Back in May, Eden launched out of the Y Combinator accelerator to provide users with on-demand tech help, whether it’s fixing a cracked iPhone screen, solving WiFi issues, installing a printer or mounting a new TV. The startup has seen steady growth, and since raised $1.3 million in seed funding, but thus far the company has been using 1099 contractors to deliver Eden tech help service.
Today, cofounder Joe du Bey has announced that Eden will be shifting its workforce from 1099 to W2, hiring some contractors as full-time employees and others as part-time employees, with some even getting equity in the company.
The conversation around 1099 vs. W2 has been heating up of late, catalyzed partially by various lawsuits against on-demand companies such as Uber, Homejoy, and Handy.
In short, Eden previously hired tech pros who work at big box retailers (Best Buy) or in small tech shops to pick up work for $30/hour as contractors. However, du Bey says that, since Eden Tech Wizards come into the home and help with sensitive problems, it’s important that they go through some form of customer happiness training.
“At Eden we’ve always prioritized people in the same way: customers, tech wizards, HQ, and everyone else,” said Du Bey. “By switching over to W2 employees, we’re ensuring that the customer gets the best experience possible and that we’re taking good care of our tech wizards.”
While 1099 contractors enjoy a level of flexibility in their job, they’re also responsible for themselves in most respects, having to pay their medicare and social security taxes, handling healthcare and insurance, etc. Hiring 1099 contractors also takes a lot of control away from the company, as 1099 classification generally limits the amount of training employees receive, control over dress code, and/or guidelines that can be set over the way they do their job.
Du Bey tells TechCrunch that a good portion of Eden’s business comes from people aged 50 or older, with Eden replacing help usually provided by younger relatives.
“If you ordered an Eden for your parent or grandparent, these are precious people. You’d want to know that someone reliable and helpful and patient was coming into their home and helping your loved one,” said Du Bey. “We put our tech wizards through a lot of training to determine if they can not only be effective but be pleasant to have in the home.”
In general, the switch will cost Eden about 20 percent more to move over contractors to W2, Du Bey says.
Eden costs $69/hour for users and currently serves the Bay Area.