Building a Better Workplace with Tech
Tim O’Reilly says that technology allows us to provide more flexible and compassionate opportunities for workers.
Tim O’Reilly is one of the smartest commentators on the sharing economy. He’s the founder and CEO of O’Reilly Media, and believes we need to reorient our economy around using technology to augment workers—not replace them. O’Reilly has a curious name for the current iteration of our economy—the WTF economy—that he explained in an interview with Reinvent’s founder and CEO.
WTF is this great expression because it can be an expression of wonder or it can be expression of dismay, and in today’s economy we see both. The WTF ‘Oh my gosh, that’s possible,’ with self-driving cars, with drones, with AI, there’s amazing new stuff happening. Then, you really don’t pay people enough to live on. WTF, you know?
So, the next economy has a design pattern, I think which is, rather than using technology to cut costs and simply to drive down the cost of labor and other things that in fact do make a company more productive, we actually ask ourselves, what does technology let us do that was previously impossible?
So often that technology consists in augmenting people so they can do new things. You even see this with Uber, for example. We had Connected Taxi Cabs for years, but all they did was put a credit card reader in the back and a little TV screen where they can show you ads, and nobody really said, “What could we do differently? How can we do this differently with technology?”
Then Uber came along and said, “Wow! Everybody has a smartphone that’s identifying where they are in real time. We could match up drivers and passengers in real time. Not only that, there’s all this mapping technology so drivers who aren’t that experienced can help find their way around. Not only that, we can build an online backend that will multiply all this possible world of passengers and drivers.”
This is technology augmenting people so they could do something that was previously impossible. Of course, that actually grew the market. The market for on-demand transportation is way bigger than it was before that. So that’s great. The down side is that Uber didn’t throw off the notion that workers are a cost to be eliminated if at all possible. They started out with ‘Well, we’re going to produce really high wages’ and then they started cutting, cutting, cutting, cutting. The question is, what’s the right balance between paying workers and paying stockholders?
When it comes to the sharing economy, O’Reilly believes providers participate for a variety of reasons, and are motivated both by choice and necessity. He emphasizes the importance of platforms taking provider satisfaction into account to mitigate turnover and empower laborers.
First of all, there are several drivers of the sharing economy. There are some good ones and some bad ones. This is why it’s again this WTF economy that you hear again and again. There’s so many wonderful reasons why people participate in the sharing economy, and one of my favorites is a story that my wife heard somewhere in the Midwest. A guy who was, I believe, a chemical engineer or an aerospace engineer, who didn’t feel like he got enough human contact at work. So he would leave early in the morning, two or three hours early for work, and pick up… be a Lyft driver, and donated the money to charity. He didn’t need the money, but he wanted the human contact. You hear stories of how people who are between jobs or… It’s a wonderful aspect of it. People saying, “Hey, I had a lousy job and this is better for me.”
Certainly there are people who do it again purely because they have to. They can’t make ends meet. But there are other people who, for example, may have a second home that they want to share, or they’re travelling… I think of my brother actually, who has found what he can get for his home in Palo Alto, it’s so great, that it’s an incentive for him and his wife to travel a lot, because they actually can pay for the trips on the rents they’re making.
Why not just go, be away from home? There’s a whole lot of wonderful interesting stories there, but there’s also a profound sense that some of this is rooted in the fact that people don’t have enough to get by on. I also see some interesting hopeful signs. For example, if you look at the competition between Lyft and Uber, one of the focuses of the competition is increasingly on who’s better to drive for. That’s a good thing, and Lyft has played that card very well.
I think they’re a more fundamentally idealistic company, but I also think that that’s really a good sign that there’s going to be a little bit more power for labor. The churn of these companies is 60% a year. You go well, there’s always going to be new drivers. Well, until there aren’t or until the quality of the drivers goes down. And I like to think that one of the really interesting loci of competition here needs to be figuring out how to take driver retention, driver satisfaction into account, as well as consumer satisfaction.
O’Reilly encouraged people to view regulation in an entirely new way—not as a set of meaningless rules that need to be followed, but (ideally) as comprehensive systems that ensure processes run smoothly. He believes that cities and sharing economy platforms should adopt this view of regulation in order to develop policies based on shared data and clear objectives.
Some years back I wrote a piece called “Open Data and Algorithmic Regulation.” In it I made the point that regulation has become a bugaboo. Everybody goes, “Ugh, regulation.” But that’s because regulation is interpreted as a set of rules. But in fact, we live with all kinds of regulatory systems that we love. Just try driving a car without the regulatory system of your carburetor or your fuel injection system. Think about the regulatory system that we call the “autopilot” that flies us around. I learned, it’s really interesting, I was on a flight recently where I was talking with the pilot, and he’s like yeah, in a busy airspace like San Francisco, we can’t actually fly manually in and out of the airport because the tolerances are too tight.
You’ve got to do it on autopilot. You know what I mean? Crazy! You think, oh well, don’t you do at least the takeoffs and landings on autopilot? No, no actually, that’s sometimes the place where they most use the autopilot now. Crazy, you know. But the point is, here’s a regulatory system. It works, we accepted it because it works. Credit card fraud detection. Right? We’re being monitored and we accept it because it’s protecting us.
Anti-spam, a regulatory system. Google Search Quality, a regulatory system. So what do all of these regulatory systems have in common? They actually have a clear objective, kind of what I was talking about earlier, that everybody’s agreed on. And it can be imposed unilaterally. Google says “Here’s our regulatory system. We want to have the best search results. We want people to click on the top result and go away happy.”
At least that’s the theory of it. Uber has a regulatory system. They say they want people to be picked up in three minutes. Right? The question is, so are there other factors that we could take into account? My sense is that if we could get, first of all, the clear statement of here are the outcomes we’re going for, then you start measuring are we achieving those outcomes. I love Google Search Quality as a model, because it’s something they’ve written a lot about, they’ve talked about. Things like just wonderful signal, like short clicks and long clicks. This idea that if somebody clicks and goes away, and doesn’t come back, it’s a long click. If they click on the result and they come right back, then click on the next one, that’s a short click. A short click means that they weren’t happy with the results. So it gets demoted.
So they built this wonderful feedback loop and that kind of feedback loop dynamic, which we’ve really mastered in Silicon Valley… It’s what drives Google, what drives Facebook, what drives any of these modern apps. We have the data that’s feeding back to making the service get better and better as people use it. It is so largely absent from the way that government does regulation.
What I would love to see is, I’d love to see a partnership between cities and the services they want to regulate, where there is real shared data, shared visibility, clear objectives.
Perhaps most importantly, O’Reilly believes in forward-looking regulation, policies that are based not on the outdated systems of the past but rather focus on the possibilities of the future.
How do we stop talking about jobs, start talking about work? How do we stop talking about getting rid of people, and start talking about how to augment people? How do we start talking about the legitimate aims of public policy, rather than just sort of having people do these things, which are really not in the interest of society as a whole? How do we have a robust discussion about what those goals ought to be? I think there’s a certain role for that kind of antagonism. We have a society that values sort of the butting of heads to get to truth. Whether it’s through the legal system, or whether it’s through just public policy lobbying and so on. But we also, I think we could do a lot better at creative engagement. I think there’s some really wonderful opportunities.
Think about Airbnb. What kind of city do we want to build, and what makes it a great place to live? What can we learn?
There should be massive amounts of data sharing. Nobody should be writing rules yet.
They should be writing the smallest possible rule set while they are figuring out what’s going on, and be focusing on what’s really happening and how does it relate to what we wish was happening. Think about drones and all that’s possible there. You think about self-driving cars. You think about just employment and the nature of employment. All these things are going through these massive technological transformations, and if we have regulations that are only backward looking, that try to make things look like they used to look, that don’t actually say let’s take a fresh look at what we’re trying to accomplish as a society, we’re really missing a huge opportunity.
Watch the full interview here.