Handy CEO Oisin Hanrahan, and Managed by Q CEO Dan Teran joined TechCrunch Disrupt in New York on Tuesday to discuss the evolution and shortcomings of the so-called “gig economy.”
Both startups help customers book quality cleaning and maintenance services, on-demand or at a convenient time. And both expect to be profitable within the next year. But the companies have taken different approaches to talent and the services market.
Managed by Q targets businesses who need office management services. It provides these services with thousands of its own, trained W-2 employees. It more recently rolled out a marketplace featuring vetted small businesses that provide similar services.
Meanwhile, Handy connects home owners with independent 1099 contractors who are background-checked and evaluated for quality by the startup.
TechCrunch editor Jon Shieber asked the executives if the “gig economy,” is actually harming workers, especially independent contractors and small businesses who used to have a more direct connection to their customers. Hanrahan said that’s a too-pessimistic conclusion.
Handymen, plumbers and all manner of service professionals have always had to put a lot of work into figuring out where and when they can work, with what kind of people and for what rate, he observed. “Should I buy leads? Will they convert? Should I pay for advertising? Should I pay per click?…You go all the way back and local business was built on flyers, classifieds and it was always hard for people to know if they were doing it right,” Hanrahan said.
Online booking platforms can help these professionals navigate such issues, mitigate costs and connect with customers, fast.
Managed by Q’s Dan Teran agreed for the most part, but more directly acknowledged that online marketplaces are taking a cut of service professionals’ revenue. He emphasized that in the US, many small business owners and independent contractors are left without the benefits enjoyed by full- and part-time employees.
Managed by Q is heavily involved with local policy, and promotes worker-friendly legislation in and beyond New York where the company is based.
Teran said, “The public conversation has created a false choice between W2 and 1099 work, and a false choice between flexibility and good jobs. In reality, the part time job has existied for generations. We have plenty of workers who choose their hours but are paid as W2 employees and have the protections of employment.” However, he said, he’d like to see state and federal policies that give freelancers and small businesses great benefits, too.
Handy’s CEO added, “It’s very very serious if [freelancers] lose their healthcare.” Beyond the negative impacts to their health and financial well-being, he said, a lack of health coverage can impact the availability of essential services that freelancers provide.
Neither entrepreneur professed to have a solution to helping workers stay healthy and productive while doing fulfilling work on their own schedule. But they agreed that assigning benefits only to those who work a certain number of hours, or generate a certain amount of income, creates problems.
Hanrahan said, “Cliffs cause problems and perverse incentives. I’d rather see benefits offered to everyone on a gradient, like a percentage of dollars earned or an hourly basis.”