On-demand markets that aren’t

Rinse, a managed marketplace for laundry and dry cleaning services where we’re investors, announced earlier this week that it has acquired the customer assets of its competitor Washio.

Before shutting down its operations in August, Washio served 7 geographies including Boston, Los Angeles, Chicago, San Francisco, Oakland, New York, and Washington D.C. This was 5 more than the San Francisco and Los Angeles markets served by Rinse.

In addition, Washio picked up and delivered its customers’ laundry whenever customers wanted. This was in contrast to Rinse’s approach of scheduling pickups and deliveries only between 8PM and 10PM in the evenings.

Finally, Washio delivered its customers’ laundry a day after picking it up, while Rinse offers a 3 day turnaround time.

While these three decisions gave Washio the opportunity to serve a larger number of customers whenever these customers demanded service, they also made Washio’s operations more costly. And the resulting benefit for customers isn’t large enough for customers to pay more for. Most people are home at some point between 8PM and 10PM, and they have enough extra clothes in their wardrobe that they don’t need a next day turnaround from their laundry and dry cleaning service provider.

As Rinse’s co-founder Ajay Prakash points out, “the on-demand model isn’t the most efficient or economical way to handle the dirty business of cleaning clothes”.

Also published on Medium.