Advanced markets for irregular work

The concept

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Travel sitesA new model of irregular work is waiting. Travel bookings show the way.

 

 

 

 

 

 

 

 

An underlying datastore for travel resources

Sellers of some services have done well out of online purchasing. Take large travel providers: booking of airline tickets, chain hotels and hire cars is now overwhelmingly online. That’s slashed transaction overheads, generated cascades of data and widened buyer choice. It’s increased demand; with booking this easy, we take more trips. And it’s all been done in a way that benefits sellers.

shutterstock_103323836Technologically, this sector has many of the dynamics of short labor transactions. An asset with changeable availability (aircraft seat, bedroom, vehicle) is booked for a period of time, sometimes at short notice. Key to sellers’ strength is the Global Distribution System (GDS).

The GDS holds daily availability of millions of seats, rooms and cars plus the owner’s rules for pricing each one to maximize earnings. Input a potential trip on Expedia, or one of its competitors; it looks up your options in the GDS. Make a selection; it is the GDS record that is updated to take those assets out of the market at your chosen times. (Technically, the GDS is actually three major interlocking platforms – SABRE, Amadeus and Travelport.)

 

160416 GDS

 

Consumer travel sites compete with each other using advertising, lower mark-ups or enticing new tools. But they can’t dictate terms to sellers in the way “Gig Economy” sites do. Sellers own their core data and track record.

The GDS takes out transaction overhead and risk. Hotels don’t have to update room availability on each consumer site after a booking. If a consumer site fails it doesn’t take away the market; it was just one channel out of the GDS. Sellers in the GDS still compete, within neutral rules, as in any healthy market. But they have collaboratively built a modern co-operative to balance the power of market-owners and buyers. A market-wide record of successful bookings incentivises seller reliability, driving up standards.

 

 

An underlying datastore for labor market resources

shutterstock_128244212We already have underlying datastores for the jobs market: In Britain Universal Jobmatch, in the US job banks run by each state. Aimed only at spreading opportunity, rather than a commercial return, they seek out every opening, operating transparently at low overheads. Commercial sites re-use the data. How might the model work for changeable hours of worker availability rather than jobs?

This market is many times more unpredictable, subjective, regulated and disparate than Big Travel. But the principles hold. Instead of a GDS, imagine a CEDAH: Central Database of Available Hours. It’s a repository for a particular geography into which any citizen can input three data points:

  1. Their skills and the types of work they will do.
  2. The terms on which their hours can be sold; this could include uplifts to cover travel distance, short notice or short length assignments, contractual rates with anchor employers, bumped up rates for disliked employers, higher rates on certain days and – of course – absolute cut offs on any parameter. (“I won’t do a booking with less than 4 hours notice.”)
  3. The hours they want to sell; today, tomorrow or weeks ahead.

A CEDAH is reliant on intermediaries who vet, insure, payroll and support workers. Their return comes from a mark-up built into each hour sold. Intermediaries can be any mix of commercial recruiters, gig websites, employment charities or public bodies each adding value in their own way. An intermediary may only put sellers in the CEDAH, or act as a channel for buyers, or both. They are the rough equivalent of branded consumer travel sites interacting with an underlying platform.

160416 GDS to CEDAH

 

A CEDAH expands choice. Any worker can sell directly through any marketplace or agency as before. But they can also own a track record of audited reliability across multiple sectors in the CEDAH.

A CEDAH can fund itself through a small mark-up one each hour sold. But its ownership and security are sensitive. Travel players substantially own or regulate the GDS, they can’t afford to be held hostage. It’s the same with a CEDAH: an untrammelled commercial operator would face daily pressure to skew markets in ways that maximize returns.

That’s one reason to see a CEDAH as similar to publicly run job-boards. The platform has no objective but maximizing seller income and raising quality in its market while remaining competitive with other ways of purchasing. Each worker interacts on their own terms, with data and facilities to exploit as they wish.

 

A CEDAH has to be low overhead, not least because it enforces regulation and collects tax but has to compete with forums that don’t. Like the GDS, it is only viable with substantial scale in a given geography. (Getting to scale is the subject of our next section.)

CEDAH technology has been funded by the UK government. Like a GDS it focuses on under-the-hood heavy lifting required to precisely calculate individualized availability and pricing. It works with complex but low value transactions while enforcing compliance and capturing full data.

 

Existing technology