Some companies are already replacing workers with ChatGPT, saying they saved money using the AI tool. The ChatGPT’s booming is making people question whether tech innovation is promoting the gig economy. Ms Ngọc Lê – Project Management & Economic Researcher at Friedrich Naumann Foundation for Freedom (FNF) shared her thoughts.

Kenyan workers drawn by Open AI’s Dall-E 2 posted on Mercatornet.

The economy that includes all kinds of jobs that are randomly arranged between businesses and contract workers is the gig economy. 

Very often in the Gig economy, companies find ways to reduce their costs, in order to expect higher profits. But the goal of the gig economy model is not aimed at reducing labor costs. 

From the perspective of employers, the gig economy is an intermediary platform with modern technology applications that makes it easier for workers and businesses to meet. It not only changes the way workers work, but also changes the supply-demand relationship in the labor market. One person, instead of serving and contributing full-time to an organization, can concurrently contract to work with many businesses. 

On the positive side, people can work online without going to the office, which leads to a person not needing to be a permanent employee for an organization and can collaborate with many businesses or organizations at the same time. Platforms also give businesses a greater opportunity to find workers with the specific skills they need.

Meanwhile, if there is no reliable market for contract work, these businesses may have to hire full-time employees, thereby increasing the cost of the business.

How will the sharing economy benefit from AI affect the economy in the long run?

First is reducing operating costs and optimizing social resources in which e-commerce and the financial-banking sector are the two areas that benefit the most. For e-commerce, this is a channel for end-users to better approach each other with more diverse products. The purchase and payment are done automatically. 

AI will tell the seller your information and you just have to wait for the item to arrive. For the banking-finance sector, platforms greatly reduce repetitive operations for millions of their customers, because the nature of banking-finance is to provide services.

For all service industries in general, AI-applied sharing economy helps people to be served at the fastest speed, in 24/7 time, workers are more productive, service users can enjoy personalized experience and improve employee productivity.

With idle assets or resources, through the sharing economy with AI applications, it will help “owners” and “needs” find each other and optimize them through financial services.

Any individual or organization can make money with this tool.

From a labor perspective, businesses can minimize the cost of hiring full-time employees, employees and employers find each other in the most accurate way.

However, there are also some negative aspects or – better said – challenges. 

The fact that the accuracy of AI tools’ returning results is very dependent on the input data of the system. These data have not really been completely verified by a reputable third party or a tool, so it is still subjective of the creator of that AI tool. 

Therefore, people still have to be the key factor in evaluating, checking and selecting information from ChatGPT to put into use. When data returns, it seems that smart users or smart organizations will become smarter because they know how to pick the right information, and conversely, individuals or organizations with limited capacity will become worse, due to the inability to select accurate and relevant information. Thereby causing confusion about a new problem.

In addition, the sharing economy also makes some traditional businesses facing more competition, falling into the situation of gradually disappearing in the market due to a decrease in revenue and demand. Thus, traditional business enterprises will need to transform models, and bear the burden of costs much more than businesses applying technology.

However, this economic model is still very new, the Vietnamese legal system is not yet prepared to manage the activities of companies applying this model, so if the state policy is not closely followed, the sharing economy can cause consequences for information security and fraud in the economy: high-tech crime, users having their personal information stolen.

In addition, there should be regulations on consumer protection and privacy of personal information. The state needs to amend the consumer protection law to update the impact of the new economic model. Data privacy regulation must strike a balance between facilitating innovation in the sharing economy and protecting personal data.

Ms Ngọc Lê – Project Management & Economic Researcher at Friedrich Naumann Foundation for Freedom (FNF)

AI helps boost the gig economy, is it fair to workers?

The application of AI in businesses is considered the optimal solution in the 4.0 revolution. On the other hand, it directly affects people’s jobs. AI will replace millions of jobs, of which unskilled workers are the most threatened. The 4.0 revolution will lose many jobs, but it will also create new jobs that require high qualifications. 

People and jobs will “naturally select” to match and gradually respond to the needs of society. Well, if we look back in history, there was a similar discussion already at the time when the steam engine was introduced and many feared that labor would then disappear. 

Or when automobiles came on the market and horse-drawn carriages feared for their jobs. It’s a fact: jobs disappear – new jobs are created. This “creative destruction” will not be different with AI. The new jobs require human resources to be equipped with appropriate knowledge and skills to meet the requirements in the new situation.

AI also helps improve labor productivity, so it is fair to say that when labor productivity is high, income will increase, no matter what industry or job. AI is just a tool to help employees and employers find each other easier in the gig economy, humans can optimize their time and workspace, not a complete replacement of humans.

Should there be regulations to treat gig workers in tech innovation?

The rapid growth of tech platforms has created an economy that shapes the world in different usage behavior. In which, ChatGPT-like companies play an important role in the development of the whole economy – society because these are the intermediate components to bring the user’s orientation and habits. Especially the relationship between the employer and the employee.

Therefore, I see that it is very necessary to have a regulation of the government for low-cost ChatGPT-like employers to protect employees, as it is the case for all other jobs in the economy. So the question is which trend will the policy be built to suit and protect workers optimally? 

In fact, businesses all want to cut costs and minimize the bond between employees and recruitment. Therefore, the contract does not specify clear responsibilities, or even without contracting with gig economy workers.

Around the world, a number of countries have made clear policy moves to protect workers. For example, Uber, in the UK, was the first market where Uber committed to paying pensions and guaranteeing paid leave as well as guaranteeing a minimum wage for drivers after Uber lost the lawsuit. 

It is necessary to build a social insurance system for self-employed workers and set minimum hourly wages so that they do not have to suffer from cheap labor’ strategy. ChatGPT, which is employing workers in Kenya, has been criticized recently. 

The conclusion of a contract must be a mandatory activity between the employer and the employee. To avoid overlap between social insurance payment agencies, platform providers need to be able to coordinate with state agencies to ensure that the state management system is continuously updated with data.

Should big tech companies pay for content they use and also pay tax?

Around the world, in some countries, such as Australia, have signed browser licensing agreements with Google to pay news agencies. As policymakers around the world act to combat the undue power of the tech giants, I think this is the right thing to do for other big tech companies that are also using other information from different resources. In fact, between search engines and source information units, this is a symbiotic relationship.

News producers have long urged governments to take steps to ensure that online platforms pay fair remuneration for access to their content sources. In essence, technology sites are benefiting from the use of information sources from press sites.

In Vietnam, according to the Law on Enterprises in Vietnam, foreign enterprises that generate revenue in Vietnam must pay tax in accordance with the law. However, it is necessary to clarify the income to apply to the tax base. Currently, the type of online businesses following the sharing economy models are believed that it is difficult to distinguish some types of income, especially incomes for copyrights, service fees and business profits… in the digital economy.