After a good overview of the faultlines within the so-called sharing economy, the authors outline emerging cooperative alternatives.
In short: if the sharing economy is the problem, then the cooperative economy is the solution!
Excerpted from Brian Van Slyke and David Morgan:
“Cooperatives are breaking into the domain of the sharing economy – in theory and in practice – and many of the people leading the charge are those dissatisfied with what both the traditional economy and the sharing economy had to offer them.
Here’s Hansen again, telling the story of Wolde Gebremariam in YES! Magazine:
After [Gebremariam] moved to Denver from Ethiopia in 2006, he worked minimum-wage jobs at the baggage claim in the Denver International Airport, and then at a nursing home. Though he enjoyed working with seniors, he wanted to go back to school and study pharmacy. The flexibility of driving a cab seemed like the right way to go. “I could work Friday, Saturday, and Sunday driving,” he says. “Then, I [could] go to school full time.”
That’s how he thought it would work, anyway. But the reality turned out to be more difficult. In 2012, he spent six months driving for a company called Metro Taxi, with a lease that required him to pay $800 per week for the use of the vehicle, dispatch, and other services. The need to earn that much every week, in addition to what he needed to live, pushed him to drive 10- or 12-hour days, seven days a week.
Gebremariam wasn’t finding the flexibility he was looking for, and turned to Uber instead. But, after driving for the company for a few months, Gebremariam says it was more of the same. “They are taking like 20 percent of our income,” he says. “We have to be on the road all the time.”
Gebremariam isn’t just complaining about it. Instead, he and 644 other drivers are on a mission to form a new taxi company that will be both worker-owned and unionized. The new co-op, Green Taxi, will have a fleet of hybrid or high-efficiency vehicles, and will offer a ride-hailing app.
As Jay Cassano makes clear in Co.Exist, this is part of a larger movement. Green Taxi was actually inspired by another cab co-op in Denver.
Rather than pay for expensive leases from traditional taxi companies or give up a portion of their earnings to startups like Uber and Lyft, many taxi drivers are banding together to form their own taxi cooperatives.
In these co-ops, each driver is an equal owner of the business, with a share of the profits and a voice in how the business is run. Denver, Colorado has one taxi co-op, Union Taxi, founded in 2009 with about 250 driver-owners. Now cab drivers in the city are already talking about setting up a second taxi co-op.
“We’re actually seeing a mini-explosion of interest in taxicab co-ops,” says Melissa Hoover, executive director of the Democracy at Work Institute. “These groups are responding to the same weaknesses in the industry that Uber is, but from a perspective centered around bettering workplace conditions, worker control, and compensation rather than ‘disrupting’ the model to benefit investors at the expense of workers.”
Drivers in a cooperative get to collaboratively establish their pay, the hours they work, and their working conditions—no small matters in an industry that employs many recent immigrants.
Of course, while the explosion of worker-owned cab companies are new, their existence is not. The Union Cab of Madison Cooperative, a worker-owned co-op of more than two-hundred members, has been around since 1979 – proving that these co-ops can be in it for the long haul while also revolutionizing traditionally exploitative industries. Union Cab was actually born out of a strike, when cabbies decided to fight for better pay and working conditions. But rather than negotiate with the aggrieved drivers, their employer chose to simply shut down the business. Shortly thereafter, several of the now out of work drivers decided that they could run the business better together – and also for the benefit of all the workers (dispatchers included!).
…if a cab driver has a bad day, they may not earn enough fare to pay back their lease and so they may end up owing the company money
The cab industry has actually regressed in some ways since 1979; drivers are often no longer considered employees but rather independent contractors (like with Uber). Generally speaking, at a normal cab agency, the company earns their income by renting the car out to the drivers. But what this means is that if a cab driver has a bad day, they may not earn enough fare to pay back their lease and so they may end up owing the company money.
For the worker-owners at Union Cab, the differences couldn’t be more significant. The co-op owns all of the assets and drivers earn a commission off their fares – so if they give a ride, they make money. Also, because the drivers own the company, they split a share of its profit at the end of every year. What’s more is that Union Cab provides health insurance to all of its drivers, which is virtually unheard of in the industry. Finally, no one worker is allowed to make more than 2.5 times the amount of any other worker. (You can read more about the Union Cab difference, here.) Why is this the case? Well, it’s because the workers, who are also the owners, voted to make it happen.
This is a complete contrast to the way typical cab companies and the executives of ride-sharing services run their businesses.
In addition, the argument has been made that Uber itself can and should be turned into a worker-owned cooperative. Again, Konczal and Covert in The Nation:
But… what exactly are the capitalists at Uber contributing to the company? Almost all of the actual capital is already owned by the workers, in the form of cars that they pay for and maintain themselves. And these workers labor individually, doing the same tasks, so there’s no need for a management class to control their daily operations. The capital owners maintain the phone app, but app technology isn’t the major cost, and it’s getting cheaper and easier by the day. […]
But a transition to workers’ owning their firms is necessary, economically smart, and one way for workers to gain power in the digital age. Because you know what worker-run firms do? Share.
The transition of an online company into a cooperative isn’t unfounded, either. As Janelle Orsi argues in Three Ways to Put Tech Platforms into the Commons, it’s happened before. Here she imagines how AirBnB could function as a cooperative while also explaining how another tech company already made the transition:
Co-bnb, as I’m calling it, could be an online marketplace owned and democratically controlled by the people who rent space to travelers. You can call it a “freelancer-owned cooperative,” a term possibly coined by Josh Danielson, founder of Loconomics.com. Loconomics just bought out its shareholders and became a cooperative corporation to be controlled by the freelancers who use the platform to offer services such as babysitting, home cleaning, and dog walking. The mission of Loconomics is to enhance the viability of freelance work, a task most reliably led by freelancers, themselves.
Soon, 40 percent of the US workforce will consist of freelancers, many of whom will cobble together income from multiple sources. We can’t allow companies like Airbnb, Uber, and TaskRabbit to take 5 percent to 20 percent of freelancer earnings. If those companies remain the gatekeepers of critical work opportunities, they’ll continually adjust search algorithms, fee structures, and terms of service to extract more out of workers.
So we don’t need to shut down platforms like Uber and AirBnB. We just need to either out-cooperate them, or, better yet, turn them into cooperatives. Because in the sharing economy, people rent out their labor and resources for the overall benefit of billionaires. But in the cooperative economy, people pool their labor and resources for the overall benefit of each other.
It’s time to forget the sharing economy. The cooperative economy is the one challenging the tech industry and changing people’s lives for the better.”