The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Tuesday, November 29, 2016

Strategic CSR - Gig economy

The article in the url below provides some fascinating insight into the lives of people working in the gig economy for firms like Uber, Deliveroo, and TaskRabbit:
 
"There are no good estimates on the global scale of the gig economy but in the US there are about 800,000 people earning money this way without being anyone's employee."
 
"Algorithmic management" is the term academics have devised to explain how the working lives of these people are increasingly being dictated by software (via apps) as opposed to by managers (as in a traditional organization and employer/employee relationship):
 
"For companies like Uber, which aspires to 'make transportation as reliable as running water,' algorithmic management solves a problem: how to instruct, track and evaluate a crowd of casual workers you do not employ, so they deliver a responsive, seamless, standardised service."
 
These algorithms essentially track every aspect of the work being conducted for the company as soon as each worker logs on to the app. It dictates everything from how quickly they must respond once an opportunity is sent to them (within 30 seconds for Deliveroo) to assessments of performance:
 
"Deliveroo's algorithm monitors couriers closely and sends them personalised monthly 'service level assessments' on their average 'time to accept orders,' 'travel time to restaurant,' 'travel time to customer,' 'time at customer,' 'late orders' and 'unassigned orders.' The algorithm compares each courier's performance to its own estimate of how fast they should have been. … Drivers for Uber's ride-hailing app, of which there are about a million around the world, are subject to similar algorithmic control. They choose when to work but once they log on to the app, they only have 10-20 seconds to respond to 'trip requests' routed to them by the algorithm. They are not told the customer's final destination until they have picked them up. If drivers miss three trip requests in a row, they are logged out automatically for two minutes. Uber sends drivers a weekly report including their confirmation rate and average customer rating (out of 5)."
 
Rather than something new, however, "algorithmic management" is increasingly thought of as an extension of innovations that were the foundation of the field of management:
 
"'Algorithmic management' might sound like the future but it has uncanny echoes from the past. A hundred years ago, a new theory called 'scientific management' swept through the factories of America. It was the brainchild of Frederick W Taylor, the son of a well-to-do Philadelphia family who dropped his preparations for Harvard to become an apprentice in a hydraulics factory. He saw a haphazard workplace where men worked as slowly as they could get away with while their bosses paid them as little as possible. Taylor wanted to replace this 'rule of thumb' approach with 'the establishment of many rules, laws and formulae which replace the judgment of the individual workman.' To that end, he sent managers with stopwatches and notebooks on to the shop floor. They observed, timed and recorded every stage of every job, and determined the most efficient way that each one should be done. … For Jeremias Prassl, a law professor at Oxford university, the algorithmic management techniques of Uber and Deliveroo are Taylorism 2.0. 'Algorithms are providing a degree of control and oversight that even the most hardened Taylorists could never have dreamt of,' he says."
 
As companies tighten the screws, however, these workers are beginning to pushback, complaining that they were lulled into working for these companies with elevated pay rates and conditions that are then gradually reduced. The recent lawsuit against Uber (in California and Massachusetts) is a good example of this. Something similar (although less formal) also occurred over the summer in London – "one of the first industrial disputes to hit the city's so-called gig economy":
 
"These are workers without a workplace, striking against a company that does not employ them. They are managed not by people but by an algorithm that communicates with them via their smartphones. And what they are rebelling against is an app update."
 
While it is clear that many people self-select into these jobs because they fit their lifestyle at present ("Some 85 per cent of couriers have told Deliveroo they use it for 'a supplementary income, or short-term flexible work'"), it is also clear that the structure of these jobs are redefining the nature of 'employment' in a way that poses significant challenges to courts (that have to deal with grievances today) and public policy planners (who will have to deal with the social consequences in the future if these jobs fail to provide the healthcare and pension support these people will need at some point). There is also, of course, a moral component to the way these jobs are structured. While some see them as facilitating 'flexibility' and others see them as incentivizing 'abuse,' the danger is that whatever we gain in productivity in the short term ("Taylorism 2.0"), we lose in our humanity over the longer term.
 
Take care
David
 
 
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When the boss is an algorithm
By Sarah O'Conner
September 10/11, 2016
The Financial Times
Late Edition – Final
Life & Arts, 1