Instability, Optimized
The gig economy has been a boon for consumers and some independent workers. But for others in the service sector, just-in-time scheduling has made making a living a constant churn.
We took our last trip to the supermarket on March 6, 2020. It was a Friday after work - the last Friday before pandemic doom set in. A sales rep from Corona beer was giving free samples and making awkward jokes that don’t seem funny in retrospect. Since then, every 10 days or so, my wife or I have typed an order into our grocery store app. A few hours later, an Instacart shopper leaves a stack of bags in our condo lobby.
What started as a temporary measure to avoid public spaces as coronavirus cases spiked has become permanent. Instead of losing an hour a week at the store, it seems worth the service fee and tip to spend five minutes on an app fielding texts from the shopper about replacement items. About 70% of our order includes the same staples, so it’s really a one-click process - “reorder.”
It is optimized. Efficient. Just-in-time.
I’ve been thinking a lot about gig economy platforms like Instacart lately. As unemployment rates have remained high, more people are becoming independent workers. Business applications are up nearly 94% year to date compared to 2019, including non-wage-paying businesses, indicating more professionals are incorporating as freelancers. And while gigs for performing artists and demand for Uber and Lyft are down, e-commerce platforms like Amazon and Instacart provide fallback options for struggling laid off workers.
Gig Economy Growth
Gig economy work is nothing new. Muscians and freelance writers and handymen have been piecing together a living or supplementing a full-time income through a patchwork of small jobs for years. But digital platforms like Uber, Lyft and Instacart formalized this system, making it easier to connect willing drivers or shoppers with buyers eager to pay for the convenience.
Reliable numbers on the gig economy are tough to come by, but estimates range between 20% and 40% of the US workforce engaged in some form of independent task work. A 2016 McKinsey survey of workers in the US and EU, dove deeper into workers’ reasons, and estimated that about 30% preferred independent gig work, 30% were either gig workers out of necessity or would have preferred full-time work. The other 40% were earning extra cash. And there’s no doubt that the number of Americans working in the gig economy has grown with the rise of the smartphone. Payroll company ADP estimates that the US economy added more than 6 million independent workers - a 15% increase - in the 2010s. The study, which came out in February 2020, wouldn’t include effects from the COVID-induced recession.
The roots of the modern gig economy grew from the same early 2000s Silicon Valley that gave us the iPhone. Without the enabling technology of the App Store, the mobile-based gig economy would be far more limited. Mike Issac details Uber’s symbiotic and sometimes tense relationship with Apple’s R&D team in Super Pumped: The Battle for Uber. As an early sucess, Uber became the face of Silicon Valley marketplace startups. “The Uber of X” soon became shorthand for any tech-driven, gig economy company.
Hustle Culture History
Gig economy startups came with a particular culture - Deep-pocketed investors willing to subsidize products to gain marketshare; the pent-up energy of nerds in their mid-20s who had finally come into some money; and a purpose-driven hustle ethos that prized long hours and sacrifice. The payoff was the promise of profit sharing and the satisfaction of moving the economy into the mobile age by breaking the sluggish taxi cartel.
At the same time, the slow recovery from the Great Recession of 2007-2009, left taxi drivers willing to supplement their declining fares with off-duty Uber black car driving. And the launch of UberX in 2013 allowed the large pool of un- and under-employed an opportunity to earn using their own cars. Supply met demand.
Recruitment marketing for drivers stressed independence, flexibility and that same hustle ethos that had been so succesful at headquarters. “Be Your Own Boss” says the driver application. the promise to earn was limited only by hours in the day, willngness to work and optimization of routes.
Optimization and hustle culture led to some extreme examples. One UberEats driver bragged to CNBC recently about making $8,000 in a month of working 12-hour days, 7 days per week. Skeptical Twitter scolds pointed out that amounted to about $14 per hour when accounting for car maintenance costs. On its company blog in 2016, Lyft praised the dedication of a driver who picked up a paying passenger on the way to the hospital to give birth.
Labor as a Supply Chain Problem
Marketing overreach aside, something about the gig economy tapped into an aspect that was missing from many service-sector workers’ lives: Control of scheduling. While peak hours and special events might drive the most profitable times for gig workers to clock in, the choice to do so remained with the worker and could be planned in advance. Counterparts in restaurants or warehouses don’t have that luxury.
About 47% of all workers without a high school degree and a full 61% of all leisure and hospitality workers don’t know their schedule more than 2 weeks in advance, according to new research from the Brookings Institution and the University of California’s SHIFT Project. The lack of schedule stability has implications on the ability to arrange childcare, health care or supplemental jobs. What’s more, the unpredictability of total hours week-to-week can lead to financial and food insecurity as low-income workers and their children ebbed in and out of eligibility for assistance programs.
Optimized management has a long history in the United States, dating back at least to 1898 when Frederick Winslow Taylor timed and rated the efficiency of Bethlehem steel workers’ pig-iron carrying abilities. As efficiency experts replaced stopwatches with software, the same algorithms that enabled the explosion of the gig economy led to the growth of “just-in-time” scheduling. Taking a page from supply chain management that sought to reduce inventories by taking into account fluctuations in demand and weather, front-line managers sought to avoid workers standing around on slow nights.
But as Amber and David Lapp write for American Compass, “Workers are People, Not Widgets.” The Lapps’ work traces the career trajectory of two working-class, white millennials coming of age in southwest Ohio in the shadow of the Great Recession. One lands in a union factory, while the other is seemingly stuck in a series of grocery store and warehouse temp jobs. While the piece is not directly related to scheduling, a stable second shift and a willingness to work overtime allows Alex, the union worker, to earn raises and eventually buy a house, while Lance’s pay and time is at the whim of the temp agencies that place him.
As researchers at the right-of-center Institute for Family Studies, the Lapps’ view on the stabilizing effects of consistent schedulding (and perhaps even more surprising, union organizing to achieve it) represents the possibility of a new direction in employer-employee relations. While liberal-leaning city councils in San Francisco and Seattle have enacted stable schedule regulations, and much of the deep analysis of such work remains tied to left-leaning think tanks like Demos, schedules’ effects on family life can resonate with social conservatives as well. There’s also a business case to be made. One 2017 American Economic Review study of call center workers concluded that the average worker was willing to give up 20% of wages to avoid working a schedule set by employers on short notice.
Technological advances have made our working lives more efficient. As we look to optimize processes and schedules, taking social costs into account will become increasingly important.