Homejoy is shutting down. The house-cleaning startup decided to close up shop after a series of labor lawsuits scared potential funding partners off.
Speaking to Re/code, Homejoy CEO Adora Cheung said “a lot of this is unfortunate timing,” but noted the lawsuits were the “deciding factor” to shut the company down.
Like Uber, Homejoy faced pushback from contractors who felt they were being treated more like employees. The company is currently fighting four different lawsuits on whether or not those working for it should be contractors or employees.
Unlike Uber, Homejoy didn’t have the bankroll to withstand incoming legal fire.
In seeking new funding, Homejoy saw resistance based on those lawsuits. Though it was able to secure some cash, Cheung said “we declined those investments because it wasn’t enough and we wanted to stay true to our vision.”