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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July 15
The Department of Labor announces new guidance around Occupational Safety and Health Administration penalty and debt collection procedures; a Cornell University graduate student challenges graduate student employee-status under the National Labor Relations Act; the Supreme Court clears the way for the Trump administration to move forward with a significant staff reduction at the Department of Education.
July 14
More circuits weigh in on two-step certification; Uber challengers Seattle deactivation ordinance.
July 13
APWU and USPS ratify a new contract, ICE barred from racial profiling in Los Angeles, and the fight continues over the dismantling of NIOSH
July 11
Regional director orders election without Board quorum; 9th Circuit pauses injunction on Executive Order; Driverless car legislation in Massachusetts
July 10
Wisconsin Supreme Court holds UW Health nurses are not covered by Wisconsin’s Labor Peace Act; a district judge denies the request to stay an injunction pending appeal; the NFLPA appeals an arbitration decision.
July 9
the Supreme Court allows Trump to proceed with mass firings; Secretary of Agriculture suggests Medicaid recipients replace deported migrant farmworkers; DHS ends TPS for Nicaragua and Honduras