[tvjunky]

Then many more business are equally bad. ETF on your phone contract? Why? Because number portability. Lots of other businesses have implemented something similar. WAG has investment to protect on each customer it acquires. Just adding the thought of additional cost might reduce customer churn. Contractor or not, why is it not thought of as theft if a service provider contacts the customer directly? It seems to me that Wag is providing all the services you describe. In return for that investment they are trying to discourage customers from thinking they can save a buck and contractors from thinking they can build their own businesses on Wags dime.

[caseymarquis]

The amount of funding Wag has is (I'm guessing) too high for just a match-making service. They need to own the continued services or they risk severe devaluation (still guessing).

It's not really about right and wrong at the end of the day (though I'm obviously biased on what I think is right/wrong). It's about the contractors doing what is best for themselves. Because dog walking is personalized, local, and occurs on a regular schedule, it benefits contractors to use Wag to build up a trusted client base, and then start their own business and cut out Wag. This is the issue with making Uber for 'Traditional Service'. There are a million gotchas which can tank things. While I'm sure there are more services than just ride sharing which check all the right boxes, I really don't think dog walking is one of them.

I actually work for a services firm, and employees starting their own businesses is something we think about. We have a one year non-compete, but it doesn't mean all that much. Instead, it's really up to us to make sure our employees feel they are paid and treated fairly, so they don't have a reason to break out on their own.

That said, we have employees. Wag has contractors.

If we worked with a contractor (we do) and they stole one of our customers, we would certainly stop working with that contractor. That said, if they were able to steal our customer, then we clearly weren't adding enough value, which is on us.

That's the real issue. If contractors can just up and leave Wag with their client base, then Wag isn't adding enough value. Even if they win the legal battle, they still have a failed business model.

Edit: Well, failed business model for the amount of funding they have. If they only had a couple million dollars in funding, they could just pivot as I'd stated above.

[tvjunky]

In my view theft is the same contractor or not. Both has an obligation to the company providing the work. I agree that a happy employee is less likely to try to steal customers but, the ethics gets a bit muddy for some. In those cases (in my own experience) the threat of a big stick is often enough. This applies to any business that puts trust in it's workers to handle customers or customer information.

With respect to your "enough value" statement, I understand. It also requires regular reminders about the level of service the customer gets from the company, not the individual. But that can't be all. Seriously, lots of businesses are like this. They need to trust their team to hold up their side of the basic work agreement.

Take a bar for example. If the bartender starts skimming cash through one of the various means, that's clear theft and depending on the amount, can be a felony. The threat of getting caught might be enough for most but, it still happens. It's messy dealing with people and we unfortunately need to do things that protect the company.

I'm not sure what valuation and funding have to do with a business model. Walmart looses more than 300mil in in theft per year. Should they be looking to get out of retail? This is just one problem every business has to deal with in one way or another.

source from 2015 but reported shrink is still around 1%: https://www.reuters.com/article/wal-mart-stores-theft/correc...

[caseymarquis]

In my state (US), you can't legally tell a contractor when to work, or who to work with, unless you've specifically drawn up terms around those things and the contractor has agreed to them (and typically been paid extra for them). By doing these things by default without compensation, you've effectively made someone an employee, and must comply with the associated laws (ie healthcare). Much of the gig economy debate is about this 'contractor by default' gray area.

It's usually bad practice for contractors to take customers on directly, but it's very different from theft. In the case the match making firm is providing no value, I think most contractors would eventually decide to take a customer on directly. Most real contractors also negotiate every single deal, and have a significant voice in the terms of the deal.

Basically, if you want to treat someone like an employee, you need to fulfill the legal obligations for employees.

You can't hire a contractor to skirt regulation, treat them like an employee, then complain when they make the right move for a contractor.

[tvjunky]

State specific rules are all trumped by IRS rules when federal withholding is involved (always). The reason companies use contractors is to make the contractor responsible for federal withholding as it provides higher cash flow. There is a clear IRS test that almost all of these companies fail. Is the contractor wearing a company branded T-shirt? Yep: Employee. It's not all that grey, it's about enforcement and risk tolerance. However, I'm not arguing the FTE vs. contractor point. It doesn't apply here.

For reference: https://www.irs.gov/newsroom/understanding-employee-vs-contr...

I'm saying, at the most basic level, unless the company is specifically offering a "match making" service, the service provider is stealing from the company by cutting the company out of revenue they expected to collect. None of these services advertise as match makers. Examples of match makers in this space are yelp, angies list, thumbtack, home adviser. They each have a clearly different busines model from Wag.

Like I said though, this applies to any company. If a company has made the effort to attract and close the customer with some expectation of LTV, that value can be realized in a couple of ways. 1. Providing service to that customer in perpetuity. 2. Selling that customer to a service provider at a price that provides a profit. If the service provider cuts the company out without compensation, the provider has taken unfair advantage by being on both sides of the transaction, having nothing invested and being compensated for the work completed before stealing the customer.

*"In the case the match making firm is providing no value, I think most contractors would eventually decide to take a customer on directly."

I think you are applying the idea of value in the wrong place. The company has no obligation to provide anything except agreed upon financial compensation to the service provider. It's the break down in value to the customer where many of these services have fallen. In that case the customer can shop for a new service. It does not mean that the service provider can use their unfair advantage and build a business from the unhappy customer. Because in that case, the "match maker" did provide value. It provided the LTV of that stolen customer to the service provider. This, again, is why Wag is also applying a fee to the service provider. For the provider, stay on the platform, get paid or pay for the customers to build your own thing. What's wrong with that?