Gig delivery drivers might game algorithmically generated pay

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Gig delivery drivers might game algorithmically generated pay

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Some gig economy companies are experimenting with “algorithmically generated pay.”

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      Deloitte
    • August 13, 2020
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    DISRUPTION SCENARIO

    Kenosha, 2021

    “You still here?”

    Lorenzo glanced up from his phone. “I told you, I’m trying a new strategy.”

    His wife, Candace, frowned. “You’re usually out the door hours ago. How is not working and not making money a ‛strategy’?”

    Lorenzo looked back at the phone. “I told you, they changed how they pay. Every order is different. I kept doing things like usual, and my pay went down, like, thirty percent. I figured it out—I need to only do big orders that pay the best. It’s the only way I’m gonna stay afloat.”

    Candace sighed. “All right, I get it. Just make sure you know what you’re doing.”

    Lorenzo nodded. He told himself that no algorithm was going to beat him.

    WORKFORCE IMPACT

    Some gig economy companies are experimenting with “algorithmically generated pay.” This pay structure varies the compensation for their contractors based on factors like the difficulty of the task, the value of the job, and even the business volume at the time. For example, a shopping service app now pays workers varying rates depending on the number of items in the order and several other factors.

    This change might lead to changes in how gig economy workers engage with the companies they work for. Wages may vary greatly, and there is evidence that algorithmically generated pay may reduce the average wage earned by gig workers. These workers may also become very selective in the jobs they choose to accept, screening out lower-paying gigs in favor of ones the algorithm values more.

    Footnote: Kim Lyons, “Some Shipt Workers Report Seeing Lower Pay Under New Effort-Based Model,” The Verge, October 16, 2020, https://www.theverge.com/2020/10/16/21519298/shipt-workers-lower-pay-algorithm-target-shopping

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