Fixing the Chaotic Crowdworker Economy

A registry would help employers find good online workers and workers find honest employers.

A lot of potential.

Photographer: Nazra Zahri/Getty Images

For two years, I have been part of a research team studying the lives of "crowdworkers" -- people who perform online jobs that range from tweaking algorithms, which improve the performance of search engines, to inputting and organizing doctor's visit notes. We interviewed hundreds of people in the U.S. and India who are doing the digital piecework required to make the Internet seem magically automated.

Crowdwork represents a small but rapidly growing microclimate in the ecosystem known as platform economies. These business activities are burgeoning through the ties that bind the Internet, smartphone apps and social networks. It's hard to believe, but we have no accurate headcount of this workforce, even though economists estimate it could make up almost 30 percent of the U.S. labor market by 2035. The boss here is not a midlevel manager but an "application programming interface," or API, software deployed through a cloud-based web platform.

The platform -- owned and operated by companies like Amazon, Upwork (formerly oDesk) and LeadGenius -- operates in concert with an API to generate and verify workers' accounts, handle the flow of millions of online job postings, and route payments to people once they complete their tasks and submit them for approval from an invisible "employer."

From our surveys of thousands of such workers, we know a lot of them string together 30 to 50 hours of work a week, earning a couple of cents to a few dollars per task. They rely on workers' forums to share information about how to sign up for platforms, what jobs to consider, which "task creators" to avoid, and even how to do certain jobs when the instructions leave out key details.

The platforms themselves provide little information about those posting the jobs. The workers have to scour thousands of tasks posted to the site each day and quickly decide which ones are worth doing.

A task creator can, unilaterally, reject the completed work and refuse to pay someone, with no system in place for people to appeal the rejection. Nor does the platform allow workers to promote their own abilities. There is simply a tally of how many tasks someone completes successfully, putting people at the mercy of the platform's algorithms and the goodwill of the task creators using the site.

Promoting collaboration among these workers would not only help them be more efficient at making a living, but also help businesses and others looking to find the best people to do specific tasks. The high attrition of labor in this sector comes in part because many don't find their way to the workers' forums or otherwise find a way to communicate with others in the on-demand economy.

More than anything, this new economy needs an objective third-party registry that allows crowdworkers to build their resumes and establish reputations, independent of the platform. They should be able to take their record of accomplishments with them, no matter where they pick up their next gig.

Unlike a typical resume, a registry would allow workers to display validated letters of recommendation from previous employers. Potential employers could register for access to this information or it could be made public, with restrictions on private information.

Such a registry would serve as the on-demand economy's Better Business Bureau, authenticating workers' identities and reputations, while saving the platform companies and task creators the engineering costs currently poured into blocking bad actors from bombarding the platform with shoddy or fraudulent work.

If companies running platforms were required through industry regulation to register why someone was suspended or removed, it would give the workers a way to publicly appeal actions when they feel they have been unfairly blocked from specific job opportunities. 

Right now, workers have no formal rights to challenge account suspensions or the withholding of wages, leaving them with little or no recourse. We met several people locked out of their platform accounts, with no prior warning or clear explanation for why they had been removed.

Ideally, the U.S. Department of Labor could be part of setting up this registry and establishing the ground rules. Its involvement would make it easier to keep track of this rapidly expanding labor force and its impact on the economy.

Among other things, the standards should require companies that are profiting from the platforms to be transparent about whether search results are being gamed. When some workers are more prominently displayed, that isn't necessarily because they did a better job but because the companies providing the rankings sold their placements to the highest bidder. We should have that information.

Platform companies, consumers and workers all have a stake in developing ways to prevent individuals from scamming and manipulating platforms in the on-demand economy. But we must also penalize employers for misclassifying workers, as well as for failing to pay them in a timely way or at all.

Responding to these challenges will not only help protect the rights of millions of people who don't enjoy the security of a 40-hour workweek. Modernizing the "sharing economy" and making it more efficient will benefit business, too.

(This article is part of a project on the future of work and workers at the Center for Advanced Study in the Behavioral Sciences at Stanford University. A different version is being published in Pacific Standard magazine.) 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.