More attractive labor platforms

Sangeet Paul Choudhary, in Singapore, is doing some excellent thinking and writing on platform. I can strongly recommend taking a look at his blog about Platform thinking.
In a recent article Choudhary looks at some of the elements of making labor platforms, like Uber and Taskrabbit, more attractive to work through.

Here's a slightly abbreviated quote:

"An increasing number of labor platforms, today, are employing contract laborers to power the supply side. They do not enjoy the benefits of full-time employment. To encourage them to participate on platforms on a sustainable basis, the platform owners need to move beyond acting like matching engines and understand the costs and benefits involved in producers participating on these platforms.

First, every platform player should lay out all costs and benefits involved in producers participating on the platform. These fall into three broad categories:

- Risk management: Platforms need to ensure that producers that are investing in the platform have capped costs of participation. This means that producers need to be insured against transaction risks.

- Learning and Improvement: Platforms need to ensure that producers constantly improve their ability to reap more benefits from the platform. This, in turn, involves community management measures that involve the sharing of best practices, an example being Airbnb’s community management programs with hosts.

- Well-being: Finally, platforms need to ensure that they guarantee well-being for producers in a manner similar to that in traditional organizations".

On not getting by in the sharing economy

A very good,and very long, article by Sarah Kessler in FastCompany examined the realities of doing tasks for TaskRabbit, Fiverr, Uber etc. She found that making a living in the “gig-economy” is not easy at all.

For 4 weeks she tried to make money by using all the sharing economy services she could – from walking dogs, tutoring kids, and delivering packages to wrapping gifts.

It’s an excellent piece of journalism.

Along the way she experienced a lot of weird and worrying situation and she got a first hand view of what life is like when you surviving from one small gig to another.

Anyone interested in the collaborative economy should be aware that there is a very harsh competetive economy alongside the warm and friendly sharing of resources among people who have something to spare.

Here are a couple of quotes from Sarah Kesslers article, Pixel and Dimed – on (not) getting byin the sharing economy:

“Because of the way TaskRabbit works, job posters can easily find the people willing to work for the least amount of money. A user with the screen-name BaubleBar (the name of an online jewelry vendor that has raised $6 million to date) creates a task for $40. "We need 10 TaskRabbits to help us pack and check the quality of merchandise, and add labels to merchandise tags," it says. "PLEASE NOTE: We cannot allow frequent cell phone use during this task, so if you need to be on your phone often, this is not the task for you. This job will take approximately 8 hours. From 8am to 4pm."

“Setting up a full day of gigs--or even a gig in a target free period--isn't easy, and it often takes as much effort as applying for a regular economy job. I get rejected from about five tasks for every one I win. Sometimes I hold spots in my calendar that I could fill with other tasks for jobs I've bid on but haven't heard from. I'm essentially competing for every hour of my employment.

Even if I land a gig with a decent hourly wage, it typically looks like nothing once I factor in the time spent looking for jobs and commuting between them. Despite the oft-repeated promise of the gig economy, in fact I have no control over when I work, because the only way to get gigs is to be available sporadically and often without much notice. For example, the only people who respond to my DogVacay profile want a dog sitter over Christmas, when I am also out of town”.

“I have come to realize that one of the cruel ironies of the gig economy is that even though it's geared almost exclusively to serve urban markets, the kind of densely packed cities where space is at a premium, one needs a car to have a shot at the cream of the work that's available. Even worse, the universe of gig economy startups is mostly relying on young people and others who are underemployed--exactly the people whom are least likely to be able to afford a car in a city. Or have an extra bedroom. Or a parking space. Or designer clothes. Or handyman skills”.

What will you do for $5 - the Fiverr website

At Fiverr.com you can get stuff done for five dollars - Voice overs, drawings, videos, search engine optimization...
It seems to be a hard way of making any kind of decent income. Scary, somehow.

Flying under the regulatory radar

Another article – this one in the Boston Globe - examining the uncertain status of people making their living in the sharing economy.

As a driver for Uber or a “tasker” working for TaskRabbit, are you an employee or an independent contractor? The difference is sick leave, health insurance, contribution to your pension..

Here’s a quote:

“If all these start-ups had to hire employees in every city they operate in, their costs would jump — perhaps to the point where they’re not economically viable. And yet if the innovation economy produces companies that have hundreds of thousands of “non-employees” who love the lifestyle, but don’t have unemployment insurance or retirement plans, we’re going to have problems as a state and society”.

The grey side of the sharing economy

Excellent article in the New York Times, describing what it's like to work for Uber, Lyft, Taskrabbit.. - trying to collect a decent income from lots of little tasks. 

The article is well balanced, it seems, showing both how the sharing economy bypasses a lot of the workers' rights and protection that have been built up over decades - but also acknowledging that this is an opening available for those who might otherwise not have employment. 

A couple of quotes: 

"In the promising parlance of the sharing economy, whose sites and apps connect people seeking services with sellers of those services, Ms. Guidry is a microentrepreneur. That is, an independent contractor who earns money by providing her skills, time or property to consumers in search of a lift, a room to sleep in, a dry-cleaning pickup, a chef, an organizer of closets."

"In a climate of continuing high unemployment, however, people like Ms. Guidry are less microentrepreneurs than microearners. They often work seven-day weeks, trying to assemble a living wage from a series of one-off gigs. They have little recourse when the services for which they are on call change their business models or pay rates. To reduce the risks, many workers toggle among multiple services".

Knud Foldschack og kravet om normalitet

Jeg kan varmt anbefale at læse Politikens interview med Knud Foldschack, hvor han fortæller, hvordan en meget hård barndom har givet ham en forståelse for alle dem, der ikke lige har styrken til at fungere i et super effektivt konkurrencesamfund. Det er en rystende historie, men den er fortalt konstruktivt og uden fordømmelse. 
Her er et citat: 
"Alt er bygget op på, at vi skal tilbage til det traditionelle arbejdsmarked. Men hvorfor skal alle nødvendigvis det? Hvorfor er det en fuldkommen indiskutabel sandhed, at vi alle sammen straks skal i arbejde? Hvorfor er det ikke et mål at sige, at vi skal have et godt liv? Tænk på indvandrerkvinder, der kommer fra en verden, hvor de har set deres mødre blive skudt eller deres mænd blive tortureret ihjel. Hvorfor er det ikke et mål, at de skal yde f.eks. ved at passe på deres børn og så over tid komme ind på arbejdsmarkedet? Hvorfor skal de tvinges i arbejde i henhold til paranoide rådighedsregler? Vores samfunds ufravigelige logik er, at man kun er en del af fællesskabet, hvis man er med til erhvervseffektivt at producere. Og det er jeg simpelthen ikke enig i. Jeg mener, at alle mennesker på denne jord vil præstere og have et godt liv. Og i og med at ingen ønsker sig et dårligt liv, er det jo mærkeligt at påstå, at der findes mennesker, som ikke gider." 

Amazing radio program by Martin Wolf on our economic future

Martin Wolf, chief economics commentator of the Financial Times, has produced a 43 min. radio program for BBC, which provides a very good and timely overview of some of the deep structural issues that are changing the economy and everybody’s future. The program is titled: "The future is not what it used to be". 

Martin Wolf covers issues such as machines taking over jobs, polarization of income and taxation and redistribution. He draws on an amazing line-up of interviews with the world’s leading economists: Thomas Pikkety, Larry Summers, Robert Stiglitz, Robert Gordon, Eric Brynjolfsson… It goes on and on. It’s hard to think of anyone else who could have produced this program.

Generally, Wolf himself sounds a bit more pessimistic than the experts he interviews.

Jeremy Rifkin on an economy where energy, information and things cost next to nothing

Jeremy Rifkin’s latest book ”The zero marginal cost society” looks at how the economy could change as an increasing part of what we consume is produced in ways, where the marginal cost is near zero. We know that once a piece of information has been produced, it can be copied and distributed for nearly free.

Jeremy Rifkin argues that the same logic will apply to 3D printed physical objects and to renewable energy.

It will be expensive to establish the infrastructure and the machinery for producing and delivering, and it will take investments to design and create the first version of a product – but from there on, all the following copies are essentially free.

As Rifkin writes:

”Like the communications internet where the up-front costs of establishing the infrastructure were considerable, but the marginal cost of producing and distributing information is negligible, the up-front costs of establishing an energy internet are likewise significant, but the marginal cost of producing each unit of solar and wind power is nearly zero. Renewable energy, like information, is nearly free after accounting for the fixed costs of research, development, and deployment”.

Obviously, this completely changes the conventional logic in business:

”As more and more of the foods and services that make up the economic life of society edge towards near zero marginal cost and become almost free, the capitalist market will continue to shrink into more narrow niches where profit-making enterprises survive only at the edges of the economy”, Rifkin writes.

One consequence of this is that the need for human labor to reproduce will be very limited. To be of use, you must create variety and novelty – you can’t make money on the second item.

A lot of people will find it very hard to find employment or earn an income – yet we will live in an era of abundance:

”When the exchange value of producing additional units of a good or service is nearly zero, it means that scarcity has been replaced by abundance. Exchange value becomes useless because everyone can secure much of what they need without having pay for it. The products and service have use and share value but no longer have exchange value”.

In my opinion, Rifkin tends to gloss over the risk of creating an economy in which a very small group of people own the infrastructure, and have the capital and intellectual resources to operate the machinery that delivers at near zero cost. Business will need VERY large-scale operation to get a return on their investment, when every transaction is so small – so the monopoly tendencies are extremely strong.

Only the superstars will be able to make money by creating designs that are so novel, that everyone will want to use them for a small fee.

Rifkin acknowledges the risk, but only in a sketchy way:

”Whether the new potential inherent in the Internet of things infrastructure can be realized will be determined by who finances the platform”.

”The prospect of a new economic infrastructure and paradigm that can reduce marginal costs to near zero makes the private firm, whose very existence depends on sufficient margins to make a profit, less viable. Cooperatives are the only business model that will work in a near zero marginal cost society”.

The solution he points to is cooperatives – however, there’s not much in terms of description of what a plausible type of cooperative. He does link the zero margin cost logic to the explosion of the ”collaborative economy” with sharing, makers, open source and social entrepreneurs exchanging value in new ways.

And I completely agree, that this is perhaps the most important trend pointing the way to an economic model for the 21st. Century.

I have a bit of a love/hate relationship to Rifkin. He has a particular knack for sensing new major shifts in the way our societies operate long before most others. He’s very good at big picture thinking, and when he is at his best, he really delivers great vision and insight.

I just wish he wasn’t so pre-occupied with promoting himself and making sure we all understand his magnitude.

Luckily, if you want a quick overview, there’s an excellent podcast where Jeremy Rifkin explains hisideas in a conversation with Paul Saffo. In fact, his ideas seem a lot crisper in this hour-long talk than in the book, which in sections tends to get overly detailed, and to spread out in too many directions.

I strongly recommend starting out with the podcast.

http://www.commonwealthclub.org/events/archive/podcast/jeremy-rifkin-are-we-moving-capitalist-collaborative-economy-4914

Robert Reich on Inequality for all

Robert Reich continues to deliver some of the most lucid analysis of the economic development. In this funny and thought provoking speech in the Commonwealth club of California he discusses the theme of his recent film, Inequality for all.
You ought to hear it. 

No growth for them: 40% of Britons are falling behind

The Economist published an informative article, describing how any economic recovery so far has only benefited the wealthy. Wages have barely risen since 2000, but living costs are 35% higher.
52% of Britons are struggling to keep up with the bills. 
Makes you wonder how far the polarization of income will go, before the trend reverses?

5 (very rich) persons living in a 27 story skyscraper - in Mumbai

 

India never ceases to surprise. It’s just so weird sometimes. Now this: In Mumbai, which is not exactly Monaco, the owner of one of India's largest Industry conglomerates Reliance, has built a home for his family of 5 persons. It has 27 floors and is supposed to have cost a billion dollars to build. Vanity Fair has photos of the inside – looks more like a hotel than a home to me. Certainly, it's quite a contrast to the rather hardcore slums in other parts of the city. 
When I passed it the other night, it didn’t look like anyone was home.
You stare and wonder.