Fleet Solutions and Sustainability Bolstered by the Gig Economy

With a Driver Shortage, Fleet Sustainability is Top of Mind.

As the economic environment shifts and a generation’s population transitions, employment opportunities in the United States are shifting as well. With cuts to the public sector, outsourcing, and technological advancements in mechanics and software, the workforce in some industries is shrinking and in others even disappearing. Consequently, many are turning to the gig economy in order to sustain employment and to provide a more balanced lifestyle. Fortunately, the trucking industry can take advantage of the latter by offering fleet solutions that better align with driver needs for a more flexible lifestyle while simultaneously offering efficiencies in fleet management and fleet payment.

A recent study by the McKinsey Global Institute, provided a look at the independent workforce’s motivation in opting for contract positions and work. The study found that up to 162 million people in Europe and the United States—or 20 to 30 percent of the working-age population—engage in some form of independent work. It goes on to say that while demographically diverse, independent workers fit into four segments.

1. Free agents: Actively choose independent work for primary income (this group is primary to Fleet Sustainability.)
2. Casual earners: Independent work provides supplemental income.
3. Reluctants: Primary income from independent work but would prefer traditional jobs.
4. Financially strapped: Supplemental independent work out of necessity.

Some consider the gig economy’s origin is a result of the economic recession in 2008. Hiring freezes, lower wages and an economic drought in the marketplace made it impossible for those coming out of college at the time to establish a career in the traditional sense. These candidates were forced to pursue non-traditional career opportunities in part-time jobs and or project-based employment. Fortunately, the effort paid off, providing choices and flexibility that a full-time employment could not offer. The same tech savvy generation looked to industries where they could make a difference and the trucking industry provided those opportunities. Today, the trucking and logistics industry is as tech savvy as many other industries in the world purely out of the necessity for fleet sustainability, and they have the gig economy along with the millennial generation, in part, to thank for it.

Today, the independent/freelance workforce continues to evolve based on the global economy and digital platforms that enables entire industries to work remotely from anywhere in the world. Short term engagements and temporary positions are more common because a physical presence is not necessary. Businesses are also under pressure to maximize resources in order to be as efficient and profitable as possible. Savings on benefits, office space, equipment and training are paramount to their bottom line in some cases, which is why the freelance workforce has become just as beneficial to the employer as it has to the freelance employee. As the millennial generation continues to flood the workforce changing jobs frequently, looking for fresh inspiration, purpose and work-life balance, the gig economy has evolved. While there has been difficulty in counting the exact number of independent contractors and freelancers, there is still proof that the segment is growing, particularly for the population under 30 years old.

A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors.

Currently, Intuit counts 3.2 million people who work regularly in the on-demand economy. In five years, their numbers should hit 7.6 million, according to the findings.

So, while some industries are shrinking and others are disappearing all together, the trucking industry is flourishing and considered one of the industries with the most potential. In fact, a study done by the Bureau of Labor Statistics considered the trucking industry as one of the top 10 occupations with the most potential for growth from 2010 – 2020. With statistics like the following, the industry is hopeful that the on-demand economy will help to address the current driver shortage.

8: HEAVY AND TRACTOR-TRAILER TRUCK DRIVERS

Net growth: 330,100 jobs

Percentage growth: 20.6%

Degree required: High school diploma or equivalent

Average pay: $39,450

The BLS says: The demand for truck drivers will seesaw based on the health of the economy.

Many consider Uber the first and most successful resources for those seeking “gig” based employment. The company presented a modern business model addressing the economic needs of the environment both in product and employment. As Uber excelled and became the largest ride sharing network in the world, they recognized clear opportunities for expansion. With a robust network and a confluence of big data at their finger-tips, it was not long before Uber saw the potential for applying their model in the trucking and logistics arena. Uber Freight provides contract work to drivers by matching trucking companies with loads to haul much like they match drivers with riders. By eliminating the middleman/broker, the company is facilitating efficiencies in managing the workload as well as fleet payments. Drivers will no longer have to wait for payment while shippers and fleet management will get real-time pricing as well as opportunities for scalable growth.

The same advancement in software solutions have also stimulated the growth of companies like EFS. By developing an expertise in payment processing software specific to the trucking industry, they have become invaluable partners in maximizing fleet payment solutions and strengthening fleet sustainability. Fleets can manage the work at hand while EFS can manage payroll, cash transfer, vendor payments, fleet card solutions. The can also leverage powerful data analytics to help evaluate capacity and benchmark volume against peer groups therefor creating actionable insights.

While the gig economy may have originated from a dark downturn, the results have been nothing but positive, especially in the trucking industry for both the fleet managers and the independent contractors. This model has provided fleet employment solutions to maximizing efficiencies for a fleet sustainability and flexibility for the driver through a work-life balance.

Resources:

http://whatis.techtarget.com/definition/gig-economy

https://www.forbes.com/sites/larryalton/2018/01/24/why-the-gig-economy-is-the-best-and-worst-development-for-workers-under-30/#2b4a16b66d76

https://www.forbes.com/sites/eriksherman/2018/03/03/the-gig-economy-wont-save-workers-at-3-37-an-hour/#378b0bb147a1

https://247wallst.com/special-report/2016/12/09/americas-25-dying-industries/3/

https://investors.intuit.com/press-releases/press-release-details/2015/intuit-forecast-76-million-people-in-on-demand-economy-by-2020/default.aspx

https://hbr.org/2018/03/thriving-in-the-gig-economy