This post is the second in a series that will explore three pervasive but rarely considered factors underlying job insecurity today. (See Part 1 here.)
The first installment in this series identified three challenges confronting the American workforce: affordable transportation, available family care and the impact of criminal records on general employability. This post specifically addresses the first of these challenges – the impact of limited transportation options on millions of American workers – and provides insight into a few potential solutions.
If asked, many people would guess that test scores, crime, or growing up in a single-parent home have the biggest impact on social mobility. However, the statistics do not support this common assumption. In fact, a recent Harvard study shows that commute time has the biggest impact on one’s chances of escaping poverty.
So why does it matter?
Affordable transportation is a must for workers, but millions don’t have reliable and affordable access. Between the burdensome cost of owning a car and paying for gas and insurance, or poor access to public transportation, many struggle to find a way to show up to work. “No-showing” a shift is a clear problem for the employee – no work, and no pay. But employers feel the pain of no-shows too.
When an employee calls in absent, employers are forced to make do with fewer people, or pay a premium to get someone else last minute. This result comes in the aftermath of a series of frantic phone calls and messages to existing staff requesting shift coverage or staffing company outreach requesting a qualified and available worker.
Between lost wages, lost sales, premiums paid to cover shifts and the costs of managing unexpected absences, both parties suffer. The publication, Absenteeism: The Bottom-Line Killer, estimates absenteeism costs $3,600 per worker each year across employers and employees. Based on a recent Gallup Poll, the loss in productivity is as high as $8.5 billion across all service workers.
It’s clear that employers should care, but in the absence of new public transportation projects, what are the options?
One emerging solution is for companies to expand commuter benefits to hourly workers. While common for large companies to offer these benefits to salaried workers, hourly employees often don’t get this option. A subsidy would bring down the cost of transportation and reduce absenteeism – a win for both parties. Although hard to solve for car ownership itself directly, this subsidy can make a serious impact on the ancillary costs of getting oneself to work including helping lower the cost of public transportation, gas, insurance and tolls. Given that it’s a cash outlay, employers have the opportunity to present the subsidy as a benefit tied to worker performance, shift adherence and long-term reliability. And considering the large dollar impact of absenteeism, it’s possible to build a business case to justify the cash outlay for as little as a tank of gas a week and still break-even on net costs.
Another option is for employers to create carpool incentive programs. Far beyond typical carpooling, employees not only agree to share a ride to and from work, but the employer actually compensates the employee – the driver – who picks up and drops off other employees. This makes transportation cheaper for the driver and increases access to work for people without their own vehicle. The benefit for employees include obvious cost savings from not driving one’s own car to work every day, reduced wear and tear on vehicles, increased socializing with coworkers, reduced commute times due to access to HOV lanes, and increased enjoyment of leisure activities for passengers, such as reading, eating or even sleeping. For the employer, such incentives can be in the form of straight monetary compensation, reward programs, or even simply preferred or reduced cost parking. Technology can make this even more viable by coordinating the best routes, tracking mileage and disbursing incentives.
Finally, ride-share services – like Uber, Lyft and Chariot – can be a solution that works across employers. The launch of Uber Pool and Lyft Line has created cheaper alternatives in major cities, but many workers live in regions not yet serviced. In the absence of these services expanding, Uber and Lyft can create an offering specifically targeting underserved communities. Similar to a bus schedule, routes are pre set, run regularly, are consistent and frequent, and can reach geographically marginalized members of society, helping them stay – and in some cases even join – in the game. Whether partially paid for by the companies, employers, or paid in full by workers themselves – the success of Pool and Line have proven that these services are viable at a price similar to a bus fare.
In addition to seizing on a basic business opportunity, there is a potential philanthropic aspect to this avenue. Such ride-sharing companies can allocate resources to such activities as a way to bolster their community giving initiatives, as well as building a better relationship with individual cities. Both Uber and Lyft have made substantial donations to charities and are building corporate social responsibility initiatives – here is an opportunity for them to tie their giving practices to their core business in a way that dramatically affects local employment and the community.
What these last two options illustrate is that technology has the ability to solve this problem on a broad scale. What we need now is someone focused on solving it, not just altruistically, but because it makes basic business sense.