I spent three months working as a pest control technician at one of the big corporates last year.
One of the techs I met was in his 50’s. He’d been in pest control for 20 years and said he never started a family because he couldn't afford to.
He was servicing about $250k in revenue a year, and taking home $80k in California.
So where does the other 75% go?
An average pest control truck at one of the market leaders generates roughly $200k in annual revenue. The tech driving it earns $50–80k depending on market and seniority. The best trucks do $400k, but that’s rare and a lot of hard work.
Some of that 75% revenue the tech never sees goes to the service center for scheduling, routing, invoicing, customer comms, compliance, reporting, etc. Layers of back-office coordination that took years and a lot of humans to build and maintain.
There's also corporate bloat - management layers and slow processes that everyone knows could be leaner, but are culturally hard to change (especially when the business is doing well enough)
What does the rest of the company actually do?
The company takes on all the risk (financial, legal, reputational) so the techs have a mostly worry free work day.
Trucks report into a well managed service center twice a week (once to pick up products, once to empty the truck) and go about their work. The deal is the techs give up most of the upside in return for a steady paycheck.
It's been this way for decades, and it works well enough for those benefitting from the bloat.
Freedom or security - pick one
Most blue-collar workers I’ve met value both, but corporates don’t offer it today.
If a technician goes independent they get “freedom” to set their own (definitely longer) hours, and keep more money per job.
They lose the safety net though. There’s no such thing as a steady paycheck, no dispatching support, and no one handling the paperwork, lead generation etc.
It takes two to three years to build an independent route from scratch, and they're stuck with residential customers, where churn is 30–40%. Commercial accounts (the stable ones with 5–10% churn) go to bigger companies with brand, relationships and reputation behind them.
So they stay W2 for the security, consistent work, benefits, and for someone else to worry about the business side. But earnings are capped and the longer it goes, they’re leaving more money on the table.
That's the trade-off the tech in his 50s has been living, and there’s millions more like him.
What AI changes
I’m talking now about relatively simple service work where a guy in a truck can go about their day unattended. Pest control, pool maintenance, etc.
Most of the back office that justifies the 75% take can now be automated if you have the appetite.
The coordination layer that the service center provides is still required, but it could be run 60–70% by AI today. Corporate bloat could be similarly reduced. (This applies to linear service work e.g. one tech, one truck, one route. Industries like HVAC that require crews, heavy CAPEX, and complex supplier relationships are a different story.)
If you started a pest control company today, with the goal of breaking into the top 5-10 nationally inside a decade, it would look radically different to today’s market leaders.
If the back office costs a fraction of what it used to because of AI capability, the share of revenue has to shift toward the worker more. Either the company passes margin along to the workforce, or they pocket it. Most will pocket it. That's when they start losing their best people.
Why would technicians continue to work for large incumbents who don’t pass on a fair share of these savings?
Logically, fewer people will go work for those types of companies, and that’s why I think W2 work will have to change.
Why incumbents can't move fast enough
Big service companies are facing a two-front war.
Front one: adopt the technology. Retool operations, integrate AI, retrain managers whose jobs just got simpler.
Front two: restructure pay. If the back office shrinks, there will be pressure to increase take-home pay for the revenue-enabling technicians.
Most large companies could do one of these, but doing both well, and in quick enough time will be almost impossible. Whether they do or don’t make the changes, they’ll lose good people along the way.
Smaller operators who build AI-native from day one won't have legacy pay structures to defend. They'll be able to offer workers 40 or 50 cents on the dollar because their overhead allows it. The tech is the product in service businesses, and when your best people leave, your customers follow.
W2 work is about to evolve
Most people don't want to run a business and aren’t cut out for it, even if AI and vertical SaaS make it much easier, so I do think technicians will still seek W2 work.
W2 is going to look different with more money and autonomy flowing to the technicians, enabled by less corporate infrastructure that workers tolerate today because they don't have an alternative.
A new generation of linear service companies can emerge, with AI-operated service centers, and almost no corporate bloat above the physical workforce. That’ll mean more money for the people doing the work, and better balanced W2 careers.
The next generation of workers in this industry shouldn't have the same story as the guy who worked in it for 20 years and couldn’t start a family.
I'm working on this, so if you're building, investing in, or running a service business, drop me a DM.