One of the key features of gig jobs is their inherent flexibility, so it can be difficult for platforms to secure loyalty from workers. Research from the University of Michigan suggests that connectivity with fellow co-workers could do the trick.

The high attrition rate among gig workers, such as over 60% of Uber drivers leaving the platform within the first six months, has led to problems of low engagement and employee retention. In order to address these issues, the researchers turned to the field of identity economics, which posits that people make economic decisions based on both financial incentives and their sense of identity, and market design for solutions.

Securing loyalty

To test their theories, the researchers conducted randomized field experiments at a large ride-sharing platform, forming teams of drivers based on factors such as age, hometown, and productivity, and having these teams compete for cash prizes.

The results showed that drivers assigned to virtual teams worked longer hours and earned 12% more revenue during the contest, compared to those in the control condition. Additionally, drivers who were randomized into teams during the experiment earned 6% more revenue two weeks after the contest was over.

Furthermore, the study found that drivers in hometown-similar teams were more likely to communicate with each other, while those in age-similar teams continued to work longer hours and earn higher revenue during the two weeks after the contest ended.

The authors also conducted a second experiment to examine the relative importance of team identity versus monetary incentives. In this experiment, nearly 28,000 drivers in three cities participated, and drivers were shown either their team ranking or individual ranking within their team, while those in the control condition only saw their individual performance information. The results of this experiment showed the importance of team identity in motivating drivers.