From The Washington Business Journal (subscription required):
Reston Limousine CEO Kristina Bouweiri needs drivers — and she is pulling out all the stops.
She is offering referral bonuses to anyone who sends her a qualified driver ($200 for a part-time driver and $400 for a full-time driver). And, for the first time ever, she has set a guaranteed minimum salary of $50,000 a year for a commercial driver.
She has raised prices to pay her drivers more, cut business travel to focus on recruitment and begun working overtime to solve what she describes as the biggest driver shortage in her 26 years in the business.
“We have had shortages before but never like this,” Bouweiri told me in an interview, estimating she has 60 openings now. “We are doing everything we possibly can to solve this problem.”
The culprit? Bouweiri attributed it to several factors, including a robust economy and low unemployment. But she also stressed the role of ride-hailing juggernauts Uber and Lyft in luring away drivers with the promise of a completely flexible schedule. Drivers for those services can log in when they feel like it, something she said she cannot offer as the company heads into one of its busiest seasons.
The growth of ride-hailing has taken a huge chunk out of what she said was a finite pool of ready, willing and able drivers. That means she’s competing with them, despite catering to an entirely different client base.
And Bouweiri’s company has been growing, with revenue increasing from $25 million in 2016 to $27 million in 2017, with more growth expected in 2018. But drivers are crucial for that growth. Bouweiri has started holding focus groups to recruit and retain drivers and has switched up how they showcase open positions. She’s even pitched the company to drivers over restaurant dinners.
“We are doing things we have never done before because that’s what it’s going to take,” she said. “We are literally rolling out the red carpet, and it’s a shift in how things have always been done. If I don’t treat my drivers like clients I won’t have any.”
The shortage comes as the number of people participating in the so-called “gig economy” in Greater Washington continues to climb, according to a November report by the Stephen S. Fuller Institute at George Mason University. The number of nonemployer businesses (a company with no employees that covers a mix of freelancers, contractors, consultants and individual entrepreneurs like Uber drivers) grew 78.4 percent from 1997 to 2015, more than the 46.9 percent growth of traditional businesses over that same period.
The number of these nonemployer businesses involved in taxi and limousine services (which covers Uber and Lyft) skyrocketed since 2010, growing from 11,190 in 2010 to 29,950 in 2015, a 167.7 percent increase. (It’s worth noting that businesses, in this sense, likely represents one independent contractor.) That far dwarfs the number of full-time jobs in the taxi and limousine sector, which accounted for 2,345 jobs in 2015.
Chris Marchetti, CEO of Sterling-based Excel Courier & Logistics, which transports everything from sensitive documents and specialized replacement parts to medical specimens, said he has 20 openings for drivers.
“I have two words for the problem: Uber and Lyft,” Marchetti told me.
His business runs on the independent contractor model, which means drivers provide their own car, and he said as those services have grown they have drawn from the same driver pool, making it harder to find and retain good drivers. Reston Limousine, on the other hand, has lured some Uber and Lyft drivers back who had become tired of using their own cars and paying for their own maintenance.
Marchetti said the company created a brand new position dedicated to retaining and recruiting drivers and is also increasing pay for drivers with longevity. And the company has been working to make drivers feel more connected to the company. Think fun activities like barbecues.
“We need to have a certain pool of people available on any given day to serve our clients’ needs,” he told me. “It can’t just be a group of people that come and go when they feel like it. We have to just work on how we present ourselves to the potential candidates and help them decide if this is what they want.”
The company, which employs about 100 drivers, has been trying to lure new drivers tired of shuttling people (sometimes drunk people, Marchetti points out) and would instead like the peace and quiet of boxes or computer parts.
“The packages don’t talk,” he said. “They just sit in your car.”