Last week, on the way home from speaking about our book, Delivering the Digital Restaurant, we took an Uber to the airport. Our driver told us, “I make $160,000 a year driving for Uber. I am a diamond driver with them. They give me a bonus every third ride I give.” Even after paying his car payment, gas, maintenance, and insurance, that’s a good living. So much so that he continued, “I’m a registered nurse. But I’ve taken my hours down as a nurse in order to drive more for Uber. I make more money, it’s easier on my body, and there’s less risk of getting sick.”
It's often reported that drivers earn less than minimum wage on a per hour driven basis and don’t get access to benefits, so this driver’s pro-Uber stance caught our attention. And our driver is not alone. It turns out that gig working is, well, a pretty good gig.
According to Uber, approximately 7 million Americans used a digital platform of some kind for gig work — Uber, UberEats, Lyft, DoorDash, Takl, Thumbtack, Rover or similar — just prior to the onset of the pandemic. For perspective, the US Bureau of Labor Statistics reported 13 million Americans worked in “Accommodations and Food Service and Drinking Places” as of March 2022.
Said another way, the size of the gig workforce is about half that of the hospitality workforce. The size of the gig workforce is now large enough to have an impact on how workers think about the nature of work. As with our Uber driver, employees from many industries are now comparing what they can get from gig work with what they can get from traditional employment, and in many ways, traditional employment comes up short.
It might be tempting to write off gig work as irrelevant competition for employees when one hears negative news about them. But as the restaurant industry continues to deal with labor shortages and turnover, now is a good time to reflect on what it is that workers like so much about gig platforms. Some restaurants might even go so far as to incorporate aspects of gig working into their offering.
Gig working offers four main benefits: flexibility, immediate pay, peak shift maximization, and no boss.
Flexibility means that gig workers can work when they want for the duration they want. This means they can fit working around other responsibilities — other jobs, school, care-giving. Gig workers can also dial up or down the amount they work depending on other demands on their time and their desired income. Traditional employment typically comes with a 4-hour minimum commitment per shift, 2 shifts minimum a week, scheduled days in advance. While the team nature of a restaurant requires accountability on the part of each team member to be present when needed, restaurants can consider offering shorter shifts and making it easy for team members to trade shifts. Scheduling software like 7shifts and harri put the power in team members’ hands to work out schedule changes and ensure flexibility.
Immediate pay means creating earned wage access. Gig workers can immediately access funds earned. Traditional employment requires payment two weeks in arrears, typically with a delay for funds transfer. When restaurant patrons were more likely to pay in cash, and therefore leave cash tips, restaurant staff often had immediate access to at least a portion of their pay. The shift to credit cards and other forms of contactless payment have dramatically reduced this once-prized benefit of working in bars and restaurants. Paying workers more frequently can be difficult for restaurants to account for. New technologies like Branch, Payactiv and Clair can offer employees immediate pay without disrupting restaurant payroll cycles. Brands like Pizza Hut & Jimmy John’s are using these types of platforms to get tips and mileage reimbursement into the hands of employees as fast as a digital gig platform would.
Peak shift maximization means working when pay rates are likely to be highest. Remember your first job in restaurants? Remember how hard you worked to make sure you were on the Saturday night schedule when tips would be highest? Remember how you avoided Monday night when tips were likely to be lowest? Smart gig workers know when their driving is most likely to be rewarded with higher fares, when they are most likely to be fully utilized, and how to ensure they won’t have any dead-head routes. Traditional employment requires restaurants to cover all hours of operation, even if some are slow and low in tips. Non-tipping restaurants also struggle to convince young workers they should give up their Saturday night to work in a busy restaurant. Innovators in the industry are starting to talk about the possibility of shift differentials to give traditional employment more peak shift maximization opportunities. Others, like Biscuit Bar in Texas, are paying bonuses to employees who work consecutive weekend days — their busiest time. Smart scheduling features, like that found in the 7shifts and lineup.ai softwares, also ensure that enough employees are staffed to peak and as few employees as possible at trough.
No boss means just what it sounds like: digital gig work platforms connect workers to jobs without human intervention. There’s no boss telling workers where to go — just algorithms. While this can feel frustratingly impersonal when there’s no one to resolve an issue, it can also feel empowering. Without a boss, there’s no politics about who gets what shift or how to earn a raise. Increasingly, technology will train employees, determine schedules and even allocate work content, but human managers will remain a critical part of restaurant life. The best restaurants will use great cultures to coach team members, rather than hierarchies of management, effectively creating an environment of no boss.
For those of you who are avid readers of this Speakerbox column, you might be thinking, “isn’t all of this the opposite of your November 2021 article about full time employment with consistent schedules?” Remember that employees, like consumers, are made up of different segments. There is no one-size-fits-all solution that works for all. Some employees will prefer consistency, some flexibility. You can target your restaurant towards one segment or another, but large employers may find they need multiple employee profiles to make their restaurants work well. This may mean offering a menu of approaches to appeal to different segments.
Meredith Sandland and Carl Orsbourn are co-authors of “Delivering the Digital Restaurant: Your Roadmap to the Future of Food.” After each spent 20+ years in corporate strategy and retail food, Meredith and Carl each concluded that food in America was changing. They left their corporate jobs in search of innovation that would transform the restaurant industry. Ghost kitchens, virtual brands, digital marketing, the gig economy and lean operations are at the heart of the future they envision. For more information, visit DeliveringtheDigitalRestaurant.com or email [email protected].