Staff On Demand and How Uber Got it Right (initially)

exo attributes staff on demand Jul 01, 2021
Staff On Demand
 

 

Staff on demand is one of the main attributes of many successful exponential organizations that use external resources for their business processes. 

While many businesses may be familiar with hiring contractors and freelancers to support their operations, one of the main benefits of Staff on demand is when it is used in business-critical processes. 

Examples include Uber or Lyft that use drivers for the core business of transporting people from A to B. 

The main advantage a well implemented Staff on Demand strategy can give an organization is flexible access to a vast pool of otherwise inaccessible global talent, at scale. 

While it may still be necessary to maintain permanent staff in certain equipment and capital-intensive industries, in an information enabled business a large internal staff seems increasingly unnecessary, counterproductive and expensive. 

When we think of staff on demand, we immediately think of Uber, that was founded on the idea of aggressive expansion. Just months after going live in New York City and Chicago, Uber stunned employees and investors by going online in Paris. London, Mexico City, and Taiwan soon after.

But something curious happened in the summer of 2014 when Uber had about 80,000 regular drivers in the US. By the end of that season, it had none. The ride-sharing company had switched from having drivers to having “partners” or “independent, third-party transportation providers”. They switched from contracted staff to staff on demand.

Uber’s geographic expansion took off in earnest in 2013 and they soon realised that they would need a different strategy to get them to where they wanted to be. By 2015, the company had already brought Uber to 275 different cities. — today, it is in over 700 cities, providing about 16M trips every day.

At one point, while Uber had roughly 4 million drivers, or partners as they call them, the company only had 27,000 employees at a market cap of roughly 49$ billion (down from 79$ billion pre-IPO). 

We should note that of late, it has become obvious that staff on demand is an important attribute but just as important is understanding the context in which it is implemented and how regulation and other factors affects its use.

Uber and Lyft are under increasing pressure to fundamentally alter their business models in California for example, the state where both companies were founded and ultimately prospered. At issue is the classification of ride-hailing drivers as independent contractors. 

Uber and Lyft say drivers prefer the flexibility of working as freelancers, while labour unions and elected officials contend this deprives them of traditional benefits like health insurance and workers’ compensation.

As such, there are still many open questions organizations and society will need to figure out around this attribute.

What do you think is the role regulation should play in these cases?

Do you see staff on demand as an opportunity both for companies and workforces or merely a way for organizations to keep employee costs off the balance sheet? Is there a balanced approach, a better way? Can these companies scale and keep prices low without working with staff on demand?

Let me know in the comments.

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