Security & Fraud

Care.com’s (Initial) Lessons For Online Marketplaces

online marketplace

As the recent Care.com news shows, taking care now can save headaches, and perhaps irreparable reputational damage, later on.

Sage advice for online marketplaces, especially service-oriented ones — where matching people is a tougher game than might be seen elsewhere.

To put it one way, when it comes to quality control: Widgets are one thing, criminal records another.

The news came this week that the online child care marketplace Care.com took tens of thousands of records offline that were unverified, as The Wall Street Journal got ready to publish the results of an investigation early last month.

The sweep was — well, sweeping. As reported, Care.com — which matches families to caregivers — removed more than 70 percent of day care centers from its site, which equates to more than 46,500 businesses. (The online marketplace displays individuals and child care centers as users research care-giving options.)

“Those businesses were listed on the site as recently as March 1,” said the WSJ. A spokesperson for the site told the newspaper that the names were taken down on March 7, the day before the investigation was published — and March 7 also marks the day the company reported fourth-quarter earnings.

Optics and timing of the scrubbing aside, here is the meat of the issue: The Journal found that at least some of the day care centers that had been listed (presumably previous to removal) had been stated as being licensed by the states in which the operate — which did not in fact seem to be the case, said the financial publication. In addition, some of the centers did not even appear to exist. And, the news outlet said, nine individuals were found to have prior police records.

“The company has said it makes clear through its website and emails to customers that it doesn’t fully vet caregivers,” the report said, and it should be noted here that Care.com also sells screening packages to those would-be employers intent on having background checks in place.

Ours is now an age where even Facebook’s Mark Zuckerberg has called for internet policing with greater oversight from government. But government regulation is only part of such an effort, and can be heavy-handed. Online marketplace models demand that self-policing be in the cards, too, and that’s especially urgent when you consider the fact that it takes years to build a reputation, and moments to destroy it. The platform that gathers information for sale — whether it’s media or a set of credentials that makes parents feel secure in hiring someone to watch their 5-year-old — has at least some responsibility to make sure some basic boxes are checked. Those boxes, for a service model, include verifying that people are who they say they are, that they are qualified and licensed.  In two sided marketplaces, such as those seen with credit card networks, trust is in place because rules are in place (and, incidentally, one side gets services for free because the other side is willing to pay to reach that audience).

The seas may be tough for Care.com to navigate now that it has to grapple with the fallout. In the latest wrinkle, Best Buy said it had suspended its relationship with the company while it conducts a “thorough review of both the program and the company” as tied to child care provided to Best Buy employees.

Scale is a noble pursuit. Scale at the expense of quality control ultimately leads to … loss of scale. You usually don’t want “thorough reviews” from your onboarded customers who are now not on board. This translates to lost business, lost revenue and lost trust.

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