For all the talk about artificial intelligence (AI) and other forms of technology making life more efficient, the unfortunate reality is consumers of all stripes are still having their time wasted and there are tangible, negative economic consequences.
A study released earlier this year by Groundwork Collaborative and Stanford economist Neale Mahoney explores the concept of the “annoyance economy.” Upon hearing that phrase, many consumers are apt to think of nuisances such as late charges, overdraft fees or even “service charges” masquerading as forced tipping.
Actually, the annoyance economy is different and arguably just as sinister, perhaps more so, than the issues mentioned above. The annoyance economy is rooted in lost time and squandered money. Yes, Gordon Gekko once said that information is the most powerful commodity, but that was fiction. Most people would prefer more time and nearly everyone wants more money, but the annoyance economy runs counter to those desires.
Annoyance Economy Is Getting Worse
Theoretically, technology should have made the annoyance economy better, but it’s actually making things worse.
“By all accounts, the Annoyance Economy has gotten worse. Over the past two decades, time spent on the phone with customer service is up 60%,” according to the Groundwork study. “Text messaging, once reserved for conversation with friends and family, now resembles our email spam folders, dominated by unsolicited offers from companies, politicians, and fraudsters.”
How with all of technology’s advancements has time on the phone with consumer service gone up 60% in 20 years? Maybe because the technology has advanced far enough. On a personal level, I recently moved and had to switch service locations with my cable/internet provider. They have a chatbot on their website intended to help with such tasks, but the chatbot sucks and I was still subjected to 20+ minutes on the phone.
Then there’s the intersection of fees and technology, which financially punish consumers on a regular basis.
“Excessive fees on rental applications can trap people in place. A single mother hoping to move closer to a better job and school might need to apply to a half-dozen apartments — but at $50 or $60 per application, the cost of even trying becomes prohibitive,” adds the study. “Spam calls, dismissed as a minor nuisance, exact a real toll. In 2023, Americans lost billions of dollars to phone scams, many of them targeting older adults.”
Government’s an Offender, Too
All this jokes about suffering at the DMV are examples of truth being said in jest because government, including the DMV, finds myriad ways of wasting peoples’ time and money. As one example, it wasn’t until the start of the current decade that the California DMV earnestly revamped its tech stack. For years, the DMV in the state that’s the birthplace of Apple and Google ran on antiquated, costing consumers mightily in the process.
“Government interactions, too, are weighed down with annoyances, as anyone renewing their driver’s license at the state DMV or attempting to open a small business can attest,” adds Groundwork. “Rigid rules and outdated contracting and technology make it hard for agencies to test and improve access to programs and services.”
Health insurance is another industry loaded with egregious offenders and one that often requires customers to submit document by fax (seriously) or snail mail. Other industries purposefully make it laborious for customers to cancel policies, services and subscriptions with all the points mentioned here (and more) equaling a $165 billion drain on the economy.
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