Facilitated freelancing: unlocking human capital

pinkstacheOn a recent trip to San Francisco, my friend and I found ourselves a few blocks away from a restaurant we wanted to check out. It would’ve been a fair walk and it was pretty chilly, so I told him I’d call for a cab. “It’s cool,” he said, “I’ll just get a Sidecar.” Before I had time to ask what that was, he was getting one. And before he finished explaining what it was, one was there.

Sidecar is a service that works on the premise that people who have cars are willing to drive strangers around for money, and people who need rides are willing to pay strangers to be driven around. That might sound a lot like a taxi company, but the important difference is that the drivers don’t work for a taxi company: they are regular people with a little extra time on their hands who want to make a little money and maybe interact with other people.

Sidecar’s mobile app does the work of getting drivers and passengers together. Drivers log in when they’re ready to drive (after work, between classes, whenever), and passengers log in when they need a ride (to work, home from the bar, whenever). A passenger uses the app to request a car, and the app matches them up with a nearby driver. When the passenger gets to their destination, no money is exchanged directly. Instead, the passenger leaves the car and gets prompted by the app for a recommended fare based on the duration and distance of the ride. The passenger can decide how much to pay (their credit card information is linked to their account on the app), but all passengers and drivers are publicly rated on the app, so they have incentive to be fair.

I mention this service not just because it was a fast and easy way to get from point A to B, but because it’s a great example of a trend I’ve started to notice recently; more and more of these, what I’ll call, ‘facilitated freelancing’ services are popping up.

For example, Etsy is an online marketplace for (mostly) arts and crafts where anyone can set up a virtual shop and sell their wares. Google Helpouts is a new service that uses video chat to connect people who need help with whatever to those who can help them. Elance is a popular website that (among other things) allows programmers and people who need the services of a programmer to find each other.

What all these companies have in common is that they provide tools (an app, a website, online transactions, video conferencing, rating systems) that facilitate business between freelancers and their customers. These companies are part of a trend that I think will have a big impact not only on freelancers, their customers, and the facilitators, but also on how we do business in general. It just might be the start of a shift away from the traditional corporate model of business towards a more equitable, efficient, and productive way of exchanging goods and services.

What are some advantages of technology-driven facilitated freelancing?

Skip the middleman
Taxi dispatchers and retail stores are examples of middlemen. They facilitate the delivery of goods and services from the producer to the consumer. When middlemen are replaced by technology (Sidecar app, Etsy store), the barrier to entry for producers is lowered, and everyone involved is likely to save money.

Use time wisely
Got a couple hours between university classes? Bored at your 9 to 5 desk job? Someone somewhere is probably willing to pay you to do something in that time: mow their lawn, offer tech support, proofread something, whatever. If you can get connected with that person, your free time will be more productive.

Mix things up
Many people don’t like doing the same thing for the same company for 8 hours every weekday. They might be good at more than one thing, and would be more productive and happy if they could do 4 different jobs in a day. Facilitated freelancing could give people the opportunity to have a variety of ‘jobs’ each day.

Find the right person for the job
In many cases, selecting from a large pool of freelancers is the best way to find a person with the right combination of skills for a given task. Furthermore, the right person is often the one with the lowest price: a student with an hour of free time to kill between classes is likely willing to charge less for a service just so they can fill the time with something productive.

Technology can help connect freelancers with their customers, but it can also help connect freelancers with other freelancers. Collaboration tools like GitHub bring freelancers together and enable the formation of teams made up of experts from around the world. Freelancing doesn’t have to be restricted to individuals working on their own: powerful collaborations can be facilitated by the right technology.

I’ve used accessible examples here, but the potential benefits of facilitated freelancing stretch far beyond these. Facilitated freelancing might enable a physician to use their free time to offer their opinion on a complex medical case in another country. It might enable a third-world farmer to earn money for their family by doing manual labor at a nearby factory on rainy days. It might enable someone who couldn’t afford to go to college to prove their worth as a computer programmer.

There is so much potential, but of course the trend of facilitated freelancing will bring with it challenges: wages may be driven low, good freelancers may be hard to find, compensation schemes will need to be devised, people in certain professions may be put out of work. But I think with the proper systems and regulations in place, we can deal with these challenges (there will be great business opportunities for those willing to address these issues).

The purpose of this post isn’t to dismiss the need for traditional corporations: they will remain important to any economy in the future. But we should always ask ourselves if there are better ways to get work done. I think that we can use technology to create more efficient corporations, to get rid of corporations where they aren’t needed, and to break down traditional barriers to employment.

If this seems idealistic, let me assure you that facilitated freelancing need not be fueled by our social conscious; the economic efficiencies that it brings, and the wealth that it creates, are incentive enough. After all, human capital is capital, and with the aid of technology, facilitated freelancing will allow us to access the vast reserves of human capital that have been left untapped by the traditional corporate structure.

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