Last week Uber announced the launch of Uber Works, their official foray into the gig economy. Over the last 10 years since Uber launched (BTW, can you believe it’s been 10 years?? I can’t), the term ‘gig economy’ has become synonymous with those who drive for ride-hailing services. Of course recently this has evolved to food delivery services as well as ride hailing, but whether the cargo is a business executive or a ruben melt with a side of pasta salad and a pickle, is it really that different? It’s the only true ‘gig’ work that has satifised the dream of working when you want to work without all of the hassle that comes with finding dream gigs. 

But is the dream of the gig economy just that – a dream? The dream part is the flexibility to be one's own boss, work when you want to work, achieve true work-life-balance nirvana and not answer to ‘the man’. But what happens when the gig becomes ‘the man’? The dream turns into a nightmare. Ok, maybe I’m being a bit dramatic. But maybe not? Just ask Andy Newman of the NY Times. He spent a couple of days as a gig worker balancing between Door Dash, Postmates and Uber Eats, while interviewing delivery drivers (or bicyclists in NYC) about their experiences working in the underground gig economy. 

I’ll let you read the NY Times article yourself, and draw your own conclusions, but safe to say that there are both strong pros and strong cons in participating in the gig-delivery economy. Yes, you do get to decide where/when/how to work, but the pay ranges from abysmal to down right wage theft. And the stress of not having a boss, means you have to scramble for your gigs, compete with other workers and live with the uncertainty of an inconsistent paycheck. And forget career advancement. 

Proponents of the gig economy are likely to say that workers have the right to work, or not work as they choose. They participate in the gig economy because they want to, not because they have to. And they’re not wrong – with unemployment hovering at 3%, workers do have the upper hand in choosing their place of employment. With the launch of Uber Works, Uber is offering their ride-sharing technology platform up to businesses of all sorts looking to fill shifts. Given the low unemployment rate, this sound like a win-win. Workers get the flexibility of the gig-lifestyle, and employers can fill shifts that may have otherwise gone unfilled.  
 

But is it really? 

Let’s think for a moment about what really drives business, particularly in the food service, hospitality and retail space, which is where my expertise lies. These businesses live and die by the guest or customer experience. Poor service is one of the top reasons why a diner may not go back to a particular restaurant (or order from there) – and the whole business model behind Yelp. Same with a hotel, resort or even amusement park. In the hospitality space, the guest experience is the number one driver of repeat business. Retail as well – the customer always comes first. 

How can a business put the guest first if they rely on unknown talent to serve that customer? Especially talent that may be a bit fly-by-night, who you’ll never see again? What’s their stake in the game? Why would they care about your customer? Do you really want to put your customer experience in the hands of someone you don’t know you can trust? 

Now what about the worker? Uber’s basic argument for creating Uber Works is this: 

“Workers face rigid scheduling and opaque information about where they can pick up shifts and how much they can expect to earn.”

And they’re not wrong – in many places of employment today, scheduling is rigid, details are hard to come by and pay can be a bit of guesswork. It makes sense that workers are choosing the uber-style gig economy over a traditional employer. But as the NY Times article proves, word is getting out that these gigs may not be all their cracked up to be. If Uber Works follows a similar business model, high-quality talent may look elsewhere for employment.  

If businesses want to truly put your customer first, they must rise to the challenge and compete head-to-head with Uber for talent. 

The question at hand is: how can you tap in to an employee's desire for work-life-balance nirvana and transparency around scheduling and pay, while still meeting the needs of your business, and putting the guest first?

Money is obviously key, and one of the key motivations to work for Uber (and I’m assuming this will carry over to Uber Works) is the ability to access that pay the same day it’s earned. According to Financial Wellness App, Branch, 80% of hourly employees say accessing their pay before payday would be helpful. Couple that with the fact that 40% of hourly workers have literally nothing saved for an emergency, and Uber has created a very ‘sticky’ employment environment.

But as we all know, there’s a lot more to creating a sticky employment environment than cold hard cash.  The Branch research report focused on 3 aspects they see as critical to the employee experience:

  • Pay (obviously)
  • Lifestyle
  • Work

The report found that nearly 70% of hourly employees are optimistic about their current job prospects, and hourly workers are much more interested in a promotion at their current employer than switching to new jobs. Not only that, but a study by Harvard Business School backs this up, with a finding that 61% of middle-/low-skill workers are happy at their current employer. 

So, if workers like their jobs and are happy, what’s driving the high rates of turnover we’re seeing in retail, hospitality and food services sectors, and what can these businesses do to appeal to the needs and desires of this highly-sought after talent? It comes down to three simple (ish) things:

  • Access to pay
  • The ability to balance life with work
  • Career development 

Uber has two of those three things nailed: access to pay and the ability to balance life with work. But they are severely lacking in the career development corner. In its current form, a job with Uber, or a gig via Uber Works, will always be just that – a job. And this gives employers of all shapes and sizes the opportunity to have a big leg up on Uber and put plans in place to build a strong workforce in the future.

 

Tackling the 3 simple (ish) keys to happy employees:

  • Access to pay? 

Easy – if you’re already a Kronos customer (if you’re not, what are you waiting on??) you can find a financial wellness partner that offers immediate access earned wages that’s right for you in our partner marketplace.

  • Balancing life with work? 

Fairly easy – give your employees the ability to swap shifts, set availability, change availability and the mobile access to do all of this on the go. The technology is available, it’s up to you and your organization how you bring it to your workforce. 

  • Career development? 

Ok, less easy. This requires some real thought around building out career paths and identifying pathways to get there and the tools required. Harvard refers to this as a ‘Learning Contract’ where the employers and employees commit to each other around a continuous learning and reskilling path. 

If employers can nail the basics like Uber has, then they can be competitive with Uber for talent in today’s tight labor market. But, if they can offer career paths, growth opportunities and a positive work environment in addition to the basics, then they win the war for talent, and can become an employer of choice.
 

For more Information Check out Workforce Institute's Findings on Gen Z and the Gig Economy

Published: Friday, October 11, 2019