The Sharing Economy’s Next Target Is Child Care
JENNIFER OLDHAM, SLATE (AUG 10, 2018)
Nanny Lane wants to make Nanny Sharing the next move in the Sharing Economy
Americans embraced sharing their homes and cars, creating billion-dollar industries. Nannies are next.
As child care costs outpace housing, food, and transportation expenses, parents are searching for new ways to save. Finding quality home care can be a zero-sum game, as deficits in the supply of in-home care and day care centers plague cities, suburban regions, and rural towns alike. Parents often prefer having one care provider, a nanny, focused just on the children at home over day care centers where kids might not get the same level of attention. But the price of such dedicated care, especially as minimum wage approaches $15 an hour in some metropolitan areas, can be untenable for most families. Sharing arrangements—where a nanny cares for children from two families on a regular basis—can both allow families who couldn’t afford a nanny to hire one and lift nannies’ economic fortunes, allowing them to make thousands of dollars more a year than they would working for just one family.
Until recently, families looking to share a nanny did it ad hoc, connecting on Craigslist, Facebook, or regional websites for mom’s groups. Most can’t afford to hire an agency, which can charge up to $5,000, to orchestrate headshots and résumés and hold parents’ hands through the interview process to find a nanny. But one company is looking to turn these informal arrangements into another moneymaker in the sharing economy.
Toronto-based Nanny Lane began rolling its matchmaking service out earlier this year and is among a portfolio of sites operated under CareGuide. The company recently raised $6 million in new equity to double its staff to 80 in the next year. John Philip Green, who calls himself the “chief executive dad” of CareGuide, says he could foresee the site bringing the sharing economy to child care. “If you think about what the travel industry and hospitality industry looked like before Airbnb, bed and breakfasts would have been a tiny sliver,” he adds. “Airbnb has gone on to be a $20 billion industry. They redefined it and formalized the price of staying in peoples’ homes.
“There isn’t anything that’s been built specifically to help nannies with nanny shares—that’s what gobsmacked us about a year ago,” says Green. “There are a lot of nanny matching services—we run one of the largest ones—but they are not suited to sharing a nanny. You have to facilitate family-to-family conversations.”
To use the site, families and nannies post profiles specifying their needs and experience. They then can message through the site and interview people who might meet their specifications. That service is free. The company also manages payroll and other duties for about 1,200 families for an $80 monthly fee. Nanny Lane is focusing on markets in New York, San Francisco, Chicago, and Houston, although it’s available to people anywhere in the U.S., where company employees work to find matches for families and nannies in remote areas.
The interface doesn’t allow parents to plug in hourly rates that dip below the minimum wage in the area where they live. Nanny Lane encourages families to pay about two-thirds of what they would pay to hire a nanny solo, instead of just halving what they would pay for a single child. For example, if a single family paid $3,000 a month for a nanny, that family would be advised to pay $2,000 a month if they chose to share the nanny with another family, Green says. The nanny would receive a total of $4,000 a month, to reflect the increased responsibility when caring for children from several families.
Nanny sharing is making a sole caregiver affordable for families on many rungs of the economic ladder who might not have given such a situation a second thought in the past. A Nanny Lane spokeswoman says that sharing a caregiver can save a family more than $13,000 a year.
“We’re a family of teachers, and sharing was the only way for us to afford a nanny,” says Merri Gonsalves Johnson, a high school English and special education instructor in Portland, Oregon. “Last year we paid $3,000 a month between two families. This year our half will be about $100 a month more, or $1,600.”
For nannies, the formalized hiring process on Nanny Lane and the requirement that families adhere to an hourly minimum wage when posting a profile on the site are a hedge against being overworked and underpaid—even as prices for nannies rise and the supply of nannies decreases due to increasingly restrictive federal immigration policies. The median pay for nannies increased to $18 an hour in 2017 from $16 in 2012, according to a 2017 survey from the International Nanny Association. The study also found more nannies are receiving paid time off and yearly raises.
Maggie and Joelle Schwartz decided to share a nanny with another family in San Francisco after their son, Elyan, was born nearly two years ago. Joelle Schwartz worried that paying for a nanny could cut her paycheck in half. In the Bay Area, a nanny can easily run $25 an hour. The Schwartzes entered a nanny share with another family for a combined $30 an hour. That extra $5 went straight to the nanny, making it cheaper for the families and better pay for the nanny.
The couple recently moved and hired a nanny through Nanny Lane, but they posted a profile to the site looking to find a family to share the new caregiver with, even though the hourly cost in their new city is the same as what they paid for their San Francisco nanny share. “For us, looking for a nanny share is not motivated by cost at all at this point,” says Maggie Schwartz. “It’s having somebody that Elyan could form a close bond with. We have two friends who share a nanny, and their kids are like brothers. They’ve been together since they were babies.”
These sharing arrangements also make relationships between families and a nanny more complicated. “When you’re working for two families, you have to consider what happens if the host family’s kid is sick—do you go to the other house?” says Eileen Conway, 31, who’s been nannying since she was 20 and is currently looking for a nanny-sharing position on Nanny Lane in the Hoboken, New Jersey, area. “They also have to be on the same page in terms of how they want their kids raised and disciplined—otherwise the nanny is being pulled in two ways, and it will never work.”
Like its sharing-economy brethren, the matchmaking site is unlikely to alleviate affordability issues for many of the nation’s families who struggle with the costs of child care. But like ride-sharing and Airbnb, Nanny Lane is also hoping to reshape an industry desperately in need of an overhaul.