Competition is good for the economy, but not good for your business when it comes to competing for hourly employees. Ride sharing services such as Uber are spreading across the US like wildfires and are in need of drivers. The allure for the unemployed is that Uber offers a convenient way to make a few bucks while using their own car and setting their own hours. It looks good for Uber and its employees on the surface, but there is an undercurrent of turmoil that you need to know about so you can take advantage and attract the hourly employees that you need before Uber gets them.
To help you, here are four ways to compete against Uber for hourly employees in Silicon Valley:
1. "It's All About the Money Boys"
In the movie, "O Brother, Where Art Thou?" the character Ulysses Everett McGill, played by George Clooney, tries to encourage his fellow convicts, Pete Hogwallop and Delmar O'Donnell by telling them that all the trials and troubles they are going through is for the money. He says, "It's all about the money boys."
Hourly employees, for all they want out of life and all you can offer them, it usually boils down to being all about the money. This is where you have a leg up on Uber. According to a National Public Radio (NPR) article, a recent study conducted by MIT's Center for Energy and Environmental Policy Research found that the median pretax profit earned from driving for Uber ultimately comes to about $3.37 per hour after taking expenses into account. The study also found that 74% of drivers earn less than their state's minimum wage, and that 30% of the drivers are actually losing money once all vehicle expenses are factored into the equation.
What does that mean for businesses hiring hourly employees? Well, for one, it means that you have a better opportunity of attracting hourly employees and luring them away from driving services such as Lyft and Uber. Make it a point to shine a light on what you will pay per hour for your hourly employees and that they don't have to use their own vehicles to make the money.
2. Offer Tips and Bonuses
According to a report last year by The Information, a tech reporting company, only 4% of Uber drivers remain in that position a year after taking the job. The report found that the number one complaint was concerning pay and not being able to accept tips. While Uber is said to be making some changes in some markets to the tips issue, it doesn't seem to be happening fast enough for many Uber employees.
Uber has also been accused of bullying its way into cities and recruiting employees aggressively by offering $1,000 signing bonus for current taxi drivers in hopes of getting them to jump ship. And, if the applicant doesn't have a car, Uber offers Uber Xchange, a leasing program that helps people with low credit scores get a vehicle. The problem is that the employee is then stuck with a vehicle that is overpriced and a lease that is costly to get out of.
One of the things you can do as an employer competing against Uber is to highlight your tips program, (if you are a restaurant or business that accepts tips), and to offer a bonus for loyal employees. For example, you may want to offer a $500 gift card or $300 bonus for employees who stay longer than 90 days. Get creative and remember that you are competing with a share driving service with deep pockets that wants the same candidates you are striving for.
3. Give Them Time
Another NPR report uncovered that one in five jobs in the US is held by a worker under contract, meaning that once the contract ends, the job ends. The previously mentioned MIT researchers also found that 80% of Uber drivers, or workers under contract, say they work less than 40 hours per week. You can compete in this arena by guaranteeing a certain amount of hours the employee can work. If you have an opening that is 40 hours, showcase it and if it is possible for the hourly employee to work overtime, spell that out as well— in dollars!
Hourly employees are typically working toward something—school tuition, rent, a new car, etc. Advertise the possibilities of income and let them know that they can have a structured schedule so they can predict how much money the can possibly make. Placed beside the statistics about Uber, your job position looks much more attractive to candidates who need or want to work more hours.
4. Give Them Protection
Because Uber drivers are categorized as independent contractors, they are not entitled to many of the employment rights such as sick pay, vacation and holiday pay and even minimum wage. If your company offers anything above federal and state laws that protect the employee, flaunt it. Some of these are perks you must provide for your employees, but showing them to hourly candidates works in your favor.
If your company offers vacation time, holiday or sick pay, let your candidates know. These are very big deals with Millennials as they cherish their time off to relax, recreate, and entertain. Use whatever you have to offer in this respect to compete against Uber, because they don't, and currently can't, offer the same. Stress the importance of the protections afforded by overtime rules, worker's compensation, and more.
Make Your Move
Uber has grown into a giant. It is like a fast moving train gaining traction in city after city across the US. But like a train, it is going to take a lot of time for it to correct many of the employee issues it is facing. In the meantime, you can begin using these four steps to your advantage over the competition that Uber presents in the Silicon Valley area. Where Uber fails its contractors, like an eagle, you can swoop down and scoop up quality hourly employee candidates looking for something better.
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