Zappos rolls out Uber-like wage model
Zappos has introduced a scheduling method for its call center employees similar to Uber’s surge-pricing model. Basically, hourly shifts with greater call volume pay out higher wages than less busy times.
Under the former system, call center workers filled in their preferred shifts on sheets of papers on a quarterly basis, a time-consuming process, according to Fortune. With preference for choice spots given to those with seniority, Zappos was also looking for a better way to incent employees to work when call needs were highest, aligning with its commitment to customer service.
Zappos, owned by Amazon, began testing an "Open Market" concept during the holidays with full-time call center employees. Employees were able request their time preferences based on likely wage rates that were estimated based on algorithms tied to forecasted call volume, past bidding on coveted shifts and emergency adjustments.
Built around historic hold time, caller demand was found to peak daily around dawn in Zappos’ Las Vegas offices, when customers on the East Coast were checking up on packages. A higher hourly rate was subsequently paid to those willing to come in early. By contrast, employees received less pay on weekends, when fewer calls arrived.
Zappos hasn’t completely figured out pay adjustments. Those working "surge" or busy hours over the holiday were compensated with merchandise-type rewards.
For employees, one big benefit promises to be flexibility in setting schedules around their lives while gauging opportunities for more or less pay. In the holiday rollout, each employee was given 10 percent flextime and the company plans to move to 100 percent flextime, Zappos said.
Danielle Kelly, scheduling coordinator, told Fortune, "People have been learning how it can be a benefit for themselves and for the company. They’re really excited to have the empowerment of [deciding] when they want to work and how long they want to work for."
Last week, New York Times columnist Farhad Manjoo wrote that Uber’s success is prompting other sectors to explore a wage model based around supply and demand, citing Instacart, TaskRabbit and Airbnb as other examples. But he also speculated on the tradeoff between flexibility and uncertainty around wages and shifts.
"The on-demand economy may be better than the alternative of software automating all our work," wrote Mr. Manjoo. "But that isn’t necessarily much of a cause for celebration."
- Zappos is bringing Uber-like surge pay to the workplace – Fortune
- Uber for retailers: Busier hours means more pay – CNBC
- Zappos CEO Tony Hsieh takes Uber ‘surge’ pay concept to call center – Upstart
- Uber’s Business Model Could Change Your Work – The New York Times (tiered sub.)
- In the Sharing Economy, Workers Find Both Freedom and Uncertainty – The New York Times (tiered sub.)
- Clear And Straight-Forward Surge Pricing – Uber
Does an Uber-like surge-pricing wage model make sense for call center employees and perhaps hourly store associates? What are the pros and cons of a surge-driven model versus traditional scheduling and hourly wage rates?