee. It remains unclear exactly how high this fee is.

  5. Referral fee: If Pros offer their services to customers outside the platform, they will be charged a referral fee (again no information is given about the exact sum). This fee is thus expressly intended to push back against platform disintermediation. Instead of taking customers “off the platform”, Pros are advised to ask a customer to add them to their “Pro Team” – composed of their favorite cleaners.

When I asked cleaners how they experience and deal with these fees, a number of issues recurrently surfaced. First, I was struck by the pervasiveness of fees in the working lives of Handy Pros: most of the people I talked to acknowledged – often rather casually – that fees were part and parcel of working through the Handy platform and were incurred regularly. They seem to be accepted as an integral part of “doing business” with Handy, although some Pros also complained about them – especially when they were considered unfair. In general, however, most Pros agree that Handy is entitled to charge these fees, because it enables them to secure the quality of their product (i.e. the cleaning services provided by their Pros). If Handy wouldn’t do this, a majority argued, cleaners wouldn’t be held accountable for their mishaps and errant behavior, and the company would quickly lose customers – which would subsequently reduce cleaners’ job/income opportunities. Fees, according to this logic, are ultimately beneficial to all sides of the platform-mediated marketplace. However, upon further inquiry, the cleaners I interviewed did have gripes with particular fees and the criteria used to charge them.

To start with the early departure fee, a number of cleaners informed me that it was not completely clear to all parties involved what “the entire service” meant. I’ve been told of situations where cleaners would finish their tasks early but were hesitant to leave the job because they did not want to incur an early departure fee. When they would ask the customer for their permission to leave earlier, they were often confronted with requests for additional tasks. Such “extras” should be added and paid for by the customer through the app, but not every cleaner felt comfortable explaining this because they did not want to “be difficult” and run the risk of receiving a poor rating and/or a negative review. Some therefore acquiesced and performed the extras for no additional compensation, while others did speak up and explained that such extras cost money. At these moments it became clear to them that not every customer has a clear understanding of the parameters of a job they requested, partly because they are not required to provide detailed information about their home or the tasks that need to be done. As a result, what constitutes the completion of “the entire service” often remains a matter of dispute – a dispute in which Pros have significantly less bargaining power because of their vulnerability to reputational damage on the platform. When you, as a Handy Pro, want to avoid such discussions, you either do what you’re asked to do and stay until the job is officially over, or you leave early and just accept the fee.

With respect to the late arrival fee, many cleaners agreed that it is unavoidable to be late for a job every now and then, given that most of them use public transportation to get to their jobs and NYC buses – if not trains – are notorious for their delays. Of course these delays are taken into account and virtually all cleaners I spoke with told me they try to leave and arrive early for a job, but incidents happen and it’s easy to be a little late – especially when you do back-to-back jobs throughout the city (and sometimes New Jersey too). Handy instructs its Pros to contact the customer through the app in order to avoid fees, but this is not always possible when you’re in a (subway) tunnel and there is no reception. Interestingly, some cleaners claimed to barely notice late arrival fees, because they are “only” $15 and are automatically subtracted from their payments. Still, for others they slowly added up, together with other – more substantial – fees. This is something I will return to below.

Perhaps the most contentious fee category is the cancellation fee. This is partly because these are among the highest fees Handy charges its Pros, but they are especially controversial because many cleaners find them frustrating and unfair. The perceived unfairness is explained by the fact there is no way to reschedule with a customer if, for whatever valid reason, a Pro cannot make it to a job. A Handy Pro is only able to reach out to a new customer 3 hours in advance of the job and is solely allowed to communicate through the app (to protect the privacy of its users, Handy provides a proxy phone number via the app, on which the customer can be reached). In other words, if a Pro is faced with a family emergency (several cleaners told me about accidents and family members ending up in a hospital) that occurs between 48 and 3 hours before a new job, they have no way of reaching the customer and are forced to cancel the job, incurring a fee. But even when Pros are able to contact a customer, a few hours in advance, Handy’s system still does not allow them to reschedule without first cancelling the job, so either the customer or the Pro will need to move ahead with the cancellation and will thereby incur a fee. This situation doesn’t seem to serve the interest of the cleaner or the customer, instead appearing to line Handy’s already expansive pockets.

As I noted at the start of this research note, for some cleaners I interviewed all these fees add up over time. One cleaner, for instance, had been going through a difficult time in her personal life for some months, which forced her to cancel many of the jobs she had previously claimed (and kept claiming, because she intended to pick herself and her work back up again), thus incurring a string of fees that ended up indebting her to Handy. At one point she had (amazingly) accumulated over a $1000 in outstanding fees, which was an amount she couldn’t see herself paying back. She contacted the company about her problem (interestingly, Handy had not deactivated her account) and to its credit Handy agreed to waive her outstanding fees, but soon afterwards she started accumulating new fees because she still didn’t have her life in order. Right now, she remains determined to stick with Handy and pay off her remaining debt so she can start using the platform to make money again – so far all her recent jobs have merely paid off parts of her debt and she has had to find other sources of income. When I asked her why she does not just quit Handy by deleting her account, she answered that she wasn’t sure what the company would do to make her pay off her debt – would they go so far as to sue her? But besides these doubts, she just really wanted to “hold on to Handy” because it had been a reliable source of income for her over the years and leaving the platform would mean relinquishing future income opportunities. What if, during a rainy day, she would need quick access to money and she could not turn to Handy? Even though she had other income opportunities and was thinking of opening up her own business, the thought of not having Handy around unsettled her – despite all its problems.

While the above example is certainly exceptional, in terms of the amount of fees this person accumulated over time, it does tell us something about how Handy mobilizes disciplinary – punitive – instruments to regulate the conduct of its Pros, who are allegedly free from constraint or control and therefore qualify for the independent contractor status. Moreover, although the outstanding fees of other cleaners I interviewed didn’t reach the extreme sum mentioned in the above example, a number of them had similarly spent periods doing jobs without getting paid because all the money earned was automatically subtracted from their remaining debt to Handy. In this situation of debt bondage, Handy manages to tie some of its Pros to its platform and thereby maintains an essentially unfree labor relation that would be unacceptable in any other workplace.

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