Politics

Crowd-sourcing a “shared economy” without jobs

Crowd-sourcing a "shared economy" without jobs

An interesting report from Reuters says retail giant Wal-Mart is thinking about a very unusual method of offering swift and inexpensive shipping, to compete with online retailers like Amazon.com:

Wal-Mart is making a big push to ship online orders directly from stores, hoping to cut transportation costs and gain an edge over Amazon and other online retailers, which have no physical store locations. Wal-Mart does this at 25 stores currently, but plans to double that to 50 this year and could expand the program to hundreds of stores in the future.

Wal-Mart currently uses carriers like FedEx Corp for delivery from stores – or, in the case of a same-day delivery service called Walmart To Go that is being tested in five metro areas, its own delivery trucks.

“I see a path to where this is crowd-sourced,” Joel Anderson, chief executive of Walmart.com in the United States, said in a recent interview with Reuters.

Wal-Mart has millions of customers visiting its stores each week. Some of these shoppers could tell the retailer where they live and sign up to drop off packages for online customers who live on their route back home, Anderson explained.

Wal-Mart would offer a discount on the customers’ shopping bill, effectively covering the cost of their gas in return for the delivery of packages, he added.

“This is at the brain-storming stage, but it’s possible in a year or two,” said Jeff McAllister, senior vice president of Walmart U.S. innovations.

This is not an entirely new concept, for the Reuters piece goes on to note existing examples of “crowd-sourcing” in the “sharing economy,” such as a courier service called Zipments, and a matching service for odd jobs called TaskRabbit.  Obstacles to this concept – such as insurance liability, permits, and the reluctance of consumers to accept deliveries from random strangers – are duly discussed.   Zipments, which has been up and running since 2010, and claims to have solved a lot of these problems with some basic screening for its crowd-sourced drivers, is offering its delivery services to retailers in several large cities.

But an obvious point about the “sharing economy” is left unmade by Reuters: it’s an end-run around the increasingly expensive, heavily mandated and regulated business of hiring employees.  As the burden on labor increases, creative fee-for-service arrangements become appealing alternatives to expensive, traditional “jobs.”  It’s the next logical step after the large-scale transition of the American workforce to part-time status – the great unreported employment story of the Obama era.  (Compare the near-total media silence on the subject to the hysteria over “burger-flipper jobs” in the Bush years.)

The willingness of a huge company like Wal-Mart to consider crowd-sourcing is a signpost along the road America’s economy is traveling.  Respect is due to entrepreneurs such as the founders of Zipments and TaskRabbit for detecting this opportunity and putting together quality operations to meet demand, but it’s hard to believe such a market could have existed five or ten years ago.  Not many people would have been eager to take on the crowd-sourced delivery work, and employers would have simply hired their own people, or contracted an agency.  The founder of Zipments, Garrick Pohl, compared his service to part-time pizza delivery drivers to Reuters, but those drivers are non-temporary employees of the restaurant they work for, not random fee-for-service volunteers.

The “sharing economy” is a clever, intriguing concept, but it’s not a sign of good health in the entry-level job market.  The appeal of the concept is said to be strongest in large cities.  Aren’t such areas generally in the most desperate need of full-time entry-level jobs?

 

 

 

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