It turns out that algorithmic pay systems systematically steal worker's wages.
If it didn't do that, the gig companies would not do this:
Algorithmic wage discrimination, as described in an academic paper last year by UC Irvine law professor Veena Dubal, involves "the use of granular data to produce unpredictable, variable, and personalized hourly pay."
And when these algorithms are not disclosed, they're referred to as "black box" algorithms, as they can't be directly scrutinized.
There are millions of workers who perform freelance work as independent contractors – 64 million in 2023, representing 38 percent of the US workforce, according to freelancing service Upwork. McKinsey in 2022 found that 36 percent of employed survey takers – which gets extrapolated to 58 million Americans – identify as independent workers.
Some of these workers offer their services through so-called gig work platforms. And in many cases, workers have little insight into how their interactions with the platform and its services could affect their pay.
One example is Shipt, a delivery service acquired in 2017 by retailer Target. As recounted by Dana Calacci, assistant professor of human-centered AI at Penn State's College of Information Sciences and Technology, the shipping service in 2020 introduced an algorithmic payment system that left workers uncertain about their wages.
"The company claimed this new approach was fairer to workers and that it better matched the pay to the labor required for an order," explained Calacci. "Many workers, however, just saw their paychecks dwindling. And since Shipt didn’t release detailed information about the algorithm, it was essentially a black box that the workers couldn’t see inside."
Yeah. The gig economy is about stealing from workers and screwing customers.
It's all a con job.
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