This “Gig Economy” Firm Prefers to Have Employees, Not Contractors – Next City
The Equity Factor

This “Gig Economy” Firm Prefers to Have Employees, Not Contractors

(Photo by Karlis Dambrans)

Like it or not — despite lawsuits and even a veiled threat from at least one 2016 presidential candidate — the on-demand economy appears here to stay. Gig economy jobs might even be the future of work entirely.

Yet creating meaningful work for those trying to earn a living in America’s growing gig economy has proven to be a challenge. Just look at the news: “The hidden anxieties of the on-demand startup worker,” “Growth in the gig economy fuels work force anxieties,” and “On-demand startups aren’t delivering on promises to workers.”

At least one gig economy company seems to be working sincerely to change those headlines.

“Let’s start with day-to-day,” says Marcela Sapone, CEO and co-founder of Hello Alfred, a New York City-based firm that bills itself as a sort of on-demand “personal butler” service that does everything from grocery shopping to sending packages for clients. “Day-to-day begins with every employee who works here, when they start their photo goes up on the wall with their name and everyone knows who they are, so you’re building a sense of community. You belong here.”

Yes, she said “employees,” not contractors. And community is essential. At the beginning of each working day, the entire Hello Alfred team — more than 80 client managers, called “Alfreds,” and 20 central dispatch staff — meets at the morning “Stand Up,” at Hello Alfred’s headquarters in the Flatiron District of Manhattan. It’s the kind of office where you can walk around with your shoes off, have lunch on the roof, and COO/Co-founder Jess Beck takes coffee orders from everyone and picks them up herself. At the Stand Up, Alfreds receive their client runs for the day, hear announcements, and bring up issues or questions.

Throughout the day, the Alfreds are in constant contact with dispatch through the Alfred employee app, which also contains their to-do list with locations and details for the day’s tasks. Dispatch designs each to-do list in a sensible order based partly on geography and partly on constant feedback from Alfreds about what kinds of tasks make sense to do earlier or later in the day or other factors. Lunch is at each Alfred’s leisure.

The Alfreds trickle back in to the office starting around 4 p.m. to drop off client keys and for a one-on-one debriefing — a chance for even more worker feedback. Sapone’s notes from countless Alfred debriefings (and other meetings) fill up every square inch of her oversized Moleskine notebook pages, many with multiple layers of Post-Its.

“One of the things I think makes meaningful work at a more abstract level is the ability to feel like you have a voice,” Beck says. “At the end of the day when you come in and you’re sitting there we’re literally saying ‘what part of your run was not well designed today,’ ‘what can we do different for you tomorrow.’”

Flexibility, as with many gig economy jobs, is essential. There’s nothing to stop Alfreds from taking on other tasks or meetings or going to class or going to the gym during the day, as long as their runs get completed in time. Not every Alfred works every day of the week. It’s up to each to decide. Depending on how many days of the week they want to work, each can have anywhere from 12 to 50 clients. Starting wage? $18 an hour. Benefits kick in for those who work at least 30 hours a week.

Alfreds play an essential role in the hiring and training process, something Beck says they’ve been working on since day one.

“One day I would like to say the final hiring decision of whether or not you become an Alfred is not mine and Jess’s, but is actually the other Alfreds, because there’s a sense of pride there,” Sapone adds.

Worker participation in hiring and training can also help reduce the churn rate. “Turnover in this kind of industry is very high,” Sapone says. Hello Alfred gives new hires two weeks of in-office and field training.

And again, those hires are employees, rather than a 1099 contractor as at Uber and most gig economy firms. As Sapone wrote in a Quartz op-ed: “There should not be a disconnect between the success of a company and the success of its workers. We believe treating our employees as our primary customer is how we can best satisfy our end users. It can become difficult to achieve this with the 1099 classification, because it inherently distances the worker from the company. There is no onus to provide meaningful work, training, or career advancement.”

Hello Alfred’s combination of community, feedback, flexibility and worker participation in hiring and training has held up, despite skepticism from investors who might think the business model too costly.

Hello Alfred has more than doubled in size since January 2014, while also seeing a 37 percent increase in the number of Alfreds who have stayed on board longer than two months, according to Sapone. Meanwhile they’ve raised $12.5 million in three investment rounds from six investors. “If this goes well, we’re talking about at least a 10 times increase in the number of employees that we have,” she says. “That’s a lot of jobs in New York City alone.”

Almost 53 million Americans have entered the gig economy, at least part time. That’s one in three people in the U.S. workforce, but demographics on gig economy workers are hard to find. According to one recent study from a group of Stanford students, compared with the general population, gig economy workers are more likely to be male, more likely to be an ethnic minority, be between ages 18 and 34, to be single, and to have at least some college or a bachelor’s degree.

Cities, says Arun Sundararajan, an NYU professor and expert on the “sharing”/on-demand/gig economy, need to approach the existence of these work-creating platforms with optimism. “If you’re friendly to the business that is conducted through these platforms, then you’re creating economic activity that leads to people being able to make money,” he says.

“The critical thing in the next decade or two is we structure labor law in a way that allows a wider variety of work arrangements,” Sundararajan adds. “The same protections, the hard-won protections of full-time employment should be extended to other categories of work so that we don’t bias people towards one particular form.”

Beyond wages, benefits and other protections, the human aspect of any business remains perhaps the thing that matters most, to most people, whether they know it or not. That might be the most important thing to remember as technology continues to change the way work works.

“The best day is full of interaction with people,” says Eeva, a 31-year old from Finland with a psychology and leadership consulting background. She moved to New York City last year, began as an Alfred in February, and is now deeply engaged in hiring and training at Hello Alfred. “Bad days,” she says, “are where I haven’t fulfilled the goals I set for myself. Also if the weather is really bad.”

The Equity Factor is made possible with the support of the Surdna Foundation.

Oscar is a Next City contributing writer, and was a Next City 2015-2016 equitable cities fellow. A New York City-based journalist with a background in global development and social enterprise, he has written about impact investing, microfinance, fair trade, entrepreneurship and more for publications such as Fast Company and NextBillion.net. He has a B.A. in Economics from Villanova University.

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Tags: jobsincome inequalityappssharing economy