Duncan McCann: 

Platforms – like Uber, Deliveroo, or TaskRabbit – connect services and products with consumers. With both sides theoretically having control over the interaction, and investing in the platform to reap the rewards, the rapid spread of platforms has the potential to revolutionise capitalism. But increasing concerns over the past few years around tech monopolies and the potential erosion of workers’ rights through the gig economy have raised questions over who really holds control over the platforms, and what impact this has on workers and customers.

Platform co-operatives present a possible alternative to traditional platforms which tend towards monopoly, concentrate power and erode workers’ rights. Drawing on a cooperative lineage which spreads out ownership and control, platform co-operatives could present a brighter future. But there are barriers to the spread of platform co-ops, including challenges of raising capital, finding the right skills within the organisation, competing with Silicon Valley, and harnessing positive network effects.

This is the second of two reports exploring the potential for platform co-ops, drawing on work we undertook with support from NESTA’s ShareLab fund. The previous report, A Better Gig? focused on the concerns of both drivers and passengers engaging in the private hire gig economy in West Yorkshire, and suggested that platform co-ops could go some way to remedying these. This paper draws on these lessons to set out the main challenges to setting up platform co-ops, and suggest ways of overcoming them.

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Through our own research, and in particular through observing the development of a new ride-hailing app started by drivers in South Yorkshire, we have identified five areas of challenge for platform co-operatives. Firstly, platform co-ops are not attractive to traditional venture capitalists and tech investors. Platform co-ops can utilise other sources of capital (crowdfunding, co-operative banks and credit unions, or blockchain and alternative currencies) but will still never be able to match the billions raised in Silicon Valley. Secondly, co-operatives must commit long-term operational and financial commitment to building and maintaining their technology. Thirdly, coops need technology which can enable it to recruit drivers and passengers in parallel, and to distribute the profits of the business. Fourth, platform co-ops must find a way of subsidising their early entry into the market in order to build a profile for themselves. And fifth, platform co-ops must find a way to harness the virtuous cycle of positive network effects.

These challenges are difficult for platform co-operatives to overcome. In the ridehailing sector, we posit that co-operatives can be most successful in either focusing on a large city-scale project, or creating a network of federated co-ops to overcome some of the challenges. In other sectors, like cleaning and social care, the less complex tech demands mean that platform co-ops can make more of an impact. As well as developing alternative market interventions, we need to tackle the dominance of existing platforms.

We are at a crossroads. Traditional platforms seemed invincible until very recently, but regulatory battles and consumer action are changing the platform landscape. Platform cooperatives can be part of building a more equitable vision of the future. But small businesses cannot do it alone.

1. We provide a series of recommendations to make platform co-operatives viable.
2. We need new funding structures that can provide alternatives to the venture capital funding model.
3. New platform co-ops must collaborate with each other and, where appropriate, form federated structures.
4. Workers should be provided with the necessary skills training and support to establish their own co-operatives.
5. Locally-focused commissioning from the public sector could provide a vital revenue stream to platform co-operatives.
6. Government must enforce existing regulation robustly to ensure a level playing field for new platform co-ops.
7. Users and consumers need to understand the impact of spending their time and money on established platforms, and be given opportunities to spend their money on ethical alternatives.

The structural challenges outlined in this report offer some of the answers as to why we have not seen more platform co-ops emerge and flourish. Platform co-ops offer us hope that we can harness the benefits of digital platforms without the harms that many of the current ones create. But their creation will require both continued experimentation and the support of policy makers both to enforce existing regulations on platforms, and create new support structures. Only by working together can we hope to create a digital economy that truly works for everyone.

Photo by the meanMRmustard

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While Ostrom’s work revealed that legal relations governing resources invisibly structure the commons, what those legal relations in fact reveal is our social and economic relations about resources: Who makes what? How much of what? And who gets what?

In the commons, the answers to these questions are embedded in a social logic according to community norms and values. In market societies, the source of these answers are to be found in the non-social economic logic of capitalism. The catalyst for this non-social economic logic, according to social theorists like Karl Polanyi and others, was the separation of people from their means of subsistence through the enclosure of the commons: throwing people off their land, separating them from the basics of life — food, water, and shelter — and charging rent for access. In the feudal commons, access to the means of subsistence was guaranteed by one’s inclusion and social status in a community and territory. In the transition to market economies, one’s subsistence became a matter of one’s ability to pay rent and/or labor for a wage. This new system unleashed a logic of competition for productive land and work, the accumulation of capital to reinvest into labor and time saving technologies, and the expansion of instrumental relations and commodification into every space and sphere of life.

As Polanyi said: “Instead of economy being embedded in social relations, social relations are embedded in the economic system.” Or to put it simply, instead of profit serving the needs of people, people came to serve the needs of profit. Polanyi’s optimistic outlook was that through property, welfare and finance regulation — through law — the market could be embedded once again to serve human and social purposes.

So, from this perspective, law is a tool for lawyers, judges, legislators, and most importantly citizens, to wield against the market, to combat the inequities that it produces in its unfettered wake-both top down and bottom up. And law can be utilized beyond property, welfare, and finance law to other domains. Law can be used towards decommodifying our means of subsistence by guaranteeing access to fundamental resources that are crucial to human life, both top down, by naming things like healthcare, education, and housing (just to name a few) as a right, to which access should be guaranteed, but also from the bottom up, by changing the structure of property and contract entitlements, for instance to allow for simultaneous use of shared resources, and curb unrestricted transfer rights. Law can also be used to reorganize work away from wage labor and towards workers’ ownership, by enacting through legislation the recognition of new legal entities like the Cooperative Corporation or the B Corporation that place non-market values at their center, or bottom up through the creation of workers cooperatives (a rapidly growing movement throughout the world). Law can also be used to alter the structure of intellectual property rights in ways that encourage sharing, collaboration, and innovation, top down by policymakers refusing to create certain kinds of property rights in these resources, but also bottom up through legal innovation and resistance through individuals adopting the Creative Commons license or “copyleft” policy over other proprietary forms of copyright.

In this new series on Shareable, “Law: The invisible architecture of the commons,” we will showcase new and emerging legal institutions that offer an alternative system of incentives for encouraging cooperation, sharing, and sustainability. These legal institutions demonstrate how citizens, working together with lawyers and policymakers, can successfully design legal institutions for themselves to decommodify our access to fundamental resources, alter the wage labor relationship through new types of legal entities, and create new ways of stimulating ownership, innovation, and collaboration around knowledge goods.

Cross-posted from Shareable

Photo by Sinéad McKeown

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Description

“Sharing economy and urban commons are inherently intertwined. New technologies and business models for the production and consumption of goods and services are rapidly transforming cities across the world in many ways: carsharing, ridesharing, short-term rentals, shared housing and workspaces. These not only put into question how urban transportation and tourist accommodation are planned, but also disrupt traditional local services, influence housing affordability and redesigning city spaces, thus often making existing local rules obsolete. These profound changes raise many issues. What kind of city is molded by peer-to-peer activities? Is a sharing economy the way to a commons-based urban economy? And what kind of rules are required, if any?

This paper aims at examining the delicate relationship between a sharing economy and urban commons and investigating how regulation can affect it. While part of the current debate is sometimes polarized between devotees and decriers of peer-to-peer economic activities, many observers emphasize their multifaceted effects. New technologies are potentially powerful tools for sustainable economic models based on genuine sharing and cooperation, permitting optimum use of existing resources and reinforcing social networks. However, many of these phenomena are characterized by conflicting tendencies. Elinor Ostrom’s empirical findings about the design principles that can lead towards a successful common regime give a great importance to the existence of rules in accordance with local circumstances and to a participative decision process. Assuming the wide variety of peer-to-peer economic models and the significant differences from city to city, we should appreciate, on a case-by-case basis, how these practices impact on local economic growth, democratize access to goods and services, foster sustainable urban development, influence the urban environment and impact on job creation and labor conditions, and we should identify the distributive consequences on the city and its inhabitants (underserved neighborhoods, people with disabilities, low-income communities). On that note, in order to instigate a truly commonsbased urban economy it is critical to identify pros and cons of these practices in a given milieu and to generate distinct strategies accordingly, resisting any temptation of “one-size-fits-all” solutions.”

Full article available here.

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The phony corporate “sharing economy” is not a sharing economy at all, but a walled garden economy in which corporations use proprietary apps to interpose themselves between drivers and riders, hosts and guests, etc., and extract a surplus for allowing them to connect with each other. A lot of people in the peer-to-peer and cooperative movements have argued that the proper response to companies like Uber and Lyft is not to restore the medallion cab monopolies and the local regulatory cartels they depend on, but to take competition one step further and destroy the legal monopolies the business model of the corporate “ride-sharing” services depends on.

The idea is to undermine the monopolies of companies like Uber, Lyft, Airbnb and the like with a genuinely cooperative, horizontal and P2P model directly controlled by the users themselves, and cut out the corporate middleman altogether. Advocates for this model have coined the term “Platform Cooperativism” for it (if you search the #PlatformCooperativism hashtag on Twitter, you’ll find links to a lot of great articles on it).

You can even take it a step further and attack Uber, Lyft and their ilk from within by jailbreaking their apps or subverting their workforces. From what I hear it’s fairly common for Uber and Lyft drivers, fed up with the exploitative nature of their relationship to the company, to quietly pass their personal business card along to trusted customers and make future private arrangements that cut the company out of the deal. Of course that no doubt violates all kinds of “non-competition clauses,” but as far as I’m concerned Uber and Lyft can put that on their TS list.

And that’s exactly the kind of thing a lot of Austin drivers and riders are doing, now that Uber and Lyft have withdrawn from the local market. According to Tuccille,

“in the wake of a ‘victory’ for pro-regulation forces, there’s been a big surge in completely unregulated rides arranged by word of mouth, through closed social media groups, and through peer-to-peer services. On Facebook, Austin Underground Ride (currently around 6,500 members) urges former Uber and Lyft drivers to join. ‘You can post your availability and info on this page and continue making the money you need to feed your families and pay your bills. Riders can post here their needs for a ride as well. We don’t need anyone. We can make our own deals as people and take care of ourselves.’”

Open-source apps like Arcade City are also making increased headway in Austin since the referendum. In other words, actual ride-sharing — the kind of genuine P2P model that should have supplanted the medallion cabs in the first place — is the biggest growth industry in Austin. And the city government and local voters, deliberately and inadvertently (respectively) doing the bidding of the medallion cab companies, are responsible for bringing it about. By outlawing the fake, hybridized form of “ride-sharing,” they opened up an ecological niche for the real thing.

Government attempts to regulate industry are almost always motivated by the interests of the regulated industry itself. But with governments and corporations being the stupid things that they are, sometimes their plans backfire.

Photo by Storeyland

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