How We Got Here: AI & the Gig Economy
Although nearly every generation since the 1800s has claimed that it is living in the most interesting of times, it is hard for our current generation not to feel the same way and feel justified in thinking so. In industries like energy we’re seeing dramatically decreasing prices in renewables leading to a surge in investment in the space, new methods for harvesting energy that are leading to increased efficiency, and dramatic advancements in power storage methodologies that are starting to eliminate the need for dirty base load plants. In construction and manufacturing there are dramatic shifts rocking the industry like 3D printed parts that can be made on the spot at a lower cost than machined parts, IoT devices connected to industrial equipment allowing more data to be gathered, and augmented reality devices allowing workers to better navigate assembly lines with precision and speed. The list of changes that this generation is seeing goes on and on, but nowhere have these changes been as dramatic and life altering as in the way that we work.
In just the last thirty years, society has moved from the idea of a static workplace where we clock in from 9–5 to the idea that we can work from anywhere for our employer, and now we are shifting into a state where workers are no longer tied to a single employer, instead they utilise online platforms to work for any number of clients. But while the movement towards a gig economy is well underway, what happens next? This article serves not just as a brief history of the way that modern societies have toiled, but also as a medium to predict future possibilities of the way we work when artificial intelligence, one of the other megatrends currently affecting our lives, takes a deeper hold.
As a reminder because it feels so long ago now, it wasn’t so far back that the idea of using a device the size of a book that would allow you access to a global repository of information, incredible amounts of processing power, and to watch cat gifs would have been the stuff of mad scientists. However, in just the last thirty years, we have seen a dramatic shift in the way people work that has been enabled by decreased cost for processing power, ubiquity of the infrastructure that enables online activities, and of course, the internet itself.
In the 1970’s-1980’s the way that people worked in white collar jobs was quite similar to the previous several decades (not counting wartime interruptions) for the majority of people. You woke up, hopped in your car, jetted out of the ‘burbs towards your corporate headquarters, grabbed a cup of joe from the vendor in your lobby, and then went upstairs to your cubicle. Once you were there you worked with pen, paper, and a good old desk phone doing whatever it is that you did. Your daily interruptions were relegated to the water cooler during breaks, the occasional obligatory meeting, and of course, chatty colleagues. At the end of the workday you set down the pen and paper, hung up the phone, and headed back home. No more attachment to the office until 9am the next morning when the day started over again.
Fast forward several years and things have started to change. What was once something relegated to corporate IT and massive mainframes, computers started taking the office by storm. Even the most basic desktop computers allowed the modern office worker to dramatically shift the way that they worked, no longer dictating notes but typing up memos and no longer doing calculations by hand but doing work only a math impresario could have dreamed of. While these developments dramatically reshaped life at the office for the average white collar worker, it was only a foreshadowing of what was to come with the advent of Moore’s law driving processing power costs down to a level where the average person could own a computer at home, combined with the rising popularity of the internet and cell phones becoming more ubiquitous.
Once cell phones, reasonably priced computers, and high speed internet access in urban and suburban areas become prevalent, we see another major shift in the way that people work. Beginning in the 2000’s, there are an increasing number of ‘remote’ workers who, while still employed by a larger organization, work remotely from a home office or other location. Initially met with skepticism from people who thought that someone not in an office could never be productive, or at least could never be trusted to be productive, the idea of remote work began to take hold. One can see why; no longer did a white collar worker have to brave the morning commute to the office and spend an average of over a hundred hours a year stuck in traffic and no longer did the average worker have to deal with workplace distractions, small talk, and everything that comes with office life. In fact, as of 2016, approximately one quarter of the U.S. workforce works remotely with some frequency, a number expected to rise significantly in the coming years.
Of course for all its advantages, there are always drawbacks to every advancement, and remote work has brought about its own host of issues, both for employers and for the remote workers. One of the largest issues for both parties has been the difficulty in integrating remote workers into the culture of the firm and their respective business unit. Humans are built to belong to communities and like it or not, seeing someone face to face still has no effective substitute, even with modern videoconferencing tools. These differences in culture and lack of integration lead to a high amount of churn in the remote workforce and can lead to increased difficulties in communication, project management overhead for supervising remote workers, and a loss of team cohesion; even within the team that is working together in person. Working remotely can also lead to a loss of productivity for certain remote workers. There are certainly types of people who are extremely high performers and can manage their own time and tasks independently, but those people are few and far between, and having a large remote workforce can lead to a loss of productivity as those hours of distractions at coffee shops, Netflix breaks, and other distractions add up.
At the same time that this was occurring there was a major shift in labor conditions in the U.S. The power of the unions were waning, pensions and retirement plans were being eliminated, and increased globalization was leading to shifting resources, layoffs, and increased animosity between employers and employees. Of course, there were also meta factors in the markets at play that meant that to be competitive employers had to shift strategies, employ only the most specialized people in their businesses and use contractors and third parties for everything else, but to the average white collar worker, the combination of lost opportunity and long term support paired with increased abilities to work where they wanted while not be as tied to an organization’s culture meant that they had much fewer qualms about moving into the next stage of the workforce, the freelance or gig economy.
In a bid to recapture the Jeffersonian vision of the independent yeoman farmer that has been part of American subculture since the founding of the country, the same remote workers and newly disenfranchised began seizing on the opportunity to become their own boss. These remote workers are from all walks of life, ranging from Uber drivers to dog walkers, to couriers, but increasingly the gig economy is affecting more and more high skilled workers like consultants, software engineers, and attorneys. In fact, the freelance economy and made up of over 42.6 million workers in the U.S. in 2006 and is expected to account for over 40% of the U.S. workforce by 2020 according to a study commissioned by Intuit. Of course, once a market reaches any sort of size, outside parties will try to become involved in order to make money, which can be seen with the development of gig based platforms harnessing these workforces. These platforms have been both a boon and a detriment to freelance workers who have seen difficult pieces of their lives like how they find jobs become automated and streamlined into mobile and web applications but have also seen their freedom dramatically curtailed, sometimes seen wages fall significantly, and increasingly see themselves more as employees being taken advantage of than entrepreneurs.
Platforms like Uber, Upwork, and Taskrabbit are now synonymous with freelance labour in various industries, but what does this mean for how people work today? For most freelance workers, life is dictated not by a boss, but by an algorithm. This means that as a freelance worker, your livelihood is likely controlled by a code base put together by a startup that very likely has the best interest of shareholders and end customers in mind over those of the workers on their platforms. Workers have little control over what the jobs are, when they are, what the details of the actual job are, or even what they pay before choosing to take on the job, instead they only have the option to accept or decline. This dichotomy of power between freelance workers and the platforms that control the flow of work, pay, and nearly everything else about their working lives has led to increasing friction on both sides of the spectrum with freelancers pushing for increased regulation from government entities to change or better enforce worker classifications and to unionize to increase collective bargaining power. For platform operators, it has increasingly led companies to seek out ways to gamify and automated the systems that they manage in order to decrease risk and increase profitability.
Today we stand on a precipice between platforms and automation. Uber, Lyft, Gigster, Deliveroo, and the multitudes of other platforms are still heavily dependent on human labor, but all are aggressively investing in artificial intelligence to automate processes and decrease risk in their businesses. While no one knows exactly what the future will bring, it is safe to make assumptions based on historical precedents and the nature of capitalism. The first is that everything that can be automated for a competitive advantage, will be automated. This means that as soon as software can write itself, cars can drive themselves, and packages can deliver themselves, that workers doing those jobs today are undoubtedly going to be out of work. The second is that while these changes are taking place, a significant portion of the freelance economy will take up arms in order to stop changes from occurring to protect their own interests. This can already be seen today but will undoubtedly only increase as individuals see that they can and will be automated out of work and that firms exist not to support their workers, but to increase shareholder profitability, and will eliminate every job possible. The last prediction that we can safely assume is that the government will be too slow to respond to the stratospheric shift in the labor market leading to large amounts of unrest not only from blue collar workers but from displaced people with relatively large amounts of agency such as engineers, bankers, and lawyers, and will likely overcompensate leading to the creation either of something like a Universal Basic Income or luddite-like restrictions on automation in the workforce.
Regardless of what your beliefs are of the right or wrong trajectory for the gig economy and the future of freelance labor, it can be agreed that we are on the verge of another major shift as artificial intelligence and increased automation enters industries that had previously been thought of as safe. What comes next will surely be the most interesting development to affect my generation and likely the ramifications will affect many to come.
This story is published in The Startup, Medium’s largest entrepreneurship publication followed by 271,813+ people.
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