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Companies in other sectors, like Starbucks and the burger restaurant Shake Shack, had programs that offered equity to ground-level workers. Managed by Q, Dan announced, had decided to bring the idea to tech startups by designating 5% of its equity shares as stock options for field operators like Ty.
It was a milestone moment. Starting any company is difficult. Dan sometimes looked sleep deprived, and he rarely took a day off. His personal relationships suffered under the weight of his work commitments, and he went through hard periods when people quit or had to be fired. Because Managed by Q had taken on the task of defining a good job, there was another difficulty on top of those shared by most entrepreneurs. Dan had to figure out policies that could work both for software engineers and for cleaners who were paid by the hour, and he had to at least try to understand the challenges faced by a workforce with whom he had little in common.
Even after all of this effort, the result was quite humble. It was hard work scrubbing toilets and desks for fair wages and basic security. Managed by Q had figured out how to make it good for business by selling other office services and supplies, and by reducing the number of customers who quit its service and the number of workers who quit its jobs. In a better world, the concept wouldn’t warrant a press conference. Still, Managed by Q had created a little bit of the impact Dan had once been looking for when he wanted to be a politician.
As Secretary Perez took the microphone from Dan, he addressed the Managed by Q workers in the audience. “When someone asks you ‘Where do you work? What do you do? What are you building?’” he said, “Tell them, ‘You are building the middle class in America, that is what you’re doing.’”
* * *
The next day, Managed by Q had plans to explain its new policies at an “operator assembly,” one of the regular gatherings that had evolved from Managed by Q’s early pizza parties with its subcontracted cleaners. All employees at the company gathered for food, updates, training, and awards.
The meeting felt more like a family reunion than a stodgy press conference. Black-and-white streamers weaved between pipes on the ceiling. Toddlers roamed around with their parents, and a buffet of pulled pork sandwiches had been set up next to a stack of paper plates and a cooler full of soda. Instead of the sounds of reporters’ keyboards and Dan’s foot nervously tapping on the floor, soda cans popped and conversations broke into laughter.
Dan, though, looked like he was on the verge of tears.
“I’m sure you noticed on your way in,” he told me, “that there’s a union asking people to sign cards.”
Managed by Q was no longer quite part of the “gig economy,” because it had made a decision to hire employees. And employees, unlike independent contractors, had the legal right to form a union. A local branch of the United Construction Trades and Industrial Employees Union—which was small enough that it listed administrators’ first names on its voicemail greeting—now hoped the workers would choose to do so.
If its employees were to unionize, Managed by Q’s business would need to change. The startup typically didn’t compete with the unionized companies that cleaned high-rise buildings, but rather with those that cleaned smaller office buildings that, unlike many New York City skyscrapers, had no obligation to use only unionized workers. Dan feared he wouldn’t be able to compete against those smaller companies’ prices if he were to both comply with the union’s prevailing wage and offer his current benefits package (for a worker who opted into every benefit, he estimated the hourly cost of that package to be around $20 per hour).
I felt conflicted by Dan’s nervousness at the union’s appearance. A union official conceded that Managed by Q’s wages weren’t particularly bad—that “it wasn’t treating workers like dogs”—but said the startup was still “nowhere near where it needed to be.” And it was true that Managed by Q’s starting hourly wage was significantly lower than that for unionized cleaners who worked in high rises.
But by this point I had observed Managed by Q for more than a year, interviewing both executives and workers, and I had seen how it consistently made decisions that improved jobs, even when under no requirement to do so. It had gone so far as to offer workers fully paid healthcare benefits and equity, both uncommon in janitorial work (and professional work, for that matter). Its workers spoke highly of the opportunity to advance along a career path. Wasn’t this, too, a valid model for creating good jobs?
Even if Dan were worried about the union organizers that were hovering near the office building door, as he started speaking into a microphone, he looked more comfortable than he had at the formal press conference. “I know it’s Saturday,” he started, “but personally there’s nowhere I’d rather be.” He ran through the highlights of the past few days, how the secretary of labor had come to speak at Q, and showed photos of “these beautiful operators” whose well-lit portraits had appeared in the New York Times Magazine.
Again, he spoke about how the business benefited by providing good jobs as he ran through the new benefits. Managed by Q would start contributing to workers’ 401(k)s, so that every time they put in a dollar, the company would match it with another 50 cents.
“How many folks here have kids?” Dan asked.
Most of the room raised hands.
“I don’t. I have a dog.”
More laughter.
Managed by Q would begin paying up to 12 weeks of full salary for operators after the birth or adoption of a child. The benefit would be based on tenure and whether the employee was a primary caregiver, but Managed by Q would contribute to fathers’ incomes while they spent time with new children, too.
“Now the last thing, that I’m probably most excited to share with you guys,” Dan said. “Everybody here knows that Q is a startup, right? We’ve all seen in the papers that the guy who painted the wall at Facebook made millions of dollars because he was paid in stock. Well, I’m here to tell you today that this isn’t a place where only the executives and software engineers are going to do well if we build something big. Over the next five years, we’ll be giving away five percent of the company to the operators working in the field.”
Most startups don’t survive long enough to be acquired or go public, and the ultimate value of the gesture might be nothing. Juno, a startup ride-hailing service that had promoted itself as a good employer, had also offered workers equity. It had recruited independent drivers under the premise that it offered them better terms, but had under-delivered on its promises when a competitor bought the company for $200 million. Advertising materials for Juno suggested that Juno’s equity units were worth $0.20 per share, but in the end, they were worth as little as $0.02 per share, leaving drivers with only pocket change.1
Dan hoped that, if nothing else, the gesture of offering equity shares would convey a message. “This is incredibly important for me to communicate to you,” he said. “It’s not my company, it’s not the company of the people who work in this office. It’s every single person here’s, we are all on the same team.”
After his speech, the group split up to attend smaller sessions focused on training, on answering questions about the new benefits, and, in one room, on just getting to know each other. But before they dispersed, Dan referenced the union. “I think you guys who have been here for a while understand that we’re deeply, deeply interested in building this company together,” he said, “and I think that our operators are exactly the right people to represent themselves.”
Operators cheered just as hard as they had for their new equity packages. “Yeah, Dan,” someone screamed. I passed Dan on my way out. “After that, I feel much better,” he said, once again looking like he might cry.
About a year later, the union submitted a petition to the National Labor Relations Board to represent Managed by Q’s workforce, but on the day of a scheduled hearing, it withdrew the petition because it hadn’t collected enough votes from workers.
In October 2017, Managed by Q announced that its cleaning and handyman operatio
n was not only a direct employer of around 700 workers (about half of them full-time), but a profitable business. The Good Jobs Strategy had not yet created a blockbuster hit startup, but it had survived.
* * *
In 2014, Trebor Scholz, a professor at the New School in New York City, left a conference panel about “the future of work,” as he put it to me, “with the words of a Mechanical Turk worker ringing in my ears.” The panel had discussed how little voice workers felt they had in their employment conditions on the platform. When they faced problems like clients who “rejected” their work, saying they were unsatisfied and wouldn’t pay (but who still kept and used the work for free), there was no way to challenge the decision. Similarly, they had no systematic way to request features that might make their work easier to complete or to report abusive clients.
“If all these critiques [of Mechanical Turk] are true,” Trebor remembers the worker saying, “then why don’t we build our own platform?”
The worker was Kristy.
After the disappointment of Dynamo, the online organizing platform for Mechanical Turk workers Kristy had helped build, she had come to the conclusion that the only way to make sure the interests of crowd workers were considered was to have workers run the platform. To bring an old idea—cooperatives—into the new economy.
Trebor agreed. It was an idea around which he eventually based a book and a conference that was attended by 1,500 people.2 He named it “platform cooperativism.”
Typical arguments against cooperatives are that they are slow—voting on decisions takes time—and that they lack the means to market themselves. But, Kristy and Trebor both argued, technology could solve some of these problems. Voting could take place electronically, which would make it faster. Marketing theoretically would be cheaper using social media and digital advertising. The digital infrastructure for a ride-hailing app or a task marketplace, unlike a brick-and-mortar building, could be shared between several different companies. And the emerging blockchain technology, the decentralized ledger-keeping system behind the success of Bitcoin, promises to make transactions between people easier and less costly by making them incredibly secure and transparent without intermediaries.
Still, Trebor was often asked: Could a self-funded cooperative really compete with venture-backed startups like Uber? The lobby of Uber’s San Francisco headquarters featured a ceiling-high world map outlined on a black wall, with blue dots sprinkled over most of it, to show where Uber’s service was available. They sure had a head start.
That’s not the point, Trebor believed. “These questions are coming from the assumption about profit maximization rather than serving a set of members,” he told me in an interview. “You don’t need to destroy Uber. But can you create an ethical, smaller alternative?” In other words, if you’re not trying to create a jackpot win for investors, there’s really no need to paint a black map on the wall with which to track an expanding empire. All you’re trying to do is provide work for the people who own the company.
For obvious reasons, when workers have more control over company direction, they fare better. What may be less intuitive is that giving power to workers also arguably benefits companies. In German-style “codetermination,” for instance, workers take seats on company boards and form “work councils” that address day-to-day issues. While many once argued that Germany wouldn’t be able to sustain this system in a globalized world, a report from the Brookings Institute recently pointed out that, in fact, codetermination has shielded Germany from the detrimental impacts of short-term fixes to create shareholder value.3 As Susan Holmberg, the report’s author, explained in a Quartz op-ed:
Executive stock options, which incentivize irresponsible risk taking [and] fraud … are viewed by the German public and its workers as highly suspect, and they are issued at a much lower rate than in the United States. And while German executive pay has risen, it is nowhere near the levels of America’s juiced up executive pay, which has become a major driver of our inequality crisis. In 2015, the typical German CEO made $5.6 million while their U.S. counterparts took home $14.9 million. Beyond the numbers, the German sense of executive strategy and purpose remains intact.4
Platform cooperatives would take this concept to its logical extreme. They would be the ultimate expression of worker voice.
* * *
Starting a cooperative business, like any business, comes with some unique challenges. When in 2016 I interviewed Joshua Danielson, the cofounder of a cooperative version of TaskRabbit called Loconomics, he had just started to recruit the first service providers after more than a year of working on cooperative bylaws. Getting to that point had taken more time than expected. “We thought we’d go global within a couple of months,” he said. “Easier said than done.”
Joshua didn’t have the resources to hire a team, and he had been willing to go into debt for the cause. “I’m a 37-year-old white male with an MBA,” he said. “I’ll be fine no matter what happens.”
The plan was that workers on Loconomics would pay $30 per month to belong to the cooperative (eventual fees, depending on the type of membership, varied between $0 and $39 per month). All of the money they earned would be theirs—Loconomics wouldn’t take a cut—and at the end of the year, the dividends would be distributed back to the workers. “When you have people performing services for you that aren’t having 20% to 40% of their pay taken away,” Joshua said, “they’re probably going to do a better job. Hopefully we’ll attract people who want to create their own business, create their own brand.”
Stocksy, a cooperatively owned stock photo site, had been able to make this theory work. Together its 900 members created $7.9 million of revenue in 2015, more than half of which was paid out to them in royalties (the site pays much higher than industry average). Stocksy paid a $200,000 dividend to its workers that year, just two years after it was founded by an iStockphoto cofounder and an iStockphoto early employee. “We realized we could do it differently this time,” one of Stocksy’s founders told the New York Times, which noted that photos on Stocksy “are far from the standard fare found on many stock photography sites” in that “colorful portraits, unexpected compositions and playful shots greet visitors.”5
Kristy imagined she’d build a cooperative platform for crowd workers as part of her Ph.D., which she hoped to complete after finishing her psychology undergraduate degree. “Picture it like the internet,” she told me in 2015. “There is a central node. It will be the node that creates the software, provides the information and the payment processing. There will be a search function, like Google in a way, where you can search workers.” Each worker would also have a personal platform that employers could access directly, and be able to set his or her own rate. Employers could either handpick individuals to hire, if they were looking for a skilled worker, or they could fill out a template to hire an entire crowd, say, if they wanted to categorize a database of 10,000 images. Each person would have an identity—not just a number—and the ability to form relationships with employers.
Trebor frequently discussed efforts such as Kristy’s planned platform. “If contingency is the new reality,” he and a coauthor Nathan Schneider wrote in an essay for Fast Company, “how can we turn it into a good thing? We can’t expect the depressing trend of platform labor to change unless we demand and create a different way of doing business.”6
* * *
Terrence knew funding for the Samaschool Arkansas program was running out, and he could tell that the program hadn’t been making a scaleable impact, despite its good intentions. The non-profit had most recently tried to use its model for work centers in East Africa and India in Dumas—its sales team pitched companies to win work that it then hired the program participants to complete—but it was hard to find projects that paid an Arkansas living wage. So Terrence wasn’t at all surprised when Samasource’s managing director broke the news to him, in a phone call, that the organization had decided to leave Dumas altogether.
Ter
rence may not have been entirely surprised, but he was a little angry. He was angry that most of his students, due to circumstances beyond their control, didn’t have the resources to participate on digital platforms. They didn’t have the computers, they didn’t have the internet speeds, and they didn’t have the right skills.
A few months later, I met Terrence at a McDonald’s in Pine Bluff, Arkansas, a city of about 45,000 people where he now lived.
“Hey, how are you doing?” he asked a kid in a white tank top and gym shorts as he ran past our booth. He was one of Terrence’s neighbors. As the boy, who looked about ten years old, told us he was doing ok and bolted into the bathroom, a woman at another table yelled after him, “Where are your shoes?”
The boy appeared again a few minutes later. “What did you eat today?” Terrence asked him. He could use a burger, he muttered, and Terrence got up to order one.
“You can say, let’s go to Arkansas and get people jobs,” Terrence said. “That’s a great ambition. It’s nice to talk about and write about. But then you start to think about what it takes.” If Silicon Valley really wanted to make a difference in Dumas, Terrence believed, it needed to study the people first. When it did, it would realize that digital apps, or a couple of grants, couldn’t make an impact on poverty that had been gaining momentum for more than a hundred years. That programs like Samaschool needed ten times as many resources to be effective.
The presence of the digital gig economy wasn’t enough to solve the problems in Dumas. In non-US cities like Nairobi, Samasource was able to hire its workers and provide them with benefits and support. It was able to hire managers to help with coaching and quality control. In the United States, the gig work on which Samaschool focused meant going without even the basic security that you’d be paid a wage commensurate with the hours you worked. For most of Terrence’s students, this wasn’t anywhere near enough support. They had problems more pressing than spending time searching online platforms for work.