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Is this the end for Handy?

3-month minimum contract marks a radical departure from startup's previous policy.

Handy, which was one of the innovators of the "on demand" cleaning service stopped taking one time cleaning appointments in 2016.  Today we noticed an even bigger change, as of 1/11/2017 Handy requires that consumers agree to a minimum term of 3 months of cleaning with the default being 6 months.  In addition, they no longer seem to offer a discount with more frequent service.  Prices for weekly, bi-weekly, and monthly service appear to be the same for each contract term.  Clients cannot cancel their appointments but they can reschedule them as long as they give 24 hours notice.  If a client terminates their service early there is a $150 contract termination fee.  The link below is to their FAQ for their new plans.

https://help.handy.com/hc/en-us/articles/215568487-What-s-the-cancellation-policy-

I tested both the website and the Handy app and on both platforms these contracts are now the only options available for the several markets we tested (the FAQ mentions DC as exempt). Handy has several well-publicized articles about how they were not able to raise more funding but they planned to be cash flow positive in the first quarter of 2017. As a cleaning business owner myself, I have often been asked by consumers if they are signing up to a long term contract. I have always been a little surprised when consumers asked this question because I know of almost no services that do require a long term contract, but I think the fact this question was asked so often shows the resistance from most consumers to this idea.

I do know some cleaning service owners that allow consumers to sign long term contacts and prepay services for a discount but this is normally only after clients have tried the service several times and are happy with the results. The idea of requiring a 3 month commitment to sign up for any service is definitely outside of the industry trends we have seen, which all seem to be giving the consumer more control over their schedule and not less.

Do you think this change is the death knell for Handy or are they just following the trends moving from the on-demand economy to a subscription based model? Join the discussion on Facebook

Derek Christian is founder and owner of My Maid Service, Cincinnati's largest, independent professional cleaning company. Prior to that, he spent twelve years at P&G working on household cleaning products. Derek is Co-publisher and Director of Business Development & Sales for Cleaning Business Today.

 


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