Thursday, July 16, 2020
In March, Rhode Island Governor Gina Raimondo announced a deal with Care.com -- a company tapped "to increase child care access for frontline workers responding to the COVID-19 crisis" for Rhode Island families.
The company, which has ties to Raimondo donor, immediately garnered opposition from some Rhode Island groups -- and now has to pay penalties in California.
Raimondo has more than a dozen times encouraged Rhode Islanders to sign up for Care.com during her press briefings.
Rhode Island Tech Play Under Fire Nationally
Care.com markets itself as the nation’s largest online marketplace for babysitters and other caregivers, and now California prosecutors announced the company will pay $1 million in civil penalties and restitution to settle accusations over misrepresented background checks and auto-renewed subscriptions without getting consumers’ consent, according to the Wall Street Journal.
“The district attorneys of San Francisco and Marin County, Calif., alleged that Care.com falsely portrayed that its background checks included a search of the National Sex Offender Registry, which is available only to law-enforcement officials, and that its higher-priced background checks provided a more robust examination than the lower-priced ones,” reported the Wall Street Journal on Wednesday.
“By misrepresenting their sex offender background checks, Care.com gave families a false sense of security about the stranger they were inviting into their homes. That practice will end immediately and consumers will be better off because of that,” San Francisco District Attorney Chesa Boudin said.
On Wednesday night, Raimondo’s office did not respond to questions about the California settlement.
Care.com spokeswoman Natasha Gavilanez did not respond to requests for comment.
Rhode Island Groups Raised Concerns in Spring
When the deal with Care.com was announced in Rhode Island, it came under criticism by Nicholas Oliver, Executive Director for the Rhode Island Partnership for Home Care, over safety concerns.
"The Rhode Island Partnership for Home Care, representing home care providers licensed by the Rhode Island Department of Health, has concerns over the announcement made earlier today by Governor Gina Raimondo regarding her relationship with ‘Care.com’ to provide access to child and elder care 'volunteers' and 'recently unemployed individuals' looking for side work," said Oliver at the time.
The Rhode Island Partnership for Home Care was established in 1990 and "represents home care, home nursing care and hospice agencies licensed by the Rhode Island Department of Health to serve patients and clients in every Rhode Island community."
Rhode Island Department of Human Services Director Courtney Hawkins answered questions in March by GoLocal in a phone call about the state partnering with Care.com, on behalf of the Raimondo Administration.
"We're not talking about medical services or ones that require a license," said Hawkins. "Perhaps you have an elderly person and you're working -- and maybe someone out of work would be willing to do that. I have to work -- I have a 5-year-old out of school and I had to find a babysitter. Luckily I had a former teacher out of work reach out. Having [Care.com] services makes this easier."
Hawkins said Care.com does a "number of checks" on their website for people who sign up to offer to work.
"There are four types of checks [and] there's a tab for safety. They vet every person -- everyone who signs up goes through it," said Hawkins, who said that approved caregivers then get an "approved" symbol.
Care.Com Parent Corporation -- and Power Player Connections
Care.com was purchased in December for $500 million by IAC -- which is chaired by media giant and former Fox executive Barry Diller and the company's board includes Chelsea Clinton and Michael Eisner.
Diller's wife, designer Diane Von Furstenberg donated $1,000 to Raimondo's campaign fund in 2018. She is the mother of IAC board member and Brown graduate Andrew Von Furstenberg.
Clinton's bio states, "As vice chair of the Clinton Foundation, Chelsea Clinton works alongside the Foundation’s leadership and partners to help create economic opportunity, improve public health, and inspire civic engagement and service across the United States and around the world."
Rhode Island General Treasurer Seth Magaziner's father, Ira Magaziner had run one of the Clinton Foundation organizations in recent years -- the Clinton Health Access Initiative.
Eisner served as the Chairman and Chief Executive Officer of The Walt Disney Company for 21 years from 1984 to 2005.
"IAC builds companies. We are guided by curiosity, a questioning of the status quo, and a desire to invent or acquire new products and brands," states the company on its website.
In making the deal for Care.com, Joey Levin, CEO, IAC said, "Family care is exciting new territory for us—and an accelerating market as demand for both child and senior care intensifies worldwide. The Care.com team has built a trusted brand and marketplace for families all over the world. We like marketplace businesses and this is one in a category we think has incredible potential."'
How Care.Com Came to RI
Hawkins said in March that Rhode Island was approached by Care.com for the partnership.
"I was actually trying to work on this at the Department to establish a registry for people to provide care -- and literally the next day someone from government relations at Care.com outreached to someone in the [Raimondo] Administration on this," said Hawkins.
Hawkins said the Care.com outreach was to Brian Gosselin, the Chief Strategy Officer at RI EOHHS, by someone "who had previously worked with him."
Gosselin was formerly a top-level veteran of former Massachusetts Democratic Governor Deval Patrick's administration.
Wide-Range of Services Promoted -- Customer Acquisition Value
The Raimondo administration pitched the Care.com deal as partnering with the tech company "to increase child care access for frontline workers responding to the COVID-19 crisis. In addition to providing 90 days of free, premium access to their website, Care.com has created portals specifically for frontline workers and caregivers in Rhode Island.”
"The State's vulnerable populations should receive care from licensed professionals that have significant training, proven skill set to deliver care, ongoing education and thorough background checks," said Oliver. "Even in a crisis, the Governor and her administration should not promote individuals or unlicensed providers to care for homebound elders when licensed home care providers may have the capacity to deliver the same quality healthcare and personal care services to those in need as they do throughout the State every day."
Once in the online custom portal for Rhode Island, Care.com also offers pet services and tutoring. According to a Harvard Business School paper, the marketing cost for Care.com to acquire a new customer is approximately $101 a person. The case study was written in 2015 before the company sold to IAC.
"I can't speak to the value," said Hawkins, of Care.com acquiring potential Rhode Island customers -- and valuable data information.
"What I know is they put a website up for Rhode Island at no cost -- [and Rhode Islanders] don't have to provide any payment information," said Hawkins. "After [three months] they will then be downgraded to a basic service. Folks will make a decision about how to move forward. This won't meet the needs of every family."
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