A campaign is being waged by investors and startup leaders across almost every sector of our economy.
Let’s call this campaign “Gigification.” The campaign to Gigify America is winning by a mile and is being waged pretty much everywhere you look, fueled by massive infusions of venture capital and concurrent with (and arguably accelerating) the dismantling of a good many systems that have, with varying degrees of reliability and success, formed the bedrock of our (mostly) functioning society.
- Gigification of Journalism: $82.4 million in venture capital dollars (so far) says that the answer to the total collapse of the business models that used to support our nation’s news ecosystem, the near-total collapse of local news outlets, the loss of tens of thousands of reporting jobs and the lack of anything resembling a shared understanding of reality is… monetized email newsletters. i.e. Substack (yes, this newsletter is published there.) Substack’s founders, the recipients of all that investor cash, have said that Substack is “attempting to build an alternative media economy that gives journalists autonomy,” is “writers firing their old business model” and “a better future for news.” All of which may or may not be true (my verdict: sort of partially true if you squint), but what is categorically true is investors have bet tens of millions of dollars that they can profit from an ecosystem of independent “creators” — people cut loose from institutions and building independent businesses on what they write — in a way they can’t from news institutions.
Read Is Substack the Media Future We Want? in the New Yorker for more food for thought on this.
- Gigification of Transportation: You’ve probably taken an Uber or a Lyft somewhere, and even if you haven’t you know the basics of the “ridesharing” startups. Venture capital and private equity investors bet more than $10 billion on Uber and just under $5 billion — those amounts are BILLIONs, those “b”s aren’t typos — that there is at least that much profit to be made from individuals renting out their time and personal property to be on-demand chauffeurs to other individuals they don’t know. There’s research demonstrating that these services have not just taken business from traditional taxi services, but also from public transportation. Notch another win in the gigification campaign, moving money from public benefit to private profit, and toward work that is everyone for themself. (Look no further than the billions the companies spent to ensure drivers wouldn’t be classified as employees in CA for evidence of how tightly tied profit and gigification are.) Both companies are now publicly traded.
- Gigification of Charity: GoFundMe is the largest crowdfunding site in the world, where millions of Americans turn when their safety nets turn out to be not so safe. This is a problem for many reasons, including some articulated by the GoFundMe CEO himself in a remarkable USA Today op-ed — namely, begging fellow struggling individuals for money to cover, say, medical bills is putting the onus for maintaining basic needs on individuals and bypassing the systems that could/should maintain them on a societal level. GoFundMe is a for-profit company that has been the recipient of venture capital money (the amount of investment isn’t public, but we do know that the investors valued the company at $600 million), meaning investors believe there’s profit to be made in gigified philanthropy.
- Gigification of Hotels: Airbnb got $6 billion in investment before going public last December. SIX BILLION DOLLARS in bets that making it easy for people to turn their private spaces public — with all the risk that entails, and as a former Airbnb host I’d be happy to tell you some tales about that risk — will be profitable. This is the gigification of hotels — risk distributed to many with rewards highly concentrated for the few -and it ripples out to the gigification of janitorial services and, among other things, customer service.
- Gigification of Customer Service: That Airbnb customer service rep you’re chatting with? She doesn’t work for Airbnb. Same for the Disney, Comcast, Amazon, and countless other massive companies. Customer service has been gigified to an extent that is astonishing, and the details are appalling. It’s complicated, but in oversimplified summary: in order to avoid paying for things like reliable wages, benefits, training, necessary equipment, etc., big companies contract out to other big companies that in turn subcontract out to literally thousands of smaller companies who then subcontract out to the independent contractors who actually chat with you. These smaller companies are set up specifically to create one more layer between the big company and the person who’s representing them. And these customer service gigs are…woah.
The workers are required to pay for their training, don’t get paid for minutes they’re not actually on the phone/chatting with a customer, are required to use specific equipment that they are responsible for buying for themselves, and, of course, have no guaranteed hours, or even basic workplace protections. Think outsourced overseas call centers on steroids.
At least part of this is against the law — one of the big companies at the top of this subcontracting chain, Arise, has been sued and lost in court, multiple times. No matter. Arise was purchased for an undisclosed sum by the private equity investment firm Warburg Pincus (“a leading global private equity firm focused on growth investing”) in late 2019. That’s a bet that gigified customer service is on a trajectory that is up and to the right, profiting a very few a very lot while dismantling another system that provided some layers of stability and accountability not all that long ago.
I sincerely and deeply implore you to go read this whole article Meet the Customer Service Reps for Disney and Airbnb Who Have to Pay to Talk to You, preferably right now but definitely before you next contact any big company’s customer support line.
- Gigification of Healthcare: We’ve talked before about a piece of the gigification of healthcare in Hims’ Campaign for a Future of Healthcare, but here I’m thinking about the doctors who work for Hims and the other startups like it. They’re independent contractors — untied to any healthcare system or larger practice. Just on their computers, processing people’s requests for prescriptions, incentivized (if not directed) to fill as many of them as possible as fast as possible. Hims raised $158.2 million in investments before going public this January.
I could go on. Pick a sector of our economy or culture and it’s being gigified. Even minor daily decisions — yes, there are platforms for “creators” to sell the right to tell them what to wear, among other things.
The campaign to Gigify America is deeply political — it’s a campaign for the answers to three of our most important political questions:
- Scale of Responsibility: what is the level of responsibility for basic societal functioning? Is society a platform for individuals to do whatever they can for themselves and whomever else they select? Or is society a set of responsibilities to each other for a baseline way of life? To make the questions more concrete (if oversimplified): is America Facebook, a platform that facilitates benefit (and profit) for those best situated to make the most of it, with no larger responsibilities or reasons for being? Or is America an interstate highway system, a mechanism with a shared baseline of rules and expectations for people to get where they’re going, even as some get there faster and in more comfort than others?
The gigification campaign says we’re Platform America — nothing more.
- Allocation of Risk and Reward: What kinds of risks do we protect people from — which risks do we take collective responsibility for? — and which do we make the responsibility of the individuals taking them? How do we allocate the rewards of risk — how broadly do we give credit for “wins” and how much do we credit and insist on reinvestment in the systems that allows for those wins? Is there a floor for public risk? A ceiling for private reward, especially if that reward is enabled by public investment?
The campaign to Gigify America says the allocation of risk and reward is entirely a private concern, with no floors, ceilings, or protections for any but the most well-resourced.
More on both of these in Evictions, Billionaires, and Venmo.
- And one we haven’t talked about in this space, yet, an existential one: What is it we’re all doing here, anyway? What is the really big ideal outcome our politics, which includes the economy, is aiming for? Is it freedom for as many people as possible? Freedom from what and freedom of what — hunger, sickness, connection, other people telling us what to do? What about equality? Equity? The highest possible quality of life? Measured by the average or the mean? Is it “profitability” — alone or as a proxy for freedom, improved quality of life, etc? Are we getting closer to or further from whatever ideal we’re aiming for there are more people experiencing ever-higher profits, but also more experiencing less — less freedom, less stability, less connection?
The Gigify America campaign says the answer is simple: we’re here for profit. Full stop. Without regard to how that profit is gained or distributed.
I disagree with the gigification answer to all of these critical questions. I think most Americans probably do. So what do we do?
- Policy and regulation are where we, collectively, can add more balance to the way we answer these questions. Antitrust, worker protections, unambiguous rules about what’s an employee and what’s a contractor, benefits for gig workers, transparency rules… lots of things. Elections at all levels of government will define the scope of these policies. So, advocacy and voting. The stuff we usually think of as politics.
- Venture capital can take a more honest and productive role in funding the future that we all — including almost every venture capitalist I’ve ever met — want to live in. I don’t know a single VC who would argue explicitly to gigify America, even as they’re funding that campaign and profiting from its success.
Last year Marc Andreessen, an extremely influential venture capitalist, and a founding partner at Andreessen Horowitz, one of the largest and most influential venture capital firms, wrote a manifesto of sorts: It’s Time to Build. That headline is now the subhead on the Andreessen Horowitz website (it used to say, “software is eating the world.”) In it he wrote:
Part of the problem is clearly foresight, a failure of imagination. But the other part of the problem is what we didn’t *do* in advance, and what we’re failing to do now. And that is a failure of action, and specifically our widespread inability to *build*.
We see this today with the things we urgently need but don’t have. We don’t have enough coronavirus tests, or test materials — including, amazingly, cotton swabs and common reagents. We don’t have enough ventilators, negative pressure rooms, and ICU beds. And we don’t have enough surgical masks, eye shields, and medical gowns — as I write this, New York City has put out a desperate call for rain ponchos to be used as medical gowns. Rain ponchos! In 2020! In America!
We also don’t have therapies or a vaccine — despite, again, years of advance warning about bat-borne coronaviruses. Our scientists will hopefully invent therapies and a vaccine, but then we may not have the manufacturing factories required to scale their production. And even then, we’ll see if we can deploy therapies or a vaccine fast enough to matter — it took scientists 5 years to get regulatory testing approval for the new Ebola vaccine after that scourge’s 2014 outbreak, at the cost of many lives.
In the U.S., we don’t even have the ability to get federal bailout money to the people and businesses that need it. Tens of millions of laid off workers and their families, and many millions of small businesses, are in serious trouble *right now*, and we have no direct method to transfer them money without potentially disastrous delays. A government that collects money from all its citizens and businesses each year has never built a system to distribute money to us when it’s needed most.
Why do we not have these things? Medical equipment and financial conduits involve no rocket science whatsoever. At least therapies and vaccines are hard! Making masks and transferring money are not hard. We could have these things but we chose not to — specifically we chose not to have the mechanisms, the factories, the systems to make these things. We chose not to *build*.
You don’t just see this smug complacency, this satisfaction with the status quo and the unwillingness to build, in the pandemic, or in healthcare generally. You see it throughout Western life, and specifically throughout American life.
He says, “It’s time for full-throated, unapologetic, uncompromised political support from the right for aggressive investment in new products, in new industries, in new factories, in new science, in big leaps forward.” He goes on to argue that the building won’t be partisan, that it won’t (and shouldn’t) be in the public sector, and that the challenge isn’t one of resources but of will.
I think he’s right on a lot of that. So it’s worth looking at what Andreessen Horowitz is putting its massive resources toward building. Not for nothing, but they’ve been on the ground floor of a good many of the gigification pioneers — Airbnb and Uber, among others. I think it’s very hard to argue that gigification meets Mr. Andreessen’s call to builders to meet the critical needs of our current crisis and our next one. So… what are they putting their money behind building now?
Stay tuned… that’s next week’s deep dive.
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