A Ten-Dollar Bonus Beats 250 Dollars

by | Mar 6, 2018 | Business Operations | 0 comments

Ten-Dollar Bonus

A few weeks back I began a slow-reveal on the issues in our study of the Gig Economy. And while I never specifically said it if you read between the lines you likely concluded I wasn’t impressed. A 50% bonus? Holy Cow! Problem is, that bonus was designed to engender loyalty, and it doesn’t really manage that.

Why? Because in real terms very few people chasing the 250 Dollar Bonus will catch it. Or be able to. Oh, and if they did pull it off, they’d expect it again. And again. And again.

One day last week, another food-delivery logistics company took an out-of-the-ordinary shot at the incentive game. You see it above; a ten-dollar bonus in extra pay per delivery.

Initially, I thought I was reading the map wrong. But no; for a few hours this company—one that normally pays $6 to $11 per delivery—really was adding a ten-dollar bonus on every job:

Ten-Dollar Bonus Rules

Sure, it was a reaction to extreme circumstances—a huge storm hit at its most intense during a lunch hour on a workday in Manhattan. But wow. This was a 90-160% bonus and all you had to do to collect was get wet. No five-days-of-being-on-call.

No competing for work and wondering if you’d done enough to make the cut. And no expectations about when or whether it would happen again. Very simple: we need your help and we’ll pay for it. Not to mention that under adverse weather conditions people tend to tip drowned-rat-looking delivery people better.

Right up there with issues like pricing on loss leaders and other food-business management issues, the costs associated with labor are troubling. And let’s remember that these logistics companies aren’t even in the restaurant business!

The Value of a Ten-Dollar Bonus

So let’s talk for a moment about why bonuses are offered.

Without judgment the other factors, bonuses recognize a job done above and beyond the manner expected. That being true, it isn’t really normal to pay a bonus either for working a lot or for doing a delivery under adverse conditions. But let’s remember that the couriers for food-delivery businesses aren’t employees. This isn’t a normal situation because in the gig economy bonuses aren’t bonuses so much as bribes. Please keep my system working! 

Our experience analyzing the food logistics part of the gig economy suggests that those bribes are exactly what works. We’re working on a better model, and some services are headed in the right direction. Overall, though, it’s been tough sledding. There are too many moving parts in the delivery equation, and more are being added! Stay tuned for that breakdown. You’ll be horrified.

Of course, we’ve got your back if you’re pulling out your hair running a restaurant. For that matter, for your issues with business process management in pretty much any business we’re right here.

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