Is Uber Going to Disrupt Staffing? Ask the Taxi Industry.

“I would argue in the war of talent, Uber won,” prophesized Barry Asin, president of Staffing Industry Analysts, at the Executive Forum North America in February 2019. At that time, Uber had nearly a million drivers on its platform to earn money in a flexible manner. A couple of months later, Uber raised to disrupt large industries such as local transportation, food delivery, and B2B freight and logistics. Just this month, with the rollout of Uber Works, talk has shifted to how Uber could “win” as staffing agencies struggle to find ways to increase fill rates with clients and engage workers as unemployment reaches historic lows.  The Uber Works platform promises work opportunities that fit worker’s schedules while being paid in a timely manner.

A Well-Capitalized, Scary Knock Off?

If you aren’t concerned about Uber because it doesn’t understand the complexities of the staffing industry, think again. Uber has a balance sheet with billions of dollars from its IPO. Its flagship service, ride-hailing, has a million drivers in the US and 3 million drivers globally. Its Eats and Freight divisions are already working with nearly 100,000 businesses, mostly restaurants and shipping companies. In the short term, Uber has hundreds of thousands of drivers seeking more ways to make money between morning and evening rush hour. Uber Works plans to put them to work from 9 to 5. Uber is partnering with TalentBurst  and TrueBlue as employers of record for payroll, unemployment and workers’ compensation purposes.  In the long term, Uber is investing $1 billion in self-driving cars and is forecasting how it might deploy its driver workforce when there are driverless Ubers.   Put simply, Uber Works makes so much sense.

The idea of offering gig workers via a mobile app is not new. In the past four years, venture capital firms have invested tens of millions in on-demand worker technology companies like Wonolo, Instawork, Pared, Shiftgig and Blue Crew to automate matching shift-based work to gig workers. Given that the US has 82 million hourly workers, representing 60% of the US workforce, staffing is a huge opportunity. Given the US market size and Uber’s assets, it is not a surprise that Uber decided to enter the contingent labor market.

PREMIUM CONTENT: The Talent Crunch: Recruiting and Retention Strategies in a Tight Labor Market – Webinar replay

Interestingly, as co-founder of Shiftgig, I couldn’t help but notice that Uber Works bears a striking resemblance to Shiftgig’s on-demand business, which was sold off earlier this year. The landing pages, onboarding process, and even marketing word choices are eerily similar. In addition, Uber Works chose to launch in the same first city: Chicago.

Uber as Catalyst

In recent years, staffing companies’ fill rates have dropped to only 60%. A simple event in mid-2012 was the beginning of the war for talent. Can you guess what I’m talking about? Some guess that it is due to the US unemployment rate at 3.5%, which is at a 50-year low. Some say that lower-wage, hourly workers just aren’t reliable. Some even talk about needing upskilling in our labor force. However, many unfilled jobs don’t require lots of skills; they simply require a good attitude, the ability to follow instructions, showing up on time and working as part of a team.

That imperative event in July 2012 was the official launch and expansion of UberX. When UberX started expanding, workers suddenly had the ability to quit their Monday-through-Friday, 9-to-5 jobs to work whenever they wanted. This served as a catalyst for how the gig economy has evolved today. Now several million US hourly workers are enjoying the flexibility by working for Uber, Lyft, Instacart, Postmates, Amazon Prime, and venture-backed on-demand staffing companies. Barry Asin stated loud and clear at the Executive Forum, embrace change or get left behind: “Our biggest threat is complacency. The idea that this is how things have been in the past is how it will continue to be in the end. We have to be willing to embrace change.”

In other words, don’t sit still and get left behind like the taxi industry.

Eddie Lou
Eddie Lou is co-founder and executive chairman of Shiftgig, a workforce technology company focused on empowering people to find local employment opportunities in a flexible manner and enabling leading staffing agencies retain, optimize, and redeploy their workforce.

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