Gig Economy Disaster: 'Uber For Laundry' Hung Workers Out to Dry and Now It's Out of Business

The on-demand laundry app Washio recently announced that it's shutting down. Alongside this announcement comes news that a San Francisco judge has rejected a settlement between the company and former employees who allege they were underpaid, saying that the deal could hurt the workers more than help them based on the financial situation of the now-defunct business.

There's a lot of commentary and debate over tremendously successful sharing economy companies like Uber and Airbnb, but much less discussion is reserved for the ventures that fail. Washio's birth mirrored many other gig economy startups: the Santa Monica company was launched in 2013 and was able to raise nearly $17 million in its first four rounds of funding. It even received financial backing from celebrities like Ashton Kucher and Nas.

At the time of its launch, TechCrunch wrote that Washio founder Jordan Metzner "sees an opportunity to displace the existing dry cleaning infrastructure." Washio applied the language of disruption to its job description. Washio sent employees to pick up and drop off your clothes, but referred to delivery staff as "ninjas":

We offer a FLEXIBLE schedule, NORMAL hours, GREAT pay and the chance to be a part of a AWESOME growing company where your feedback is always welcome. This is a fantastic opportunity to make money on your time in your car. Our ninjas are compensated competitively at $20/hour and your pay is based on time alone (not determined by the number of drop offs or pick ups during each shift). You can sign up for as many or as few shifts that fit with your schedule each week.

Gawker's Sam Biddle succinctly summarized the major issue hovering over this alluring pitch: "Twenty bucks an hour is double the state minimum—which is great!—but it's part-time only, without any benefits, and you're driving your own car around to get from job to job."

Last year a former Washio employee named Akil Luqman sued the company, claiming it broke California minimum and overtime wage laws, denied workers breaks and failed to fully reimburse work expenses. The complaint also featured a charge that's leveled against many sharing economy companies: Washio classified full-time hourly workers as independent contractors. The case was taken up by Shannon Liss-Riordan, the Boston lawyer who has launched suits against Lyft and Uber.

A Washio ninja would pick up your dirty laundry and the company would wash it for $2.15 per pound, with a $30 order minimum. The service was regularly criticized by users and holds a mere 2-star rating on the iTunes store. One user wrote:

I really wanted Washio to be great, but it's dodgy. Set up my first pickup: no confirmation message or email. I can't see any order history or pending pickups in the app. So I called customer support the day-of to confirm: call won't go through. No recorded message, nothing. The line is dead. So I SMS for support. No reply. Then no one showed up during the pickup window. Now I'm trying to remove my credit card because I'm sketched out and CAN'T EVEN DELETE MY CREDIT CARD. They seem well able to send me unsolicited marketing emails, but apparently that's all they're good for. Beware!

A letter about the company abruptly shutting down was posted on Washio's website:

"We generated millions in revenue and hundreds of thousands of orders, but the nature of startups is being innovative and venturing into uncharted territory: sometimes you make it, sometimes you don’t. We are proud of what we accomplished along the way: over one million items of clothing dry cleaned, and over 21,000 tons of laundry washed and folded!"


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