The dark side of nudging?
In a recent New York Times article, the maverick taxi company Uber came under fire for “pulling psychological levers” to influence when and where their drivers work. A company whose drivers are employees could simply tell them what to do, but a key feature of the Uber model is that drivers are self-employed contractors, who are free to choose their working hours.
So Uber is resorting to other means to persuade their drivers. It uses a female persona (Laura) to send texts with tips of where to go next, because that is more likely to influence the overwhelmingly male contingent of drivers. It uses techniques from the gaming industry, showing income targets just within reach, to entice drivers to keep on working. And it uses defaults on their screen (“keep driving” is the highlighted answer when a driver is trying to log off).
The article caused many commentators to question the ethics of Uber’s practices: this is a company blatantly pursuing its own interests, exploiting the weaknesses of its drivers to their detriment. Surely this was not nudging for good? The title of a Harvard Business Review article by Francesca Gino, a professor at Harvard Business School was unambiguous: “Uber Shows How Not to Apply Behavioral Economics”. Yet other behavioural experts were a lot more sanguine. Co-author of Nudge Richard Thaler didn’t see anything evil in the practices that were exposed by the NYT, and Dean Karlan, a professor of Economics at Yale University, suggests that what is painted “as mind control” would be regarded as “good business practices in another section of the paper”.
When a win-win is not a win-win, and when a win-lose is still a win-win
Professor Gino concludes her article saying that the great potential of applying behavioural economics in organizations is to create win-wins. How could one disagree with this? After all, the win-win is the foundation of human progress and wealth creation. As Adam Smith said in his Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.” We win from buying our meat, beer and bread just as much as the…