Skip to content

Posts Under independent research on Care.com Category

Care.com: Addressing Safety in the Gig Economy

March 21st, 2019

Care.com: Addressing Safety in the Gig EconomyAs the internet has transformed commerce, social, and work life over the last 10 years, consumers have become increasingly willing to entrust personal safety to operators of websites that provide matching services. Dating over the internet, once taboo for fear of linking up with a sociopath, has given way to comfort with finding in some cases, partners for life. Finding and accepting transportation over the internet comes along with the risk of placing one’s personal safety in the hands of a driver whose qualifications and personal habits are something of a mystery.

On Friday, March 8th, the day after Care.com released Q4 results, The Wall Street Journal published a highly critical article about Care.com’s screening practices for caregivers in its online edition, entitled, “Care.com Puts Onus on Families to Check Caregivers’ Backgrounds—With Sometimes Tragic Outcomes; The largest online marketplace for such services says its members are responsible for ensuring background checks are performed.” The article was also published on the first page of the Journal’s week-end print edition. Without reviewing here the entire contents of the article, the most salient points were that the Journal had found hundreds of instances in which daycare centers were listed on Care.com’s website as state-licensed, but were not. In at least one instance children died while under the care of a non-licensed facility.

The article was also critical of Care.com’s screening procedures. Care.com’s preliminary screening checks multijurisdictional databases, as well as the National Sex Offender public website, as part of a manual process, which can take up to 48 hours, and which rejects an estimated 10 percent of those seeking a listing within 24 hours. Existing and prospective customers can also purchase additional packages that range in price from $59 to $300 to conduct a more detailed level of screening.

The article, while specific to Care.com, raises the question of responsibility and liability for companies operating in the gig economy. Like LinkedIn, Indeed, and other jobsites, Care.com does not conduct employment level background checks. Uber, for example, like Care.com, conducts a background check on its service providers, ie. drivers. This includes a Motor Vehicle Record review, as well as a criminal background check. Background checks for Uber drivers, according to the Uber website, are conducted by Checkr, a third party background check provider that is accredited by the National Association of Professional Background screeners.

On March 11th, Care.com filed an 8-K with the SEC in which it noted that it would no longer allow caregivers that are new to the platform to engage with the platform until the preliminary screen has been completed. The company also disclosed that it was exploring solutions to help verify the identity of both caregivers and care seekers on its platform. Care.com will also be looking at potential changes regarding notification of members on its websites when, for example, a caregiver is no longer allowed to provide services on the platform. Care.com also eliminated all listings of daycare centers that were not updated and reviewed by the daycare center itself. Finally, Care.com announced a new board level committee that will oversee the company’s safety and cybersecurity programs.

To be sure, the concept of guarding personal safety over the internet continues to evolve. It is likely that industry best practices will emerge over time. However, there is still likely to be an element of trust every time someone steps into an Uber or Lyft-driven vehicle, accepts an invitation for lunch through an online dating site, hires a person based in part on job experience posted on a website, or employs a care-giver in their home.

Care.com: A Linked In For Family Care

November 15th, 2017

Care.comWith trailing twelve month sales of $165 million, a market cap of roughly $555 million, $96 million in cash and no debt, Care.com has become the leading online destination for finding and managing family care in the US. Like LinkedIn, which matches job seekers with prospective employers, Care.com is focused on matching the needs of families and caregivers creating in essence a one-stop shop for family services throughout the lifecycle of a family or individual household.

Led by founder and CEO Sheila Lirio Marcelo, and Michael Echenberg, EVP of finance and CFO, Care.com targets a large addressable market, as evidenced by the fact that US consumers spent $300 billion on family care services last year, including child day care, housekeepers, nursing care facilities, tutoring, and pet care services. The market remains highly fragmented, served by traditional family care agencies, as well as brick and mortar chains that provide a variety of services.

Last year in the US, consumers spent over $300 billion on family care services, including child day care, housekeepers, nursing care facilities, tutoring, and pet care services. Services providers include nanny agencies, child day care centers, elderly care services, including in- home services and nursing care facilities. Specialized service providers for tutoring and pet care, as well as other online destinations provide a wide variety of competitors in this highly fragmented market.

Family care decisions often reside with a female head of a household, the primary audience targeted by Care.com. Decisions for services providers are often based on word of mouth stemming from personal networks. Decisions must be made with regard to the preference for in-home services, or brick and mortar facilities outside of the home.

Care.com identifies its primary target market as the roughly 46 million US households with income greater than $50,000 per year with either a child under the age of 18 and/or a senior aged 65 and over. The company also includes an estimated 15 percent of households with incomes under $50,000, with similar dynamics. Care.com’s in-home consumer services remain in the early phase of market growth, yet benefit from some compelling demographic facts and trends, which include the rise in single parent households, the prevalence of dual income households, an aging population, and increasing trust in the internet as a destination to help make decisions relating to family, home and health.

In just 10 years, Care.com has carved out an enviable internet presence, which features more than 26 million registered users, comprised of nearly 15 million families, and more than 11 million caregivers. At the end of the most recent quarter, 320,000 paying families purchased a subscription to the company’s caregiver listings, and/or the company’s service for household payroll and tax preparation services.

Key swing factors that will determine Care.com’s ability to rise or fall over the next 12-18 months include it ability to:

  • Grow its core US consumer business through continuous improvement to its core matching platform, as well as targeted initiatives to grow senior care, housekeeping, and pet care, leveraging its registered community of more than 26 million members.
  • Develop awareness as a trusted source for families and caregivers, through both its own accreditation, as well as the halo effect provided by corporations, non-profits, and potentially insurance plan providers that adopt and promote its services.
  • Drive additional revenue growth from three key growth initiatives: employer-sponsored family services for employees, overseas expansion, and marketing programs for daycare, nanny, and elderly care agencies.

For more information on Battle Road’s 24 month assessment of Care.com, please contact [email protected].