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On Wednesday, May 8, 2019, Uber and Lyft drivers around the world went on strike. It was possibly the largest gig-economy protest yet. The issue? Driver satisfaction.
Last year, a UPS carrier strike was narrowly avoided.
Uber reduced per mile pay for drivers to 60 cents (the International Revenue Service (IRS) calculates the fixed and variable costs for operating a vehicle at 58 cent p/m in 2019). Compare that rate with the $2.20 p/m Uber paid at launch in 2013. Experienced gig-economy drivers now make substantially less than what they did at the start, somewhat reverse of how things are supposed to go.
If this still seems like a great deal to OTR carriers, who make between 28 cents and 45 cents per mile, while it’s difficult to directly compare the two industries, please think of ride-hailing drivers as Owner-Operators, paying all their own expenses, who average one-thousand miles per week and drive vehicles not designed for such heavy use. A Volvo s60 is going to wear out about five times faster than a Volvo VNL 860, and depreciate even faster.
Low pay wasn’t the only source of dissatisfaction; many drivers expressed feeling disrespected by their companies.
This lack of satisfaction has led to an incredible turnover rate: the average Uber driver quits after just three months. Despite wage woes, the Ride-hailing industry hasn’t had trouble finding new drivers, yet. Even during the strike there were no reports of users unable to get rides. (Uber and Lyft have not released any official data on the impact of the world-wide strike.)
The same can’t be said for the Transportation & Logistics industry, which is facing a labor crunch bordering on labor crisis. The average age of a North American truck driver is between 49 and 52 years old, with a driver shortage approaching thirty-six thousand.
Solving the driver shortage will be no easy task. We’ve discussed previously about the need to attract more women drivers as a potential solve, and the American Trucking Association has lobbied to lower the minimum driver age to 18 (though Doug Waggoner, CEO of Echo Logistics, recommends against it.)
According to FleetOwner, barely more than half of trucking professionals are satisfied with their jobs, with close to one-third being dissatisfied. Interestingly, salary was only ranked third in importance for satisfaction. “Home time” ranked highest, followed by “good equipment.”
In a parallel with the Ride-hailing industry, a major source of dissatisfaction was poor treatment by management.
Treating employees better starts at home. Many companies host driver appreciation events and are giving employees greater flexibility, a prized benefit among Millenials.
Superior routing and fleet management technology, such as that provided by HERE, solves many of these problems. Dynamic routing based on real-time information means less time stuck in traffic, and the improved end-to-end visibility cuts down on idling time at check-ins and depots. This efficiency leads to a better return on the pay per mile for the carrier, and more time to spend at home with their families.
The UPS scare and Uber and Lyft strikes serve as a potent reminder that drivers are the backbone of the T&L and mobility industries. Improving their job satisfaction is just as important as improving customer relations.