Earlier today, Bolt (formerly Taxify), announced the launch of an even cheaper ride-hailing service offering in South Africa. I specifically say "even cheaper" because Bolt's standard offering was already cheaper, on average than Uber X in South Africa - Uber's cheapest offering.

This caught my attention because I already know from speaking with some Uber X drivers (I admit, this doesn't necessarily represent all of them but for my purposes, it is a good-enough signal) I have come to learn how some of those who lease their vehicles directly from Uber sometimes have to do trips around the clock just to barely break even every week after all their costs are paid. Speaking to them I got a sense that the only people who benefit from ride-hailing are us as customers and the platform owner.

It felt like they live to ferry us up and down but are stuck in a cycle that they are unlikely to break away from because they barely make enough profit to save money. It's what I previously phrased as "platforms cannibalize the industries they disrupt."

This led me to ponder, perhaps the only logical conclusion to all of this, not just ride-hailing but most of the gig economy, is that Artificial Intelligence (AI) will eat it all up.

One of the industries that were among the very early adopters of using algorithms (otherwise known as programmatic advertising) is the marketing and advertising industries. Simply put, this is a data-driven form of advertising where advertisers can fine-tune where and when their adverts appear and even allocate a specific budget for the ad unit. This has meant that online publishers generally cannot directly negotiate with advertisers and now rely the large advertising networks like Google Ads to handle all their advertising. Interestingly, generally speaking, and on average, the CPM rate (cost per thousand views) across most ad networks has been dropping.

Before I get back to ride-hailing, let's take a few steps back and look at an industry that has had most of its income almost devoured by algorithms (just no AI yet).

Before programmatic advertising, as can be seen with large ad networks such as Google Ads, publications like iAfrikan.com would exclusively negotiate their advertising rates directly with advertisers or their agencies. This is still happening but a much lower rate. What is more common is that now brands and agencies have become accustomed to the benefits of data and algorithm-driven advertising that requires minimal human interaction and allows them to squeeze all the out of every dollar they spend.

On the other hand, publishers are making way less than what they were making before programmatic advertising. Worse, CPM rates (cost per thousand views) seem to be dropping requiring publishers to get a bigger audience every year just to make what they were barely making the previous year, akin to the Red Queen's Race.

Now, with that in mind and looking at today's gig economy using the example of ride-hailing, with prices for consumers dropping regularly while the platforms are not reducing their cut from the transaction (in some cases increasing their commission percentages), the drivers are getting squeezed. At some point, it will become unsustainable for them to continue driving.

What happens then?

Simple, AI takes over.

And this is already being planned for. Sticking with the ride-hailing example, companies like Uber have been doing a lot of R&D into autonomous vehicles. You also have companies like Zoox, recently acquired by Amazon for $1,2 billion, building an exclusively self-driving fleet of taxis which require no human supervision.

This eliminates drivers and all of a sudden, the business model starts to make some financial sense for all involved.

As I mentioned earlier, this applies to most of the gig economy. This is because, by their nature, most gig economy jobs (if I can even call them that) are not too complex and are somewhat repetitive. The perfect recipe for software, and then later AI, to completely gobble them up.

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How African countries can prepare for future disruptions

African countries need people who have skills and discipline to drive the next set of digital technology innovations. Education will play a major part in this.

New low-cost ride-hailing service launched by Bolt in South Africa

Ride-hailing platform Bolt, formerly known as Taxify, has announced the launch of Bolt Go in South Africa - a ride-hailing service that is 20% cheaper than its normal Bolt offering.

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Cameroon has opened an ICT research center

A new center for research in Information and Communication Technologies has been unveiled in Cameroon.

Quote of the day

Artificial Intelligence will eventually eat most of the gig economy jobs, it is only a matter of time. (Tweet this)

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