Question

A firm offers a pick and drop facility for its workers.

Why would a profit-maximizing firm opt for such a policy?

Answer 1

A firm offers a pick and drop facility for its workers, this means that all the workers of that particular firm are picked from their homes in the morning and carried to the workplace and are dropped back to their homes in the evening by the vehicle provided by the firm.

A profit maximizing firm opt for such a policy because their are many benefits of this like-

• It saves cost of transportation. If the firm doesn't provide pick and drop facility they may have to provide transport allowances to its employees, which may cost higher than this.
• If employees go to the firm by firms transport facility they are less tired and hence are more productive at work.
• All the employees will reach workplace at time and no one will be late, and hence the production process may start on time.
• If there are more work some day and hence they can do overtime and can be dropped back at late night.
• Travelling everyday in same vehicle increases bonding between the employees and hence they will be more productive when they work in group.

So, though providing pick and drop facility may incurred some cost to the firm as seen directly. But if we look at its benefits ( which may not be seen directly) these are very high and hence profitable even for profit maximizing firms, so they provide such facility.