Category Archives: Labor Economics

Seven key takeaways about economic mobility

Brookings has a great article about new research on economic mobility (preferably upward) and friends. If people tend to be willing to make friends across economic classes it’s a big boost to chances of economic mobility.

One great thing is the links to interactive maps showing what drives social capital. You can see them here.

Richard V. Reeves and Coura Fall Tuesday, August 2, 2022

Seven key takeaways from Chetty’s new research on friendship and economic mobility

Gig driver for a day. Here’s what we learned making deliveries for Veho

Here we see a day in the life of a package delivery driver for Veho, which seems to be an enlightened last-mile delivery company that is actively trying to make work friendlier to the driver. The system they have developed tries to take into account driver needs as well as those of the customer and the shipper.

One of the major factors involved in keeping a workforce today is giving workers input and making the workplace friendly for them.

Veho seems to be using that principle to drive their business. Let’s hope it is successful for them.

One downside of this approach is the need for a depot where the packages are brought before the routing is done. That’s a capital expense that not all services will want to implement. It also slows up expansion into new markets, since the warehouse sites must be found and built out. However, the depot is key to the optimization for all the involved parties, including the driver.

Brian Straight Wednesday, August 3, 2022

Gig driver for a day. Here’s what we learned making deliveries for Veho | Modern Shipper

Owner-Operators appear to migrate to large trucking companies

This news service called ‘Loaded and Rolling’ is aimed at the trucking sector. The article here is intriguing. The author has postulated the downward swing of spot trucking rates compared to negotiated or contract rates as the driver for an apparent movement by owner-operator drivers back to large truckers rather than staying on their own. The evidence they cite comes from several large firms’ quarterly reports, which indicate how many drivers and tractors they have.

It’s easy to understand why drivers might want to do this. With fuel prices through the roof, they’d rather let the trucking firm foot that bill. And they can’t get a spot premium anymore for working alone. So signing on reduces their risk. It may also let them take advantage of fleet buying prices for services and for tractors themselves, which are quite pricey right now.

This doesn’t imply anything about the drivers’ status regarding independent contracting. While some drivers might become employees, many will remain independent contractors. It’s only California at present where the status of employee versus contractor is under such scrutiny.

But even there, the economics will favor a move for drivers to larger firms. The costs are everywhere, and with spot prices down it’s harder to earn a premium on piecework. In California, it’s mostly drayage drivers, who work short hauls to and from ports and distribution points, over relatively short distances, that are protesting having to become employees.

I think the protests won’t go on much longer, and won’t spread outside the ports. Port drayage involves short hauls, and when there’s not as much congestion, reasonable turn times. If a driver can do several turns a day and get home at night, being an owner-operator might be ok. But when delays and sudden changes in routing screw up driver schedules and paid time, drivers are not satisfied. Owner-operators have the luxury of parking their truck and working in another industry, such as construction. Employees can’t; but on the other hand, they can get benefits such as health care and pay for wait time at turns, and the trucking firm will be paying the fuel and billing the customer. But the questions about how AB5 will be administrated in California, especially for drayage drivers, can be settled without changing the law.

If more drivers what employee status, due to the economics, that will reduce the noise level also. And it will be easier to make sure trucking firms are not taking advantage of their drivers of whatever type.

July 27, 2022