Fabricare is not Uber for Laundry, and that’s a good thing

From Pro Pakistani:

FabriCare, an app which aims to revolutionize the laundry industry to make it more convenient, affordable and efficient, has raised $100,000 in a seed investment round against a 16% equity stake.

The investment was shared among all three judges of the show, Idea Croron Ka.

Their pitch from the show suggests that they are Uber for laundry. I don’t think they are. Describing a typical lifecycle of their customer Fahad, the CEO, said (paraphrased): when a customer needs laundry she can request it via their app. Someone from Fabricare picks up the clothes, gets them cleaned and ironed and returns them back within 24 hours. This is not an Uber model. Uber does not cover the last mile itself. They let the drivers do that. For Fabricare to be Uber for laundry, the laundrymen, which Fahad referred to as partners, will have to pick the laundry themselves.

While this might seem trivial, it’s an important difference.

Uber, or any company calling themselves Uber for X, is a two-sided marketplace. They connect drivers with riders. They own the customer relationship but not necessarily the parties involved on either side of the relationship. They let the market forces i.e. their rating system govern the business. As an extension, their business model is to take a cut on the transaction. The major chunk of the transaction still goes to the driver. Fabricare, on the other hand, is owning the supply side. They are not exposing their “partners” to the customers. Which means they are a service provider and not necessarily a two-sided marketplace.

Both, providing a service and being a two-sided marketplace, have pluses and minuses. But you have to know where you are to exploit the inherent advantages. As an example, both Uber and Lyft have been trying to make subscription model work. The problem is subscription means a guaranteed availability of the service, something that requires a one-one relationship between the customer and service provider. A two-sided marketplace like Uber thrives on breaking that relationship let alone enabling it. A customer using Uber does not have a one-one relationship with one particular driver.

If I call Uber, drop it and then immediately call again the chances are I am going to get two different drivers. While that’s fine when I am traveling on my own schedule. It’s not ideal for my bound needs e.g. school pick and drop for my kid. For one, I, as a customer, would be freaking out on the prospect of having to deal with a new driver on daily basis. Second, the incentives don’t match up for the individual driver. Why would she go to pick a customer who has already paid a fixed amount of the trip, the incurring cost of which is unknown? This is especially true in peak hours. The same peak hours when the guaranteed service inherited in the subscription model is required the most.

On the other hand, a rental car service provider, by virtue of owning the supply side, can offer a subscription service with ease. They can easily allocate a driver to pick and drop someone from location A to B on daily basis. The customer would be happy too because she knows what to expect? Fabricare is more of a rental car service than Uber. While that’s not sexy it’s by no means any less of a business model. Maybe they can just call themselves Stripe for laundry or something.

Joke aside, it’s important to understand these intricate details of your business. The number one problem with laundry is that it requires a certain level of trust and care. You want your clothes to be treated in a certain way. And you don’t want to tell this to every new person that comes at your door. Second, laundry is a recurring predictable task. The Job-to-be-Done here is less about the task itself but rather in the satisfaction that it will be taken care of. Both are perfectly suited for a subscription service. Fabricare is getting the first part right. But conflating themselves with Uber is resulting in them having a blind spot about the second. And that’s limiting their actual potential.