Memo: Two Sides of The Algorithm

That 15 minute delivery of shampoo and kombucha may come with a deepening divide between the classes. You are happy with your service and the service person may be happy with the opportunity but what does it mean for the role of algorithms in society? The digital has long overflowed into the physical world (your Uber ride is algorithmically chosen). But this seems different.

Convenience doesn’t come without a cost. When people are willing to pay for a fast and easy service that eliminates friction in their lives, other people become responsible for making that service happen. The spread of the 15-minute economy has given more people the option to order immediate deliveries of anything from pharmacy medications to snacks to full grocery orders. That means more people are needed to deliver to them. The result is influenced by a bifurcation of wealth and a new labor structure, where workers are separated by what side of the algorithm they’re on.

It became clear during the pandemic that there was a human cost to convenience as people began ordering same-day delivery from Instacart, Amazon Prime and Target’s Shipt in order to avoid going into grocery stores themselves. Rather than take on risk of exposure, those who could pay to do so sent couriers on their behalf, while those who needed the wages took on that risk instead. We’re no longer in a Covid-related state of emergency, but the delivery app industry isn’t slowing down.

In the feature article of No. 758 of 2PM Attack of the Snack Apps, Ajesh Patalay spoke to the rise of Europe’s suite of delivery apps, including Getir, Zapp, Weezy, Jiffy, Flink and Gorillas, all of which have swelled in size and valuation and shrunk the expected delivery time of energy drinks and ice cream from local convenience stores. Deliveroo, also in the UK, is partnering with Morrisons to promise 10-minute delivery via a new service called Hop. In the US, Gorilla has launched its 10-minute delivery, while Gopuff is building a new convenience store model based around speedy delivery. When need is taken out of the equation in favor of sheer convenience, on-demand delivery begins to look less like a positive innovation and more like a wedge-driver. Consider this prescient quote by Michael Miraflor:

The goal is to stay above the algorithm. If you fall below it, you are 10 minute delivery labor. There’s nothing wrong with that. Nothing wrong with hard work. But instead of white vs blue collar I refer to it as above/below the algorithm bc that’s what it has become.

This reminiscent of the sentiment behind the Parasite Economy, as 2PM published last December.

This is the cost of the proliferation of eCommerce. We’ve set the precedent where last-mile workers and drivers are without the benefits that the market would expect of hard workers. The growth of the online retail industry is critical to local, national, and global markets. But it does not need to be this way.

The middle class is shrinking as jobs opportunities and wages gravitate towards two poles (working class, wealth class). Many opportunities in the digital-first economy are determined by one differentiator: requesting the help of the algorithm or being commanded by it. On-demand delivery is the biggest tell. As Michael Miraflor wrote in that tweet, the algorithm is the new line of demarcation. We will begin to view the economy through the lens of the algorithm that controls our personal impressions, our information, our entertainment, and – increasingly – the service that we receive (or are commanded to provide).


Editor’s Note: this is syndicated opening from Member Brief / No. 758. On occasion, I publish key insights to 2PM’s wider audience. To take full advantage of 2PM’s platform, join the membership.

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