In 2019, Lai founded Tinycare, a company with a mission to fix childcare. Its all-in-one model set out to create housing for teachers while also providing children with an at-home learning experience. Teachers converted part of their apartments, which were sub-leased or co-signed by the company, into licensed daycares throughout the Bay Area and Arizona.
Lai sold Tinycare to the Montessori school network Higher Ground Education in February 2023. The company laid off all of its employees on Aug. 1, 2024, and closed all sites on Aug. 31, leaving some teachers housing insecure and unemployed. HGE would also rename Tinycare to Guidepost Pico.
Four parents and nine former teachers told Mission Local about issues of minimal communication from Lai and upper management, working outside of contracted hours, juggling four to six students with a teacher’s assistant and being unable to easily complete operational tasks, leaving teachers feeling “underpaid, overworked and struggling with chaotic conditions” and some leaving one year and half after they started.
While some parents paid nearly $4,500 a month per child in some cases for Tinycare’s tuition and teachers felt blindsided by added responsibilities and costs and some struggled to pay their portion of the rent, which ranged from $500 to $2,000 and other expenses with $17.75 to $19.81 an hour, Lai claimed he and his team were upfront about costs and handled teacher concerns. They hired experienced directors and teacher managers, created a peer teaching model with mentor teachers to add support and added more prep and holidays over time, which were cut once HGE took over.
In an updated version of the story, Lai told Mission Local that on average tuition was around $3,330 and explained that Tinycare’s system for calculating the amount of rent teachers contributed was also reflected in their initial compensation so they would pay lower taxes and not have to pay for rent out of their wages resulting in their total compensation being higher than the market average. In some cases, teachers would only have to pay a small portion of rent if they needed an additional room, like in a three-bedroom apartment, outside of the two-bedroom apartments that the company was leasing.
The operation system was also confusing to Tinycare’s Head of Education Adam Nadeau, who said he spent much of this time trying to explain the “complicated model” to prospective teachers but ultimately believed that teachers wouldn’t have felt misled.
Lai's opponents are making use of the publicity.
Website www.FactsOnLai.com, promoted with an ad paid for by Fix Our City SF, appeared in late September. The site claims that Lai and Tinycare also received a labor violation complaint through California’s labor commission and was sued by two former employees for wage and compensation issues.
At Lai’s request, several teachers told The Ingleside Light how they had an opposite experience from what was depicted in the Mission Local article.
Former teachers Emma Allison and Jessica Bergman left the company feeling pride in their work and gratitude for being a part of the innovative childcare model. They said Lai was continuously hands-on and would even offer his help as a teacher’s assistant.
Allison said that, like any job, there were moments of feeling overwhelmed but if she ever needed help she would reach out to Tinycare’s administration and they would always be there to assist.
Once HGE took over, however, that’s when the tone and communication from upper management began to shift.
“I think the sale that Michael made was a really great decision for him and I was happy for him and I think it was the right move but just personally, it did feel a little bit more corporate and stuff so it’s hard to say if I hadn’t moved if I would still do it just because I did feel that different atmosphere once we had transitioned over to Higher Ground,” said Allison, who moved out of state shortly after HGE took over.
Lai also told Mission Local in a written statement that he felt sad about how HGE operated once he was no longer a part of Tinycare’s operational decisions team. Though he was still a part-time advisor, Lai told the Ingleside Light that he was not informed of the closures ahead of time and found out from a former teacher. He also said he was disappointed with Mission Local’s coverage of the situation.
“Though not perfect, I’m proud of my former Tinycare team's innovative model combining childcare and teacher housing across 30-plus sites and high-quality care serving hundreds of children and families during Covid, when daycares were shutting down around the country,” Lai told The Ingleside Light. “Isn't that what we want our leaders to do? To try with heart to tackle some of our hardest challenges instead of just complaining about them?”
Anne Marie Kristoff (she/her) is a recent graduate from San Francisco State University's journalism program. She enjoys writing about the arts, entertainment and nature.
