Full transcript: Recharge CEO Manny Bamfo on Too Embarrassed to Ask

On this episode of Too Embarrassed to Ask, Recharge CEO Manny Bamfo talks about his startup, which lets customers rent hotel rooms by the minute rather than by the night. Lots of listeners wrote in with questions about how much these rooms cost, how they’re cleaned, how the people who clean the short-term rentals get paid — and, of course, whether they’re used for sex.

You can read some of the highlights from the discussion here, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Too Embarrassed to Ask on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

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Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode.

Lauren Goode: I’m Lauren Goode, senior tech editor at The Verge.

KS: You’re listening to Too Embarrassed To Ask, coming to you from the Vox Media podcast network. This is a show where we answer all of your embarrassing questions about consumer tech.

LG: It could be anything at all, like which gadgets Kara Swisher’s going to write about at CES because I hear she is super excited for CES.

KS: I’m going. I’m going for the woman thing.

LG: You’re going for a panel, aren’t you?

KS: Just the fact that there’s no women speaking.

LG: You’re not going to hang out with me?

KS: No.

LG: Really?

KS: I’m trying not to.

LG: I thought we were going to tape a podcast there.

KS: I’m going to fly in and fly out. Maybe we will.

LG: Oh, I need to be on the Kara Swisher schedule.

KS: We’ll see. We’ll see. I don’t love Vegas this year, I don’t want to go.

Anyway, so send us your questions. Find us on Twitter or tweet them @Recode, or to myself, or to Lauren with the hashtag #TooEmbarrassed.

LG: We also have an email address, it’s TooEmbarrassed@Recode.net. A friendly reminder, there are two Rs and two Ss in embarrassed.

KS: For the spelling impaired.

LG: Happy New Year.

KS: Happy New Year. How are you doing?

LG: This is going to be our first episode of 2018.

KS: Yes. How many years have we been doing this? Long time.

LG: We’ve been doing this podcast for two whole years.

KS: We were way ahead of the curve.

LG: We were so ahead of the curve.

KS: So ahead of the curve.

LG: I remember I said that year that podcasts were the new business card and people really liked that.

KS: Right.

LG: It was on like Vox Media marketing materials at one point.

KS: Yep.

LG: Our inaugural podcast two years ago was with The Verge’s Casey Newton and this is the best part, I love this, we talked about CES because of the timing and we talked about Peach.

KS: Peach.

LG: Do you remember that app?

KS: That was the best social network on a Friday and then it was over by Saturday.

LG: It really was. It really was.

KS: Yeah.

LG: Then the next episode we talked to Steven Sinofsky about cars and all kinds of things.

KS: He’s really fun. He’s another person I like to talk to.

LG: Yeah, we should have him back. Steven Sinofsky, come back on the show.

KS: Yeah, absolutely. I think I’ve already asked him.

Anyway, today on Too Embarrassed To Ask we have someone totally new. We’re delighted to be joined in the studio here at KQED in San Francisco by Manny Bamfo. He’s the CEO of a company called Recharge, but no, this is not about recharging batteries, although that’s a very good business, too.

LG: No, it’s about recharging people.

KS: People.

LG: Manny, welcome to Too Embarrassed to Ask.

Welcome. Well, rather, so excited to be here.

KS: Good.

LG: He’s also welcoming us, thank you.

LG: He actually has created a hotel room out of this KQED studio right now, so he’s welcoming us.

Exactly. Yeah, we’re going to use the studio by the minute.

LG: I have to say, we got a lot of responses and questions ...

KS: Tons. We were surprised.

LG: ... from people about this topic we’re talking about today. Partly because I tweeted about paying for hotel rooms by the minute and so of course some people went straight to rendezvous and prostitution. We’re going to get into a lot of the legitimate questions that we received in the later half of this show.

KS: People love this topic.

LG: But let’s talk with Manny first about Recharge. What are you trying to do with Recharge?

KS: Explain it very briefly, Manny.

Absolutely. Recharge is a living network and in that network, we allow people to use living space for as long or short as they like. So you can walk into a hotel and you can use it for one minute, or you can use it for one million minutes, it’s totally up to you. It is 100 percent in your control.

KS: Okay. So, it’s very much down the lane of the WeWorks and the ... Right now, bars in San Francisco are being turned into workspaces.

Yeah.

KS: It’s the idea is there’s all this unused inventory and you are taking advantage of that.

Correct.

KS: So it’s a bigger conceptual idea. Why not do it for hotel rooms, which sit empty, how much of the time?

Correct.

LG: For hours or a day.

KS: It’s like cars or Ubers or anything else, right?

Right.

LG: How did you get into this? Tell us a little bit about your background.

KS: Your story.

LG: And then tell us about the moment where you were like, “I want to use this excess inventory for hotel rooms to do this thing.”

Yeah. Absolutely, it is about unutilized space. If you look at the suite of companies looking at this — you mentioned companies that are utilizing bars. For us, we think about this in terms of fluid real estate. Real estate right now is extremely rigid, so you have to use your apartment, it has to be a one-year lease, or in a hotel there’s a 12 p.m. checkout, 3 p.m. check-in.

KS: I hate the checkouts.

It’s extremely rigid.

KS: I hate the check-ins.

You can’t control it. So, there’s a whole myriad of startups that are making that, at least on the supply side, much more fluid. Where instead of the supplier telling you the time function of how you purchase it, you as the consumer can say, “I purchased it in the exact way I want.”

In terms of how we got into this, before this I was working in ride-sharing, so I worked at a very small startup Hitch and Lyft acquired it. After that, I had the opportunity to sync up with the investors who lead that round, Cyan and Scott Banister, and I began thinking about ... I thought a lot about traffic patterns, because here in San Francisco and the Bay Area, you’ll have people, a lot of drivers, who will come from the outskirts and they’ll drive in San Francisco, but many of these people, they can’t afford to live in SF.

KS: Right.

I can barely afford to live in San Francisco, right?

KS: Right.

So, they’ll come from Vallejo or from San Jose or from Daly City, and when they come into the center of the city, oftentimes they weren’t able to use the bathroom, you can’t walk into Uber and use the bathroom, that’s ridiculous. We would offer living space and different break locations for them. I remember one day there was somebody who came to our location and was like, “Bro, I would pay you $50 an hour just to use the restroom in the city.”

LG: Did he actually say, “Bro?” Were you like, “All right, bro ...”

He said something different. He said something different. What he really said was that he’d pay 50 bucks to use the bathroom in the city, but I won’t go so far as to what he said exactly.

LG: Okay.

KS: Okay.

The bottom line was, I started thinking about it, yeah, I walk into a Starbucks, I can’t break here.

KS: Right.

I can’t just lay out and just use it for the time I want. I booked an Airbnb, I can’t just stay however I want, I can’t ...

KS: The space is free, it’s sitting free everywhere.

Correct.

KS: There’s all kinds of spaces. Just the way it is with bars or-

Correct.

KS: There’s all this free inventory. Again, Uber and Lyft were founded on that idea.

Correct.

KS: I remember John Zimmer telling me, “80 percent of cars are not in use.”

LG: Right, the driver downtime is a big thing.

KS: Right. Not just that, but the cars are empty, there’s all kinds of emptiness going on in lots of places. Inventory management.

LG: I was going to say, things are priced around those constraints.

KS: Right.

LG: If you have a hotel room that’s priced for 24-hour usage, even though someone’s only using it for 12, then the price, understandably, has to cover that.

KS: It’s also priced — Manny, you and I talked about this — around the needs of the hotel, the cleaning needs.

Correct.

KS: They don’t think about usage, like they aren’t thinking about loads. What’s interesting, speaking of people thinking about loads, is you have an investment from Jetblue’s tech incubator, Jetblue Technology Ventures ...

Yep.

KS: ... when you launched, so they were thinking about it. Explain that.

First of all, Jetblue is a fantastic airline. It’s an outstanding airline. For us, the relationship was very natural. I think in 2017 there were a lot of issues in terms of customers having complaints with the overall travel journey, and so for Jetblue, they’re thinking about it ... Well, they have millions of passengers that might experience a cancellation or delay, or millions of passengers who will land and they’ll have a red-eye and they can’t check in until a certain amount of time.

KS: Right.

To be able to offer those customers a piece of their home, because that’s what we sell. Like, in your house, Kara and Lauren, when you guys are at home, you can sleep, you can have a conversation with your mom, or you can cry, you can do whatever you want. When you’re out on the go, you can’t get that haven, and so that’s what Jetblue is able to give their customer on the go.

KS: In Europe, they do in airports, they have these capsule things.

Correct.

KS: They don’t have them in the U.S. at all. Sometimes, if you belong to one of the lounges, they have a shower.

LG: Yeah, like Centurion Club.

KS: Yeah.

LG: Or the Delta Sky Club, that’s another one.

KS: But it’s not great, it’s expensive.

It’s not.

KS: And it’s not a great experience, and it’s not convenient, at all.

LG: You still never have real private time.

KS: No.

It’s not private.

LG: Because you can shower, but then when you go out into the lounge, you’re still surrounded by other people.

KS: You’re going to sit there and eat tiny crackers with other people. Yeah, it’s true. It’s always expensive.

It is expensive.

KS: I have money, but I’m like, “I’m not paying for that,” kind of thing. You can’t pick the level of service. In your case, you’re trying to get hotels of different prices.

We started in the luxury category, right?

KS: Right.

So we were the first in history to have a Four Seasons that was selling by the minute, right?

KS: Right.

LG: Wow.

We absolutely started in the luxury category in a similar way that Uber started with the limo, for example. Right now, we do offer several tiers of service, where you can use hotels that are three-star, four- or five-star.

KS: Right.

LG: So, your pricing is around about a dollar to two dollars per minute? Is that accurate?

It will fluctuate.

LG: It fluctuates, so it’s dynamic pricing.

KS: Sure.

It’s definitely dynamic.

LG: Okay.

Let me ask you something. Right now, we’re all here in the studio, right?

KS: Mm-hmm.

So, none of us are at home, so one question to think about is that if you were going to offer your home for 45 minutes to somebody to come and recharge, what would that cost be? What does 45 minutes or an hour of space, what is that? There’s no market price for 45 minutes at the W or 45 minutes in your household.

KS: Right, right.

LG: Yeah, but I think those are different value.

KS: Priceless, for my house.

LG: That’s what I’m saying, those are different value propositions because a hotel ...

$1,000 a minute?

KS: Yeah.

LG: A hotel just has the inventory there and they already have all these safeguards in place, but with a home, it’s like the Airbnb thing.

KS: Yeah.

LG: Like, “Oh, someone’s coming into my home, they’re looking in my fridge, they’re using my toilet, they’re playing with my cat.”

KS: But hotels are not, you’re right, it’s just empty. It’s empty space.

It’s just empty.

LG: Right.

KS: Right.

This is empty space.

LG: Yeah. I guess I’m saying I wouldn’t even know, to answer your question, I wouldn’t know what I would charge because I would be thinking about all the private space in my home, as opposed to a hotel room, but for a hotel room, this seems to make a lot of sense. How did you determine the pricing? How did you look at it and say ...

KS: There’s a fee you pay for everyone, too.

Correct. There is a ...

KS: It’s like a $25 fee or something.

We have a service fee.

LG: Per booking?

Per booking, correct.

LG: Okay.

We didn’t start that way.

KS: Eventually not, I’m guessing, like a subscription kind of thing, correct? You could eventually subscribe.

Correct. Correct.

KS: Yeah.

Absolutely.

KS: But there’s a booking fee.

LG: Okay, so there’s a $25 booking fee and then let’s say I stay in a hotel room for eight hours, that’s just probably long, I would think.

KS: Yeah. Four hours.

LG: But you could sleep in eight hours, like have a night’s sleep. Then it’s $2 per minute, so you’re paying $25 plus $16, so that’s actually ...

Okay, so let’s just take a quick ...

KS: Right, give us an example.

Yeah. For example ...

LG: Oh, it’s by the minute. Sorry, I was doing the calculation wrong. Right, okay.

Absolutely. Well, here’s the thing, depending upon how long you book it, you’ll be quoted a different price.

KS: So longer, you pay less.

The longer you stay, the cheaper it is.

LG: Okay.

So we’ve actually designed it so that if you were to stay, for example, 12 hours, or anywhere from 12 to 16 hours in a hotel room, that would be a certain portion of the actual overnight rate. If you were to go in and just stay for two hours, then you would have what we kind of focus on as day pricing. Right now, here in San Francisco, if you were to look up Hotel Zetta, for example, one of our partner hotels, right now that hotel is probably $40 an hour. If you were to stay two hours or so, with the cleaning, or the service fee rather, it’s about 100 bucks.

KS: Right.

If you were to stay at Hotel Zetta for 16 hours, then that rate would be much more commensurate and more equal to the overnight rate.

KS: But it’s your timing, it’s also your timing.

Correct.

KS: That’s one of the issues, you don’t have to stick in there 12 to ... Check-in at 3, checkout at 12, kind of thing.

You just do as you want, right.

KS: You’re paying for the convenience.

You pay for the convenience.

KS: Right.

LG: So, for the person who comes in on a red-eye and lands at 7 and has a meeting at 1, and they just want a four-hour nap, that’s actually more expensive, but then you’re also probably tapping into the business market where people are maybe able to expense that.

Yeah, able to expense it.

LG: As part of their business travel. So, how much would something like that be, if you’re just looking for a four-hour window in the morning to take a nap and a shower?

Well, it depends on the tier of service.

KS: The level of hotel.

Yeah, it depends on the tier of service. You could find a hotel where that might cost you 300 bucks, or you could find a hotel that it would cost you 80 bucks.

KS: Yeah.

The other thing to note here is that if you come in, in your example, if you stay from 7 a.m. to 7 a.m. the next day, in the hotel’s eyes, that’s two nights. So, there are actually times where you can go in and you can use it for 24 hours and that’s cheaper because they’re going to ask you, anytime before 3 p.m. check-in, they’re going to ask you to book the day before.

KS: So it’s convenient. It’s a convenience thing.

LG: Yeah.

KS: Which is really interesting. As you get bigger, you could see it becoming ... As you understand the usage —because hotels really don’t keep track of this stuff.

No, they don’t.

KS: They just don’t, and they worry about cleaning, and that’s the ... They don’t have flexible cleaning schedules when they could. They actually could do a lot of this through technology, which is interesting.

LG: We had a lot of questions about that.

KS: Yeah.

LG: In the second half of the show.

KS: We’re going to ask those in the second half.

LG: A lot of people were asking about the cleaning.

KS: Two quick question, before we get to that, we’ll do that through the questions.

Yeah.

KS: So, it’s available for guys in San Francisco, right?

San Francisco and New York.

KS: New York.

LG: San Francisco and New York.

KS: How difficult is it to make partnership with these hotel chains?

The value prop, once a hotel starts working with us, is instantly clear, and it’s because of the yield. If you think about travel as a huge market, $550 billion industry, traditional hotel travel, from the OTAs to the corporations like Marriott, Starwood, Four Seasons, all of these guys, you’ll have your traditional hotels and then you’ll have online travel agents. In the industry right now, everybody, for the most part, is focused on discount rating, or rate parity, right?

KS: Right.

I’m a hotel, I’m Marriott.

KS: Like HotelTonight, right?

Perfect example. HotelTonight, they’ve done a great job. The fundamental value prop is cost. So, you go on Marriott, the hotel’s 200 bucks, on Hotel Tonight it’s 160. For us, that’s not necessarily our philosophy. Our philosophy is that if the hotel is selling it for 200, how can we allow that hotel to sell it for maybe 350 by servicing several customers? So, we expand yield and we expand that yield ...

KS: So they like that.

Yeah, who doesn’t? Who doesn’t like more money?

KS: Why don’t they do it themselves? It’s hard to do it individually.

It’s hard to do. And also, in this business ... It’d be the same question: Why doesn’t HotelTonight do this? Why doesn’t Priceline do this? Because nobody’s thinking about it in this way.

KS: Or Airbnb.

Or potentially them.

LG: Well, it probably involves a deeper sort of level of integration with the hotel partner, as well. With HotelTonight, they just know there’s inventory, they’re able to price out that inventory for that traditional hotel room stay. You’re talking about blocks of hours during which there are certain logistics that has to happen, someone has to be able to clean in that time, so I’d imagine the communication level with the hotel partner is different.

Is much greater. If we had a hotel, let’s call it Recode & Recharge, right?

LG: Mm-hmm.

Hundred-room hotel. In order to run Recharge efficiently, really we need to understand, even if we’re 100 percent occupied, we have 100 people coming in, there’ll be 20 people who leave early in the morning and 20 people who don’t come until late at night, so you have all this vacancy during the day. We’d have to understand the number of vacant rooms that you have per hour of the day, and our technology ...

KS: They’re probably predictable, too.

It is predictable, right. When you look and you actually study the arrivals and departures, patterns of every hotel, it is predictable and that allows us to be able to interface that vacant inventory to our customers.

KS: Yeah. That’s interesting.

LG: Are you able to spot patterns or are your hotel partners able to spot patterns, based on the kind of traveler it is? For example, if there’s a family of four, are they leaving before checkout time, or right at checkout time, compared to the business traveler who maybe is up and out the door by 7 o’clock in the morning because she has business meetings to get to. Do you have that granularity of detail around who are these people who are using this and how they’re using hotels?

One hundred percent, but I want to doubleclick into the word you used, you used traveler. That’s not what we focus on, and here’s why. In traditional hotels, apartments, this space overall, people service the traveler. When you break down the time function to the minute, all of the sudden we now have locals, we have a lot of locals, as well as commuters and travelers.

So we have customers that use us who come in from LA, and we also have customers who use us who come in from Palo Alto and Alameda, or we’ll have customers who live in the Sunset and work in FiDi. We segment out our customers along travelers, commuters and locals, and there are huge differences.

I think the other thing that makes this really interesting is that the demand patterns are extremely different. If you think about Thanksgiving, a lot of times those hotels are very empty, but we’ll have commuters that are coming in on Black Friday, right?

KS: Yeah.

So, that ... different patterns also kind of adds to the value prop as we fill in their vacancy.

KS: Right. Okay. We have a lot of questions, but last very quick question, if you answer briefly, you have a lot of ... The hotel chains like Yotel, that sort of does this.

Sure.

KS: What’s the biggest difference between what your competitors do — there’s day use, hotels by day, even Breather, and apparently you guys use Breather at The Verge?

LG: We use Breather a lot at The Verge, but it’s funny because we’ll use it for our video shoots.

Got it.

LG: Breather, for those of you who don’t know, is a service kind of like this, there are these empty spaces around the city, they’re usually really nice-looking, like if you ever look at our videos and you think, “Oh wow, The Verge writers all have these perfect millennial little apartments,” I don’t have exposed brick in my home and nice airy lighting, and all of this shabby chic mid-century modern furniture.

KS: I do.

LG: You do?

KS: No, I don’t.

LG: The Breathers all have that aesthetic and we shoot a lot of our videos in them.

KS: Smart.

LG: The one thing I’ve always thought is, I wonder if I could ever take a nap in this place? Like if I ever really needed to take a nap. Two, there are no showers, from what I have seen.

KS: I did it the other day on an Airbnb Experience. They were renting something that was ...

LG: But that’s an Airbnb, where you’d expect the ...

KS: No, it was an Airbnb Experience and the guy said he got the thing for temporary use to do his ramen thing. Anyway, it was really interesting.

LG: Oh, that’s interesting.

KS: It made me think about all the unused space everywhere.

LG: Yeah.

It’s everywhere.

LG: The Breather is a good example of this, too. So what would you say is your biggest differentiator between all of the examples we’ve just listed?

Yeah, I think Breather is certainly one of the companies that we think about in the foray of fluid real estate.

KS: Fluid real estate.

They’re reimagining the way that you can utilize real estate, and they’ve done a tremendous job. I would say the biggest difference is that we’re a living space. If you think about networks, you’ll have a network like LinkedIn, which is the world professional network. You have Facebook, which was the world’s social network. Recharge is building the world’s living network, where you can access and get living space for as long or as short as you want, anywhere, anytime.

KS: Yeah.

LG: What about kitchens, like if someone wanted to cook a big meal but they didn’t have the right kitchen for it, could you do that?

That absolutely would be a component of Recharge, right. Absolutely. Any living space.

KS: Airbnb. Obviously, Airbnb’s the one you’ve got to be nervous about.

We’re nervous about a lot of things.

KS: Yeah, Airbnb.

We’re nervous about a lot of things, we’re excited about a lot of things, as well.

LG: If you had to look at your next market that you really want to expand into, tap into, what is that market and why?

Yeah, absolutely. We have people on our waitlist in LA, in D.C., in Miami.

KS: Oh, areas, cities, yeah.

LG: Yeah.

KS: Cities. They’ve got enough to do with their hotel situation.

London, too.

KS: London.

The route between London and New York, it’s a pretty big one and so we ...

KS: I always get there at a weird time and I have to wait for my hotel. I would pay. I would pay to just have a little snooze.

Yeah.

LG: I’ve heard from a lot of business travelers who have said they would use this.

KS: Yeah, 100 percent.

So let’s get into listener Q&A.

LG: Yes.

Let’s do it.

KS: Okay. We’re here with Manny Bamfo, is that right? Bamfo?

Bamfo, absolutely.

KS: What a great name. The CEO of Recharge. Now we’re going to take some questions from our readers and listeners. Lauren, would you like to read the first question? We’re going to group them, right, Lauren? Correct?

LG: Yeah, because we got a lot for this one. This group of questions and comments were primarily concerns about cleaning crews, wages, even the environment.

Sure.

LG: Sam [Donnally 00:19:01]-

KS: Keep them short answers.

Absolutely.

LG: Sam Donnelley remarked that, “Hotel room cleaners are some of the hardest working, lowest paid people in modern society, I wouldn’t pay for this without some assurance they’re getting a cut of my money.” Lee Ball said, “On the one hand, I would use this,” I’m paraphrasing that, “but turning a room around for a few minutes’ use has to be bad for the environment.” Someone else was asking about the cleaning fee, if the cleaning fee is charged separately. James Strieb commented that, “Fixed costs like laundry and cleaning could kill the concept. The rooms and buildings would have to have a whole new format.” Nick Felker says, “It takes a while right now to clean out a hotel room for the next guest, would the turnaround time be faster?”

KS: Okay, that’s a whole lot of questions.

That’s a whole bunch of questions.

LG: It’s really all about the cleaning.

KS: Let’s start with paying the cleaners.

Yeah.

KS: Let’s start with paying the cleaners.

Absolutely. We add more work for cleaners and so cleaners do make more money with Recharge. Every individual Recharge clean is billed at the exact same rate as a regular clean, even though, on average, cleaning a Recharge room is about half the time, but we still give the cleaners the same amount of cash as if they were to clean a room that somebody stayed in for three or four days, for example.

LG: And you’re paying that, Recharge is paying that to the hotel, who pays it to the cleaning crew?

KS: It’s through the fees.

The hotel will pay the room attendants, will pay the cleaners on our behalf.

KS: But you can’t make them do that, right?

We cannot make them do that, but all our hotels are compliant with union rules and so they do do that.

KS: Okay.

LG: Okay.

KS: All right.

LG: So, that fee, is that something that’s worked into the service charge? When I, as a customer, come and pay Recharge, that ...

Not always.

LG: Okay, so where does that money come from?

Not always. It just comes from our customer plate. So, we always make sure ... Our averages are well in the hundreds of dollars and so, what you pay, what our customers paid to use Recharge, covers the cleaning fees and then some, to make sure that our cut and the hotel’s cut is well worth everybody’s while.

LG: So, it’s not a percentage. It’s not a percentage of each stay that someone is paying that goes to cleaning, it’s actually a flat rate based on Union rules.

Not necessarily. Each hotel will have their own rate that they pay their cleaners, they have a certain amount of credits, which is a certain amount of cleans that each room attendant will do per day, and they pay out in accordance to their own hotel. What we’ll do is, we’ll make sure that the money that they receive from the customer more than pays for that.

For example, in some five-star hotels — we operate at the Pierre, we’ve operated at the Taj, we’ve operated at Four Seasons — to clean those rooms, it costs more than, for example, cleaning at a Hyatt. We make sure that in the rate that we have, when the hotel receives the customer plate, it more than covers the cleaning cost.

KS: Cleaning cost, all right.

Even though the cleaning costs ...

KS: Presumably there’d be more work for people.

LG: What about the environment? When you go do a hotel room now, they always say, “Please reuse the towels, please reuse the sheets, let us know if you want to reuse them because it’s greener,” right?

Yeah, absolutely.

LG: I guess if three different groups, or families, or people are coming through ...

KS: That’s the way it goes, it’s not good for the environment. You can bring your own towel.

LG: Maybe they’re not all using the towels.

KS: Yeah.

LG: You never know.

KS: You could bring your own.

It’s a lighter use of the room, but this is something that we’re focused on, as well. As we continue to grow, we’ll begin to measure this and work to making it as environmentally friendly as possible.

KS: That’s hard. That’s a hard one. There’s more towels.

LG: Is there a flat fee or a flat split that you’ve established with all of your hotel partners, or does it vary?

It depends. It depends. It depends on the hotel.

KS: Yeah, but cleaning the towels and washing them is a cost, is certainly a cost.

LG: Okay.

But it’s all of this stuff that gives us our advantage. If you think about a lot of the innovations that have come from the hotel, a lot of it was driven primarily just by being online. Just by being mobile.

KS: Right.

This is one innovation that is actually coming from the operations. To the person’s question about, “Wow, cleaners are very hard-working, not necessarily paid very well,” our position is, we know that. When we think about the gig economy, one other thing that really excites us is that this innovation is actually being driven from the inside of the hotel. It’s a combination of looking at workplace efficiency as well as technology.

LG: Being driven from inside the hotel, how so?

The operations.

LG: What do you mean? As opposed to ...

The cleaning schedules that are changing, it’s the way that they are actually working, it’s the actual workers in the hotel that ...

KS: They have not changed that, at all, I think. I’m guessing the hotels are run incredibly badly.

LG: I imagine that’s why the ...

KS: They take away things the way airlines do, they’ve taken away room service, they’ve taken away ...

Correct.

KS: That kind of thing, which you can get stuff delivered now, but it’s a really interesting question that hotels are very much like airlines. The experience has not gotten better at a hotel, I think, over the years, because of technology.

LG: Well, and they’re allowed to do that because they rely on fixed schedules, for the most part.

KS: Right.

LG: Whenever you rely on an 11 a.m. checkout time or a 3 p.m. check-in time, then that window in the middle ...

KS: Nobody does fixed anything anymore.

The world is not fixed anymore.

KS: The world is not fixed, it’s not. Think about retail.

It’s fluid. It’s not fixed.

KS: The other day, I was getting something at the store and it was not open, and I was like, “I’m going to Amazon.”

Yeah.

KS: I don’t think about it at all, which is interesting. You’re right, the world is not fixed. That’s a very good quote for 2018.

LG: Are you in touch with cleaning people who are adapting to these new schedules?

KS: They’re like your drivers, they’re your drivers.

LG: Yeah, exactly. Are you in touch with the people who are actually doing the groundwork at one of your partner hotels who suddenly has a cleaning maybe in the middle of the day when normally it would be checkout time, or whatever it might be?

Our technology and operations do interface with all aspects of the hotel to make sure it runs efficiently.

KS: Okay. All right, well, we’re going to be watching you on that one. All right, from this already exists category of comments, don’t be offended Manny.

No, no, bring them on.

KS: “Super common in China to pay by the hour, I’m surprised it’s not a common practice elsewhere.” Oh fine, China does everything right. Good idea. “There’s a startup in Barcelona that already does that,” thank you. “Amsterdam airport, shower hotel.” All right, we know those. “Be aware,” Treb Gatte again, “Be aware we have this service via American Express Centurion Lounges, I’ve had meetings, meals, and showered there, it’s also right here at the airport, I guess it depends on the larger market.” Yes, if we don’t all have the American Express black card, we can’t do these things.

LG: I don’t think you have to have the black card for Centurion, but you ...

KS: In any case, they’re expensive.

LG: Right. Yes.

KS: They’re expensive and it’s not sleeping, it’s not snoozing. I think the only place I’ve ever snoozed was a German ... Frankfurt Airport, I think, I snoozed in a capsule.

LG: Wait, Amsterdam Airport has a shower hotel?

Mm-hmm.

KS: You just take a shower though.

LG: Cathy Klapperich says?

KS: Yeah.

LG: I’ve been to Amsterdam Airport, I didn’t know there was a shower hotel there.

KS: They always had that. They do, but it’s not easy.

At SFO, the international terminal, there’s actually a shower that you can book ...

KS: Is there?

There is.

LG: Really?

Yeah. Yeah.

LG: I was just there, I didn’t know that.

KS: It’s hard to find.

It’s hard to find. So that’s what we do, we bring this to the forefront of the consumer’s mind.

KS: Yeah.

Letting them know that at the click of a button, there’s always living space you can access.

KS: That’s the concept that people don’t get it.

Yeah. One of the most surprising use cases that have kind of come up with this concept are just the whole host of nursing moms that have started to use this, right?

KS: Yes.

Where now they don’t have to pump in the bathroom, they don’t have to go and look for privacy, they can always find privacy whenever they need it and rely on Recharge.

LG: I was just going to say, it’s a nice idea if your workplace is not providing the proper room for you, which they should, then I would hope this would not have to be your fallback, but if you’re really in between places and you’re not relying on a workplace to provide a mother’s room for you, then that’s a really good option.

You know, I ended up stranded in Hong Kong at five in the ... I shouldn’t say stranded, but it was like five in the morning when I landed, and I was in Hong Kong, and I didn’t know anybody, and I couldn’t check into my hotel room, and I ended up sitting in a steam room for like two hours.

That’s crazy.

LG: I was very dehydrated.

KS: That’s ridiculous

LG: Well, there was ... I don’t know, there was also a bench outside of the steam room where I could just sit for a while and then I could shower, but ...

We’ve heard all sorts of stories.

LG: Yeah.

We’ve heard people say that they will crash on the floor of an Equinox, or on their office floor or in a movie theater. We’ve heard all sorts of things.

LG: Yeah, I was going to say, my significant other’s big on the gym thing. He takes a lot of red-eye flights and when he lands he always just tries to find a gym that he can go shower at, and sit ...

Well, give him a code, he can use Recharge.

LG: We cannot accept gifts, Manny, but thank you very much for the offer. He would probably try this anyway.

KS: We know it’s out there, but it’s not out there like Uber used to not be out there. It is, but it’s not. It’s hard. It’s hard to find.

LG: Yeah.

KS: It’s haphazard, anyway.

All right, next one, people who really liked the idea.

LG: Yeah, these are people who were stoked. Matt Rosoff from CNBC. Well, this is when I asked people if they would be interested in this.

Sure.

LG: He said, “Yes, absolutely. Regus already does hourly conference room rentals, probably others do as well. Hotel room rentals make sense.”

Yep.

LG: Natalie Panek, she just wrote the 100 emoji. Brianna Wu — who’s written into the show a couple times recently, thanks Brianna — “I would absolutely pay for this, there have been so many times while traveling I need a place to stop and make a few calls.” Tiffani Ashley Bell says, “I would. I always want to do that to fix up my hair before a meeting, but rare to find outlets in public bathrooms to be able to curl your hair, for example.”

KS: Yeah.

LG: This is true, plus you don’t want to be that person standing there with a hot iron, some type of tool, I always think of this when I’m traveling with my curling iron.

KS: You never want to be the person with the hot iron.

LG: I never want to be that person standing there in the bathroom.

KS: Do you have a hot iron, Lauren?

LG: I have all kinds of hair tools. Really?

KS: You have long hair, you’re right.

LG: One of my brothers is a hair stylist, it comes with the territory.

KS: I have not seen a hot iron, ever.

LG: Yeah, he has better hair than I do.

KS: Yeah.

LG: Let’s just get that out of the way. Kelly Ann Collins, “Yes, I’ve rented rooms with HotelTonight just to nap, there are two services I have on speed dial just in case, but not by minute. Having a spot for six hours when you’re in a city for meetings then have to hop a flight, makes a lot of sense.”

KS: Yep, business travelers.

LG: #EntrepreneurLife.

KS: Yeah.

LG: People seem to really like this idea.

KS: Like the concept, yeah. So business travelers really are your focus right now.

Yeah, business travelers, for sure, but again, locals and commuters, we just ...

KS: Oh, commuters, talk about that.

We have customers in the Bay Area that have used us 100 times in 12 months. 100 times.

KS: Wow.

You start to think about, who uses Airbnb 100 times in a year?

KS: Yeah.

Now, when there are more reasons to use this space, it’s not just about when you fly to a new city, you can use it in your existing city, the number of use cases that explode.

KS: Right.

So, on the demand side, we’re getting more repeat, and on the supply side, there’s more yield.

LG: What about nefarious things?

KS: Nefarious.

LG: Okay, we have to get to ...

KS: I’ll get to this. Here, Ali Khayrallah, “Something poetic about the oldest profession, infrastructure, becoming a new startup.”

Yeah.

KS: By the way, Ali, you can have sex anywhere. “Seriously, if it can work, if they manage to squeeze the main cost, which is cleaning labor, so it may turn into another nightmare for non-employees, a la Uber.” Colin Brady, “When reading Weinstein —”

LG: Colleen Brady.

KS: Colleen Brady, sorry, Colleen. “When reading Weinstein-related pieces, surprised how many interviews take place in hotel rooms.” They don’t, it’s just a Harvey Weinstein original concept. “Maybe there’s a need for a new kind of meeting space that can be rented for short periods of time.” Yes, there is, like Workplace Café is one, there’s all kinds of stuff like that. Talk about the nefarious thing.

Yeah, I mean, listen ...

KS: Honestly, it’s none of your business, all of you people.

Yeah. This is not about rock and roll, this is not about going in, having a party, having some sort of affair, or anything like that. That’s not what this is about. Have people had intimate moments in Rechargers? I’m sure, right? You can do that anywhere. You can do that on the street, you can do it in an Airbnb, or a hotel, HotelTonight, Priceline, you can do that anywhere.

KS: Yep.

Our focus is really to take the control out of the supplier and put it into the consumers’ hands.

KS: Right.

When you do that, it’s just an extension of your house that you’re carrying wherever you go. It’s not about that purpose, but in the end of the day, when you open up a service for the world, the world will use it in every imaginable way. We take security very serious and we assure that, at the very minimum, when people are using our product, that they’re all safe.

LG: Worst case scenario, are you on the hook, are you liable in the event that, let’s say, someone does have a wild rager of a party and they trash the room? Or, let’s say someone who was in the room complains about some type of sexual harassment or assault while they were booked under your service, what happens then?

Yeah, absolutely. They would report it to us, we would investigate the issue, and we do have insurance, and we would take responsibility alongside the hotel to ensure that the customer who recharged with us was safe and everything was accounted for.

LG: Have you had any incidents like that?

We have not. We have not.

LG: Because that was a big moment for Airbnb, do you remember that?

KS: Yeah, yeah, yeah, the orgies.

LG: No, it was the anonymous person, I think her initials were EJ, who had her apartment completely trashed and that was, I think, the ... That was a big coming-of-age moment for Airbnb and how they initially handled it.

KS: Let’s be honest, there’s never been that happening in hotel rooms?

LG: No, no, no, that’s what we’re saying.

KS: Yeah.

LG: I’m saying, but when that happens in the life of a startup ...

They happen ...

LG: ... you’re going to have to deal with it eventually.

We just crossed New Year’s Eve, right? And the amount of partying that goes on in hotel rooms on those days ...

KS: That would be a good one, that would be interesting. Those are probably booked. Your issue is inventory, too, on peak times, when people actually want this for short times, right?

We get inventory 365 days, so ...

KS: At New Year’s Eve, I bet hotels, they’re always like, “We’re 100 percent booked,” or whatever.

Sure, but the thing that’s interesting is that ...

KS: Oh, getting ready for New Year’s parties, too.

Correct.

KS: Yeah, you could rent it for ...

LG: You want to pregame, Kara?

KS: No. No, but say you’re going into the city for a thing and you don’t want to dress and be dressed in the car, and driving up from whenever, from like where you live out in the boonies, for example.

LG: I don’t live in the ... I live in the Valley.

KS: And I won’t have you at my house. I won’t have you at my house to get dressed. That you would do that, you’d dress ... If you were going to an event at a hotel, you could dress there, and then just leave behind ... You could just do it.

Even those days that you’re mentioning, whether it’s New Year’s Day or not.

KS: I just thought of my use case.

Salesforce [is in town], we can use dynamic pricing to match yield, right? So if the hotel’s $1,000 a day, great, we can sell it at $250 an hour. We can match and we can ensure that we’re always performing service. It doesn’t always work like that, but we are a dynamic ... The reason it doesn’t always work like that is because our demand does not follow travel. Our demand curve is not a travel demand curve, it’s a curve composed of commuters, locals and travelers.

KS: Yeah. All right, but you have an age thing, right? Correct?

Correct.

KS: No prom goers.

LG: How old do you have to be?

18.

KS: 18.

LG: 18.

KS: Okay, all right, okay. That’s interesting.

LG: I’m sure some 18-year-olds go to prom.

KS: We’re going to finish up now, but Manny, again, it’s the idea of yield management, of ... So, technology really does help that. How behind are hotels in technology? I imagine a lot. They’re talking about doing things like having robots deliver room service, key check-ins.

Key check-ins, yeah.

KS: It still has taken forever to happen on your phone, no one’s doing it that much. I’ve done it maybe once or twice. They still have the plastic keys, they moved from regular keys. Where are we with hotels and technology? Because you would think, the one I did, there’s one in New York where I just check in at a kiosk and they issue the key, and I go up, I never talk to anybody, and I really like that. The whole check-in process is kind of like someone making you baked Alaska by the table, it’s like, give me my key and let me go upstairs. Talk about that just briefly before we end.

They’re behind.

KS: Yeah, thank you.

Period. They’re behind and many of these ... These guys are our partners and we’re working with them to get ahead of the times. It’s a weird dynamic and it’s because these companies that manage have ended up second to the OTAs. You have companies that are huge, like Marriott, that are a fraction of the value of Priceline, a fraction of the value of Airbnb, right?

KS: Right.

They’re spending so much time trying to figure out how to compete and to win against these online travel agents that have come and, for the most part, taken their pie, and it’s taken their eyes a little bit away from technology. They have a long way to go, and we’re definitely a part of the mix in continuing to push that along.

LG: I have to say, I’m at the point — this is going to sound really terrible, like I don’t want to interface with human beings — but I am at the point when I come to a hotel, I would rather not check in. They know I’m coming, I have a reservation, in most cases, sometimes it’s a last-minute thing, but there should be all kinds of authentication that has occurred beforehand or occurs at the point of entry, where you can just walk in and then you get an alert on your phone and it says, “You’re in hotel room 703,” and then you just go, and you tap your phone or your watch and I should just be able to go in.

KS: It’s like, there’s a line. Why is there a line?

LG: I don’t know why.

Walk up to the door, face ID recognizes you and when you’re done, you check out.

KS: Yeah.

LG: Granted, human beings are a very, very important part, critical part of the hospitality business, so I’m not suggesting that that should go away.

KS: But in better places.

LG: Right. It should be for other services.

KS: I want restaurant recommendations, although you can use that online, too.

LG: Right. Yeah, I did have an instance recently where a human being had to come help me out with something that wasn’t working properly in the room, but for the most part, just the check-in and checkout process, the checkout process is already pretty automated, but the check-in ...

KS: It’s the line waiting. I’ve waited in so many hotel lines.

LG: Yeah, just certain things-

KS: That’s why I’m not going to CES, I don’t want to wait in another line.

LG: Oh geez.

KS: There’s some big lines there.

LG: Yeah, they’re big.

KS: I don’t like lines. Every time I see a line, I’m like, “This was inefficiently done.” All lines should not exist.

LG: Kara, we should try and do a Recharge.

KS: Okay.

LG: We should have a meeting.

KS: You and I will do it. What do we do? Curl our hair with your curling iron? All right, we’re going to do it.

LG: Yeah.

KS: We’re going to do it.

LG: I’ll bring the curling irons.

KS: We’re not going to tell you, Manny.

LG: You bring the $12 juices.

KS: Yeah.

LG:From your fancy neighborhood cheese shop, wherever you go.

KS: Yeah.

LG: We’ll have a meeting.

KS: Okay.

LG: We’ll arrange a meeting.

KS: We could do a podcast.

LG: We could do a podcast from a Recharge.

We’d love to have you guys.

KS: All right.

LG: I don’t know, should there be napping?

KS: Yeah, we’ll nap.

LG: I tried napping when I was in the same hotel as you at South by Southwest, I tried napping, it was a disaster. I tried napping and Kara literally walked over to the bed and she handed me an eye mask, and I thought, “That’s so nice, she knows I’m trying to take a nap, so she handed me an eye mask.” Then she proceeded to make like seven phone calls. I was like, “I think you forgot to give me the damn earplugs.”

KS: You know, Lauren, I try my best with you and obviously you’re going to be constantly unhappy. Anyway, we like the idea. Manny, we love the idea.

LG: Kara, I don’t want to escape you. I don’t want to escape you ...

KS: It’s true. In any case, we’re going to try it. I think it’s a really interesting company. The conceptual idea of yield management and empty space is a big one. Going forward, you could do it in lots and lots and lots of places.

And we will.

KS: Yeah. All right.

LG: Thank you so much for joining us.

KS: Thank you so much, Manny.

Thank you.

KS: We really appreciate it. This has been another great episode of Too Embarrassed to Ask. Manny, thank you for joining us, as we said. Thank you to KQED in San Francisco for letting us record in the studio today.

LG: Yes, thank you for letting us record here. We didn’t even have to use a Recharge to book it, but we’re here. If you all enjoyed this week’s episode as much as we did, be sure to subscribe to our show and you can leave us a review at iTunes.com/TooEmbarrassedToAsk.

KS: Also, Manny, what is the Recharge ... It’s an app on ...

It’s an app. You can get it in the Apple Store or in the Play Store on Android.

KS: And Recharge.com?

Recharge.co.

KS: .co, .co, okay.

LG: .co.

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This article originally appeared on Recode.net.