Human powered search startup ChaCha has been the subject of a little bit of ridicule at TechCrunch since its launch, thanks to its entertaining snafus and some issues with its business model. Despite its various problems over the years, the company has been able to raise a boatload of money, as much as $62 million, adding another $4 million to the pot most recently.
Unfortunately, some of the human “guides” who find the search results for visitors to ChaCha are taking a pay cut once again. Last summer, ChaCha implemented a “Pay-For-Performance” system, that forced guides to work five or more hours per week if they want the higher payrate (20 cents per question), which we said would alienate the site’s more casual (but accurate) users. Regular guides would make 10 cents per question. Now, ChaCha has decided to cut the rates of “Voice Transcriber” guides from 4 cents (people who transcribe voicemail questions and answers) to 3 cents per transaction, with the pay cut taking effect last week.
ChaCha said that because the startup is answering nearly 600,000 questions a day, they need a workforce of more than 55,000 guides to answer the questions properly. The startup claims that their budget is too small to compensate transcription guides with higher payout. In an email sent to guides, ChaCha said that Transcribers have enjoyed the “relative” highest pay of all guide roles, with other types of guides (i.e. the guides that answer questions) and even ChaCha headquarters staff enduring pay cuts beforehand.
We contacted the company to inquire about these cuts, and were told that the “Pay-For-Performance” system was eliminated in February and replaced with a pay system based on the difficulty of the question answered. Many of these guides are only interested in making a quick buck, which is why there are frequently poor search results. But for other guides, ChaCha is an extension of the workday, offering some relatively easy money to help supplement their incomes. Under the new compensation system answering a math question would get a guide 20 cents but answering a more simple question would only get 10 cents. This seems like an improvement to the previous flawed system, which seemed to alienate many guides who actually answer questions correctly.
Regardless, the cut from 10 to 3 cents for transcriber guides over the past year is considerable and will likely see some backlash from that faction of guides. Last year, guides were apparently not being paid on time by ChaCha.