"What do on-demand services, AI, and the $15 minimum wage movement have in common? They are telling us, loud and clear, that we’re in for massive changes in work, business, and the economy."
We're seeing a shift from cabs to Uber, but what about the big shift when human drivers get replaced by artificial intelligence? Ditto airplane pilots, burger flippers, and some physicians. WTF? Exactly. Once again we have a main video and a second one available only in Flash (sorry about that), along with a text transcript that covers both videos. Good thought-provoking material, even if you think you're so special that no machine could possibly replace you.
You need a platform, a platform needs developers, well, that’s true of society as a whole. If we don’t have a virtuous circle the whole thing falls down, and we basically all that discussion about income inequality becomes part of the backdrop of thinking about oh, we have to do things a little differently and we have to actually say, oh no we can't have so much of the gains going to the top management of companies and to the financial markets. We have to have more going to workers. Because the whole system will suffer if we don't. We kick the can down the road by first by having two income households and then by buy consumer debt and then at some point that all breaks down and we have to say oh, we actually have to start paying people more if we want the system to keep working. So that’s sort of an interesting intellectual thread that I have been having a lot more sympathy for as I’ve dug into this and you actually understand how many people in our country are living in a pretty hellish world.
Slashdot: That makes me think of the big difference between cities and more rural places. A lot of things you are talking about are they’re enabling if you have a lot of people in one place.
Slashdot: But they're much harder to get the same value out of if you don't have that critical mass.
Tim: Right. There's no question that this is a city-centered economy and based on critical mass. And it's true that not every kind of opportunity will work in every location, but I think what I think is interesting is technology can enable a lot of different places. I think for example about space that Airbnb has been in and also more traditional companies like HomeAway or the like – they’ve made it possible to find wonderful places out of the way. My brother for example, he is a builder and after 2008 in that crash he couldn’t nobody could build anymore, but he could borrow himself to build properties that he was going to turn into rental properties so he has ended up, he had a farm he had a bought to develop and to sell and he ended up building things and turning them into vacation properties and he was like oh this is a good business. This is in rural Virginia, but he’s managed to market and one of his sons was trying to become a professional soccer player in Europe and in England, actually made a little bit that way, but why he was doing that, he’s managing these properties, the marketing of them on the internet from England for rural Virginia and they made a really successful business out of that. So here he was able to continue to do what he does building properties develop a new kind of business because of all this internet enabling technology. And this is in a rural area.
Slashdot: One thing I think search has replaced advertising in the sense that with a thing like Airbnb the potential customer says I'm looking for the following attributes that the business would have no idea, it wouldn't possibly have the wherewithal to reach out to all potential customers.
Interviewer: Well, and it's also things like reputation. You think about how much Trip Advisor or you know or the reputation system in something like Airbnb you look at the ratings, that really makes a difference. But it's also I think a notion Airbnb talks about quite a lot is the role of experience. Their most successful properties are marketed as unique special experiences and part of what is the appeal of an Airbnb is that it's not a faceless hotel. And so I think that that whole experience economy teaches us a lot about the future as well.
Slashdot: There's a lot of things that can now be far more custom ironically, or paradoxically because everything about them is off the shelf.
Slashdot: So you can mix and match in ways in ways that are much more standardized.
Tim: I think that's absolutely true.
Slashdot: But things like Taskrabbit... I think people might have the opposite sense that they're doing good things for people sometimes. I'm of mixed mind about them but you know some people say this is trivializing time, it's causing people to do tasks switching all the time and really chasing a few bucks because their competition is willing to take a penny more or a penny less.
Tim: Yeah. I do think that, I guess, I would say about that first of all I don't think any of us know how all this is going to shake out. I do think that there are in general market mechanisms take us part of the way there. You know if people aren’t making enough of a living at it they'll stop doing it. Or if the working conditions are really bad they will stop doing it. Unless they have no better alternative. And the real question that's why I think it comes back around to some of the fundamental working conditions you know if these things are bad jobs they can only thrive because other jobs are worse. And so you know what that need should call out in all of us is the need to think about the broader context of low wage labor in America.
Slashdot: Sure, the Foxconn problem is that people say these are horrible jobs which they by American standards would be but by comparison to the jobs that those who take them are choosing them over.
Tim: Right. But I think there's a difference in that we can't directly influence except by what we choose to buy. Whether Foxconn makes better jobs and there's a good argument that you’ve made that you’re actually hurting people more by not buying those products and helping build this. But we can also make choices. We can say we want to pay more for products. You know I go you know everybody who says you, I love the people who say well, I hate surge pricing on Uber, but the drivers don't make enough money, I go well you can't have it both ways. You know, at some point we have to accept higher prices if we're going to pay people more. For a while, we may accept lower profits in some cases, because we do have I think there is a huge problem in corporate America that has to do with the diversion of what used to be reinvestment of funds into business into things like stock buybacks which drive up stock price. I think there was a huge mistake that was made you know back when they tied executive compensation to stock prices in a sort of attempt align compensation with results but it had actually the opposite effect, it led to a lot more short term thinking. Because you can actually drive results by cutting slashing costs not reinvesting and I think there's been a pretty serious study of how stock buybacks went up after that versus investment.
Slashdot: Sure. It doesn’t actually see the six-month horizon.
Tim: That's right. And you can, you can totally see where the economy starts to go off the rails and I think as a country we actually have to start investing in hard problems and actually as a world in solving hard problems and that's where we'll actually create jobs. I was working with the Markle Foundation on a project which is called the Rework America initiative and – it was you know kind of big struggle, what technology is doing to the future of jobs you know, what's happening to the hollowing out of the middle class, what are we going to do about it. And this guy Mike McCormick who's the CEO of a place called Fair Oaks Farm which he describes as a 10,000 family farm. He says, well, the way I see it there is going to be nine billion people in the world and they're going to need food. There is billions people joining the middle class they need better food. We have a job to do. You know that's what creates jobs.
It is like what is the hard stuff that we ought to be doing. And we need to transform our energy grid, we have to fix our water system. We have to just rebuild the crumbling infrastructure in general and actually modernize it. These are the kinds of things that create jobs and I think there's a technological vision that lets us reinvent this stuff. If you look at where Logan Green of Lyft is trying to go, is like I want to reinvent public transportation. I want Lyft line to taking a car you know an ordinary person you know able to take a car to where they want to go more cheaply than taking what used to be a bus. He was in LA County Transit Commissioner originally and he was like we have a system that serves 5% of people, loses enormous amounts of money.
You go to a place like Zimbabwe where they got these little jitney systems where people can get anywhere, and 95% of population uses it. And that was sort of part of the inspiration for where they're going with Lyft and I kind of go yeah that's like let's rebuild the transportation infrastructure. And I think in each of these cases just as with the Internet there will be enormous disruption. But that disruption, you know we have to be careful not to protect the incumbents. We should be thinking about is: Is this good for society as a whole? Is it good for society as a whole? Let the chips fall where they may with incumbents versus upstart. But do think about the big picture and the long term. But don't think about it trying to use the techniques that were the right techniques in 1930.
Slashdot: A worry I have sometimes is that there will be some equivalent to the New York City taxi medallions.
Slashdot: That's going to end up getting claimed by the current upstarts, and they say oh no now we're the establishment. But it’s much harder once it is distributed as it is even now. There's a system sort of like the jitney system in Puerto Rico.
Tim: Yeah, yeah.
Slashdot: And I thought that was fascinating to ride and I've been waiting now with some with happy results for that sort of thing to emerge here.
Interviewer: And I do think that when there's a crisis often that's when innovation happens. So when I think about the future of the economy, I think some of it will be a mix of innovation, a mix of people realizing that these are things that we have to do and urgent necessities from unforeseen crises that we have to deal with.
Slashdot: Decoupling companies from work is a really hard thing. You mentioned insurance another big thing is taxation. You have to file quarterly. That's going to knock a lot of people out because it is complex because of time sync.
Tim: But again you could easily imagine a system that reinvents that. So we just have to go out there and start making stuff happen.
Slashdot: This would be neat stuff to watch in the 5- 10- 20-year trajectory.
Tim: Yeah. Exactly. And that is how long it will take.
Slashdot: I think a lot of things people always can productively look back and say that was the silly thing to have happened, why didn’t this happen sooner.
Tim: That’s right.