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On-demand plowing

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  • SIMA
- Posted: March 20, 2017
By Alicia Hoisington

Plow-on-demand services, piggybacking on the ride-sharing popularity of apps like Uber and Lyft, have made their way into the professional snow and ice industry. But with the gig-like nature of these services, some question whether the model is sustainable in an industry that prides itself on training practices, operational efficiencies, reliability, communication, relationship building and liability protection.

Even so, app developers interviewed for this story say the services were created due to a need they saw in the marketplace.

Ben Zlotnick, founder and CEO of Eden App, has been in the industry for nearly 15 years. He’s the owner of a landscaping and snow plowing business in Toronto, but he says he’s always been involved in the technology side of business. For the past five years, he’s been running a technology accelerator program in Canada. His on-demand app was born out of merging his two worlds.

For Wills Mahoney, co-founder of on-demand app Plowz & Mowz, the need came about when his mother couldn’t get out of her driveway one winter.

“I called companies to help her, but no one picked up the phone,” he says. “I drove out there and shoveled it myself and saw 15 plow trucks drive by missing the opportunity.”

Filling in the gaps
Most of the apps target primarily residential customers who aren’t looking for or can’t afford a seasonal contract. Contractors with gaps in their routes can use the apps to fill the holes and generate more revenue. Contractors who register to provide service assume liability with insurance policies they already have in place for their business at large. Some apps, such as Eden App, have incidental insurance.

Mahoney says Plowz & Mowz has about 3,000 contractors signed up. The commission rate for a job is 30%. Eden App has approximately 700 contractors in its well, and its commission rate is 25%. A typical two-car driveway might cost $40 to plow and about $25 for a sidewalk, Zlotnick says.

While the Eden App is expanding across greater Toronto with plans to expand farther in Canada and into the United States, Plowz & Mowz works in about 30 U.S. markets.

“We created a dense network of landscape providers, and we can complete jobs at a quick pace,” Mahoney says. “We’re tapping into a new market of consumers, maybe people who have never used a snowplow service before. And snowplow operators love it because they only see jobs on their route. They can walk away with extra income.”

Can it work?
Residential customers are the primary target for most of the apps -Shovler even offers to clean the snow off your car or dig it out if you’ve been snowed in on the street. There is some debate as to whether the on-demand model can work as well on the commercial side of the professional snow and ice management industry.

Plowguys, formerly known as Plowme, started as an on-demand app in 2012. Since then, the company has shifted away from on-demand services. Now a consumer can either request snow removal by buying a snow package or hire a merchant through its Travel Ad. A Travel Ad is an offer a merchant creates that can be updated on the go. Updating the Travel Ad will broadcast it around the merchant’s current location. As such, merchants can use their mobile devices to pick up work while on the road.

Yeh Diab, co-founder of Plowguys, says the shift happened because he sees the on-demand model as “a bad idea, inconsistent with how snow contractors run their businesses, and nonsensical from a logistics and economics point of view.”

He says snow services are not similar to ride sharing. “It’s more like waiting for the bus, and you should buy your bus ticket for the season.”

A contractor’s intent is to maximize a route for its regular customers, Diab says. When a contractor has invested $10,000 to $40,000 into a truck and plow and is expected to show up for $50 to complete a job for a driveway with no idea of the boundaries or obstacles, the model doesn’t work, he adds. And then, customers expect instant gratification.

“We like on-demand services as consumers,” says Plowguys’ Aaron Smith. “The truth is it’s not sustainable. It’s a gig, not a job. It’s side money.”

SIMA CEO Martin Tirado, says he has significant concerns of a purely on-demand model, with major challenges around entering work sites unseen.

“At times it can be done, but a lot of times you’re going to find significant pain points,” he says. “Not everything can be ‘uberized.’ ”

He sees more possibility for using apps for route optimization rather than on-demand service. “It’s not sight unseen; it’s planning in advance and aggregating for efficiency.”

Tirado says if contractors are trying to determine whether to sign up with such a service to look at it as an add-on until they can evaluate whether the market they’re working in can sustain such a model.

“It’s unclear right now how many people will be using them and how satisfied people will be,” he says. “My suggestion is to have a steady portfolio of booked business in advance - and add extra if your routes can accommodate.”

He says generally SIMA members don’t like the model, viewing it as further commoditization of the services they provide. SIMA will continue to keep an eye on the model and recognize opportunities for continuing education.

John Fox of Fox Partners is a contractor signed up with Plowz & Mowz, and so far he says he has no complaints about using the service. 

“It helps to subsidize my current level of business,” he says. “I’ve been able to keep busy enough.”

The key for him is to use the app as a tool to work for him. He has two trucks at his ready. One is used for his regular customer base, while the other is assigned to his Plowz & Mowz customers. Sometimes those customers become recurring jobs for his company, with users requesting him again through the app.

“You don’t have them as a client per se, but maybe for the whole month they’ll be your client,” Fox says.

When it comes to liability, Fox says it’s no different from a typical job through his company. For instance, if a piece of earth flew up and shattered a front screen door on the job, he’d be responsible for his own clients just as he’d be responsible if it happened while on a job for a Plowz & Mowz user.

“It's a good business model,” he says. “I can say you have to get your reputation up pretty high to get work. They have subsidized my income to allow me to grow naturally and not go into debt with a lot of marketing,” he adds. “As I grow my own business, I can use that income to have capital to grow.”

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Alicia Hoisington is a freelance writer based in Cleveland. Weigh in on this story by contacting Martin Tirado at martin@sima.org.
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