Concert companies fear labor shortage despite recession
“One of the biggest challenges with carpooling is creating a balance in the market, making sure you have enough drivers for each driver,” Lyft Green said last month. “And the two respond within very different time frames.”
Then there’s an unexpected factor: The hastily constructed pandemic safety net seems to be working, leaving people less desperate. Like most Americans, performing workers received stimulus checks – one last spring and a smaller one in January. (Another seems to be on the way.) For small workers who once had other full-time jobs, states have extended unemployment insurance payments. And for the first time, the stage workers – and all the other freelancers –became eligible for some form of federal unemployment insurance, $ 600 per week.
Concert companies say they have felt the impact. A spokesperson for Uber said company data suggests its number of available drivers has fluctuated based on UI policies. When the stimulus hit drivers’ bank accounts, for example, fewer logged in to work on the app. DoorDash chief financial officer Adarkar told investors last month that “on the one hand, you would have expected a big influx of Dashers due to increased unemployment. But this was offset to some extent by stimulus checks. “
JP Morgan Chase Institute Research published in 2018 suggests that families tend to turn to online work, especially driving, after a household member has lost their job and needs to supplement their income. Basically, people sign up for a gig when they need the extra money.
More recent search The institute finds that expanding federal pandemic assistance and stimulus checks programs have given families, especially low-income families, more cash than they previously did. At the end of the summer, the average household bank accounts held 40% more than the previous year.
“I’m not surprised that people aren’t coming back to the platforms, because the government has done a very good job of meeting people’s needs,” says Fiona Greig, co-chair of the institute. Pandemic assistance was designed to discourage workers from seeking employment in the midst of a public health emergency. Unlike other state unemployment programs, it does not require workers to actively seek employment while accepting payments. So, for now, workers may not need to play.
According to management comments, the supply of drivers is probably not an existential problem, at least in the long term. It is also quite simple to solve. “As a labor economist – which I am – the market response for employers who have difficulty recruiting workers is to pay higher wages,” says Parrott of the New School. There is anecdotal evidence that this is happening: Drivers in some cities, including Indianapolis, Oklahoma City, Pittsburgh, and Sacramento, Calif., Say they’ve received emails and notifications from gig companies offering one-time bonuses if they go. connect and fill a few. trips. Lyft said last month it would spend an additional $ 10 million to $ 20 million this quarter on driver incentives, after cutting its recruiting costs by $ 15 million late last year. .
But the question of when to encourage workers to get behind the wheel is a delicate one. Companies want plenty of people signed up and ready to go once more Americans get their shots and are ready to go back to normal lives, including Uber rides.
“Getting more drivers into the system takes time,” Lyft CEO Green said last month. “It’s a bit more like directing and turning the Titanic, while demand can change much faster. Don’t tell him how it ends.
More WIRED stories