WageIndicator - The state of platform cooperatives in 2022
MARTIJN ARETS
To discover how platform cooperatives can become more successful, I travelled to Rio de Janeiro last week for the conference 'Owning the Future: Sustainably Scaling Platform Cooperatives With the Global South'. In this blog, I share my thoughts, observations and new insights on the development of platform cooperatives. I discuss the background and context, the development of the debate around platform cooperatives and argue for a broader view of this phenomenon.
What came before: enthusiasm about platform cooperatives
While cooperative platforms are certainly not new, in 2014 three US professors made the cooperative model known to the relatively general public in three blogs as a responsible alternative in the platform economy. Professor Juliet Schor describes the cooperative platform in her essay 'Debating the Sharing Economy', Professor Trebor Scholz does so in his blog 'Platform Cooperativism vs. the Sharing Economy' and Nathan Schneider publishes his blog 'Owning is the new sharing'. In their publications, all three philosophise about what happens when those who depend on the platform also become owners and directors of the platform. In doing so, they describe cooperative platforms as counterparts to the emerging and mainstream platforms. Or as Scholz nicely puts it, "but just for one moment imagine that the algorithmic heart of any of these citadels of anti-unionism could be cloned and brought back to life under a different ownership model, with fair working conditions, as a humane alternative to the free market model."
Their thinking resonated with many, including me. Since 2017, I have attended conferences in New York, London and Berlin to learn more about platform cooperatives and the people behind this movement, which Scholz is ultimately pioneering. I did literature research on the phenomenon at Utrecht University, interviewed initiators of platform cooperatives and maintained a public database of platform cooperatives. This resulted in several videos,two academic publications and a PhD position for a talented researcher who further explored the topic after I left the university.
The subject continues to fascinate me. Meanwhile, I find myself with many new questions again, which is why I decided to travel to Rio de Janeiro this year to gain new insights. The timing could not have been better: not much earlier, Elon Musk bought Twitter and showed that the absolute antithesis of shared property and governance is not the best option and started the discussion on the decentralised Twitter alternative Mastodon.
Four strategies for greater cooperation
In Rio, I saw four different tactics to ensure more cooperation in the platform economy:
1. The platform cooperative 'from scratch';
2. The platform cooperative as an extension of existing activities;
3. Existing cooperatives using platforms to facilitate their members;
4. Cooperative service providers for non-cooperative businesses.
Platform cooperative 'from scratch'
First, users can build their own new app: the platform cooperative 'from scratch'. Erik Forman presented 'his' initiative 'The Drivers Cooperative' in Rio. This platform cooperative has existed since May 2020 and has 7,500 members in New York. Drivers get $23 to $30 an hour on average and the app has now generated more than $4 million in revenue for members. Another great example is the platform for home cleaners Up&Go, which grew out of existing cooperatives of cleaners.
While algorithm-driven platforms isolate workers, these kinds of platform cooperatives do the opposite. They make the platform work for the human, rather than the human for the platform. In my opinion, a much better approach. In addition, offline communities often play an important role in these kinds of cooperatives. For instance, I saw many examples of South American platform cooperatives doing their best to build physical communities and bring back the human touch. Physical communities also create more 'digital inclusion' and the offline component is needed to allow people to access digital platforms, which often include simple tools. For example, "Movimento dos Trabalhadores sem Teto" presented a tool that links homeless people looking for work with clients looking for services such as cleaning or painting. The technology, which is free for working people, works on Whatsapp and has already been used more than 3,000 times
These offline communities can mean a lot to users, Suci Lestari Yuana also describes in her PhD research on delivery workers in Jakarta. She studied how delivery workers form communities, in which they take risks together and teach each other how to deal with platforms' algorithms.
Users also collectively make choices that an algorithm might not make. For example, cleaners at Up&Go voted against an individual rating and in favour of a joint rating, and delivery drivers at a Brazilian platform cooperative set their own rates. This goes against the optimal efficiency that platforms strive for, but it is questionable whether we as humans are better off with an optimal efficiency model. In my opinion, humans are not made to be very efficient. I, at least, am not.
With 'from scratch', it is often thought that working people start their own cooperative and launch a platform completely independently. In practice, things are different. Successful cooperatives often receive organisational or financial support from institutions. This is also the reason I call on trade unions to spend their money not only on litigation, but also on supporting cooperative initiatives. For example, I do not understand why, after Deliveroo's departure from the Netherlands, Dutch union FNV is not talking to 'bestellenbij.nl', an alternative meal delivery app with cooperative ambitions.
The starting point of a 'from scratch' platform cooperative can come from the workers themselves, but often the initiative lies with an enterprising outsider or an institute. CoopCycle has found a nice middle ground. This federation has developed a concept and software for local meal delivery cooperatives. The software is available under a self-developed 'coopleft' license (say: 'co-op-left') that only worker cooperatives can use for free. Meanwhile, 70 local worker cooperatives are using this software, including an initiative in Argentina. This strategy leaves everyone in their strengths: the delivery workers do well what they are good at and the technology is further developed by a 'meta-cooperative', which the delivery workers co-own through their worker cooperative.
The platform cooperative as an extension of existing activities
The variant I had given little thought to before my visit to Rio is a cooperative that uses existing data streams to empower the working one. An example I was already familiar with was the Drivers' Seat Cooperative. This cooperative collects and analyses data from taxi drivers and other 'app-based drivers'. In this way, users gain shared knowledge about their work, for example: at what times do you earn more? Which app is the most lucrative? This allows them to make more informed decisions.
One case that was new to me was PescaData: a digital ecosystem of 300,000 fishermen in Mexico. Fishermen were already obliged to provide certain data on fishing to the government. Thanks to the cooperative platform, they can also use this collected data to their own advantage. They can also use the platform to connect with other fishermen and organisations, sell products and come up with joint solutions to problems.
Existing cooperatives using platforms to facilitate their members
Digital tools and platforms can help existing cooperatives organise themselves better and involve members more actively. Such organisations are also interested in this, a very readable study shows. Platforms can also contribute to the mission of existing cooperatives. For instance, SEWA (a cooperative federation in India with 300,000 women members and 106 cooperatives) is studying how platforms can improve the situation its members are in. But also Spain's Mondragon, which was present in Rio with a delegation, is trying to project cooperative values on platforms in the incubators they facilitate.
Looking more broadly, unions, which like cooperatives and platforms centralize a fragmented group of individual workers and use economies of scale to fight for better conditions, could also, like SEWA, start their own platforms or partner with cooperative platforms. With the scale they have, for example the Dutch FNV has more than 900,000 members, they can spread risk and potentially become the largest employer in the country by using an (internal) platform. While I question whether this is a desirable scenario, I do use this to argue that unions can use their economies of scale in a very different way to do good for working people. And I also call on unions to take responsibility and experiment with this.
Cooperative service providers for non-cooperative businesses
Finally, a number of cooperative service providers presented their story that services deliver to non-cooperative organisations. When you talk about making an impact and spread cooperative values, then of course this is also an effective way. A good example of this is Belgium's Smart, which for a long time employed Deliveroo's bicycle couriers through a cooperation agreement.
Towards greater impact and success
What needs to be done to increase the impact of platform cooperatives? This question has kept me and many others busy for a while. Also in the name of the conference was the word 'scaling', scaling up. In my opinion, in any case, it is essential to broaden our view to make more impact:
1. From cooperative as a legal form to a focus on cooperative values;
2. A broader (geographical) context;
3. A broader collaboration;
4. A broader definition of scale and success;
5. Greater role of education.
From cooperative as a legal form to a focus on cooperative values
Should a platform cooperative be both a cooperative and a one hundred per cent digital platform? To make more impact, I think we need a broader definition. For a start, starting a cooperative in many countries is incredibly complex. You are bound by conditions that as a start-up initiative, you suffer more than you enjoy. That is why I advocate a focus on the underlying cooperative values as defined by the International Cooperative Alliance (ICA):
1. Voluntary and Open Membership;
2. Democratic Member Control;
3. Member Economic Participation;
4. Autonomy and Independence;
5. Education, Training, and Information;
6. Cooperation among Cooperatives;
7. Concern for Community.
A cooperative should never be an end in itself. The term 'platform' can also be broader as far as I am concerned: after all, it is about content and impact, rather than form.
A broader (geographical) context
It strikes me that everything in the debate about the platform economy and especially the gig economy is viewed from a United States context. United States in terms of standards of work and the questionable ethos of Silicon Valley. Even when the discussion becomes 'international', it is mostly about the US and Europe. This is a real problem. This is why I have been pushing for a truly global debate on the gig economy for two years with the Wageindicator Foundation. There are more continents on this globe and I think the impact of platforms and platform cooperatives may even be greatest outside the US and Europe. In fact: it already is. We need a much more diverse discussion from a true global perspective.
At least in Rio, they were clear: Brazil has been the hub of the cloud economy for more than 100 years. A comprehensive report on the state and context of platform cooperatives in Brazil was also presented. So, it is time to take off the 'Western' glasses and look at the context of the labour market and the impact of platforms by continent or country, with respect for the difference in institutional contexts. In that respect, it was a good move by the organisation to organise this edition not in New York again, but in Rio de Janeiro. Next year it will be India's turn.
A broader collaboration
There are a lot of great initiatives, but platform cooperatives simply do not know from each other what they are doing. Scholz has set up the 'Platform Cooperative Consortium' (PCC) at The New School, including a library of tools. That is a great start, but I think it is important to also build a network per country or continent. After all, each continent has its own culture, laws and rules.
To secure public values in the platform economy, it is also important to involve more stakeholders. This could be in the form of knowledge and coaching, funding or creating favourable conditions (or preference) for platform cooperatives. The PCC gives a foretaste and presented a report with policy interventions.
This can be done at various levels. James Muldoon, author of the book 'Platform Socialism' spoke of an 'ecosystem of democratic platforms', dividing it as follows:
- Local - domestic cleaning, courier services, freelance labourers, handywork and food delivery platforms;
- Municipal - short-term rental platforms, app-based ride hail services and co-operative workspaces;
- State/national - healthcare, childcare and social security;
- International - social networking platforms and internet search engines.
He advocated looking closely at the function and target groups of the platform at each stage. Muldoon's statements fit well within the 'frame' from the platform cooperative movement, while I still prefer to put on a more objective lens.
A broader definition of scale and success
Criticism of platform cooperatives is often about the lack of success examples. The debate often features the same examples that often work on a small scale. Is this a bad thing? Of course it would be nice if there were a cooperative version of Uber, but the question is whether we should look for a 'platform cooperative unicorn'. An awful lot of small initiatives together can also make a lot of impact. Think of CoopCycle, which now facilitates 70 local worker cooperatives.
Scalability does not say everything. Look, for example, at my own initiative GigCV, the data sharing standard through which gig platforms share reputation and transaction data with their workers for free. I was allowed to present it myself in Rio. A modest initiative and which cannot grow into a global player because of the chosen set-up, and yet I see it as a great success. Not only can 50,000 (and next year 100,000) platform workers now download their CV data in a verified PDF, but it also proves that data sharing with users is possible. Thanks in part to GigCV, data sharing with workers is now on the national political agenda and former opponents of data sharing stand a lot more nuanced in the debate. My goal with GigCV is therefore not to become the biggest, but to change default expectations and attitudes towards data sharing. The goal is for data sharing to become the new standard and a data lock-in an act of weakness. People that use the lousy excuse that this is not possible now have to fund a better excuse: I proved it is possible. GigCV shows that even a small initiative can have a big impact. Which, in my opinion, is also the only way to stand up to the strong lobby of big-tech platforms. Start with those who do want to and create something good that others can no longer ignore. Which also helps to create policy and legislation. Start small, think big and change the world slowly but surely.
Greater role of education
If the focus in education is on profit maximisation and students learn that the dream scenario for an entrepreneur is a sale of the company to Meta, Google or Facebook or an IPO, then it is also not very strange that entrepreneurs do business in a certain way. Why don't models like cooperatives, steward ownership and social enterprises play a central role in education? I think there is a lot to be gained here. You could also take a more fundamental approach and make more room for social issues and uncertainty. A kind of life or society wisdom combined with economics and the balance between individual and collective.
In conclusion: a long way to go
In this piece, I have provided an overview of 7 years of research in this field, supplemented by my renewed thoughts on platform cooperatives following the congress in Rio de Janeiro. A lot has happened in the years I have been involved in the debate. Where with my
research at Utrecht University years ago I was still working on a foundation, there are now dozens of talented researchers working on this topic and platform cooperatives are really on the map. It is great to follow this from the sidelines and learn from the work of others.
Visiting the conferences gives me an insight into worlds outside my bubble and teaches me to look at developments in the platform economy through different lenses. There is no one 'planet gig'. Thankfully.
Meanwhile, I also see how difficult it is to change systems. This was confirmed after a dinner in Rio with several network members. Every ambassador of platform cooperatives 'just ordered' an Uber to his hotel at the end of the evening. After all, that was the safest way to travel as a tourist in Rio de Janeiro after sunset and is recommended by every Brazilian.
I am convinced that we should work towards a system where we do not have to weigh up our convenience against our values. There is still a long way to go, but we will get there.
A big thank you for the team of the Institute for Technology & Society of Rio de Janeiro and the Platform Cooperative Consortium for organizing this great conference. And off course a big thanks for all crew, speakers, sponsors and participants.