The disappointments of the online economy – for instance, user surveillance and systemic labor abuses – stem at least in part from its failures to meaningfully share ownership and governance with relevant stakeholders. Under the banner of ‘platform cooperativism’, an emerging network of cooperative developers, entrepreneurs, labor organizers and scholars is developing an economic ecosystem that seeks to align the ownership and governance of enterprises with the people whose lives are most affected by them. This represents a radical critique of the existing online economy, but it’s also a field of experimentation for alternative forms of ownership design. This essay presents and analyzes some of the ways platform cooperativism has begun to generate ownership designs that could serve the platform economy of the future differently than the investor-owned structures that currently prevail.

Acknowledgments
This essay stems from an ongoing collaboration with Trebor Scholz, and while he is innocent of my oversights, I am indebted to his insights. The following has also benefited from the input and feedback of Devin Balkind, Josef Davies-Coates, Enric Duran, Daniel Hu, Brent Hueth, Tim Kuhn and Keith Taylor, in part through an open review process at https://ioo.coop.

On March 18, 2016, at a press conference with US Secretary of Labor Thomas E. Perez on his right and a platform user named Ty Lane on his left, Managed by Q CEO Dan Teran announced, ‘Over the next five years, Managed by Q will give 5 percent of the company to the operators working in the field’.¹ On the backdrop behind them, Managed by Q’s logo – a futuristic, sans-serif grey Q repeated over a black background, much like Uber’s U – evoked the company’s status as one of the many trying to be ‘the Uber for x’ – in this case, the Uber for office-cleaning. But Teran’s announcement represented a departure from Uber’s notorious disavowal of employment responsibility for its drivers, whom it seems impatient to supplant with self-driving cars. In addition to full-time jobs and benefits, Managed by Q was welcoming the platform’s worker-users as genuine co-owners.

Co-ownership has mostly been missing in the implicit social contracts of online platforms – the Internet-enabled, multi-sided markets that employ networked forms of connection and transaction to transform industries, workplaces and livelihoods (Parker et al., 2016). The principal owners of platforms, along with founders, have been the investors who inject capital in expectation of generous returns. Technology companies may offer stock options to early employees; users, in contrast, have been treated like external customers. Yet in many cases they don’t pay the company any money while contributing essential content (e.g., virtually everything one encounters on platforms like Facebook or Reddit), even entrusting to the platform their personal data and their livelihoods. Platforms train users to think of themselves as participants in ‘peer production’ (Benkler, 2007) and a ‘sharing economy’ (Schor, 2014). But the online economy’s ownership structures habitually fail to reflect either the platforms’ stated aspirations or their social realities.

Managed by Q’s directors, however, recognized that its office-cleaning ‘operators’ were a class of users that served as the company’s face to the office-owning clients who provided revenue; co-ownership, therefore, seemed like an appropriate way to incentivize operators to take their responsibility seriously. The announcement also made for good press.

Canonical notions of corporate structure and governance, even when they encompass a wide variety of stakeholders, tend to affirm the practice of granting ownership and control to investors, since they bear direct financial risk (Jensen, 2000; Monks and Minow, 2008; Parmar et al., 2010). But when platforms hold near-monopoly status and wield control over urban transportation networks or data about intimate relationships, their risk profile is more complex than a share price. Platforms increasingly act as infrastructure, enabling productive activity among users – from individuals to large organizations. They’re not just a means of production but a means of connection. These webs of dependency, however, have not reached the platforms’ boardrooms. Managed by Q’s experience, together with a growing body of research on cooperative models, suggests that platform builders may be missing out on opportunities shared ownership could present – from retention, loyalty and diversity among their users to untapped potential for financing and public benefit (Albæk and Schultz, 1998; Davidson, 2016; Hueth, 2014; Molk, 2014; Pérotin, 2016).

The platforms now vying for dominance have tended not to maintain high labor standards among user-workers and other contractors, even bending the law in the process (Scholz, 2016b, Slee, 2016). Platform-based workers typically lack the expectation of coverage for illness, injury and retirement. The allure is real, as platforms offer the possibility of independent livelihoods, a departure from the drudgery and discipline of an old-fashioned job. But platform owners enjoy the far more lucrative benefits of having a fluid workforce without a large, fixed payroll. Investor-owners have little to lose and much to gain from sidestepping the conventional responsibilities of employment.

Less visibly, the mismatch between the interests of platform owners and users presents itself in the realm of data. Ubiquitous platforms like Facebook and Google, as well as others that operate more discreetly, gather reams of data about Internet users and offer it as a product. This data supplies a growing surveillance economy based on targeted advertising and pricing, which, intentionally or not, easily bleeds into discrimination of already marginalized populations (Bernasek and Mongan, 2015; Couldry, 2016; Pasquale, 2015). Although a platform like Facebook may insist that users retain ownership of their data, immense and illegible service agreements grant the platform such sweeping rights over that data as to render user ownership close to meaningless. Additionally, the prospect that one’s online activity might affect a credit rating, or find its way into the database of a spy agency, has already dampened the free speech that the Internet once promised.

As the platform economy reorients how industries operate, it should also challenge taken-for-granted corporate ownership models. Cooperative ownership not only shares wealth more equitably among participants, but it also unlocks efficiencies by reducing the costs of transacting and contracting with an enterprise’s essential stakeholders (Bogetoft, 2005; Hansmann, 2000; Hueth, 2014; Molk, 2014; Taylor, 2015). Online platforms have yet to enjoy the value and benefits of this model. The time seems especially ripe to take up the challenge that Marjorie Kelly (2012) has described as ‘ownership design’: What ownership structures are appropriate, competitive and just for an economy orchestrated through platforms? How can corporate structure better align the feedback loops of actual online sociality?

One collective effort to address these questions, and one in which I have been involved, has come to be called ‘platform cooperativism’. As well as a rhetorical insurgency, this initative has opened a space of experimentation in online ownership design, taking inspiration from the legacy and ownership designs of the mostly offline cooperative movement. I will present and analyze here some of the ways platform cooperativism has begun to generate ownership designs that may serve the platform economy of the future differently than have the investor-owned structures that currently prevail.

‘The next sharing economy’

Cooperative economies of some kind have probably existed as long as human economies in general. But in parallel with the rise of industrial capitalism, they have formed a distinct and transnational sector, with shared values and business practices of its own. From local food and housing co-ops to vast co-ops of farmers, retail stores, or electric utilities, this sector generates over $2.2 trillion in turnover worldwide, often in ways that serve needs unmet by investor-owned businesses.² It’s a part of the global economy widely relied upon yet overlooked, a ‘sharing economy’ before Silicon Valley adopted the term.

The prospect of platform cooperativism is at once new and old among the cultures surrounding the Internet. Early software and hardware hackers employed certain cooperative-like practices as they assembled the rudiments of the personal computer and the means of networking them. They shared source code; they developed structures of democratic governance across great distances; they resisted corporate enclosure in the process (Benkler, 2007; Coleman, 2012; Kelty, 2008). Small groups of software developers have formed successful worker-cooperatives.³ Some of tech culture’s innovations deserve to be studied more closely by the offline cooperative movement, as they demonstrate the plausibility of, and some proven techniques for, highly distributed and productive self-management; many co-ops emerging among young people today are organized around tech culture’s flexible, networked forms of connection rather than recreating industrial-era jobs and membership societies. Platform cooperativism, therefore, is not starting from scratch in tech culture.

Still, true cooperative business models have been almost entirely absent from the online economy. One can at least speculate about the reasons why. The disruptive efficacy of the venture-capital financing mechanism has rendered it a go-to blueprint to the exclusion of other approaches. The technological sophistication necessary to build online enterprises has also proved prohibitive for the often-marginalized communities that tend to adopt cooperative strategies. And until recently the Internet could be considered an optional realm of activity; co-ops tend to appear when people have an unmet need, not to furnish a mere accessory or curiosity. But it is becoming harder and harder, around the world, to secure a livelihood without taking part in the online economy. Perhaps this is why, in the past few years, recognizable platform co-ops have begun to appear.

The Spanish collective Las Indias distinguished platforms as one type of cooperative in a 2011 blog post (de Ugarte). In 2012 the Italian federation Legacoop promulgated a manifesto for ‘Cooperative Commons’, stressing the need for cooperative business models to manage the growing stores of data that users feed to online platforms.⁴ Stocksy United, a stock-photo platform owned by its photographers, went online the following year. By 2014, Janelle Orsi, founder of the Sustainable Economies Law Center in Oakland, was calling for ‘the next sharing economy’⁵ – the sharing of cooperative ownership – and was helping to design the bylaws for Loconomics, a gig platform owned by its workers. I began documenting such projects in collaboration with the online newsletter Shareable (Schneider, 2014); meanwhile, drawing on the lessons of his Digital Labor conferences at The New School, Trebor Scholz coined the term ‘platform cooperativism’ as an alternative to the systemic abuses of investor-owned platforms (Scholz, 2014 and 2016a). In consultation with labor organizations and platform workers, Scholz and I co-organized the 2015 Digital Labor conference, ‘Platform Cooperativism: The Internet, Ownership, Democracy’, and co-edited a subsequent book, Ours to Hack and to Own (2017). People around the world trying to develop online platforms through democratic ownership and governance began to coalesce their scattered efforts into a new economic ecosystem.

Since early 2015, along with Devin Balkind of Sarapis and others, I have maintained The Internet of Ownership⁶, the most exhaustive directory to date of the platform co-op ecosystem, and I lean heavily on that experience here. The directory includes not only ‘co-op platforms’ (which adhere to the International Co-operative Alliance’s standards for cooperative identity, detailed below) and various tools and organizations that support them, but also ‘sharing platforms’ (like Managed by Q) that practice shared ownership or governance with platform users, at least in part.

Platform cooperativism can likewise be taken to mean a broad invitation to a fairer online economy through shared ownership and governance; platform co-ops, however, are strictly those platforms that are also bona-fide co-ops by widely agreed-on standards (Sutton et al., 2016). The most recent revision of the principles that the International Co-operative Alliance holds,⁷ adopted in 1995, is as follows:

1. Voluntary and Open Membership
2. Democratic Member Control
3. Member Economic Participation
4. Autonomy and Independence
5. Education, Training and Information
6. Co-operation among Co-operatives
7. Concern for Community

To clarify these, the ICA promulgates the accompanying ‘values’ of self-help, self-responsibility, democracy, equality, equity and solidarity.

Most of the cooperative principles resonate somewhat with the social contracts of the platform economy. ‘Voluntary and open membership’ is a default practice among platforms, which typically enable anyone (with access to requisite technology) to create an account; ‘autonomy and independence’, too, is a value that platform owners often assert while disrupting incumbent industries, even while proclaiming a well-meaning ‘concern for community’. There is much ‘co-operation’ among platform companies as well, such as through API protocols and standards-setting organizations like the World Wide Web Consortium. Practices of ‘education, training and information’ often happen on platforms through much the kind of mutual education – in online forums and in-person meetups – that cooperatives encourage among their members.

The resonance, however, only goes so far. Principles two and three above – democratic governance and ownership, crucially – are almost wholly absent from the platform economy. Online user-experience design often seeks to divert users’ attention from matters of governance and ownership, such as by rendering opaque the processes of revenue generation through apparently ‘free’ services. Consultation with users on changes to features or policies is, at best, superficial.

Democracy itself has taken on a new meaning online. A Web search for ‘democratize internet’ or the like reveals that in tech culture ‘democracy’ has come to signify merely an expansion of access to various tools and resources, rather than the collective governance and joint stakeholdership to which the word, in other contexts, refers. That old kind of democracy is illegible to the Internet’s dominant ownership designs. The contention of platform cooperativism is that the design of platform businesses, and thus of the online economy generally, can and should allow for democracy in the fullest sense. There is no one-size-fits-all solution, and cooperation won’t necessarily produce the appropriate response to every design challenge. But these kinds of designs are worth at least considering far more than they have been in the online economy thus far.

I hope I can be forgiven for leaving the necessary, important task of raising objections about the value and prospects of platform cooperativism to others. I look forward to learning from them. But it has seemed to me a better use of this space to offer a broad sketch of the movement’s progress. I hope, also, that the critiques of this nascent movement might come in the form of challenges rather than repudiations that could cut it at the root. It should be a foregone conclusion, but is too often not, that in a society that claims to be democratic, the advancement of democracy into new spheres of social life should be a question of how, not whether.

Ownership designs

In the following I introduce some of the design patterns (Alexander et al., 1977) that have so far arisen in the experimentation of platform cooperativism and related undertakings. Most of the projects referred to can be found in The Internet of Ownership directory, as well as the ‘showcases’ in Ours to Hack and to Own. I draw from published material on their websites and my conversations with their participants. While nearly all are too early-stage for a thoroughgoing evaluation, the patterns they embody at least trace the outlines of a new palette of options for ownership design in the online economy.

Work: Value creators as value owners

Amazon’s Mechanical Turk platform, which enables posting and carrying out piece-work tasks (tag some images, transcribe a recording, fill out a survey), gets its name from an eighteenth-century curiosity in which a human chess player sat discreetly inside a machine, dazzling the public and contemporary notables alike with its apparently mechanical intelligence. The reference is too apt for comfort; the human beings working on Mechanical Turk appear through the platform almost as if they were just another algorithm. Starting in 2014, these workers mounted a widely publicized email-writing campaign called ‘Dear Jeff Bezos’, alerting the Amazon CEO to the fact that ‘Turkers are not only actual human beings, but people who deserve respect, fair treatment and open communication’.⁸

Workers on Mechanical Turk, for instance, enjoy no minimum wage or ability to rate the behavior of the pseudonymous employers who meanwhile rate theirs. And while this case is egregious, it is not unique. In 2016, as many as 24 percent of US adults reported earning income on platforms (Smith, 2016). The prevailing platform business model is to achieve scale while reducing labor costs and interference in management, automating tasks wherever possible.

Platform cooperativism inclines toward another approach, one in which the people contributing value co-own the platforms and help decide to what ends they operate. The aforementioned Loconomics, for instance, is a platform co-op for short-term gigs in which the workers are co-owners; unlike ‘Turkers’, who rarely receive replies from Amazon when they submit complaints, Loconomics is designed to benefit from worker participation in governance. Its worker-owners invest in the platform through periodic dues. Also in the San Francisco area, the SEIU United Healthcare Workers West union is backing the Nursing and Caregivers Cooperative, through which the nurses collectivize and co-mange the terms under which they deploy their labor on their app, NursesCan. The stock-photo platform Stocksy United, incorporated as a Canadian cooperative, has found that including the photographers as members (alongside staff and founders) is a way of recruiting more talented contributors than might otherwise be possible, and of prioritizing artistic quality over ruthless expansion.

Part of securing fair work-lives on platforms is the development of ‘portable benefits’ that don’t rely on any one employer, but that better suit the promiscuous connectivity of a platform economy. This, too, is a job well suited to co-op models – hearkening back to the cooperative mutuals that gave birth to the modern insurance industry. The Freelancers Union in the United States and SMart in Europe are membership organizations that have delivered benefits to many thousands of independent workers, relying heavily on online tools. This kind of model, often in cooperative forms, is proliferating rapidly (Conaty et al., 2016).

The storied successes of twentieth-century worker cooperativism – such as the Mondragon Corporation in the Basque Country and the Emilia-Romagna region of Italy – sought to secure full-time industrial jobs. But many in the latest generation of co-ops seem designed to free their members from the need for a job altogether. Prime Produce, for instance, is a cooperative co-working space in New York City that prefers the language and ethic of ‘craft’ over ‘work’; the New Zealand-based cooperative network Enspiral aspires to redefine work as ‘stuff that matters’. ‘Open companies’ (such as Gratipay, a crowdfunding platform) or ‘open value networks’ (such as Sensorica, which develops scientific instruments) have sought to rely on no employees at all, but to create products by rewarding the contributions of participants through a distributed platform. In Barcelona and the surrounding region, the Catalan Integral Cooperative draws member-owners in first by facilitating freelance work, and then by enabling them to obtain food, housing and services through internal trade and mutual credit rather than relying on euros. Some of its members have been involved in creating FairCoop, which proposes to do much the same on a global scale by connecting local ‘nodes’ through online tools, including a cryptocurrency called FairCoin (Schneider, 2015b).

Platforms need not regard those who contribute value through them as temporary stand-ins for algorithms. By orienting their business models around such contributors, platforms can provide not only decent livelihoods, but also a means of bypassing dependency on employment relations altogether.

Data: Treat it like it’s someone’s stuff

Much as Mechanical Turk disguises value-contributing workers behind a platform, business models based on so-called ‘big data’ often seek to disguise the fact that they’re capturing value from those contributing it. Facebook, for instance, provides extensive privacy controls by which users can customize what other users see about them – few of which affect, however, what Facebook itself sees, records and claims license to monetize. The economic power and promise of large pools of human data depend on the relinquishment of certain ownership rights by the humans involved, such as through opaque service agreements. These pools, in turn, can become outsourced repositories for government intelligence and law-enforcement agencies.

What would less duplicitous ownership designs for data look like? Commodify.us, for instance, has pioneered a model by which users can download a copy of their data from Facebook, then re-upload it, selecting which license they would like to apply to each data set – allowing them to monetize their data on their own terms. A more developed version of that general idea is TheGoodData, a London-based co-op, which allows users to monetize their browsing data with a browser extension and donate the proceeds to charitable causes. Meanwhile, under the aegis of MIT and the Qatar Computing Research Institute, an ambitious initiative called Solid (‘SOcial Linked Data’) proposes a framework for a new species of social applications based on modular, consensual data-sharing agreements, granting users granular control over what they share.

Given the centrality of trust and ownership in matters of data, particularly highly personal data, cooperative business models may be especially well suited to building data economies that are both transparent and competitive. Starting with highly sensitive medical data, the Swiss platform MIDATA.coop is developing a business model for personal data storage based on cooperative ownership and governance, together with secure open-source software. In the United Kingdom, a research project called OurData.coop is exploring the potential for a widespread system of such data co-ops, through which people could both retain control over and selectively monetize data that they produce.

A further use-case for data co-ops is in practicing the sixth cooperative principle of cooperation among cooperatives. Already, established co-ops like Ringlink Scotland (which supports agricultural business development) facilitate data-sharing among their members. Newer projects, such as the U.S.-based Data Commons Cooperative and CoopData.org, seek to provide platforms for data-sharing among co-ops that can help them find each other and work together. The promise of big data need not depend on ambiguous or misleading ownership arrangements.

Code: Keep the lords’ hands out of the commons

At least since the Charter of the Forest that accompanied the Magna Carta, people who live by and co-manage common resources have found the need to protect them from the acquisitive tendencies of those at the top of the social pyramid (Linebaugh, 2009). In order to protect the code-sharing habits of early hacker culture from the proprietary urges of corporations and universities, Richard Stallman inaugurated the Free Software movement with the GNU Public License in 1989. This and similar ‘copyleft’ licenses were quintessential hacks, turning intellectual-property law against itself by employing an author’s copyright privileges in order to liberate her code into a commons, free for anyone – with the requisite skills, equipment and time – to use, adapt and improve. Legal scholar Lawrence Lessig pioneered the transfer of this same hack to non-software cultural production through the array of Creative Commons licenses (Bollier, 2008). The accomplishments of this movement have been remarkable; copyleft practices have insinuated themselves into the modus operandi of the mainstream tech industry, creating many billions of dollars worth of freely available, world-class software in the process.

The tradition of hacking intellectual-property law, however, has not extended to the challenge of hacking corporate structure and corporate profits; as a result, there has been a disconnect between production, governance and ownership. The terminology of ‘open source’, which emerged about a decade after Stallman’s GPL, advertised collaborative code-sharing as an opportunity for low-cost, crowdsourced corporate innovation. Many of the large open-source projects now operate through foundations guided and funded by corporations that benefit from the community-developed code. Google, for instance, has been able to redeploy the open-source Linux kernel as Android, the world’s most popular mobile operating system, which also happens to be an effective tool for transmitting lucrative user data to the company’s proprietary databases.

The leading online peer-production communities, like Wikipedia and Linux, have also remained troublingly homogeneous, with low rates of participation among women and (at least in the United States) non-white ethnicities. Explanations for this in such communities range from instructive to denialist. But the reality is that those engaged in peer production must either be paid to do so or have surplus leisure time – a surplus that less-privileged populations are less likely to have (Dryden, 2013). By relinquishing ownership of intellectual property to this kind of commons, peer producers may have actually amplified some of the inequalities of the society around them, while allowing corporations to reap the profits. Corporate-led open-source development, too, has cultivated highly sophisticated back-end tools while leaving the features that are user-facing – that is, customer-facing – far less well developed, rendering them unable to compete with commercial counterparts.

Many of platform cooperativism’s early advocates have been advocates, too, of Free Software and the open-source movement. Stallman, as well as Free Software partisan Micky Metts, spoke at the 2015 New School conference. Some insist that platform cooperativism should include a commitment to the exclusive use and production of the GPL and similar licenses. Others in the community have embraced a new generation of intellectual-property hacks specifically attuned to corporate ownership design as well as the intellectual property itself.

Dmytri Kleiner’s Telekommunist Manifesto (2010) outlined a proposal for a ‘Peer Production License’, which adapted the Creative Commons Attribution-NonCommercial-ShareAlike license by adding a clause that permits commercial use by worker-owned enterprises that distribute surpluses solely to the worker-owners. If Linux were licensed in this way, Google couldn’t make use of it but a worker-owned company developing mobile devices could. Lost is the mainstreaming effect of corporate adoption, but the value conjured by peer-producers is not so easily captured by capital. Co-ops gain a competitive advantage. The Peer Production License has been promoted by P2P Foundation founder Michel Bauwens (in Scholz and Schneider, 2016), and the platform co-op Guerrilla Translation has adopted it as a general policy – though it remains marginal and largely untested in practice.

A more restrictive experiment in license innovation is the ‘Co-op Source License’ of the Co-op Source Foundation, a software-development platform co-op.⁹ This license assigns profits from commercialized software to contributors based on “commitment level and peer review.” CoMakery, while not itself a cooperative, is a startup developing a tool for distributing profits in this kind of arrangement with the aid of blockchain technology.

Even without adopting additional restrictions, platform co-ops have sought to develop new strategies for connecting the immense value in the open-software commons with end-users. Snowdrift.coop, for instance, is a cooperative platform designed to provide sustainable financial support for projects that contribute to such commons; platforms like this could incentivize open-source developers to focus more attention on user interfaces that can compete with closed-source alternatives.

Platform cooperativists seek to add a more fair and explicit economic layer to peer-production, prevent corporate value capture and facilitate cooperation among cooperatives. Some of the more restrictive proposals could come at the cost of losing the broad user and contributor base that corporate adoption can offer. Yet each of these experiments represents a plausible innovation in its own right as well as a constructive critique of the Free Software and open-source legacies.

Protocols: No decentralization without representation

Defenders of a free and open Internet also cherish the network’s decentralized design. While working at the RAND Corporation in the 1960s, Paul Baran developed the concept of distributed packet-switching as the basis of a communication system that wouldn’t rely on any single node that could be vulnerable to Soviet attack (Baran, 2002). Despite notable exceptions such as the Domain Name System, this distributed logic pervades the Internet’s protocols. The liberating promise of decentralized networks, in turn, seems to have inclined Internet denizens to seek further liberation through further decentralization. Technologies like peer-to-peer file sharing have allowed users – by relying on no central server – to share copyrighted music and video files without interference from the copyright holders. Platform cooperativism is in a sense a call for decentralization as well, in particular the decentralization of ownership.

The Internet as many people experience it has become remarkably centralized. They gain access through the monopolistic broadband providers that have replaced the small-scale, local ISPs that were common in the days of dial-up (although some regions co-own their broadband through cooperative utilities). Much of their online lives takes place through a small number of monolithic companies such as Facebook and Google – which track browsing habits through cookies, embedded buttons and mobile surveillance. But decentralization is also undergoing a revival, as early Internet architects like Tim Berners-Lee and Brewster Kahle call for re-decentralizing the Web.¹⁰ These initiatives seek to challenge the centralized platforms with a new generation of decentralized protocols. The cryptographic blockchain technology that enabled the Bitcoin digital currency system, meanwhile, makes possible a bewildering array of decentralized possibilities, from a replacement for the Domain Name System (e.g., Namecoin) to ‘distributed autonomous organizations’ made of ‘smart contracts’ (e.g., Ethereum). Advocates revel in the ambition of a ‘trustless’ ‘decentralized society’ that cryptography will allegedly enable (Frank, 2015). And in many respects the promise is real.

Bitcoin, however, has become a cautionary tale. While the underlying cryptography has held up according to spec, the social outcomes are less encouraging. Wealth distribution in the Bitcoin economy is massively stratified – much more so than in the conventional economy – and a small cabal of ‘mining’ pools have come to dominate the creation of new coins and the governance of the system. In effect, Bitcoin has become centralized yet ungovernable.

The urge to decentralize and distribute authority across networks risks neglecting the necessary work of reconstituting that authority in democratic ways. But decentralization and democracy can go hand in hand, too. For some years now, federated social networks like Diaspora, Friendica and GNU Social have implemented features familiar to users of Facebook and Twitter through decentralized networks of independently owned and governed nodes. I am a member of the ‘democratic membership organization’ May First/People Link, which finances, owns and manages a GNU Social node; my data for the network is managed, therefore, by an organization accountable to me, while enabling me to interact freely with the global network. This model, while less lucrative for investors than a centralized social network, is well suited to democratic organizations. Scale occurs through the protocol, not the platform.

The democratic potential of blockchain technologies, also, is considerable – even if it has rarely prevailed in practice. While Ethereum smart contracts could implement a digital autocracy governed by an absolute monarch or an unaccountable robot, they’re just as capable of facilitating highly democratic structures. Some projects have turned to cooperative models to solve problems that vex other blockchain systems; Rchain uses a co-op as a means of scalability, while Moeda turns to credit unions as partners for expanding financial inclusion.

To those who regard decentralization as a liberatory end in itself, platform cooperativism adds the qualification that having a decentralized system doesn’t remove the challenge of governance – it just alters where and how governance takes place. For decentralization to have democratic consequences, it needs democratic design.

Finance: Rent capital, don’t be rented by it

Some assume that cooperatives are incompatible with large-scale financing, that they must forego the growth and innovation that investor ownership enables. A glance at the global cooperative sector, however, belies this. It is true that cooperatives cannot cede the powers of governance and ownership that investors typically expect, but in areas where co-ops have flourished, they have formed quite formidable financial institutions – such as credit unions and cooperative banks – to hold capital and make it available to the sector for growth. José María Arizmendiarrieta, founder of the Mondragon Corporation, insisted that co-ops have a responsibility to capitalize: ‘A cooperativism without the structural ability to attract and assimilate capital at the level of the demands of industrial productivity is a transitory solution, an obsolete formula’ (2013).

Rather than ruling out the possibility of financing, cooperative models require a different kind of ownership design in their financing schemes than businesses that invite investor control. Thus far, however, the online economy has relied on a venture-capital investment model based on granting considerable rights to early investors, followed by an eventual ‘exit’ through either selling the company to another company or trading shares on speculative markets. For platform cooperativism to take hold as a live option for enterprises, other designs are needed.

Loomio is a New Zealand-based worker co-op that produces a popular online decision-making platform. Venture capital was not an option, and the team members considered adopting non-profit status, but found it incompatible with their ambitions for scale. By early 2016, however, they had raised a round of $450,000 from investors who supported their mission and regarded their worker-owned structure as adequate assurance. The investors purchased non-voting, redeemable-preference shares, assuring a return based on the company’s revenue without compromising its cooperative model. While the investment remains a modest one by Silicon Valley standards, it beckons toward more sizable promise.

Cooperatives were, in a sense, the original crowdfunding, allowing communities to self-fund enterprises that served them. And while online crowdfunding has been an effective enabler of new initiatives, it lacks the shared ownership of co-ops. New platforms want to bring that back. Seedbloom is building an blockchain-based equity crowdfunding tool, enabling contributors to become co-owners of the projects they support; it has already helped enable the development of Resonate, a cooperative music-streaming platform owned by fans, musicians, and labels. Open Collective, while not a cooperative, is a crowdfunding tool that enables groups to form online cooperatives and manage their budgets without need for formal incorporation or a bank account. Tools like these can help significantly lower the barriers to co-op formation.

A vibrant platform co-op sector will require a variety of financing mechanisms. Purpose Ventures is an emerging investment firm designed from the start to specialize in ‘self-owned’, ‘purpose driven’ companies that seek sustainable growth, not a rapid exit; as the companies grow, their success enables new companies to join a mutually supporting ecosystem. FairCoop is attempting to create a global cooperative financial system with several concurrent mechanisms, including its own cryptocurrency, a mutual-credit network, a savings service and a variety of mission-driven funds.

A further source for platform co-op investment is the existing offline cooperative sector. While some large, well-capitalized co-ops have begun investing in platforms, they often face a learning curve in doing so. Just as the tech sector has yet to learn what it takes to systematically develop co-ops, the cooperative sector must learn how to apply its financial resources and know-how online. One promising approach may be to forge collaborations between successful tech accelerators and cooperative financial institutions.

What unites these various forms of cooperative-friendly financing is how they reverse the conventional corporate model, in which capital rents workers’ time and seeks to extract profit from customers. In co-ops, online and off, participants find capital when they need it and rent it without relinquishing their business in exchange.

Education: Train owners, not just workers

The promotion of education has been a pillar of cooperative enterprise at least since the Rochdale Society of Equitable Pioneers’ famous store in mid-nineteenth-century England, and it remains a basic principle for the global cooperative movement. Business shapes the people who engage in it as an implicit education; cooperativism seeks to make that education explicit, and to educate members as informed, empowered stewards and owners. Some of the world’s most important co-op networks, including the Mondragon Corporation and the Antigonish movement in Nova Scotia, grew out of schools. It is an irony of Silicon Valley’s history that Leland Stanford, founder of the tech industry’s flagship university, was a passionate advocate of cooperative enterprise and included in his Grant of Endowment a directive ‘to have taught in the University the right and advantages of association and co-operation’; it’s an intention that the university, and the tech industry it helped spawn, has largely ignored (Altenberg, 1990).

In Scholz and Schneider (2016), a chapter by Karen Gregory asks in its title, ‘Can Tech Schools Go Cooperative?’ By ‘tech schools’, she refers to the recent proliferation of unaccredited, often for-profit ‘bootcamps’ that offer intensive curricula designed to produce students ready for well-paying jobs for software companies in a matter of only weeks or months. Gregory proposes, instead, a kind of tech school that sets the bar higher, to ownership: ‘a curriculum that explores the possibilities of new forms of collectivities, organizing and worker agency’. Gregory calls for locating such schools in public universities, for the sake of accessibility for populations currently underrepresented in tech jobs. New programs in cooperative business at public institutions – such as the City University of New York and Laney College, a community college in Oakland, California – are currently in development, but by and large their orientation is toward offline cooperatives.

A model partly along the lines Gregory describes, meanwhile, has emerged through the New Zealand-based cooperative network Enspiral, which is home, among other enterprises, to Loomio. In 2014 members of the network formed Enspiral Dev Academy, a coding school that equips students with marketable skills while also introducing them to the opportunities for co-ownership in Enspiral itself. The academy offers scholarships and priority for applicants from underrepresented populations (as some more conventional tech schools do as well). Likewise outside the sphere of public education, the educational arms of cooperatives like Mondragon Corporation and Co-operatives UK offer distance-learning programs that could prefigure platform co-op models for massive open online courses (MOOCs) and the like.

Whether in public or private forms, education will be an essential component of a platform co-op sector. Some of the most important education likely takes place through the platforms themselves, in the ways by which a platform presents itself to members as a medium of co-ownership and elicits from them responsible decision-making and stewardship.

Governance: Kumbaya won’t do

In co-ops and investor-owned companies alike, shared governance can turn into a caricature. Those with limited experience in the cooperative sector might assume that just because an enterprise is, say, legally owned by its workers, cumbersome consensus-based processes must be the norm. And in companies where the workers are not owners, managers might try similarly cumbersome performances to instill a fictional ‘sense of ownership’ intended to encourage more productive behaviors. Platform cooperativism has challenged both versions of superficial communalism by seeking to align appropriate ownership and governance structures rather than hiding one behind the other.

The task of efficiently balancing the stakeholdership relationships of the platform economy is far from straightforward. Traditional lines that distinguish worker-owned, consumer-owned, or producer-owned co-ops tend to blur in a platform economy where much of a platform’s value comes from the contributions and resources of people who are not the company’s employees. Many emerging platform co-ops have opted for multi-stakeholder models that encompass various classes of co-owners, such as employees, users and customers. The FairShares model, for instance, is a recent effort to facilitate and codify a multi-stakeholder structure. Platform co-ops like Loconomics, Resonate and Stocksy United use multi-stakeholder structures for both ownership and governance.

There are lessons to be drawn from the distributed governance models of foregoing tech culture. Open-source software communities have developed sophisticated governance practices, ranging from the formality of the Debian Constitution, which manages a popular version of Linux, to the free-for-all of an IRC channel. These hackers’ commitment to transparency, also, can offer correctives to a cooperative movement that has too often been opaque, even to its members. Holacracy and sociocracy are governance structures that conventional companies have used to distribute authority and empower employees; they’re even better suited to cooperative models in which that empowerment extends to ownership of the company itself.

Experiments that have emerged from civic and political innovation have proved useful for economic democracy, too. Loomio – which translated the decision making processes of Wellington, New Zealand’s 2011 Occupy encampment into a platform – serves as a primary governance tool for Enspiral and other co-ops worldwide, along with schools, government programs and businesses. The ‘liquid democracy’ model pioneered among alternative political parties in Europe and South America could be well-suited for large-scale platform co-ops.

There is potential for governance, also, in the now-reflexive daily practices of online platforms – Facebook ‘likes’, Reddit ‘upvotes’ and so forth. These features of user experience could become the rudiments of meaningful shared governance. If this were the case, we might see a reduction in the often careless behavior found on social media. Could the Reddit uprising of 2015, which ousted a CEO, have proceeded more constructively if Reddit users had levers for self-governance besides conspiring to shut down the platform?

Not every wheel of governance must be reinvented. For all the radical governance models on offer, platform co-ops need not necessarily reject every practice that conventional platform companies already employ – while retaining the significant difference that the managers are ultimately accountable not to outside investors but to the platforms’ actual participants, as well as to the communities in which participants live.

Policy: Local value for local benefit and control

Confronting the platform economy’s onrush of disruptions, policymakers have found themselves in the position of trying to say ‘no’, in various and sometimes futile ways, as they attempt to retain appropriate control over their economic infrastructures. Ride-sharing platforms destabilize structures for taxi regulation, and room-renting platforms unsettle tourism policies. Both bypass established compromises in labor relations. Industries that were once more or less locally governed and owned are now orchestrated from the platforms’ headquarters far away – and those platforms’ investors insist on taking a sizable cut. Platform cooperativism gestures toward a new set of options to consider, toward something policymakers can say ‘yes’ to.

Co-ops have long represented this kind of constructive alternative, and in many parts of the world their flourishing has been made possible through proactive policy. In the United States, for instance, the Department of Agriculture provided grants and loans for the creation of electric utility co-ops in rural areas that investor-owned companies opted not to electrify, starting in the 1930s; today, federal agencies have begun helping some of those same co-ops offer user-owned broadband service. Co-ops are a tool not only for meeting needs that capital markets fail to meet, but for doing so justly, in a way that keeps wealth among the constituencies that create it. To this effect, Michel Bauwens and others have theorized the ‘partner state’ as a framework for governments that enable, but do not control or direct, the flourishing of cooperative and commons-oriented enterprise (Kostakis and Bauwens, 2014). The city of Barcelona has taken early steps to enshrine platform cooperativism into its economic strategies. And in August 2016, UK Labour Party leader Jeremy Corbyn issued a ‘Digital Democracy Manifesto’ that included ‘platform cooperatives’ among its eight planks.

In her statement for the 2015 Platform Cooperativism conference,¹¹ New York City Council member Maria del Carmen Arroyo wrote, ‘Worker cooperatives offer a viable method to address the long-term challenge of reducing the number of chronically unemployed and underemployed residents and the number of workers trapped in low-paying jobs’. To this end, she had already supported legislation to fund worker-cooperative development in the city, as well as steps toward preferential treatment for co-ops in city infrastructure contracting. She added that platform cooperativism ‘can put the public in greater control of the Internet, which can often feel like an abyss we are powerless over’. Another City Council member, Ben Kallos, made a last-minute appearance at the conference to announce his proposal for a ‘Universal E-Hail App’ with an open protocol that would level the competition between taxis and ride-sharing drivers.

Taking the example of the accommodations-rental platform Airbnb, Janelle Orsi has proposed three kinds of cooperative alternatives, outlining a distinct role for government in the ownership design of each (Schneider, 2015a). What she calls ‘Co-bnb’ would be a co-op owned by the renters of rooms in a given area; ‘Munibnb’ would be owned and operated by cities as a public good, enabling them to set controls and caps on short-term rentals; similarly city-managed, ‘Allbnb’ would add the principle of redirecting the profits from the platform back to residents as dividends, recognizing the fact that, when visitors come, their hosts are all the city’s residents, not just those from whom they rent a room.

Such municipal ownership models have been pioneered by so-called ‘sharing cities’ such as Seoul, South Korea, which has restricted certain platforms while promoting the development of local alternatives. Municipal ownership is not strictly cooperative – it violates the cooperative principle of ‘autonomy and independence’, among others – but this approach recognizes that, as stewards of common infrastructure, governments are essential stakeholders in the platform economies that rely on such infrastructure to operate.

When a business serves the role of organizing and enabling the transactions throughout an entire sector of the economy, it has historically been regarded as either a monopoly or a public utility. Just as the monopolies of connective railroads inspired the U.S. antitrust laws of a century ago, a recognition is growing that new strategies of enforcement, and perhaps new laws, are needed to regulate the emerging online super-platforms (Khan, 2016). Enabling transitions to more democratic ownership designs may be a way to help these platforms better self-regulate, rather than inviting more stifling regulatory regimes.

Designing for the future

Cooperatives have often formed from a posture of reaction, of meeting unmet and essential needs, rather than anticipating desires or advertising them into existence. The growing movement for platform cooperativism, too, has tended toward imagining co-op versions of existing models, rather than wholesale innovations. While conservatism can be a strength and a source of stability, it will also be a liability in an evolving online economy of capital-rich enterprises competing for winner-take-all market share. Leading offline cooperatives have made a point of investing in innovation, and platform co-ops will need to do so all the more. To this end, Trebor Scholz has formed the Platform Cooperativism Consortium at The New School to orchestrate research and funding specifically for this emerging sector. The Internet of Ownership maintains a library of legal templates and bylaws. And research initiatives like the EU’s P2Pvalue project are starting to incorporate platform cooperativism into their work as well. Such efforts face plentiful challenges.

Among the most visible platform co-ops in development, for instance, are cooperative taxi companies vying to compete with the likes of Uber. Companies like Green Taxi Cooperative in Denver, Alpha Taxis in Paris and ATX Coop Taxi in Austin are betting that they can provide better service with drivers fully committed to their work through various degrees of equity sharing, combined with their own app-based hailing technology. In the short term this strategy may have promise. However, Uber’s longer-term outlook appears to be premised on an eventual transition to self-driving cars – and an economy in which human driver-owners could turn into a cumbersome liability.

The question at hand, really: How do we cooperativize robots? It’s a challenge for domains well beyond transportation. The ‘internet of things’ – the growing industry of automated, networked gadgets, from watches to home temperature controls – poses problems of trust and surveillance that cooperative ownership could be especially well suited for, but only if they move into that new market quickly enough. Platform co-op researchers need to investigate more deliberately what potential innovations and business models investor-owned companies aren’t seeing because of the limitations of their own ownership structures.

Matters of intellectual property ownership take on fresh urgency as people invite artificial intelligence more fully into their lives through systems like Amazon’s Alexa. Silicon Valley titans Elon Musk and Sam Altman, among others, have formed an organization called OpenAI to develop open-source artificial intelligence technoloegy, but, as with open-source software generally, this does not prevent value from flowing mainly to corporate investors. Peter Barnes (2006), on the other hand, has suggested that those who monetize our information commons could pay fees that would be redistributed equally to the population in the form of a universal dividend. And a team of computer scientists has proposed a preliminary model for artificial intelligence owned by the people whose data-labor trains it (Sriraman et al., 2017). The nature of democratic ownership design for a more automated future is by no means obvious, but investor control need not be a foregone conclusion.

Finally, an honest platform cooperativism should extend its gaze beyond the platform economy itself to its material substrates – in particular, the human conditions surrounding the mineral extraction and assembly of the hardware on which platforms depend. This has been neglected territory for the emerging platform co-op ecosystem, which has remained software-oriented. But there are some promising points of departure to consider. Fairphone is a Dutch smartphone, available in Britain through The Phone Co-op; it is designed with an ethical supply chain in mind, including decent working conditions and conflict-free minerals. The Indonesian co-op KDIM is building its own locally produced smartphone. In China, Huawei, the world’s largest telecommunications hardware manufacturer, is significantly employee-owned – though it is neither a formal co-op nor a model for worker rights. Perhaps platform co-ops, by building other co-ops into their supply chains, can help set high standards for sourcing and labor. Further research is needed, however, to develop more democratic ownership designs for the hardware, natural resources and human labor on which any future platform economy will depend.

Ownership transitions

What would it take to have an economy in which a can-do entrepreneur with an idea for a platform – the kind of person who wants nothing more than to create something new and excellent and receive some fair compensation for succeeding – will conclude that her best way to proceed is by practicing democracy? The answer, of course, is that it would take a lot of things at once. Ownership design is best considered a process of open-ended choices, based on patterns that we test and apply iteratively. Integral to the designs themselves, therefore, are the processes for instantiating them.

There are two basic kinds of co-op development: startups and conversions. Startups that begin as co-ops from their inception have the chance to hard-wire cooperative values into their structures and cultures; they typically rely on the widespread recognition of an unmet need. Conversion, meanwhile, involves transitioning an existing enterprise to democratic ownership and governance, combining a proven business model and its existing momentum with a structure better aligned to serve the people who rely on it.

Startups might come in several forms. Some will be bootstrapped – drawing on existing communities of users to finance and populate a platform that meets their needs, perhaps through equity crowdfunding. Along these lines, venture capitalist Brad Burnham of Union Square Ventures envisions a new generation of less risky ‘skinny platforms’ that deliver lower returns to investors and higher returns to labor. He told Shareable in 2015, ‘We can generate a return participating in that, and we think that’s what we should be doing’ (Geraci, 2015). Other kinds of startups, meanwhile, might spin off from existing cooperatives, online or off, perhaps connected by a federation or other forms of ongoing cooperation. For instance, the German cooperative marketplace platform Fairmondo is spreading to the UK through the aid of two existing cooperatives – Fairmondo itself and Worth Cooperating in the UK – with the intention of creating a freestanding multi-stakeholder co-op. Rather than growing as a multinational company, they’re replicating and sharing a common pool of open-source software.

Conversions, too, can come in various forms. One is a mature-stage transition. Especially when a product is unproven or lacks a ready community of users, a cooperative structure may not be the appropriate ownership design early on; it makes sense, then, that forward-thinking founders and investors should hold the risk, as well as the opportunity for reward. Once a community of users forms, however, the nature of the business changes, and cooperative ownership models become more appropriate – such as to govern labor policies or the use of personal data. A loyal and active community can provide founders with a fair return for their early innovation and investment; shared ownership, meanwhile, can help keep that community loyal and active and interested in their platform’s success. Another kind of conversion – more speculative and challenging, to be sure – could take place once a platform has achieved the sort of ubiquity that makes it, in essence, a monopoly-utility. For instance, as former Harvard Library director Robert Darnton contends (2009 and elsewhere), Google Books has created a unique and essential information commons by scanning and making available documents that may never be scanned again; a company whose chief responsibility is shareholder profit, however, does not seem to be the appropriate steward for an archive of such immesurable value. Similar concerns in the platform co-op networks have spurred a ‘BuyTwitter’ campaign, which calls on the company to convert to some form of user ownership. A new generation of antitrust policy might finance and aid transfers of platform ownership to the users who depend on them. Cooperative models are both proven and adaptive enough to merit consideration as we design and adopt – so far with too little foresight – the platform utilities of the twenty-first-century economy.

The extent of platform cooperativism at present remains limited to a rallying cry, a few success stories, and a cluster of far-flung, early-stage experiments. Merely saying that it should take hold more widely, as we advocates have attempted to do, is not enough to overcome the formidable barriers of financing, market access, public education and competition that this kind of model faces. Even a brief glance at the existing, offline cooperative economy – the credit unions, the electric utility co-ops, the farmers’ marketing and supply firms – makes clear that a more cooperative online economy would not guarantee utopian outcomes. But the achievements of past co-op sectors do at least suggest that such models are capable of scaling to reach and shape significant portions of economic life. When they do so, they furnish more resilient, institutionally diverse societies, impacting the behavior of non-cooperative enterprises as well as the lives of their members.

Insofar as platform cooperativism has been a scholarly project, it introduces questions that have been too often neglected in research on internet cultures and economies. How are platforms owned and governed, and how could they be owned and governed differently? How does their ownership shape the platforms’ structures of accountability? How do ownership models organize and limit the kinds of technologies available to people?

Thankfully, this has not been merely a scholarly project, but a participatory one. The emerging experiments have not merely followed the path called for or imagined by theory. That dynamism only reinforces the supposition, however, that when we reorient systems of ownership and governance toward democracy, transformative things can occur.

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Photo by Photographing Travis

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‘Ownership is the ground where the tug-of-war for the next social contracts is being played. Who owns what will determine who really benefits’

After a contentious early meeting of Green Taxi Cooperative’s driver-members, then in the process of forming the largest taxi company in the state of Colorado, I asked the board president, Abdi Buni, about self-driving cars.

The state legislature had started clearing the way for them on our roads, after all, and the airport was giving Uber and Lyft preference over the local taxis. Buni’s competitors were thinking about them, so what about him?

“We’re really trying to feed a family for the next day,” he said. “When it happens, we’ll make a plan.”

He said this with the kind of weariness about technological wonders that I’ve frequently found among co-op directors – and I could easily understand why. Uber and Google were testing their automatons with billions of dollars from Wall Street in the bank, while Green Taxi was running on what membership fees its mainly immigrant drivers could scrape together.

But the reality was that the self-driving cars were not some distant future that could be put off. As investors poured money into the car-sharing apps in anticipation of automation, the apps put so much pressure on Denver’s taxi industry that drivers fled their old companies for a better deal in their own co-op.

In that sense, it was as if the robots had already come. Green Taxi owed its existence to them.

There are two stories commonly told about robots these days. One is that, in the not-too-distant future, some enormous percentage of jobs currently being done by people will be taken over by computers, and the workers will be left twiddling their thumbs. The other is that, like past periods of technological change, job markets will simply evolve, and new, better things will arise for us to do.

The truth is neither – and everything in between. I say so, not by having any special insight into the future, but by noticing certain features of the present.

For instance, while it might look to some observers in affluent, urban areas that we’ve entered a post-industrial age, more stuff than ever is being produced on this planet, with human hands very much involved – it’s just that this is happening in different places.

Even where old factories have turned into apartment lofts, jobs show no particular sign of going away – they’re just less secure. People in places where it was once possible to support a family on one standard, career-long salary are becoming used to lifetimes of gigs, found and mediated by machines. Social contracts are shifting, while companies, governments, workers, and myth-makers are vying to set the new rules. It’s not a sudden robot apocalypse, it’s a longer, slower tug-of-war.

The winners will be the owners. Many of the world’s highest valued firms claim the title because they own vast, vast stores of data – data about us, data that can feed their algorithms.

Ownership is the ground where the tug-of-war for the next social contracts is being played. Who owns what will determine who really benefits. The owners, also, decide which tasks to invest in automating and what happens to the people who used to do those tasks.

Right now, a few very powerful conglomerates are likely to dominate this contest, companies based primarily on the west coast of the United States and in China. They are only getting stronger, as is their capacity to pull what they need from the rest of society and remake the rules on their terms. In new guises, this is a story we have seen before. It’s the story of railroad barons, big banks, and big boxes, of economic bullies that provoked people to create their own economies of scale through co-operative enterprise.

It begins with thinking about automation like owners do, not like victims of it. In worker co-ops, rather than fearing how machines might take work away, workers can imagine how they could use those machines to make their lives easier – in ways better and fairer than the investor-owners would. Consumer, purchasing, and marketing co-ops can use data visualization to demonstrate the superiority of their supply chains. The less people have to do to maintain all this, the more they can turn to opportunities for creativity.

Co-ops thrive when they discover how to do what other kinds of companies can’t or won’t do. Co-operative AI, also, may be intelligent in ways the investor-owned counterparts can’t be.

Emerging data co-ops like MIDATA (for medical data) and GISC (for farmers’ data) are built for privacy and transparency, while many of their competitors optimise for surveillance and central control.

TheGoodData harvests the proceeds from members’ web-browsing habits for micro-lending programs, and Robin Hood Co-operative runs an algorithm that prowls financial markets for opportunities to fund public-domain projects. This kind of data can in turn inform future co-op robots, like the flying drones that Texas utility co-ops used last year to restore power after Hurricane Harvey struck the state.

Rather than worrying about how robots and apps will make their current business models harder, co-ops should ask how smart, member-focused automation can set them apart. But the barriers are real: This takes economies of scale, and co-ops need to band together to create them.

For instance, there are driver co-operatives like Green Taxi all around the world – what if they created a shared hailing app that customers could use wherever they go, and pooled the data for mutual benefit?

Meanwhile, consumer car-sharing co-ops like Modo in Vancouver are well-poised to be leaders in adopting driverless vehicles – accountable to the local community, not to far-away investors. In hard-to-automate service professions like house-cleaning and childcare, platforms like Loconomics and Up & Go are using co-operation to automate marketing and payment so workers can focus on –and get paid better for – doing their core jobs.

The 20th century was full of science fiction about technology making people’s lives better and freer, but we’ve wound up with a 21st century of worsening inequality and insecure incomes.

The world of The Jetsons doesn’t arrive automatically. In order for the benefits of technology to be shared more widely, the ownership of it must be shared, too. Co-operation is uniquely well-suited to do this.

Reposted from The News Coop

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Nithin Coca: Loconomics is a platform cooperative that allows service professionals working in areas like dog walking, home care, child care, massage therapy, and tutoring to connect and offer their services on a platform that they own. Founded by Joshua Danielson in 2012, Loconomics, which is based in San Francisco, California, aims to provide an alternative to investor-owned platforms such as Wagg (dog walking), Taskrabbit (gig work), or Handy (home cleaning). The company also just announced a collaboration with Doing What MATTERS for Jobs and the Economy, a program by California Community Colleges. The Loconomics platform will be used as part of a course on the gig economy, which will help bringing cooperative economic principles to students. We spoke with Danielson and Kyra Harrington, Loconomics’ Brand Marketing Manager, to learn more about Loconomics’ vision, their new partnership, and how a platform cooperative could empower service professionals and serve as a tool for economic empowerment.

Nithin Coca, Shareable: Where did the idea for Loconomics come from — and why did you feel it was necessary?

Joshua Danielson, Loconomics: In my 20s, I spent a lot of my money on services and I knew that the platforms, back then mostly temp agencies, often take 30-40 percent of people’s pay. Local services were something I believed in. The world’s full of products, while services are sustainable and personable. They enrich people’s lives in a way that products don’t. Ethos behind it is to do something that doesn’t increase wealth inequality. This is what many traditional businesses [with venture capital] end up doing.

We – Joshua and I – first met more than two years ago, and even then, Loconomics had been around for some time. Can you tell me about your progress, and the challenges you’ve faced in getting the platform cooperative set up?

Joshua Danielson: It’s taken much longer than expected, which is not atypical for any first-time entrepreneur. I started out neither having been a project manager nor having the technical expertise to move quickly. I’ve acquired a lot of those skills since then, and we’re able to execute things in a fraction of the time it used to take.

Loconomics started out as a benefit corporation, and our first round was a desktop version launched in 2012. It was bad timing. No one knew what a benefit corp was, nor did they care. It wasn’t true ownership, it wasn’t that differentiated from other platforms, and we didn’t have a mobile app. I began to wonder how this would look as a cooperative, but as most service professionals are freelancers, I didn’t know how that would work. I met Janelle Orsi with the Sustainable Economies Law Center, and she had been speaking out about the sharing economy/platform economy.

The conversion to a platform cooperative took a lot longer than expected because we wanted to do it right. The bylaws alone took over a year to write. Janelle has a lot of expertise and is in the cooperative movement. I let her lead, and I made sure to bring a healthy dose of business strategy to it, to ensure it was a sustainable platform, and we’d have staff that would want to work here.

What was the cooperative structure you ended up deciding on, and how does it work in practice?

Joshua Danielson: We officially converted in June 2014 to a California cooperative. We were a patronage based co-op at that point, with no shareholders. That means Loconomics is owned by workers and nobody else. We felt that keeping our focus on local services, and creating a platform that works for service professionals and clients has a lot potential to shift wealth inequality, so that gradually services can be booked without the middlemen.

Our revenue model is that service professionals will pay $20-40 for our ownership plans. With the $20 a month plan, they gain access to dividends, vote, can run for board, and get access to our sister platform where they can communicate, gain support, and have networking opportunities.

For $40, they also get access to scheduling software and new project management tools, in addition to being part of the cooperative. When there are profits leftover, they are entitled to dividends based on what they have paid into the platform. There are no commissions, and they elect the board, so they oversee the platform. Staff, like myself and Kyra, will be doing day to day activities — we are entrusted with the mission on their behalf. We’ve removed the traditional incentives and are self managed, have capped salaries, and  don’t have a bonus system. Staff elect one board member, two are nonprofit appointed, and six members are elected by service professionals. We get dividends based on how many hours we work, but this will roughly end up being the same as a service professional member who paid their dues.

So, can Shareable readers find services on the platform right now?

Kyra Harrington: Right now we’re focusing on recruiting on service professionals. Just over the last year, we’ve found there are a lot of challenges they are coming up against. They are often by themselves and face challenges on their own. That’s why we’re trying to build community through our sister platform — Loconomomics.coop — where service professionals can congregate. There are a lot of professional advantages they get from joining coop.

Service professionals have created nearly 600 listings on the site so far — and as we transition out of beta and going to do a full push this winter to onboard new members.

Service professionals can be a huge category. Any specific fields or sectors you are focusing your outreach on?

Joshua Danielson: Currently we’re focused on handful of services that include self-care professionals, such as massage therapists, acupuncture, cleaning professionals, handymen, and also dog walkers, pet sitters, child care, and tutors. Existing platforms for dog walking and cleaning take commissions up to 40 percent. They also proved that service professionals are looking at these platforms to get services booked, so that shows demand.

Kyra Harrington: When you start talking about co-ops, people often have not heard about it. To focus our messaging, we’re focusing on what’s in it for them as a service professional. Our focus is on tangible benefits: software, marketing, community, and no commissions. No one is getting rich of your back. And we’re a platform co-op, so you have a voice in our future.

Joshua Danielson: Most platform workers don’t feel like they’re being taken advantage of. Not many people have done the math. We want to have the numbers to say that, for example, dog walkers on Loconomics earn X more than on Wagg. That works better than telling them they are being taken advantage of.

That definitely sounds like a stronger message. So, what are your goals further ahead — where do you hope to see Loconomics in the near and medium term?

Joshua Danielson: First goal is to reach financial sustainability, and that we can achieve with 2,000 member service professionals. That would give resources to hire staff, and ability to scale and build partnerships across the world. Scaling helps everybody through increased bargaining power and network effects.

Kyra Harrington: It’s about helping each other versus fighting each other for business. The co-op element allows members to get to know each other — and you are more likely to refer your clients to others via a trusted referral network. Loconomics also allows members to market their services collectively versus paying a platform to compete against each other.

Joshua Danielson: The power of the marketplace is that you can book different services with Loconomics. You might first find your dog walker, but when you are also looking for a massage, you can find that on Loconomics too. It’s another value proposition to any service professional: They’re likely to get clients from other professionals. Our cooperative business model lends itself to members helping each other in ways that other platforms cannot.

It may have taken longer than I thought it would, but we’re excited to get to that point. The financials back it up, and there’s a place for Loconomics in the market. We need to reach a critical mass to get the ball rolling faster, so we’d love for people to check us out and refer professionals who could benefit from the power of a co-op. We’re committed to reducing wealth inequality, and we feel ownership is the way to do that — ownership over the tools you use and the way that you access work.

Nithin Coca: I’d also love to hear more about your new partnership with California Community Colleges?

Joshua Danielson: Under the Doing What Matters for Jobs and the Economy Small Business Sector program, twenty-four colleges are participating in a Self-employment Pathways in the Gig Economy project starting February 2018. Students will create job listings as part of this program, and Loconomics will assist them in finding work opportunities, tracking their earnings, and supporting them in transitioning into the independent workforce as small business owners. This group of students is going to be introduced to cooperative platform ownership as an alternative to traditional gig economy platforms.

This Q&A has been edited for length and clarity. Header image courtesy of Loconomics. 

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Kevin Stark: It’s easy to group all enterprises that promote “sharing” into a single category. New technology has made it much easier for people to share almost everything — cars, houses, work spaces, just to name a few. There’s really no shortage of ways that people can pool resources. But there’s a huge difference in the goals between for-profit sharing economy companies like Uber and Airbnb and nonprofit groups like tool libraries, time banks, and makerspaces. Juliet Schor, professor at the sociology department at Boston College, explores this tension between for-profit and nonprofit sharing groups. Schor has carefully outlined her findings in her prolific writings on the subject.

In one paper, she interviewed dozens of young people that were using for-profit sharing companies to determine their motivations for using the service. For starters, she argues that for-profit companies like Uber and Airbnb are contributing to inequality in America (also a subject that Schor has written about). But what else is different? Are users motivated by different things? Class or demographic distinctions? How has the economy shaped modern sharing organizations and vice versa? Here’s an excerpt from our conversation:

Kevin Stark: One argument for the for-profit sharing companies like Uber is that they provide a frictionless way for people to find work.

Juliet Schor: The on ramp to earn on one of these platforms is easy compared to other kinds of jobs. Our interviewees report that they can get on these platforms even if they have criminal records, which bar them from other types of employment. The other side of it, however, is that just being accepted to earn on these platforms, doesn’t mean that you will get work. TaskRabbit has a very high hourly rate; we have people earning $100-$150 an hour, but you may not be able to get work.

We don’t have the data from the company, but my sense is it is operating like a winner-take-all model. Certain people on the platform are doing well, they have great ratings and they’ve done lots of tasks. They get hired a lot. On Airbnb, you can list your place but we find that your race and education level are related to whether you can get people to book it. People who live in areas with higher rates of non-whites, for examples, are less likely to get bookings. They get lower reviews and lower prices.

You argue that Uber et-al are contributing toward inequality. Who is being crowded out?

This conclusion is not the product of a full economic analysis. It’s from our research which looks at the dynamics at the individual level and extrapolates to what might be happening at the full economy level. In the past, many people would not have been taking up the type of work that they are on platforms. The platforms were originally marketed as cool, technologically advanced, ecologically helpful — they had a discourse of common good.

Many were launched during the recession and attracted a young, highly-educated, white group of people as customers, and more importantly, as earners. What I’ve argued happened is that the platform de-stigmatized blue collar and pink collar work for these people. We are finding people with graduate degrees who are cleaning houses on TaskRabbit or students who are bicycle couriers. They are doing … work that traditionally has been done by people who didn’t have college degrees. Some of them talk about these status questions. This is a very highly educated, relatively privileged group of people, in comparison to the labor force that has done this type of work in the past.

Do you think that that’s derived from the incentive for the companies to make money or how they are designed, or a reflection of our society and access?

The larger context is the economy. The growth of inequality in this country started as more of an 80 percent and 20 percent phenomenon. My story is about inequality within the bottom 80 percent. What’s happening is that when you have problems of wage stagnation or high debt for young people, education debt, lack of economic opportunity, lack of good full time jobs with upper mobility, then these college educated young people, are facing less opportunity relative to comparable people in the past. That puts them in a situation where they are trying to get more opportunity, to better their situation.

The companies come along and offer them something that makes sense to them, that’s not too at odds with their status identities. So, to answer your question, it’s really both. I do think the larger economic trend of the shrinking middle class, declining mobility, wage stagnation, growing under and unemployment, all those well-known trends are important for understanding how these platforms came into the market. They came in during the depths of the recession. It is very favorable for companies that want to hire people. They will get more highly qualified people without having to pay the extra money. It is a cascade affect in bad economic times. Everyone gets pushed down, but it is like a ladder. The ones at the bottom get slammed. It goes in the other direction. When things improve and the labor market gets tight, people can move up.

There are the for-profits that we’ve talked about, but also the nonprofits — seed banks, time-banks, makerspaces. What’s the distinction?

In our research, we started by studying nonprofit sharing initiatives, such as a time bank, a maker space, a food swap, and what we call open-learning, free online educational resources. The nonprofits generally start with an idea about creating an alternative kind of exchange or market or set of social practices. We found that people participate or sign up for these spaces because they are ideologically aligned with them.

With the time bank, for example, they think it’s a great idea that everyone’s time is valued equally and that, they can barter services. But many of the people don’t need bartered services, so they treat the time bank like it’s volunteering. They give stuff to people, but they don’t necessarily cash in their balance. In practice, they don’t like the idea that what they are offering is only worth as much as other people. Some of them are solo practitioners of massage therapy or yoga teachers or whatever. The time bank has a $10-15 an hour economy for generally available skills like driving or walking a dog. But a yoga teacher or a massage teacher is more likely to charge $75 or $80. The time bank didn’t work out so well because there were divergent valuations and the idea that everyone’s time being equal is such a big jump from the market where there’s a large inequality in how people’s time is valued. There was also class prejudice, where people would reject those with poor grammar or a bad website. On the one hand, people know they are going to an amateur market, but on the other they want something more professional.

One of your organizing lines seems to be built around the idea of public benefit, and you write that sharing platforms can also function in the “public good.” What about at the scale of Uber or Airbnb?

A lot of the nonprofits, the scale wouldn’t work. They are designed to be local. Some are for face-to-face services, like a time bank. On the other hand, there could be an app that just gives you local options, as, on Uber it just gives you all the cars around you. You could do something like that with a timebank. But you would have to allow for local conditions. Here’s another point about nonprofit efforts that have been made for general labor service platforms, like Loconomics, which aims to be a general labor platform or a pilot program in the U.K. where a municipality launched a labor services platform.

The idea was that people who needed stuff done could hire people with spare time — a kind of nonprofit TaskRabbit. There are two issues: If you have imbalance in the market — which we do, with a weak labor market, it will be hard for the platform to work. TaskRabbit can do it because they have an algorithm that privileges certain people. But a nonprofit doesn’t want to function that way. You don’t want an algorithm where a few people get tasks. The other thing is that with general labor service platform you can’t tailor to the specific needs of types of labor. The one-size-fits all market does not work very well.

Your critique of Andrew Yarrow’s “Thrift” — that he didn’t dig deep enough to understand what the thrift movement meant to its participants. What’s motivating users of Uber and Airbnb, and is that different from, say, a tool lending library user?

With the nonprofits, people are motivated by several common good claims. One is ecological. People think that these are lower-footprint way of doing things. The second is social, either to have social connection or in cases like a time bank, a critique of inequality. That’s important to people. Then there is the critique of the big impersonal corporation, and a preference for the local and the face-to-face and the personalized. There’s almost an aesthetic dimension to that. That’s been important for a lot of people in both types of platforms. You also see this on some of the for-profit platforms, for example, with choosing Airbnb rather than a hotel chain.

That’s a major motivation we’ve found. With the food swap, there is a critique of the industrial food system. With the for-profits, the number one motive is money, although, these other things also come into play. On Airbnb people think that it is reducing eco-footprints because fewer hotels are being built (they don’t think about how people are traveling more because of Airbnb). And there’s another aspect for the people who are earners on the platforms, which is that they don’t want nine-to-five jobs and want a certain amount of autonomy or flexibility. Maybe they have other careers or obligations. They aren’t nine-to-five people. This is another set of motives around autonomy and flexibility.

Header photo by Yoel J Gonzalez via Unsplash

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“All emotion is involuntary when genuine,” said Mark Twain.

For anyone starting a co-op, this rings true—even more than the first cooperative principle of “voluntary and open membership.”

Co-ops self-organize out of desperation and determination. With emotions running high, and without access to venture capital, co-op organizers romanticize crowdfunding as a digital barn-raiser.

Intuitively, this makes sense: we want to build a beloved community, not tap people out.

In practice, most co-ops struggle with crowdfunding. Very few campaigns lead to what Arlie Hochschild’s The Managed Heart calls “deep acting,” our genuine emotions at work. Instead, organizers fall back on “surface acting,” the kind of behaviour associated with fake smiles and guilt parties. They often strain volunteers, stress supporters, and fail at their goals.

Marketing has skewed our view of crowdfunding by influencing how we think and feel about community.

What does “community” really mean here? Community is collective action with a shared story. We join clubs and co-ops that offer material benefits — things that matter to us on a daily basis—and we stay because of solidarity with our peers and a purpose we can achieve together. The more we act collectively, the more we strengthen these incentives.

Incorporating as a co-op is a long way from building community. There’s a grain of truth to idea that co-ops are the original crowdfunding, yet people experience them in our organizing and campaigns, not the bylaws or business plans we might be tempted to show them.

We can’t extract generosity through crowdfunding—that’s what marketing tries to do in platform capitalism. Instead, we must form relationships rooted in reciprocity.

I learned these lessons last year, when I partnered with Loconomics to grow their membership and crowdfund their platform.

On paper, Loconomics had a beautiful model: a local services co-op owned by the freelancers doing the work. The user-owners get tools for booking clients, a growing marketplace, and a dividend based on the co-op’s performance. But the appeal of joining a co-op needed as much validation as the platform itself.

To research freelancer needs, I interviewed a representative group of a dozen local service providers—some with their own client base, others taking odd jobs on platforms like TaskRabbit. Nobody felt misinformed, much less exploited, with what they get through on-demand service platforms. However, everone craved the feeling of belonging to something bigger. A part-time plumber with a philosophy degree described the ideal as “less a client base, more a partner base”—in other words, a co-op. But, would anyone pay to join one?

People will give endless feedback on ideas, but only commit if they see value. A sure way to make this shift is through opportunities for people to test a prototype and express their emotions.

Emotions on the Internet

For anyone who has run a crowdfunding campaign, mobilizing genuine emotion can sound like difficult, draining work.

After working in dozens of campaigns, I’ve seen a tension play out between crowdfunding and membership. Crowdfunding is a one-off moment of collection action, but when the projects that we care for also take care of us, people come together and stay together.

How might we reinvent crowdfunding campaigns so collective action continues?

It’s tempting to search for answers on the Internet. But before going online, consider the case of a real-life forest:

Neera M. Singh, author of a 2013 forest conservation study in Odisha, India, found a region that challenges the logic of paying individuals to manage resources as market goods. She observed how villagers harvest only what food and wood they need from the forest, and sing songs celebrating its cool breeze, too. Singh concluded that community stewardship sustains thousands of villages because people organize their labor both effectively—forming accountable relationships around their work, and affectively—developing shared identity in the process.

The story of stewardship in Odisha shows another side of crowdfunding and collective action. While starting a project might depend on pooling financial contributions, sustaining it requires emotional investment.

How do emotions look in Internet marketing? Query your favorite search engine for “women laughing alone with salad,” and you’ll see a cliché used to evoke health and happiness.

I suggest taking a look if you haven’t recently—partly because it’s hard not to laugh at the fake emotions, but mainly because a similar caricature shows up in how on-demand service platforms market themselves. TaskRabbit, for example, portrays images of smiling helpers cleaning kitchens while women hold babies. Unlike stock photos, however, we meet TaskRabbit in real life.

Source: TaskRabbit please don’t sue me

Their marketing may be full of clichés, but on-demand service platforms are full of opportunities to become emotionally invested.

Platforms like TaskRabbit leverage our emotional investment to grow their user base. Their user experience is designed to delight us, especially at key moments around transactions. When interacting with a chef, host, or any service provider who loves their job/gig, we enjoy acts of kindness that have little to do with rating systems. But platforms do not support self-organizing. Instead they leverage community activity to increase user engagement, and resist attempts to leave. TaskRabbit charges a $500 finder’s fee to move consumer-provider relationship off of its platform.

This is the norm in platform capitalism: products extract value from transactions for outside investors. The platforms connect us to resources more than they operate as a resource themselves or a place to gather. In this context, our emotions are more like “laughing alone with salad” and less like singing together in Odisha’s forests.

The real issue with emotions lies with the conditions in which they are extracted. Emotions on the Internet can be better understood with Hochschild’s theory of “emotional labor,” which describes how we adapt our emotional expressions in deep and superficial ways to align with workplace rules. While Singh found villagers laboring happily, defying market logic, Hochschild argued more than 30 years ago that emotions get commodified in a capitalist service economy.

Looking at how emotions change over time, however, shows how people become invested. Beth Hoffman, in a 2015 study of worker co-ops, found that embracing emotion ultimately benefits democratic participation. How? As individuals get comfortable expressing themselves, they develop an identity as co-owners. Hoffman quotes someone from Organix Co-op describing the freedom to be sincerely happy:

If something is great, I say so. If I think everyone is working well, I tell people around me that. Here, I’m free to be enthusiastic. I can get pumped up about the co-op, and it’s not nerdy, or sucking up. Hell, there’s no owner to suck up to. I’m the owner! So I’m not sucking up; I can just tell everyone when things are going great!

Emotional labor in co-ops can undo habits formed in extractive contexts, to the point where co-owners feel like their coworkers and workplace are like “family” and “home.” An office worker at Chemical Cooperative says how:

Where I worked before is a lot worse, a lot worse. Because people there were, spending a lot of time protecting themselves in writing and defending their position… It’s not at all like that here. But it takes some getting used the fact that you can be yourself here. Like you can take your shoes off when you get home.

Such transformative, humanizing experiences in co-ops contrast with how we relate to one another through one-off moments in Internet marketing. It’s also the kind of place where emotional investment grows into stewardship.

Barn-raisers for Stewardship

Happily, my partnership with Loconomics concluded with them focusing on community before launching a product.

To see what invitation attracts people most, they swapped their full website for a simple sign-up page. And to learn about user experience, they welcomed service providers and clients to events where they could try the app, volunteer, or become owners. Getting together finally made it possible to experience what a community might feel like—a celebration.

At a minimum, community is a shared feeling of belonging. These feelings well up when people come together, through book clubs and parties, and they evaporate when the organization shuts down, puts up a pay-wall, or simply has a change of heart. Such precariousness is hidden, however, when a platform manages to balance user satisfaction and extraction.

Building community through crowdfunding plays out in a similar way. It starts with a goal of mobilizing contributions from many individuals. With enough incentives and excitement, the possibility of passing a funding threshold triggers collective action. This usually happens only once. And if a project does get funded, any future collective action depends on whoever owns and controls the value created. Without emotional investment in a cooperative arrangement, campaigns run the risk of ruining relationships over unmet expectations.

Marketing strategies extract generosity and resources by developing an audience, message, and call-to-action, like guilt parties where people leverage relationships unfairly.

For crowdfunding to become stewardship, we need rolling barn-raisers—activities for guests to co-create with their gifts, celebrate their accomplishments, and build again.

A barn-raiser is an organizing strategy for a cooperative alternative that involves people, invitation, and engagement (think P-I-E):

1. Connect with people. Audiences are passive, but people put emotions at the core of cooperation. Learn who might join the effort, and what they’re trying to get done.
2. Make an invitation. Messages are static, but invitations cultivate voluntary and open membership. Define what you want to celebrate, together—in-person and/or online.
3. Sustain engagement. A call-to-action limits inputs, but engagement supports democratic ownership and control. Seek participation more than financial contributions.

By starting small and learning as they go, barn-raisers can “grow the pie” for co-ops. Organizing a crowdfunding campaign can follow the same steps.

This is how a crowdfunding becomes stewardship: raising expectations, embracing the challenge, and sharing the value as community grows.

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