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Can We Design An On-Demand Economy That Will Work For Everyone?

We know what the future of work will be for a lot of workers—so now it's time to try to make it better.

Can We Design An On-Demand Economy That Will Work For Everyone?

[Illustrations: MaleWitch, i3alda via iStock]

On weekends, LaNeisha, a 33-year-old in San Francisco, borrows a friend's car to drive for Uber. When she discovered that she could rent out her closet for $290 through a startup called Roost, she turned it into a storage unit. She finds other gigs on Craiglist. For LaNeisha, who struggled to find work otherwise, it's a way to survive. But it's not easy.

A new report looks at the workers of the on-demand economy—from Lyft drivers and EatWith chefs to former McKinsey consultants who now use Catalant to find clients—and argues that we need to redesign platforms and policies so all of those workers can have sustainable livelihoods.

"The algorithms that power these platforms don't come from above," says Marina Gorbis, executive director of Institute for the Future, which produced the report. "They're shaped by human beings, at least for now. We need to really deeply think and understand the early signals of this transformation, and start seriously thinking about how you design the emerging platform for positive outcomes."

Whether or not people like Uber—or the 1,000 or so other startups using related tech—the work is unlikely to stop growing. Decades of evolution of technology like GPS, sensors, and software enabled what the Institute calls the "digital coordination economy," where apps can easily match people's needs with others who want to fill them.

"Uber didn't appear overnight," she says. "Uber is the result of probably 40 years of us building out the technology infrastructure that enables Uber. We can't put these technologies back in the box."

The report analyzes the early experiences of people working in the field. They found seven archetypes. Some, like LaNeisha, are "hustlers," chasing money day-by-day through the apps. Others use apps just to make a little extra as students, or in addition to a full-time job. Consultants use apps to streamline finding new clients; freelancers use the platforms to sell less specialized skills.

For many, the gigs are an alternative when regular work isn't feasible—one homeless vet used a pet sitting site to save up money for an apartment while sleeping at clients' apartments instead of a homeless shelter. Others have used apps to slowly ramp up to more hours while recovering from a serious illness.

Full-time gig workers—some drivers or housecleaners, for example—sometimes work for a single platform. "Entrepreneurs" use the platforms to create their own brand and business. One Lyft driver started driving in drag to differentiate himself; he's now moving on to start his own business with a fleet of drag queen drivers.

Despite the downsides, from erratic and always-on schedules to isolation and job insecurity, the gig economy does have positives. LaNeisha couldn't easily find a traditional job. Some people want to pursue creative work that isn't compatible with a nine-to-five; others want flexibility or need an economic stopgap.

With better design and regulation, the negatives could be minimized. Some of the changes can start with the companies running the platforms, which are typically focused on pleasing investors and customers, not gig workers. Platform designers could, for example, give people tools to help workers better anticipate work hours, while preserving flexibility, to give a better sense of stability.

Other changes could come from regulation. As the economy shifts, some things will likely need new regulation, while some older regulation might no longer make sense. Data collected by platforms, for example, should probably be regulated—who and what is being tracked and how it's used. Traditional business licenses, on the other hand, might not be necessary if online rating systems work well.

Workforce training might also shift. "You need to have a lot of financial savvy, be able to manage your finances—all the things that were done for you by your organization you have to do yourself," says Gorbis. "People are not trained in that very well. There's a whole ecosystem of services that may be needed for this kind of work."

The report lays out a series of insights for policymakers, platform designers, and workers. In the coming weeks, Institute for the Future will release another report focused on the labor economics of the on-demand platforms. Then they plan to use the insights from both reports to bring people together to begin designing a better system.

"We want to really help design a generation of what we call positive platforms," Gorbis says.

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