By Cristian Bustos. Originally published at ValueWalk.
The rate of Americans resigning from their jobs continues to soar; coined the ‘Great Resignation.’
Record numbers of workers are quitting their jobs, although this trend is not affecting all sectors equally. According to the Bureau of Labor Statistics, a record high of 4.5 million Americans resigned from their jobs in November 2021.
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The disparity between sectors is evident in these latest figures. For example, approximately 6.9% of food and accommodation sector workers quit, yet the finance sector only saw 1.7% of its workers walking off the job.
The extent of resignations within the private sector (excluding employees from public sector positions such as government roles) has also hit record numbers, with 4.3% (or 4.3 million workers) voluntarily leaving their jobs.
While quit rates are high, these latest figures show that hiring rates are even higher. These employment stats give workers even more confidence to quit their jobs and successfully find something more suitable.
The data preceded the latest Omicron outbreak, so time will tell the impact this latest strain may have on these trends. Nevertheless, the combination of high quit rates and solid job opportunity growth indicates a robust economy.
The Pandemic Gives Rise To Mass Lifestyle Reevaluations
The pandemic has caused the population to question many aspects of their lives, including housing, location, and employment. The lockdown conditions highlight some of the long-term challenges that workers face across many industries.
The light finally shone on how desperately problematic the conditions of the public health sector have become; the vital yet dangerous nature of their work, intolerable hours, toxic attitudes , and shameful rates of pay for such crucial workers.
Low-income food and grocery workers suddenly became ‘front-line workers,’ and those with roles in the warehouse and distribution industries also suddenly became vital components of a struggling U.S. economy as the eCommerce boom hit. All things considered, it’s no wonder that employment trends are significantly shifting in response to such changing times.
Many older Americans decided to retire early, with people over 55 accounting for around half of the resignations. With school closures and student quarantines, many women have also left jobs to care for children at home.
Others chose to use the pandemic conditions to kick start their businesses or freelance instead of being employed. Many people are live off savings, cashed in stocks or investments, spousal income, or move back in with family to live more cheaply; the reasons for this ‘Great Resignation’ are certainly broad.
During 2020, almost half of all Americans (42%) worked from home, almost double the rate in 2019. In 2021, Millennials and Gen Z reflected more excellent freelance and gig work rates, both as rideshare drivers and independent contractors — likely a representation of job cuts, resignations, and the pursuit of new and more flexible earning options.
Rideshare Sector Flailing Despite Restoring Freedoms
With so much freedom to move around recently restored, it would be reasonable to expect that rideshare leaders, Uber and Lyft, would be fighting fit and ready to meet renewed demands for travel. Yet, both are struggling to entice drivers to return, resulting in longer customer wait times and rising prices.
According to a report from CNBC, former ridesharing drivers continued to largely stay off the roads last year, fearing the pandemic. However, Uber reportedly expected 80% of drivers to return once fully vaccinated and even invested heavily in getting people vaccinated by offering free transportation to vaccine hubs.
John Zimmer, president of Lyft, once claimed that most ridesharing lifts would be in autonomous vehicles by 2021. Yet, Lyft abandoned this vision and sold its developmental unit to a subsidiary of Toyota in 2021. Uber also offloaded its autonomous vehicle division in 2020 due to increasing concerns over safety and mounting expenses.
Safety concerns are prevalent in the ridesharing sector. For example, according to Uber’s 2019 Safety Report, out of 1.3 billion rides in America that year, 3,045 sexual assaults and 58 fatalities, with nine resulting from physical assaults.
Uber increased its safety features and introduced the Industry Sharing Safety Program and other safety initiatives. Lyft also introduced many new safety features in the same period, including a PIN verification system to prevent riders from accidentally getting into the wrong vehicle.
Vehicle Sales On The Rise As Ridesharing Giants Struggle
Many experts touted ridesharing as a ‘transportation revolution’ that significantly reduced car ownership. There were promises of reduced city congestion, consistently affordable rides, and self-driving cars have all gone undelivered thus far. Instead, vehicle sales are again on the rise after an inevitable slump in 2020.
Having burnt through colossal amounts of venture capital funding, Uber reported a whopping loss of $6.8 billion in 2020 and $8.5bn in 2019. Meanwhile, Lyft also racked up losses of $4.4bn for the same period. Uber and Lyft’s resuscitation efforts may eventually win. But it will be a difficult battle to win, with many broken promises paving the way for consumer disenchantment. Time will tell.
Startups Offering New And Improved Business Models
The ridesharing industry as a whole, however, is far from over. Startups such as Alto, Kaptyn, and Revel – coined as Rideshare 2.0 – offer an alternative to sector giants Uber and Lyft. Using employees as drivers rather than self-employed ‘gig workers,’ these enterprises provide company-owned vehicles, too.
Moreover, by maintaining their fleets and employing their drivers, these companies seek to provide a more reliable and consistent ridesharing experience while improving the earnings and employment perks for the drivers, too.
Are Turbulent Times Ahead For Ridesharing Companies?
It will be difficult to predict the future viability of the ridesharing model until the pandemic conditions are far behind us. Nevertheless, with flailing sector leaders battling against new startups gaining traction with their business-model improvements, it seems inevitable that the industry is in for some turbulent times before finding a clear path.
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