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These Startups Are Ditching the Uber Model and Hiring Full-Time Workers

Photo: Courtesy of Managed by Q

When Dan Teran set out to launch an on-demand office services startup in 2014, the model to follow appeared obvious. Companies like TaskRabbit, Handy, and Uber had fired up the gig economy by hiring thousands of workers as independent contractors. In doing so, the startups benefited from a cheaper workforce, and workers got to enjoy greater flexibility in when and how they worked.

But Teran had just read management expert Zeynep Ton’s newly published book, The Good Jobs Strategy, in which she held up companies like Zappos and Trader Joe’s as proof that investing in a workforce can make a company more profitable in the long run. Teran couldn’t shake the feeling that Ton was right. On top of that, the 1099 contractor model was just starting to show signs of weakness, as Uber had recently been slapped with a class action lawsuit alleging it was exploiting drivers. So in launching Managed by Q, Teran decided to make what seemed like a gamble: He would make members of Q’s workforce full W2 employees, eligible for company-paid health insurance, a 401K with match, and paid family leave.

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