Wag, the ‘Uber for dog-walking’, is drawing Uber-like scrutiny

Americans spent an estimated $70b on their pets last year alone

For venture capitalists looking for the next gig economy success story, the dogwalking app Wag seems like a good bet. After all, Americans spend a lot of money on their pets — an estimated $70 billion (Dh257 billion) last year alone — and the three-year-old startup is growing fast and looking to raise at least $100 million to fund its expansion.

Several investors were getting ready to up the ante last month, according to three people familiar with the situation, when social media began to surface outrage about Buddy, a Beagle-Labrador mix who went missing while under the care of a Wag contractor. Buddy’s owner, a Long Island retired nurse named MaryEllen Humphrey, accused the company of misrepresenting its rescue efforts and trying to buy her silence with $2,500 and by offering to pay for a planned trip to Disney World when a local news station inquired about the missing pup.

Wag Labs Inc., the app’s parent company, did something unusual for a tech company: fired off a cease and desist letter to one of its own customers. “If your retraction and apology to Wag! are not publicly posted to each and every social media platform that you have used to libel Wag! within 24 hours of the time of this email, this office has been authorised to use all available means to bring as swift as possible an end to your lies,” company attorney Mark Warren Moody wrote.

Wag disputed Humphrey’s accusation that it offered her money to keep quiet. Company spokeswoman Marcy Simon said that in the case of Buddy, Dog-walking app, Wag, which put one of Uber’s most outspoken investors, Shervin Pishevar, on its board, grew quickly after Jason Meltzer, Josh Viner and his brother Jon cofounded the company three years ago. Rover was launched in 2011 by venture capitalist Greg Gottesman, who envisioned an in-home boarding experience after his lab Ruby Tuesday was injured at a Seattle kennel. Wag and Rover charge about $25 (Dh92) for a half-hour dog walk in San Francisco; about $20 in New York and Chicago. Wag takes a commission of about 20 per cent per transaction and for Rover, 40 per cent. Wag hired a professional dog rescuer, issued a Pet Amber Alert (which texts or emails neighbours that a pet is missing) and set up a $1,000 reward. Simon said the company spent about $1,000 per day searching for Buddy.

Humphrey assertions.

On Saturday, a woman out walking her own dog discovered the Humphreys’ pooch standing near a “Find Buddy” poster. He’d suffered a few cuts disputes Wag’s and was covered with ticks but was otherwise unharmed. That same day, the family had been out looking for Buddy with professional trackers they’d hired themselves after Wag failed to recover the dog. Despite the positive outcome, the damage to the start-up’s reputation was already spooking potential investors, including one who said his venture firm got cold feet after hearing about Wag walkers losing dogs.

Inspired by Uber, pet-care start-ups want to revolutionise an industry that has long relied on word of mouth referrals and lamp post advertisements. The best known of these are Wag and Rover.com, which offers a broader assortment of services including boarding. But Wag’s experience is a reminder that technological disruption rarely goes smoothly; especially, when it involves a four-legged family member. Even as Wag and Rover compete for customers with easy-to-use apps and celebrity endorsements, they’re battling many of the same issues that have bedevilled other gig economy players: regulatory scrutiny, complaints about shoddy service provided by people they don’t directly employ, high marketing costs and heavy losses.

Imri Larsen and Seong Park, a couple in Brooklyn, said a Wag walker lost Tokki, their beloved Jack Russell terrier mix. Park and Larsen said Wag grew concerned when the couple tried to gather surveillance footage to find out what happened. “They seemed more interested in keeping things quiet than helping us find our dog,” Park said. Tokki was eventually struck by a car. Larsen and Park said Wag has sent them a check for $402 to cover the cost of Tokki’s cremation.

Simon, Wag’s spokeswoman, disputed Larsen’s and Park’s claims and said co-founder Meltzer spent 18 hours a day searching for Duckie. Simon said Wag has a dedicated team to handle dog rescues.

Despite the legal threats, Buddy’s owner Humphrey has continued to criticise Wag online and speak to reporters. “Wag has tried to bully me repeatedly,” she said in a phone interview after Buddy turned up safe. “I didn’t want to be bullied or bribed. I just wanted them to help me find my dog.”