Startups that dispatch temp workers are living or dying alongside the businesses they serve, as COVID-19 boosts some and sinks many others

  • Staffing startups like Wonolo, Instawork, and Jitjatjo run apps that help temp workers find gigs at places that frequently need extra hands, like restaurants, warehouses, and hotels.
  • Many of these startups are experiencing turbulent times as COVID-19 kills demand from their customers in industries that are affected by government shutdown orders, or by patrons’ fears of  exposure to the virus.
  • Wonolo CEO Yong Kim said business initially fell during the pandemic, but a boost in demand for essential businesses stabilized his company.
  • These companies also struggle with a business model that requires sending temporary staffers from workplace to workplace while public health guidelines recommend minimizing contact with large numbers of other people.
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Apps that match temp workers with short-staffed businesses like restaurants, hotels, and warehouses made up a burgeoning tech category before the coronavirus outbreak started erupting in the United States. Now, the startups that created those apps may be living or dying along with the businesses they serve.

“Business has been tough,” said Thor Wood, CEO of SnapShyft, which matches workers with open shifts at restaurants and hotels in the Midwest.

Staffing startups serve a range of industries that rely on temp workers to fill shifts when business spikes past normal capacity, or permanent workers are out sick. Restaurants, hotels, and warehouses all use these platforms. Contract workers tap the staffing apps to pick up shifts washing dishes, laundering clothing, moving crates, or performing a host of other chores.

For staffing startups that assist businesses affected by government closure orders to fight the pandemic, the downturn in demand has been devastating.

“Business for us has dipped to the lowest of the lows,” said Tim Chatfield, CEO of Jitjatjo, a New York City-based startup that services the metro area’s vaunted dining scene. 

“We were on a trajectory to rapidly scale geographically,” Chatfield said. “We’ve pulled that all back at the moment.”

Now Chatfield runs Jitjatjo via video chats from a “command center” in his apartment’s bedroom. His bed is hidden by a black curtain, and a custom purple neon sign hangs over his head, reading “#hirehospitality.” He keeps a TV running nearby so he can stay on top of the headlines, as the future of his company rides on the latest news updates about the spread of the virus and local health regulations dictating whether his employees can work or not.

“We’re dealing with something that is really, really tough in that the knowledge around it is evolving on an hourly basis,” Chatfield said. “And we’ve got people spread out across multiple markets, each with different rules.”

But as closure orders have demolished demand for temp workers from some businesses, demand from others has skyrocketed. Wonolo CEO Yong Kim said that although business started to get rocky in the early stages of the pandemic, the surge in demand from some of his client businesses brought Wonolo close to its pre-pandemic customer growth expectations. Wonolo has a more diversified clientele than some of its rivals.

“Think about all the supply chain businesses that are in the supply chain, or logistics-related for consumers,” Kim said. “Grocery stores that need stock, courier services that deliver goods, or ecommerce companies that provide online goods or services.”

Companies that dispatch temporary staffers must grapple with the fact that their core business activity can run contrary to current public health guidance on slowing the spread of coronavirus. Far from limiting contact, these startups send staffers from one workplace to another, exposing them to large numbers of people and various indoor environments.

“There’s lots of reasons food workers could be at high risk,” said Peter Dooley, an industrial hygienist with the National Council for Occupational Safety and Health. “Restaurant work involves typically close, small spaces… also, restaurant and food work involves a lot of people-to-people contact. A lot of interactions with people, whether it be customers or coworkers or management or whoever.”

Startups have responded to these risks by furnishing workers with safety information. SnapShyft has sent CDC guidance and changes in local mandates through app alerts. Wonolo has created educational courses for its workers. And Jitjatjo, which actually employs its 10,000-strong workforce, is offering two weeks of paid sick leave for workers who catch the virus.

“We’ve only been made aware of two cases of positive results [of COVID-19],” Jitjatjo’s Chatfield said, “Which is phenomenal considering we employ over 10,000 people.”

Wood said he worries that even after business closure orders lift, workers will hesitate to continue using the apps out of fear for their own safety.

“The workers might have PPE, but there’s no guarantee that the guests do or that they’re going to abide by the rules,” Wood said. “I’ve seen it firsthand where you’ve got some businesses and some groups of people that are adhering to the mask rules and social distancing, and others that are on a different planet.”

Here are some of the leading startups in the staffing app industry:

Pared

San Francisco-based Pared was launched in 2015 and now operates in cities on both coasts and the midwest. Unlike many other apps in the same category, Pared focuses exclusively on finding shifts for food workers. Pared has been used by local restaurants and big names like Pizza Hut and McDonalds. 

Instawork

Instawork is often cast as a competitor to Pared. Both launched in San Francisco in 2015 and now operate in cities across the country. But unlike Pared, Instawork helps workers find shifts in industries outside of food-related work, including warehouse gigs and delivery jobs.

SnapShyft

Indianapolis-based SnapShyft was founded in 2016 and now provides shifts for food and event workers. The startup opened a second office in San Francisco last year to recruit top talent.

Wonolo

The Bay Area’s Wonolo was founded in 2013, an early entry in the category. Wonolo helps businesses find temp workers for  a broad range of services, including warehouse work, food production, cleaning, and administrative positions. Wonolo claims high-profile corporate clients like Coca-Cola, Papa Johns, and fashion retailer Uniqlo.

Jitjatjo

New York City-based Jitjatjo was founded in 2016 and connects workers to shifts at the city’s restaurants. Unlike many other startups in this category, Jitjatjo’s more than 10,000 workers are employees of the company, not contractors. CEO Tim Chatfield said that business has been way down since the pandemic hit New York City. Jitjattjo has since pivoted to offering disinfection services.

Shiftgig

Chicago’s Shiftgig was founded in 2012 and first focused on connecting local businesses to temp workers before transforming into a SaaS business that helps staffing agency employees find gigs. Shiftgig is used by national staffing agencies including LGC Hospitality and The Job Center.

Qwick

Qwick was founded in 2017 in Scottsdale, Arizona and has expanded to eight major cities across the country, including Phoenix, Dallas, San Diego, Atlanta, and New York City. Qwick is focused on finding shifts for food workers and event caterers. 

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