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August 14, 2018

Look out for the backlash(es)

Summary:

With technology, there’s always a backlash. Margaret Atwood, author of the dystopian “Handmaid’s Tale,” says, “With all technology, there is a good side, a bad side and a stupid side that you weren’t expecting.” Proponents of a technology can always paint a glowing picture of the good side and somehow get us to not even try to imagine the bad side—then a bad side does, in fact, appear, and the stupid side sneaks up on all us. Backlash ensues.

Her observation popped to mind because of this article in the New York Times last week on the disillusionment settling in among Uber drivers in New York, suggesting that the sharing economy may not be all it’s cracked up to be. I’ve actually been waiting for this backlash for a while, ever since a friend remarked to me about a year ago that Uber is “financed by drivers who don’t understand depreciation.” They track the hours they spend, plus the cost of gasoline and maybe oil changes, but don’t account for the fact that every mile they drive takes something out of the value of the car. As a result, the drivers are essentially making a gift to Uber of the depreciation. The Times article does find disenchantment about the economics of the gig economy, plus even deeper concerns; Uber et al. sold drivers on the idea that they could work in their spare time and finance their dreams, but those careers as, say, recording artists are nowhere to be found. 

The idea of a backlash against tech probably isn’t too hard a sell these days. We’ve all seen Facebook, Twitter and other social media have to scramble to defend themselves against charges that they are facilitating racism, the hacking of American elections and just about any other bad thing you can imagine. Elon Musk—Mr. Ironman himself—has found that not every rocket makes it to Mars and is facing a backlash.

I wish there were some easy lesson I could offer about how to anticipate the backlash against whatever technology you’re exploring.

History can sometimes be a guide to understanding technology. In the early days of the commercial internet, some idealists envisioned world peace because all this open communication would lead to understanding and a global community. (No, I’m serious.) But historians pointed back to the early days of the telegraph in the mid-1800s, when similar hopes rose because you could now exchange messages between world capitals in minutes, not weeks or months, and could remove misunderstandings. Those hopes were, of course dashed. (The parallels turned out to be so strong that someone wrote a book on the telegraph whose title was “The Victorian Internet.” Telegraph operators actually had the first chat rooms; when lines were idle, they’d gossip with each other up and down the lines.) eBay showed us that markets that theoretically operate with no friction don’t actually get to operate in the theoretical world. They have to deal with the real world, one in which all kinds of friction can occur, especially when parties don’t know each other and have to find a way to trust each other. Other examples can surely be found related to privacy issues, to the insights that are (and aren’t) to be found in data, and so on.

But the only real defense I know is to be jaded: Look for the bad side of a technology even when the evangelist has all your attention focused on the good side. And be ready to duck fast when the stupid side shows up. It will. 

Have a great week anyway.

Paul Carroll
Editor-in-Chief

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About the Author

Paul Carroll is the editor-in-chief of Insurance Thought Leadership. He is also co-author of Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993. Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.

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