This past Tuesday (9/10/19), California legislators approved a landmark bill that will require companies to treat contract workers as employees when the contractor's work is considered "part of the main business." In response, Uber declared that they were not subject to the new law because it does not consider its drivers to be at the core of their business.
At Rinse, we feel very differently about our Valets: they have always been at the core of our business and are at the frontlines of our customer experience. To that end, the new legislation doesn’t impact us at all because we have classified our Valets as W-2 employees since the very beginning (2013).
Read our CEO and Co-Founder Ajay Prakash's Forbes article from 2015 to learn more about why it's so important to Rinse to have our delivery drivers receive employment status.
Forbes Article from July 15, 2015
Over the past few years, there has been a growing debate around whether someone is an employee or independent contractor, particularly in “on-demand economy” companies that require a staff of drivers and other service providers to deliver their product or service to the end customer. The recent ruling by the California Labor Commission on how Uber should classify its drivers has re-ignited this debate.
While I can’t opine on how other companies have decided to classify their workers, I wanted to provide perspective on how we formed our opinion on the subject at Rinse in case you are currently thinking about starting a company where delivery is core to its value proposition.
At Rinse, a critical part of the experience we’ve created for our customers is the interaction they have with our Valets (which is what we call our drivers) at the point of pick-up and delivery. Our Valets are on the front lines of the customer experience, so we made the decision to classify them as employees (“W-2”) early on. Depending on how you use your delivery staff, you might decide to take a different approach, but here are three reasons why W-2 status made sense for us — and why it could make sense for your drivers too.
It’s the Right Thing to Do
When starting a company, it’s imperative for founders to remove any friction that may stand in the way of getting their product to their customers to collect feedback. Given that, you want to spend less time early on agonizing over decisions like whether to classify your staff through W-2 or 1099 forms, and instead spend more time on actually serving your customers and improving your product.
Even though classifying your drivers under 1099 status is quicker and cheaper (especially since you avoid payroll taxes), it’s important to understand what exactly your drivers will do and how they will do it. At Rinse, our Valets work less than 20 hours per week (which one person told me early on puts us in a “gray area” in the employee vs. contractor debate), but we provide them with a uniform, make their schedule, tell them where to go and when to go there, and supply them with most of their equipment. According to IRS guidelines, those are all indicators that W-2 status is most appropriate for them. If you expect your drivers to do similar things, you might draw the same conclusion that we did.
It’s Better for Your Drivers
Although W-2 status is more expensive for your company, it is much better for your delivery staff in the long run. Financially, they end up paying fewer taxes each year, are compensated for overtime hours and are reimbursed for each mile driven. More importantly, though, it signals to your drivers that they are a critical part of your team (which they are!).
At Rinse, we invest enormous amounts of time in training our Valets so they have complete product knowledge to best serve our customers and the appropriate context to understand the importance of their role. This investment has led to better performance, happier valets and incredibly high levels of retention (and in some cases, Valets have been promoted into key roles on our customer experience and operations teams), and is an investment we would be less likely to make if we classified our Valets as merely contractors.
As you think about building your team, consider using the W-2 status as a strong motivational tool to get the best out of your delivery staff.
It’s Better for Your Customers
Most importantly, investing in your delivery staff is ultimately better for your customers. One thing I’ve heard consistently from customers since our early days is that we have the friendliest and most competent delivery staff out there. This is because happy employees who really care about their company are more likely to go above and beyond to make sure their customers are happy. In addition, sending a consistent delivery staff to your customers only serves to increase the level of trust they will have in your brand and in your service. At least, that’s what we’ve seen at Rinse.
If delivery is core to your product offering, it’s worth your time to think through how you want to classify your drivers. If you’ve noticed the recent spate of lawsuits against delivery companies that have chosen to go the 1099 route, it might be wise to classify your drivers as W-2 employees today. That said, regardless of how the “W-2 vs. 1099″ debate evolves, make sure you take a people-first approach and take care of all your employees, especially your service staff like drivers, as they are often the main touchpoint for your customers. Remember, happy employees lead to happy customers, and ultimately you need happy customers to even be part of this ongoing debate.
This feature allows customers to see how many stops their Valet has before theirs so they can better plan their night. The approximate time of arrival that you received via text message at 5:30pm is usually accurate but the Where’s My Valet feature is the best place to get an up-to-the-moment estimate of when your Valet will arrive at you door. Similar to Uber or Lyft, this feature allows you to see how far your Valet driver is from your house and how many stops they have before yours so you can better plan your night.
Here’s how it looks:
The Where Is My Valet feature is one that our team designed in response to customer feedback and feature requests. If you ever have an idea for how Rinse can be better, please share it with our team by contacting [email protected] We review customer requests regularly and update our service to better serve our customer’s needs!
At Rinse, your health and the environment matter. That's why we take the following actions to make sure that it’s not just your clothes that are treated with care.
1. Rinse is perc-free
Historically, the most widely used solvent in dry cleaning has been perchloroethylene (“perc”), but this solvent is a known carcinogen and can have a hazardous impact on the environment and individuals’ health.
An estimated 80% of dry cleaners still use it, but Rinse only works with dry cleaning partners who use environmentally friendly cleaning processes, and none of our partners use perc.
Wait, why would anyone use perc?
The short answer is that it’s a very effective cleaning agent and it is accepted as a part of the industry. The environmentally friendly alternatives to cleaning with perc, are effective, but they take more time and effort on the part of the cleaner, which means it costs them more.
When you support cleaners that abstain from using perc, you are helping the entire industry move in a more environmentally friendly direction.
Read more about Perc and Rinse’s Green Cleaning Practices.
2. Rinse accepts clothing donations
We’ll collect any clothing that you’d like to donate and make sure it gets to a charitable organization, rather than ending up in landfill.
Did you know that the average American throws away up to 81 pounds of laundry per year? And that one in three of people surveyed said that they threw their old clothes out because it was easier that recycling or donating?
Many people don’t realize the true cost and value of their clothes—just creating a single t-shirt can take up to 700 gallons of water. By donating or recycling your old clothes instead of throwing them away, you are not just helping your community and the charitable organizations that receive them but you are making a huge impact on the environment!
What you can do - When you have clothes you’d like to donate, just put them in a separate bag (don’t put them in your Rinse bags!) and your Rinse Valet will collect them during your next pickup or delivery. We then make sure that your clothes are given to a local charity and stay out of the landfill!
Rinse offers repairs
Thinking of parting with your favorite piece because of a tear, broken zipper, or missing buttons? Rinse can likely repair it for you! Check our our pricing by repair type here.
3. Rinse uses less water and less energy
Our cleaning partners use high-efficiency washing machines which means up to 50% less water is used when compared to traditional, at-home washing machines, resulting in millions of gallons of water saved each year.
Additionally, cold water washing not only keeps your clothes looking better for longer, but it saves energy. Combined with high-speed spin cycles which reduces the amount of time clothes need to spend in the dryer, Rinse is able to significantly reduce the amount of water, electricity, and carbon emissions associated with cleaning.
4. Rinse uses biodegradable poly bags and recycles hangers
Traditional Dry Cleaning and Wash & Fold practices use plastic to ensure your clean clothes stay clean when they’re delivered to you. Rinse does this, too, however, much of the plastic wrapping that Rinse uses is biodegradable. For the portion that isn’t we’re happy to collect the plastic and recycle it for you.
What you can do - At your next pickup or delivery, give your Rinse Valet any unwanted wire hangers and the non-biodegradable portion of plastic used to protect your Rinse orders so Rinse can recycle them.
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A question that we often receive is why Rinse only picks up and delivers orders between 8pm and 10pm. With other similar services like Instacart and Doordash delivering at all hours of the day, it’s a pretty understandable question.
The short answer: we maintain a two hour delivery window in order to save you money!
We're able to charge the prices that we do because we keep our operations as efficient as possible.
When you give us an item to clean, we pick it up, take it to our warehouse to check it in, take it to one of our cleaning partners, carefully clean it, pick it up from a cleaning partner, take it back to our warehouse to we can check it out to a Valet, and deliver that item back to your front door. That's a lot of travel for one dress shirt (or skirt, or suit, or whatever). The only way that doesn't cost our customers major dollars is because we do everything we can to streamline operations. Our consistent 8pm to 10pm delivery window is just one of about 15 tactics that make up our secret sauce for smooth and affordable operations.
We’re able to execute the same operations each day in batches rather than on a one-off basis which is much more efficient. For example, with order pickup and delivery, we're able to go from house to house in a certain neighborhood like a honey bee, picking up and delivering clothes in your area rather than ping ponging back and forth all over town throughout the day. Since we pay our Valets hourly, that makes a huge difference when it comes to cost savings, and we’re able to pass that along to our customers.
We choose the 8pm to 10pm window because that’s when most customers are home (though with Rinse Drop, customers don’t need to be) and because traffic has usually died down at that point, making it easier for our Valets to get where they need to go.
We’ve put a lot of thought into why we do things the way we do and we’re always happy to share with our customers. If you ever have any questions, just reach out to our helpful Care team at [email protected] or visit our FAQs.