Making the On-Demand Economy Work for Workers

Managed by Q’s success shows that it’s possible to create an on-demand product while serving both employees and clients rather than shorting the former for the benefit of the latter (we’re looking at you, Uber, Lyft, and all the rest).
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Managed by Q’s success shows that it’s possible to create an on-demand product while serving both employees and clients rather than shorting the former for the benefit of the latter (we’re looking at you, Uber, Lyft, and all the rest).
(Photo: Managed by Q)

(Photo: Managed by Q)

Managed by Q, a Manhattan start-up, will provide cleaning services on demand with the touch of an iPad the company will install for free in your office. Other services include restocking office supplies and sending a repairman to do last-minute work. And the only charge for what you use, rather than a recurring subscription fee. It’s like Uber for tidy workplaces. Except, it’s not like Uber at all, because Managed by Q has managed to build a business while also providing its workers with stable employment and benefits without sacrificing efficiency.

“Companies want to run their business and don’t want to do anything else that’s not core to their service,” says co-founder Saman Rahmanian. Where businesses usually have to staff up an office management team to run their spaces, Managed by Q does the dirty work for them. The iPad that clients can place their orders from—for a last-minute scrubbing or a fixed toilet—is like an “operating system for physical space,” Rahmanian says.

What’s surprising about the company isn’t its fundamental business model. Similar on-demand services already exist for home cleaning. Managed by Q was originally designed to service New York’s residential towers as a replacement for older, less technologically savvy cleaning crews, one-upping them for speed, responsiveness, and glossy branding for what remains a grubby industry. Rather, it’s the employment structure. Managed by Q has found that by not making its workers compete for work on a platform it controls, as Uber, Lyft, and Homejoy do, it can offer a better product and achieve better results.

A marketplace model—drivers struggling to catch every fare they can while retaining good user reviews and surviving shifting prices, for example—creates competing incentives for the company that owns the platform and the workers who perform the labor.

Like Zirtual, a Las Vegas virtual assistant company I covered previously, Managed by Q found it difficult to reconcile the economy of relying on contract workers with what it wanted to achieve. “We started working with big cleaning companies to subcontract from them and realized we couldn’t get results we wanted if we didn’t have direct control over the labor,” says co-founder Dan Teran.

A marketplace model—drivers struggling to catch every fare they can while retaining good user reviews and surviving shifting prices, for example—creates competing incentives for the company that owns the platform and the workers who perform the labor. The platform seeks to optimize the value it extracts from the workers while workers figure out ways to subvert the system in their favor.

Instead, Managed by Q hires staff employees whose schedules are planned out in advance and optimized toward the day’s requests. “Helpers” who assemble Ikea desks, change light bulbs, or hang artwork “might have a full day traveling between offices,” Teran says. Cleaners “have post-lunch clean-up shifts across different offices” or a six- to eight-hour shift at night, cleaning three or four offices for two hours each. “We keep in mind where they live and keep their accounts closest to transit routes for them,” the co-founder says.

Unlike competitive platforms, Managed by Q offers another perk of traditional jobs: opportunity for advancement. Cleaners can become supervisors, and helpers can be trained by the company to complete higher-wage work—something only possible with W2 employees, not temporary contracts. “In order to retain the best people, we also needed to be the best employer,” Teran says.

After its recent hiring of David Plouffe, previously one of President Obama’s chief political strategists, Uber has been trumpeting its “job creation,” particularly with its upcoming push to expand in Europe, where it claims it will create 50,000 jobs across the continent. While it lacks that massive scale, the 150 jobs created by Managed by Q across 200 offices in New York are more recognizable as jobs rather than part-time gigs. The company’s churn rate—how often employees turn over—has been less than one percent in the life of the business, according to Rahmanian. “It allows us to look at people almost like part of the product,” he says.

Handymen on demand. (Photo: Managed by Q)

Handymen on demand. (Photo: Managed by Q)

W2 jobs still aren’t necessarily full-time roles with the perks, salary, and equity enjoyed by start-ups’ higher-end employees. But Managed by Q’s success shows that it’s possible to create an on-demand product while serving both employees and clients rather than shorting the former for the benefit of the latter. The company’s rate of growth will never be as significant as Uber’s because scaling up requires more care in finding stable customers and staff (all Managed by Q offices buy at least four hours a week of cleaning at a cost of $25 per hour). But its model is more sustainable and its social impact more positive. “As an employer we’re allowed to create communities,” Teran says.

In other words, the company and the workers both are invested in the success of the service. Thought it might not be as outwardly disruptive as other start-ups, Managed by Q is poised for survival—a quality, after all, we also value in the technology we use. 

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