Designing a New Operating System for Work

The battles between Uber and taxi companies and the 1099 vs. W-2 debate are just the first signs of the upheaval emerging with the rise of the on-demand economy. We are at the beginning of an historic transformation in the nature of work and structure of American jobs. A host of technologies — from automation to digital platforms for coordination of tasks, from Lyft to Gigwalk to HourlyNerd — are reinventing not just what people do to earn a living but at a much deeper level how we organize to create value. For the new class of on-demand or platform workers, there are no career ladders to climb and often no human bosses holding you accountable. Your “manager” might even be an algorithm that breaks down jobs into individual tasks and automatically routes them to the best qualified and available “gig worker.”

Today’s emerging platforms and ways of working may seem new and alien, but let’s remember that the way we work, the way we organize ourselves to create value, is not preordained.

In fact, wage labor, the idea that we sell our time for money, is a relatively recent phenomenon.

Wage labor is only about 300 years old, a blink of an eye in our human history. Before wage labor, we produced, traded, and invented things, but we did so locally and on a small scale. With the rise of connective technologies — from railroads, cars, telegraph, telephones, and, eventually, the Internet — we rapidly scaled up production. As Nobel Prize-winning economist Ronald Coase pointed out in his seminal 1937 paper “The Nature of the Firm,” large organizations came to dominate our production landscape because they’re highly efficient mechanisms for producing at scale while minimizing the transaction costs of planning and coordinating activities beyond local geographies and small markets.

So in that sense, large organizations are a kind of technology, a technology for scaling up economic activities while minimizing costs of doing so. You could think of it as an operating system for work that’s been running for a century. And now we’re creating a new operating system, based on always-on Internet, mobile devices, social media, sensors and geolocation technologies. But this new operating system for coordinating human activities and creating new kinds of value could also be riddled with catastrophic bugs, pushing large swaths of the population to labor at subsistence levels, with no benefits and little predictability over their earning streams. We need to address such challenges before this operating system is ingrained in our way of working so that mistakes we make become societal-scale problems.

The same platforms that some are denouncing today for eliminating middle-class jobs could also be programmed, both literally and metaphorically, to better support middle-class wages through more efficient work matching, democratized access to information and tools, and collective leveraging of legal and other resources.

Imagine that you, as a worker, can decide when and how you want to earn income, using a platform that has information about your skills, capabilities, and previous tasks completed. An algorithm matches you with a gig that optimizes your income opportunity. Meanwhile, another platform directs you to learning resources that could increase your earning potential. And importantly, your benefits are not tied to a single employer but are portable. In one scenario suggested by the unlikely allies — union leader David Rolf and billionaire Nick Hanauer — companies like TaskRabbit and Uber would contribute their fair share to your Shared Security Account that sticks with you, not the company paying into them.

We’re not there yet. Far from it. So what can be done? The solution is not to force many of the on-demand workers into formal W-2 employment and thus undermine the core positive elements of new work arrangements, namely flexibility and autonomy. We shouldn’t go back to the old operating system. We have planted the seeds of something better. The time is now to shape how this will play out during the coming decade.

At Institute for the Future, we worked with 70 thought leaders, technologists, and social inventors to synthesize 10 Strategies for a Workable Future, a kind of agenda for immediate action for policy makers, platform developers, labor and educational organizations, and the public. We’ve just launched this report to coincide with our participation at the U.S. Department of Labor Symposium “Positive Choices in the Digital Economy,” and other conversations happening in Washington, D.C. on this urgent topic.

In this report, we raise crucial questions like, how can platforms and workers collaborate to ensure that everyone makes the most of available data? How can we enable individual skill-building that improves overall workforce capacity? How can we learn from co-ops without throwing away the value of the venture capital model of investing? These are just some of the challenges we must solve to ensure dignified and sustainable livelihoods for everyone, and make a future that works for all of us.