BlueCrew and Wonolo both run on-demand marketplaces for blue-collar gigs. The startups use smartphone apps to connect people to temporary jobs such as warehouse packers, janitors, delivery drivers, forklift operators, line cooks and event staffers.
But according to the report in the San Francisco Chronicle, the two rivals diverge significantly when it comes to employment. Their contrasting approaches crystallize ways AB5 is changing the work landscape.
BlueCrew has always hired its workers as employees. Now, as California makes it harder for companies to claim that workers are independent contractors, it’s seeing a surge of interest from clients trying to comply with the new law and with Dynamex, the 2018 California Supreme Court decision that AB5 codifies.
Wonolo has primarily hired its workers as independent contractors. AB5 has prompted it to drastically shrink its California operations, essentially ending gig jobs here after the first quarter, although it will keep its headquarters in San Francisco.
“Given the limitations of AB5, we anticipate that we may not be able to allow businesses to post jobs in California as of March 31,” Wonolo CEO Yong Kim said in a letter to its workers. “This means you will see significantly fewer jobs on Wonolo in California. We have not made this decision lightly but have done so in order to protect businesses from any unnecessary risks associated with the new legislation.”
In an interview, Kim said that the move, which he characterized as “de-emphasizing” rather than exiting California for good, was a matter of principle in creating a “workers-first company.” Wonolo wants the freedom to devise its own modern ways to meet workers’ needs and feels it would be hamstrung here, he said.
Echoing arguments made by Uber, Lyft and other gig companies, Kim said that what blue-collar gig workers want “is flexibility and autonomy of their schedule, working when and where and for whom they want.”
Walking away from California, its largest market by far, “will be a financial burden to us,” Kim said, but the business is growing elsewhere in the country. “It’s a drastic move, but we stand for what we think is the right thing for providing new kinds of benefits for Wonoloers and other gig workers.”
By contrast, BlueCrew, based in Chicago with offices in San Francisco, has received dozens of client inquiries and new customers since the Dynamex decision in April 2018, and that intensified leading up to AB5’s Jan. 1 implementation, said CEO Adam Roston.
“Over the past few months there was a steep change of interest in California in what we offer,” he said. “We are designed to access workers quickly on demand but are also a compliant solution because 100% of our workers are (employees). Customers are coming to us who were using gig labor because they’re no longer comfortable with that.”
In California’s tight labor market, most of BlueCrew’s jobs pay about 50% above minimum wage – or else it couldn’t attract workers, he said. The company covers mandated benefits such as workers’ compensation and disability insurance.