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.
Daily News & Commentary
Start your day with our roundup of the latest labor developments. See all
June 5
Nail technicians challenge California classification; oral arguments in challenge to LGBTQ hiring protections; judge blocks Job Corps shutdown.
June 4
Federal agencies violate federal court order pausing mass layoffs; Walmart terminates some jobs in Florida following Supreme Court rulings on the legal status of migrants; and LA firefighters receive a $9.5 million settlement for failure to pay firefighters during shift changes.
June 3
Federal judge blocks Trump's attack on TSA collective bargaining rights; NLRB argues that Grindr's Return-to-Office policy was union busting; International Trade Union Confederation report highlights global decline in workers' rights.
June 2
Proposed budgets for DOL and NLRB show cuts on the horizon; Oregon law requiring LPAs in cannabis dispensaries struck down.
June 1
In today’s news and commentary, the Ninth Circuit upholds a preliminary injunction against the Trump Administration, a federal judge vacates parts of the EEOC’s pregnancy accommodation rules, and video game workers reach a tentative agreement with Microsoft. In a 2-1 decision issued on Friday, the Ninth Circuit upheld a preliminary injunction against the Trump Administration […]
May 30
Trump's tariffs temporarily reinstated after brief nationwide injunction; Louisiana Bill targets payroll deduction of union dues; Colorado Supreme Court to consider a self-defense exception to at-will employment