As the U.S. job market begins showing some signs of strength, a major threat looms over companies that rely on gig-economy workers.
Now, as an attempt to attract and keep short-term laborers on staff, on-demand companies are starting to offer better benefits, perks, and bonuses, according to The Wall Street Journal. Uber, Lyft, and DoorDash are just a few of the startups spending big bucks to maintain a constant labor pool.
In July, Uber added an app feature that allows users to tip drivers. Back in June, the ride-hailing company announced a new program that would help drivers become full-time workers. So far, about 100 drivers have been hired into customer support roles, a spokesperson told the Journal. Uber also rolled out a pilot insurance plan to help cover on-the-job accidents. Lastly, when a user signs up to be an Uber driver in San Francisco, they can take home a $1,000 bonus.
Lyft, which already had a tipping system in place, launched a tiered perks program in 2015. It gave workers better health care and car maintenance services depending on the number of rides they completed. Additionally, the signing bonus for Lyft is $800.
But ride-hailing companies aren't the only ones trying to retain their part-time workers. DoorDash plans to expand its employee network by leasing motorized bicycles for workers' use during delivery trips. The food delivery startup is also teaming up with outside companies to connect its independent contractors to health insurance plans.
A 2016 McKinsey Global Institute report found that about 4 percent of the U.S. workforce has earned money in the gig economy. But the turnover at these companies can be quite high; an estimated one in six participants is new, and more than half of gig economy works leave their jobs within a year, according to a November 2016 report from JPMorgan Chase & Co. Institute. Harry Campbell, who runs The Rideshare Guy, a blog that covers the on-demand workforce, writes that while gig-economy startups are trying to challenge the turnover rate, employees are still mostly unhappy with their take-home pay.