The 1099 World: Three Key Ways the Sharing Economy Benefits the Future of Human Work
In 2013, the Economist published an article about the rise of the sharing economy, and lauded the emerging model as one that was here to stay and would ultimately change the way we think about consumer goods and services. Since that time, many of the companies fueling collaborative consumption have come under fire while some have even been crushed, unable to withstand government regulations.
Detractors argue that workers (or “giggers” as they are often deemed) earn slightly above minimum wage without benefits. This ultimately leaves a burden on the state, as many giggers live without health insurance (despite Obamacare) and will eventually age out with little or no retirement funds.
The alternate viewpoint is that allowing flexibility and freedom in terms of human work creates opportunities for those who want to work but either (A) have trouble finding full time work, or (B) for various reasons (raising kids, taking care of elderly family members) simply can’t fit into the 9-to-5 job box.
The truth is, whatever side of the argument you choose to take, we don’t have any viable robotics that can physically, mentally, or emotionally replace any one person that we as a society categorize as today’s giggers. Unless, of course, the Bicentennial Man exists and I missed the memo? That being said, as the Economist so adeptly pointed out several years ago, this economy is here to stay, and we are best served to begin “working with it” to ensure the success of our future workforce. In doing so, we should also understand the clear benefits of the sharing economy — or “new economy” as it becomes ubiquitous — so that we can solve problems within it, from a human standpoint.
Benefit No. 1 — Assets Offset Many Issues Caused by Automation & Outsourcing.
As long as there are humans on the planet, people will need to work and humans will be required to conduct certain aspects of this work. Although skills are shifting to account for managing machinery and the relationships between them, as opposed to simply operating machinery (as automation and A.I. evolve), those sitting squarely in the new economy are doing neither. This subset of work has simply re-arranged how we mechanize logistics (think Uber and Airbnb) to leverage assets we already have. It’s impossible to outsource a ride to the San Francisco airport to a person living in China. Or to depend on a robot to provide you with alternative shelter options during a last minute trip.
In other words, if you own (or rent) a car, a home or any other useful assets, the new economy makes it possible for that asset to work for you…any time or day of the week.
However, one critical point to the success of the new economy is to allow the service providers (giggers) the ability to set their own price. This may not be preferable for companies like Uber that use pricing to entice drivers to show-up at key times to serve their passengers. Ultimately, companies that power the sharing economy must ensure the customer has a satisfactory experience. In order for both parties — the gigger and the customer — to benefit, certain concessions must be made.
Benefit No. 2 — Companies Powering “giggers” Will be Large Enough to Provide Network Benefits.
Companies that control these micro-economies, such as Airbnb, Uber, and LendingClub, have something that traditionally is limited to the government and unions: The scale of a workforce and the power to command or negotiate a price for a service on behalf of their giggers.
Imagine, in addition to government and unions, that these companies had enough power (both in the form of data and assets) to negotiate rates for health insurance, retirement plans, and other critical items currently not offered to giggers. This would also create a level of stickiness in the network. The controls would take a bit of effort to nail down but essentially what would happen is if a gigger took a month off from the “networked platform”, or even quit, they would have a certain grace period (3 months, 6 months) to find other alternatives. In other words, it eliminates some of the current complaints around lack of stability created by the sharing economy.
But what about illness, vacation, or time off? Solving for this could be an industry unto itself. One solution that could be offered through the large sharing economy platforms, would entail giggers saving a percentage of their total income to “buy” time off. The parent company would hold this money much like a 401K where it could earn interest. The gigger could then draw from this account immediately when sick or in advance for a planned vacation. Imagine the implications for a modernized financial services industry!
Benefit No. 3 — Provides Flexibility for Those Raising Families.
One of the main reasons we started Daybear was that we saw the struggle many parents faced in terms of child care. From mothers who want to stay at home but need to work full or part time in order to supplement the family income, to fathers who want to spend more quality time with their families, the new economy provides a unique opportunity for people to re-arrange their thinking (and schedules) about work.
Currently, the sharing economy mostly benefits those who want extra income on the side, or who want to continue to earn an income after they’ve officially “exited” the workforce. But in the future, I think the outcome of the new economy will be that families can worry less about finding work outside the home and focus more on how they can make their home (or any other physical asset) a key component of their job.
While technology has certainly enabled the velocity of transactional-based businesses, and the Internet has virtually flattened the universe, nothing will ever be able to replace the necessity of human connectivity through families and communities.
These humans will remain a key component to the future of work, and many will become the giggers of elderly care, nursing, child care, pet care, and virtually any care industry. For anything where the outcome isn’t simply determinate by logic (art, design, etc.) and bits and bites, we are best served to invest in the development of systems and standards that will allow for our evolving 1099 world.