On-demand cleaning service Handy now allows customers to tip through its app

Two of Handy's founders, Umang Dua (left) and Oisin Hanrahan.
Two of Handy's founders, Umang Dua (left) and Oisin Hanrahan.

In the midst of a nationwide conversation about tipping in restaurants, the housecleaning and handyman app Handy, a rising star in the “on-demand” world, has added a tipping feature on its smartphone app in a bid to make it easier for customers to express their gratitude for a job well done.

Handy allows customers to find and pay for home cleaning or repairs using an app on their phone, one among a legion of companies in the growing “gig economy” that connects people in search of a service — laundry, food delivery, transport — with independent contractors who specialize in that job. Cleaning or repair professionals (Handy calls them “pros”) in the company’s network can view requests to find jobs, and collect their payment through the Handy app.

“People were largely tipping in cash before, and this was a better way to do it,” said Oisin Hanrahan, chief executive at Handy, who dropped out of Harvard Business School in 2012 to start the company with his roommates.

Pros earn about $18 on average per hour and, like contract workers at many other on-demand firms, can choose the hours and frequency with which they work. Handy takes 20 percent of the earnings per job, not including tips, which the pros collect in full.

Beta tests of the new feature tipping indicated that customers were inclined to use it to pass on extra cash to their hire. “With cleaning and handyman services in particular, this is where you would offer a tip if you were happy with the service,” Hanrahan said. “It will make it more likely that people will tip.”

Tipping has become a point of contention among independent contractors working for other “on-demand” services. In October, a group of drivers contracting for Uber sought to organize a strike to call higher pay from the company and included a request for a built-in tipping feature in the Uber app among their demands.

The debate on tipping gained steam in October, when New York restaurateur Danny Meyer decided to raise prices and eliminate tipping at his restaurants. The decision sparked a debate on when tipping is appropriate, and whether on-demand services should include a feature to allow customers to tip directly through their apps.

An informal survey by The Boston Globe indicates that customers are likely to use a tipping feature if offered: Lyft drivers receive a tip from customers up 50 percent of the time through the Lyft app — which does offer an option to tip — compared to Uber drivers who experienced tipping up to 5 percent of the time, in cash, because the Uber app lacks the option.

In November Handy announced that it had received $50 million in new funding, bringing its total venture capital investment to $110 million. The immediate goal is to focus on developing the customer and “pro” base in existing cities, and “towards the back end of next year look into expanding into new verticals and new cities,” Hanrahan said.

“Handybook,” as the company was called at launch, offered its first services in Boston and New York in July 2012. That fall Hanrahan and the team moved to New York City to build the company. In September last year the founders changed the name to “Handy.” The service now counts 10,000 contractors in its network, and logged a million bookings as of this June.

Handy is headquartered in New York but maintains a small office near Downtown Crossing.

Nidhi Subbaraman writes about science and research. Email her at [email protected]
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