Adi Kamdar is a student at Harvard Law School.
Some gig economy startups are eschewing the route Uber and Lyft have taken and are, instead, classifying their workers as employees, not independent contractors. What I’ve referred to in the past as the “poster child” of this strategy is Managed by Q, which began as an office-cleaning service. The company starts its nearly 700 workers at $12.50 per hour, and it offers its full-time workers—which make up half the force—health benefits and a 401(k) plan.
A recent article in Quartz noticed that, while many competitors taking the independent-contractor route are going bankrupt or dissolving, Managed by Q’s “good jobs” strategy is paying off. The company is going strong, still hiring employees and still raising millions of dollars. While the office-cleaning service, known as Q Services, still makes up most of its business, the company has expanded to serve as a marketplace for other local service providers.
Most importantly, Managed by Q is announcing today that Q Services is profitable.
That profitability calculation includes salaries and benefits for all Q Services employees; recruitment, training, and software costs; uniforms and other equipment; and a standard umbrella insurance policy and workers’ compensation. It leaves out equity grants, rent for Q’s Manhattan headquarters, and salaries and benefits for corporate employees who work outside the services unit, fairly standard in calculating operating profit. Managed by Q as a company is not yet profitable.
“It was a big bet that we made on our approach to employment, on employing people at all, as a technology company,” [founder Dan] Teran told Quartz. “We would not have gotten to this point if we had not made the choice to not only employ people, but to go above and beyond in investing in their training and development, and make them a part of the business.”
While the company as a whole isn’t yet profitable, Teran points to the upfront investments he makes in Managed by Q’s workers as the key to success, increasing worker satisfaction and reducing turnover.
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October 9
DHS proposes a $100k fee for the foreign grad employment program; Trump suspends tech company access to green card program; and private equity perpetuates poor working conditions for home care workers.
October 8
NLRB judge finds UPS unlawfully restricted union insignia; Harvard graduate workers authorize second strike; OSHA orders Union Pacific to pay $300,000 in damages in whistleblower case.
October 7
DOL scraps plan to remove decades-old wage-and-hour guidance from federal regulations; New York enacts personnel records access law; Starbucks loses bid to dismiss Workers United trademark suit.
October 6
Protect College Sports Act dampens athlete unionization outlook; Stanford RA union decides to withdraw petition
October 5
Delaware bans captive audience meetings; EEOC settles remote work national origin discrimination claim; First Circuit stays enforcement order in VA's dispute with AFGE.
October 4
Boston nurses announce open-ended strike; federal judge restores federal prison workers' union protections; St. Louis workers form the first movie theater union in Missouri.