On-demand moving service Bellhops grows 5X year-over-year, brings the sharing economy to middle America
As anyone who’s ever attempted to earn a few extra dollars of beer money while in college can attest, the coed moving company idea may be as old as higher education itself. If college campuses are fully stocked with one thing, it’s muscle-bound coeds – or if we’re being politically incorrect, dudes – willing to carry heavy objects for a few bucks an hour.
But with high-profile startups like Uber and TaskRabbit showing consumers the power of the on-demand economy, the notion of opening the yellow pages or pulling a flier off a telephone pole or coffee-shop cork board is an artifact of decades gone by. Even Google, Yelp, and AngiesList seem inefficient.
Bellhops is a two-year-old Chattanooga, Tennessee startup that has been quietly building momentum by combining the best of these old and new business models. Started by two former investment bankers, Cameron Doody and Stephen Vlahos who grew disillusioned with the corporate grind, the company has grown from a small campus-focused micro-moving service to a 135 city operation with more than 8,500 on-demand laborers. The company is on pace to complete 15,000 moves in 2014 and has doubled revenues monthly through the first seven months of this year, according to Doody, putting it on pace for 5X growth, year-over-year.
Like Uber and TaskRabbit, consumers can book a Bellhop online or through a soon-to-launch mobile app, and have the option to request movers to begin work within a matter of hours, as opposed to the standard days or weeks. For laborers, the work is completely flexible and provisioned on a first come, first serve basis. This means that college students who want to earn a few extra bucks can simply open their smartphone and accept an open request for moving help. Bellhops must complete a video training program affectionately called Bellhop Academy, that covers the fundamentals of moving as well as the culture and values that the company wishes to promote.
The company focuses on short distance moves – currently under 15 miles – and makes trucks available upon request at an additional charge by renting them from third-party providers. Users pay $40 per bellhop, per hour, and labor receives $15 of that total.
“It’s twice what they could make working at a pizza shop, plus they get regular tips,” Doody says. “And they can work whenever they want and can choose to work with their friends. We have really high satisfaction scores among bellhops.”
The company advertises its service on the basis of its on-demand availability and low cost, but also that its movers are typically clean-cut and reasonably educated. It’s a compelling narrative and one that seems to deliver in practice as well, given recent reviews. The company claims that its movers have earned a 97% customer satisfaction rate across thousands of individual jobs.
“People really like the demographic and education level of our movers, and appreciate the transparency in our booking process,” Doody says.
Of course, Bellhops isn’t the first company to tackle the on-demand labor market. TaskRabbit and erstwhile competitor Exec have both made attempts, each with limited success. More vertically focused businesses like ride-sharing and on-demand delivery services (e.g. Postmates or Instacart) have found more success, however.
It’s a distinction that isn’t lost on Doody, who says, “TaskRabbit and others that struggled didn’t focus enough on a single thing, in my opinion. Nobody knew what they ‘were’ because they tried to do everything. We know there are other opportunities we could tackle, but we’re really focused on scaling out small scale moving.”
It’s a smart strategy and one that should serve the company well as it looks to go from niche service to a sustainable nationwide operation. But the company has branched out in one meaningful way. Rather than just focusing on small consumer moving jobs, the company has begun to serve large bulk labor projects as well, like property managers that need to furnish college dormitories and large apartment buildings. The company will do as many as 100 such jobs this year and will generate nearly $750,000 in revenue from these jobs alone – a sum that Doody describes as “a fraction of our total business.” He declined to share more specific overall revenue figures
Focus is just one of the many obstacles the company will need to navigate. As we have seen elsewhere in the sharing economy, regulatory compliance, insurance liability, and independent contractor background checks are all landmines that can derail otherwise promising businesses. Bellhops has yet to run into any of these challenges in any meaningful way, Doody says, but that doesn’t mean it won’t become an issue down the road. It only takes a few injuries, robberies, or worse for the whole model to come under intense scrutiny. But of course, like with taxis versus Uber, traditional moving companies aren’t immune to these risks either.
Now that Bellhops has figured out its model and is scaling rapidly, Doody plans to expand the service into 250 major cities across the US by the end of 2015. The company now has 31 full-time employees at its headquarters, and it's commissioned city directors in each of its 135 markets to help recruit additional laborers and promote the service on the ground.
“One thing that I think is really cool is that we’re bringing the sharing economy to middle America – places like Oxford, Mississippi,” Doody says.
Bellhops has raised more than $2 million in Seed funding from a number of investors including Chatanooga incubator and Seed VC Lamp Post Group*, which counts Access America Transport co-founder Ted Alling as a cofounder – how’s that for strategic alignment? The company was accepted to Y Combinator late last year but turned down the opportunity to participate in the Silicon Valley accelerator program. Bellhops is currently in the market looking to raise a Series A round, according to those close to the company, and is said to be attracting significant interest. Right on cue, the company has even rocketed to the top of ProductHunt today.
In any given year, 50 million Americans will move, roughly 60 percent of them doing so locally and 75 percent or about 22 million people falling into the ‘do-it-yourselfer’ camp, according to statistics from UHaul. With a nearly unlimited supply of eager college labor and a bit of technology used to manage them, this is a classic analog market dying to be disrupted. The kids at Bellhops seem to have a running start at being the ones to blow this on-demand labor market wide open. We’ll see if they have the operational chops to keep this early lead.
*Disclosure: Lamp Post Group is an investor in Pando.