Monday, March 31, 2014

The TaskRabbit Economy

We are clearly entering an era when computational tools and digitization will change the nature of the workforce. Erik Brynjolfsson and Andrew McAfee attempt to address the issues associated with this new phase of industrialization in their recent book The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies.

"Now comes the second machine age. Computers and other digital advances are doing for mental power—the ability to use our brains to understand and shape our environments—what the steam engine and its descendents did for muscle power. They’re allowing us to blow past previous limitations and taking us into new territory."

Brynjolfsson and McAfee predict that technological progress will be "astonishing" and the results will be "profoundly beneficial" to humanity. However, progress will come at a price. Such a transformation will be profoundly disruptive in terms of the impact on individuals and the nature of the resulting workforce. However, they are optimistic:

"It’s important to discuss the likely negative consequences of the second machine age and start a dialogue about how to mitigate them—we are confident they are not insurmountable. But they won’t fix themselves, either."

An article in The Economist discussed the issue of displaced workers and provided this insight:

"A 2013 paper by Carl Benedikt Frey and Michael Osborne, of the University of Oxford, argued that jobs are at high risk of being automated in 47% of the occupational categories into which work is customarily sorted. That includes accountancy, legal work, technical writing and a lot of other white-collar occupations."

This chart was also included:

Brynjolfsson and McAfee are dubious about standard pronouncements about the inevitability of job creation. Pundits comfortably predict that because technology has generated new jobs to replace obsolete jobs in the past, it must necessarily do that into the indefinite future. To this notion the authors reply:

"Which history should we take guidance from: the two centuries ending in the 1990s, or the fifteen years since then? We can’t know for sure, but our reading of technology tells us that the power of exponential, digital, and combinatorial forces, as well as the dawning of machine intelligence and networked intelligence, presage even greater disruptions."

Nevertheless, the authors are excited about what is to come. They predict that innovative ideas and opportunities for new companies will explode in this "second machine age," offering new types of uses for labor.

"We can do more to invent technologies and business models that augment and amplify the unique capabilities of humans to create new sources of value, instead of automating the ones that already exist."

Examples of how this new age will use labor do not abound in their narrative, and one they do pinpoint as a valuable new trend is one that some might find troubling: crowdsourcing.

"This model is interesting because instead of using technology to automate a process, crowd sourcing makes it deliberately labor intensive. The labor is provided not by a preidentified group of employees, as is the case with most industrial processes, but instead by one or more people (often many more) not identified in advance, who choose to participate."

The authors tell of using this approach to obtain some of the charts used in their book.

"We found them by posting a request for help with the task to TaskRabbit, a company founded by software engineer Leah Busque in 2008. Busque got the idea for TaskRabbit after she ran out of dog food one night and realized that there was no quick and easy way for her to use the Internet to find (and pay) someone willing to pick some up for her."

One can assume that TaskRabbit posts jobs loftier than fetching dog food. Robert Kuttner wrote an article for The American Prospect titled The Task Rabbit Economy.

"Early this year, Patricia Marx wrote a witty New Yorker piece titled "Outsource Yourself" on her experience hiring a Task Rabbit to purchase and deliver hors d’oeuvres for her book group. When Marx fell behind in her reading, she hired a second Rabbit to summarize the book for her (Proust’s Remembrance of Things Past, no less) and to ghostwrite some clever comments. She then retained a third Rabbit to bake madeleines."

"Marx’s adventure reads like a cross between Woody Allen’s famous short story, "The Whore of Mensa" (in which a character hires a young Brandeis graduate to talk pseudo-intellectual to him), and a labor-market fantasy by Friedrich Hayek."

Kuttner fears that we will become a nation of "Rabbits."

"It’s the reserve army of the unemployed made flesh. What’s diabolically brilliant and emblematic about the company is that prospective errand-runners bid against one another for jobs. To get an assignment, an aspiring Rabbit offers to do the chore for less money than he or she thinks other prospective Rabbits are bidding. That’s what makes it a metaphor for the new economy, a dystopia where regular careers are vanishing, every worker is a freelancer, every labor transaction is a one-night stand, and we collude with one another to cut our wages."

It appears that this method of employment is also being utilized by businesses. Jeff Stibel, another enthusiast for the things to come, introduces us to "cloud labor."

"Crowdsourcing comes in all shapes and sizes online….Sometimes referred to as ‘cloud labor,’ these companies include Elance, oDesk, Guru, CloudCrowd, and Amazon’s Mechanical Turk….these companies are really just online matchmakers. They are powerful online alternatives to traditional outsourcing, with low transaction fees and the ability to hire workers for even the smallest of jobs. Cloud labor sites allow people to find work and employers to find cost-effective labor."

"Since 2007, oDesk has grown by more than 100 percent per year, reaching into over 40 countries….But this isn’t like Monster or CareerBuilder; on oDesk the jobs are single tasks. You might make a call, stuff a few envelopes for the holiday, or assist with a dinner reservation. For that work, you might receive $.25 or $100 and perhaps the opportunity to work again."

Whether TaskRabbit or oDesk, Kuttner has the correct perspective on these developments:

"In its technology, the Task Rabbit economy is very 21st-century, but it brings back the 19th, an era when most people who didn’t farm or own property were casual labor."

Brynjolfsson and McAfee prefer the term "peer economy" to capture the likes of TaskRabbit and oDesk. They seem to favor this employment trend because they expect "casual" labor to be the only kind that will be available to many people.

"Peer economy companies are examples of innovations that increase the value of human labor rather than reducing it. Because we believe that work is so important, we believe that policy makers should encourage such creations."

On the one hand they claim that our problems are best addressed by market-based solutions:

"The best solutions—probably, in fact, the only real solutions—to the labor force challenges that will arise in the future will come from markets and capitalism, and from the technology-enabled creations of innovators and entrepreneurs."

On the other hand, they suggest a number of ways to address the future jobs problem that are decidedly not market based. These suggestions were obtained by crowdsourcing and are not necessarily endorsed by the authors.

"Nurture or celebrate special categories of work to be done by humans only."

"Start a ‘made by humans’ labeling movement…."

"Ramp up hiring by the government via programs like the Depression-era Civilian Conservation Corps…."

The most intriguing suggestion of all is this one:

Provide vouchers for basic necessities like food, clothing, and housing, eliminating the extremes of poverty, but letting the market manage income above that level."

If this second machine age is going to be as disruptive as appears likely, the concepts of labor and workplace will undergo dramatic transformations. Society will have to deal with this. Guaranteeing a ‘living income" to all may be the only viable approach.


Jeff Stibel is the author of Breakpoint: Why the Web will Implode, Search will be Obsolete, and Everything Else you Need to Know about Technology is in Your Brain.

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