Try to name one aspect of your life that is not digitising and globalising at a rapid pace.
Chances are you’re spending more of your money on amazon and less at local retailers. Your media consumption probably has shifted from linear TV and radio to Netflix, Youtube and Spotify. Instead of browsing the local library, you search on Google. Communication by letter, fax or voice telephony is being replaced by Facebook and its assorted messaging apps. In lieu of hotels you stay at private homes through airbnb. And instead of calling a cab you hail an Uber.
What do all of those have in common? They are global digital platforms that rapidly replace local and regional providers. Powered by unrelenting economies of scale, it doesn’t cost the platforms almost anything to add another user or expand into a new geography–quite in contrast to the regionally confined players they replace.
Think about transportation. As a traditional taxi company you need to hire drivers and set up a phone service manned by a dispatcher. Once you reach critical mass in your city, you need to hire a second, third and fourth dispatcher to avoid losing business to the busy signal. And with every additional city you enter, you need to replicate that structure unless you have so many drivers and dispatchers that you will no longer be able to manage them on your own.
At this juncture a second layer of management is put in, usually on the regional level, to stay in control of various local operations. Were you to grow further, you would then need to set up a national management layer to stay on top of the regions, then a continental one and ultimately, a global one.
The underlying problem is the rule of seven–in most organisations, no manager can typically take care of, coach, reward and sanction more than seven employees, leading to an ever more hierarchical pyramid structure on top of local operations actually providing services to customers.
What the global platforms in the vein of Uber have done is to flatten this pyramid. Their drivers are freelancers, removing the need for human supervision. They are matched with customers by a routing algorithm that outclasses any human dispatcher.
Through the vast amount of data fed to its AI through its app, Uber knows more about local demand than any locally ingrained taxi company, no matter how long it has been operating. It also knows how to distinguish its good and reliable chauffeurs from the dodgier ones without ever having had a conversation with any of them. There is no need for management structures. There is only the platform, connecting riders and drivers, offering frictionless commerce to both.
The system is so efficient that in most cities you will get an Uber car more quickly then an ambulance or a police officer. The Uber might be en route to you long before you’ve been able to tell the emergency phone line where you are and what sort of issue you are facing.
You might think of this as an isolated example, but it has dramatic consequences for public life, even the very fabric of the state. Think about it–a lot of what the state does is in fact governed by a matching algorithm–just like Uber. The state matches teachers with pupils into classes, policemen with suspects and suspects with courts. It matches maintenance engineers with public infrastructure, and conductors with trains and buses. Which brings us back to Uber…
As a consequence, it should not be a surprise that it only a question of time until public services are also being concentrated into global platforms, each one of them slicing off yet another aspect of the state: teaching, nursing, policing, civil engineering and public maintenance.
In the private sector, industry after industry is already getting ‘uberised’. Legacy providers are being replaced by freelancers finding customers through online platforms, with the dominant ones usually having originated in the Silicon Valley. The last few years have seen the ‘uberisation’ not just of transportation but also accommodation (airbnb), cleaning (helpling), food delivery (deliveroo), handimen (myHammer), and business services (freelance.com)
Citizens around the world have a right to demand that public services are carried out in the most effective and efficient manner possible. Some may be surprised that voters from countries spending the majority of their GDP on public services (eg France) are the least content with what they are getting from the state. Making state functions more efficient by consolidating them into global platforms would free up cash to benefit citizens directly, eg through higher pensions or welfare payments.
Imagine selected state functions such as taxation, education or police reorganising in the same way as Uber. That would mean one well-aligned global force of individual freelance agents hunting criminals, teaching children or collecting tax revenue based on locally adjustable criteria. Connected through an AI platform, a global police force, for example, would be able to coordinate their activities to identify suspects, make arrests, accumulate evidence or protect vulnerable city hotspots.
As freelancers, police officers would have to sign up to a strict code of conduct. They would be incentivized against actual outcomes such as arrests made, suspects searched or citizens protected. They would be penalised for overstepping boundaries or errors of judgment such as wrongful arrests. There would be no more need for paper pushers in back offices. Support functions such as pathology, profiling or criminal psychology could be provided in the same manner, based on an AI that quickly dispatches available forces to crime scenes.
Such a system would be considerably more efficient and effective than local, regional and state police in place today. Stories abound of terrorists being allowed to go about their business because data wasn’t shared between various police units even in the same region or country. Under a fully ‘uberised’ police force this could no longer happen. A global Web of security would tighten around criminals, precluding any possibility of escape.
Policing is all but one example. Once a critical mass of state functions has submerged into effective global platforms, the question will arise what state functions will still be needed to be carried out by the state itself. In particular, the division of state functions into local, regional, national and international politics will face increasing pressure.
Today’s democracy is based on the illusion that local, regional and national bodies of representation (eg parliaments) are most attuned to the needs of citizens and best able to provide for their needs. As a result, the ensuing local, regional and national administrative overheads have so far escaped questioning with regard to their efficiency.
Whether one talks about education, taxation or policing, it turns out that local needs are not at all that different across the globe. Voters want their children taught well, their sick cured and their criminals caught. There is no reason to assume that powerful, specialised global platforms wouldn’t be able to do a better job coordinating local service providers than political hierarchies.
As soon as a critical mass of state functions has become uberised, the logical next step would be to get rid of local, regional and national administrative overheads altogether. The sole governing body that should remain would be a sort of global anti trust authority that would prevent platforms from merging into global behemoths. It should also prevent any specific platform from becoming too powerful, sucking out abnormal economic rents from consumers. That in itself would be a worthwhile pursuit, considering the dominance that a handful of platforms has already reached today. The call goes out to budding tech entrpreneurs around the world: show us that you can do better than the state! If you do, you may change the world more profoundly than all of Silicon Valley taken together. At last, the dream of humankind uniting under a single banner may come true.