When it comes to our valued SweepStars, we pay between 65% and 80% of the total booking fee to our SweepStars based on their experience. This is in line with other on-demand platforms. The SweepStar is responsible for paying for their transport.
- Our per hour rate for SweepStars, starts at 65% of the hourly wage for a new SweepStar, who then goes on to earn 80% of the hourly wage after about 2 months with the company.
- Our average booking time is 7.1 hours, or about R210 per day. This equates to around R4k a month.
- The earning is a flat rate and the total amount is related to hours worked, however, we limit the type of work being done to basic housework.
- SweepStars do pay for their own transport and data, and our teams use various means to ensure that transport costs are minimized, we’d be happy to share more of that in detail.
- Regarding data, the average cost of data for using the app for a day is around 12c. Our SweepStar app was specifically designed differently from our customer-facing app, with low data usage and simple ease of use in mind.
- The vast majority of SweepStars work for the platform between 3 to 5 days a week, with 30% of SweepStars working in other homes outside of the platform (we of course fully support this, and many of this group initially joined our platform due to underemployment).
What is the hourly rate paid to SweepStars?
- SweepStars earn from 65% of the hourly rate for their first 2 or 3 months on the platform, and then this rate is increased to 80% of the hourly rate thereafter. At this rate and with our average booking size of 7.1 hours, this equates to +R3,500 in the initial period, and roughly +R4,200 per month thereafter. The initial rate covers the additional support required in the first few months, paid background and reference checks and materials used and provided during onboarding.
How does this compare to minimum wage and national averages?
- According to the Department of Labour and as of December 2017, minimum rates for domestic workers are R1,641 in rural areas and up to R2,545 in urban areas for 2018. According to a BusinessTech study with over 6,000 respondents (https://businesstech.co.za/news/finance/227253/how-much-south-africans-are-paying-domestic-workers-in-2018/), the majority of South Africans who employ a domestic worker pay up to R3,500 per month.
How does SweepSouth’s business model work?
- SweepSouth retains 20% of the total booking fee to cover the costs of running the company. This includes the costs of insurance that covers all bookings, vetting and other onboarding, some transport costs, on-the-job support for SweepStars (in case of any emergencies), and business running costs like internal office staff, marketing, transaction and banking fees, software and technology, and telecoms and admin.
What influences domestic worker pay in South Africa?
- Domestic worker pay in South Africa is influenced by a number of factors, including the market’s ability to pay, the level of skill of the work, the supply of workers in the industry vs demand, and regulations like minimum wage. In domestic work, with the market being households, employers are individuals who pay for another person’s salary out of their own. The industry currently has over a million registered workers, and unfortunately, data has shown that in households under economic strain, domestic workers are amongst the first casualties.
What if I can pay more?
- We introduced tipping so that we could allow clients who can afford to pay their SweepStars more, to do so. Tips are paid in full to SweepStars, with no margin for SweepSouth (there is a small bank processing fee of on average R2). We also have clients who prefer to tip in cash. As part of our efforts to improve, we are considering a feature allowing customers to pay more over and above the booking amount (not linked to the concept of “tipping”), and this amount will also go to SweepStars without any of it going towards the company.
What about data and transport costs?
- We have designed the SweepStar app to be particularly low on data costs, and this is something we monitor frequently. Even with the frequent usage required to work on the platform, data costs for actively using the app are no more than R10 per month in total. For the past three years, we have engaged telecoms companies on zero-rating our app and also worked with a number of independent companies to investigate this, and we feel this work will bear fruit soon. In 2017, our CEO appeared on a panel at the World Economic Forum Africa meeting and talked to chief executives in the telecoms and banking industry about prohibitive banking and data costs and the negative effects they had on financial and digital inclusivity for those at the base of the economic pyramid.
- Regarding transport costs, SweepStars pay for their own transport and with our operations team, choose areas to work in that minimize transport costs. We in fact think that one of the benefits of working with SweepSouth is having access to work opportunities in areas where transport costs are lower, compared to having to take work regardless of what transport costs would be incurred. Our app is also designed to help SweepStars find shortest routes to clients and we have a team on hand to assist with logistics and taxi routes in the mornings. As part of our response to Metrorail issues in Cape Town for example, we sponsor and/or arrange transport for SweepStars who require assistance.
Have you tried increasing your rates/domestic worker wages previously?
- Yes, the company was initially launched in 2014 at rates of R50 per hour (80% of which went to SweepStars). This rate was too far above market willingness/ability to pay and the result was reduced income to SweepStars because of reduced demand for the service. We believe rates can be revisited with the strategy below.
How will SweepSouth increase general national domestic worker wages over time?
- With SweepSouth being a technology-based company that is able to scale far faster than a traditional business, our aim is to bring large numbers of the previously unemployed domestic worker force onto the platform, which already pays higher than average rates. As we bring more people onto the platform, the supply available outside of it (at lower wages) decreases, increasing relative demand and allowing us to increase pricing. Increased standardisation and professionalisation help with this trend, as well as SweepSouth becoming a market leader for pricing benchmarks in a very fragmented industry. Domestic workers in private homes also become aware of SweepSouth rates, putting their employers under pressure to pay more (to prevent their leaving to join a platform like SweepSouth). Lastly, this is all complemented by the additional benefits outside of wages which the platform is able to negotiate for SweepStars, decreasing some of their living costs and as a result increasing relative net income.
Is there anything you do over and above wages to add value to SweepStars?
- Yes, we provide access to basic financial literacy and savings training and access to low cost bank accounts as part of our onboarding. We have also engaged with partners to provide free basic benefits and medical resources (medical advice on call) to SweepStars. Lastly, we are working with both online training providers to provide basic skills training and vocational courses to SweepStars, and with larger organizations to act as potential employers for those who have passed these vocational courses as part of an up-skilling drive. We are an active example of this, having promoted a number of SweepStars into positions within our operations teams in Cape Town and Johannesburg.
What else will you do?
- Either internally prior to these discussions, or as a result of them, our team have discussed potential updates to our platform in addition to the various current actions we’ve outlined above. These include more SweepStar involvement in setting individual rates, engaging with potential partners to help with partially-subsidised transport costs, and extending the tipping function to a generic function where you can pay more if you are able to.