HomeHero is shutting down its on demand caretaking service for seniors, the company’s CEO and cofounder Kyle Hill said in a blog post. He blames a Department of Labor decision from October 2015, which upheld a federal ruling stating that more than 2 million home care workers would qualify for the Fair Labor Standards Act — and in particular qualify for overtime benefits. He added that California legislators agreed to boost minimum wage to $15 by 2022, which would force HomeHero to increase its rates.

“Almost exactly one year ago, HomeHero lost its core identity when we were effectively forced to terminate our working relationships with 95 percent of our 1099 caregivers and required to adopt an inferior employment business model,” Hill wrote. “In the process, HomeHero also lost a majority of its competitive differentiators in price, speed and scalability that allowed us to be so disruptive in 2014 and 2015, and it had nothing to do with competition.”

He also blamed “pilot fatigue” for the failure — HomeHero worked with health systems, such as Kaiser Healthcare, Cedars-Sinai Medical Center, Stanford, Dignity Health, University of California, San Francisco Medical Center, Providence Health — but according to Hill, most of those pilots were being constructed solely for case studies and had slim chances of turning into sustainable contracts.

“Simply put, despite serving thousands of patients since 2013, we do not believe a technology-enabled W-2 home care agency is our most attractive business opportunity going forward. Rather than continuing to push the boulder up the hill and risk a spectacular failure, we will attempt to leverage our talented team, unique experience and technology IP to build a more sustainable healthcare business outside of home care,” Hill concluded.

At this point, it’s anyone’s guess what the HomeHero team is up next…