Republished from Grassroots Economic Organizing (GEO).

Nic Wistreich: Uberfication has become shorthand for many new concepts—from the sharing economy to any significantly disruptive digital business model. But what exactly did Uber do that was materially different to earlier disruptive digital businesses? In short:

• It created software…

• To replace existing industry-wide operational structures…

• That created huge cost and efficiency savings at the supply end (by removing human operators and taxi stands)…

• And created significant user-experience benefits at the delivery end (by providing an interface and fixed fee structure)…

• Which together has allowed the company to rapidly scale globally, threatening traditional taxi companies in every territory in which it operates.

Of course, the question remains, why is Uber not a coop? In principle, it would be the perfect model for a worker coop: a piece of software owned by drivers around the world that helped them do their work better with the costs and surplus or profits shared. In reality, it required the high-risk VC (Venture Capital) environment to finance and build such an innovative and disruptive piece of software. Public agencies, NGOs, social enterprises and coops do not have a strong track record building innovative technology. Even the great and successful collaboratively made pieces of technology—from within the open source community—are regularly criticised for not having a great user interface. Open source exceptions to this, such as WordPress, are run as private, profit-making companies.

The coop version of Uber will surely inevitably come, but at such a pace that when it does, Uber may have Facebook-levels of market saturation, and be midway through being hardwired into bus stops and taxi ranks the world over. Before looking at the cultural approaches that set successful digital businesses and services apart, it’s worth considering what exactly Uberfication could mean in the context of cooperatives, and why it’s of increasing social urgency that future Ubers are owned by the people who are governed by them —be that workers or consumers.

The digital boss

While computers have been used in management for decades, they have typically been one of two types: perhaps easiest categorised as either communication or alert. Communication-type machine management is where a manager creates a task on a system and assigns it, maybe on a space where people can leave comments. Perhaps there are a bunch of open tasks, such as on O-Desk or a Github bug list you can chose from, or perhaps you are assigned the task. Perhaps it tracks your time, calculates the cost, and takes a snapshot of your screen every ten seconds to make sure you’re not on Twitter – but in principle it’s just a machine streamlining the process of communicating (and recording) instructions. Alerts are similar but automated: for instance ‘the printer is out of paper’, or ‘the hydroelectric dam is about to collapse if you don’t open a sluice gate’. It’s communication, but the manager in this instance is a sensor of some sort, and it’s doing a job that a human probably can’t even do.

Interface machine management, as used by Uber, is a shade different because it acts as an interpreterbetween consumer and worker. The consumer creates a command, ‘I want a lift’, and the machine reinterprets that into instructions for workers, who compete to do the task. Finally, the consumer takes on the role of manager, writing the worker’s job assessment and inadvertently helping collectively decide how likely the driver is to stay in the job or not.

So humans are still vital. But the machine has become line manager, while the consumer has become empowered by the machine to have the final signoff, irrespective of their expertise. This fits within a ‘customer is always right’ sort of business, but less so in one full of drunk people arguing with taxi drivers about the quickest way home.

Putting aside such a disempowerment of the worker to the benefit of the consumer—we live under capitalism after all—the more concerning aspect is the massive empowerment of the machine in the process. Ultimately the software is answerable only to the management of Uber—not to the workers or even the consumers—i.e. the software is not answerable to any humans who are directly involved in each transaction.

It will always be part of the company’s legal obligations to their shareholders to keep maximising possible profit, regardless of the consequences to the humans involved. Although this is nothing new, traditionally that hard edge has been softened by the natural compassion of the people involved, capable of using judgement (“Your partner is in the hospital? Please take the rest of the evening off”). When the machine is our boss, and that machine is programmed solely to serve shareholder interests, there is less hope for compassion as that’s a programming cost with little economic benefit (so we’d get the review: “driver was quiet and moody, tried to tell me their life story, would NOT recommend”).

To conclude: The promised disintermediation of management structures – with web 2’s End of the Middleman potentially becoming Web 3’s End of the Middle Manager – will empower machines and software over the worker and consumer to unimaginable levels. Where those pieces of software are designed to serve solely a CEO’s corporate responsibility to maximise returns for shareholders, this empowerment offers considerable social, health and environmental risks, and at a speed of growth that will outpace lawmakers. However, if the software is answerable instead to the workers (and perhaps consumers) it manages and serves, then the considerable efficiencies, user-experience, and flexible working benefits that this shift could bring could be cause for a certain level of hope.

A cooperative rethink

As has been demonstrated by the Amazon workers sprinting around warehouses trying not to lose their jobs by meeting their numerical targets, machine-led human management feels like the harbinger of a dystopian sci-fi nightmare, somewhere between Terminator and Modern Times. A natural response might be : “such systems must be resisted, and the only answer must be to avoid them, boycott them or legislate against them”, a bit like some politicians’ understandable – if deluded – desire to outlaw any form of encryption.

But what if taxi software had been written with priorities other than maximising profits, growth and shareholder satisfaction—and instead a set of social values:

• Personal. Prioritising driver mental and physical health in a job that traditionally sees high levels of heart attacks because so much time is spent sitting down, while providing a secure level of income with flexible working hours.

• Social. By training drivers in basic first aid and intervention, to empower them to help, or get help, for vulnerable people on the street, and potentially act as first-movers to anyone in distress or needing a quick exit.

• Environmental. To reduce the number of cars on the road by a certain percent through car-pooling and lift sharing (experiments show reduced congestion by some 50%).

This fits into the model of win-win-win (W3?) enterprise where the personal, collective and planetary benefits each more than offset any social, individual or environmental costs. It also fits comfortably with the social values embedded within much of the cooperative world.

Cooperatives offer a further benefit unique to this culture shift of empowered machines. If software is to become the worker’s direct line-manager, then by letting the worker in turn be the machine’s line-manager a positive feedback loop can be created where bugs, injustices and problems within the software can be ironed out—in a humane, worker- and person-centric way.

But how does something like this get created without the VC support that backs startups and pushes them through rigorous development to be launch ready, then through rapid growth and into IPO? While there are countless open source projects proposing enviro-social benefits (from the Fairphone to Precious Plastic, many struggle to raise the capital and scale sufficiently to offer a convincing alternative to mainstream approaches.

So if there is one question to answer, it is not whether uberfication of the majority of industries is increasing (it seems to be), or whether worker- and user-owned coops can offer a more socially responsible and humane counter to this model (of course they do)… it’s how to finance and build software that can rival shareholder-owned, VC and IPO-driven alternatives.

Engineering better online cooperation

It would be over-ambitious in this article to offer a single proposal to solving that challenge. Indeed, the act of answering that question may need to take the form of some engaged form of doing, i.e. only in trying to build such coops may the pitfalls and perils be understood and resolved.

There’s a considerable and demonstrable demand for better digital tools to support traditional coops…

There’s a secondary issue: as well as creating a new environment and techno-legal structures to facilitate digital-cooperative-Ubers, YouTubes or Facebooks, there’s a considerable and demonstrable demand for better digital tools to support traditional coops with everything from fundraising, transparency, communication, management and decision making. While this is a much different set of needs, the spectrum of digital tools around coops needs to encompass that which can support the 100,000 member ‘legacy’ coop, the small vegetable shop that wants to integrate their checkout system with their membership system, and the new Uber that wants every account holder to be a shareholder.

Rather than trying to solve all these problems at once, a sensible approach might be to create the environment for multiple people and coops to start trying to solve different parts of these problems at the same time—collaborating and sharing code, costs, information or ideas where it is useful, and trusting that the outcomes will start to materialise when sufficient numbers of smart people are resourced and networked together to try and tackle some of these problems. In other words, for there to be an incubator, with a core set of requirements, a guiding vision and core projects and APIs, but sufficient room for a range of outcomes and approaches to emerge in parallel.

This approach may help cover some of the main cultural and structural questions:

• The agile and lean startup, typically driven by headstrong individuals with a small team, vs the democratic, board-accountable and sometimes bulky large coop or public body. Greater scale typically means a slower process and more inefficiency and greater democracy can increase those tendencies (or seem to).

• Full democratic open source, where anyone can submit code or fork, as in Linux, vs the (benevolent) dictatorship management model of Apple, where user-journey and experience is put ahead of any other considerations; the two extremes of software development practice as we currently know it

• Following from this, the choice between a platform that is focused, elegant and easy to use, vs one that can serve all the different needs many different coops might have.

• And, perhaps most key, whether to build on the work of those who have gone before or to start from scratch? In other words, CiviCRM has the advantage that it works across Drupal, Joomla and WordPress – it’s free, open source and has a large active community of developers and users and countless extensions for different needs from Direct Debit to HR Management. But it’s large, demanding, sometimes problematic, and if built from scratch today would have a much different and lighter architecture.

These four questions represent a version of the age old tension between the conservative and radical, the orthodox and innovative. It may be helpful to keep that tension (aka Woody vs Buzz Lightyear) as an operating condition rather than choosing one side, but to ensure that tension fuels serious, positive and responsible innovation, rather than keeping it forever trapped at committee stage or plunging into rapid innovation without considering the wider socio-enviro-personal impacts. Either way, it’s likely the solutions will be found in the doing.

Photo by timlewisnm

The post Can Cooperatives Build Better Online Tools to Disrupt the Disrupters? appeared first on P2P Foundation.

That’s no exaggeration or any hypothetical. Its as real as it gets with numbers, with actual people and small businesses to prove it.

In the past two decades, Open Source has become an immense ecosystem which empowers its participants and liberates them from their constraints in all respects – not only from proprietary, controlled platforms but also especially financially.

Let’s examine how big has Open Source become first, and then look into how people are making money in a sharing economy.

A wide, wide world

Today, Open Source now has many business models to make money and develop in sustainable fashion. You are not obliged to await donations anymore. One of the many Open Source business models will surely fit your application and your future vision about your business.

To top that, the Open Source ecosystem is now huge. It became so huge that its not far off to say that it is practically the entirety of Internet. From server infrastructure to application space, Open Source has become the new norm of I.T.

The choice for OS for servers is today Linux. Not only tech giants like Google run their applications on Linux server farms, but also Linux is de facto OS practically in all datacenters/hosting corporations which provide Internet space to end-users. You will be hard pressed to find a IIS host today.

Linux has even gotten into devices – leave aside handheld devices in which Linux based OSes became ubiquitous – Linux is being used in many more places ranging from Smart TVs to Home Routers as well.

What’s even more stunning, an entire ~80% of Websites/applications on Internet run on Open Source PHP, ~20% of all websites on Internet are on WordPress, and ~20% of Ecommerce websites are built with one single plugin for WordPress, WooCommerce. WordPress uses GPLv3, which is even more hardcore copyleft than GPL.

Real people making real money in a huge ecosystem

Even without talking about the Ecommerce/Business conducted on WordPress platform, solely the WordPress ecosystem of Themes, Plugins, Services sports over $1 billion dollar market by itself.

540M Active Plugins Makes WordPress a Billion Dollar Market

Together with Themes, it becomes a massive ecosystem:

Just How Big is WordPress Exactly?;

And this is actual cold hard cash – not valuations or estimates, with no investors, no financial schemes. And majority of those who are making money are single programmers, working alone solely on WordPress:

2014 in review – Pippins Plugins;

Pippin Williams, a lone programmer who just recently took on a few team members, made over $700,000 in revenue in 2014. Majority of this money is profit, and it is cold hard cash. A year earlier he broke the $300,000 revenue mark alone. And he did that with only 50,000 active installations of his plugin, Easy Digital Downloads.;

Small software corporations which produce WordPress themes are making multi-million dollars every year.

Leading Premium WordPress Theme Providers Compared;

Whereas WPMU Dev, as a major Plugin development company, is on par.

How Real Businesses Are Making Very Real Money Using WordPress? and the Numbers to Prove It

As easily demonstrated above, Open Source is doing whoop-ass amounts of cash for its developers, and users are quite, quite happy. No programmer in no institution can imagine what Pippin did, by single handedly reaching $700,000 in revenues from tens of thousands of direct-user customers and have a thriving software business – not in Google, not anywhere in Silicon Valley, not in Academia. Yeah, if you are very lucky, you may come up with a ground-breaking piece of software and then get some investors to pay you some good hard cash, but as what you can understand from the trend in current venture capital business, it will either take ~10 years to get there, if you ever get there at all. You won’t get there working for Apple, for sure. The catch here is that there are many like Pippin, even though not everyone makes $700,000/year.

But how does this work? Which business model?

Taking WordPress as an example, its mainly SaaS, with variations:

You can give away your software free, and charge for premium version and its updates.

Many small WordPress businesses use this format. It works pretty well. Free version is posted on WordPress org, and this ends up being advertising/distribution for free. You get thousands of users, whereas a decent percentage of them convert into Premium users because they want specialized/professional features that are required for their particular activity. The free users create an ecosystem of support and also market the product through word of mouth.

The updates are subscriptions, they are charged generally yearly – so its recurring revenue – not one time sale. The software constantly funds itself.

You can give your software free, and sell addons

Recently this is the most popular – the software is given away free, and many addons exist for specialized purposes. Users customize their installation as they need, allowing them minimum cost and maximum specialized functionality for their purpose. Incidentally the addon revenues become significant – because dozens of addons surpass the value from which you could sell a premium version. And its less bloated as well. You can serve paid and free addons at the same time.

Like Premium version method, the addons are also on a subscription basis, with users paying yearly for updates and new features. Its recurring revenue. This is the method Pippin’s Plugins used with Easy Digital Downloads.

You can give a free plugin which provides a specific SaaS

Like how Automattic’s own Akismet plugin does – the free plugin enables a SaaS service – spam control, accounting, any kind of API, social login – whatever you can imagine.

Naturally it is charged as a subscription, making the revenue recurring.

You will give support service in addition to above

All of the items above will incur support needs. Developers generally provide both community support through forums, and premium priority support. Support revenue becomes considerable – Pippin William’s plugin Easy Digital Downloads sells support subscriptions for $299/year, for example. This is a business oriented plugin, hence the complicated-ness and the high price. But in general in WordPress ecosystem the average support subscription ranges from anywhere in between 1 to 3 months to 1 year, with support price being $45 on average. You can offer $45/month support subscription as well as $45/year support subscription depending on the complexity of your plugin.

Premium services, development

These are no joke either – even with free plugins, a vast range of custom development requests materialize and these can very well supply a small software house with projects for a long time. Surely, for this option to be viable, your plugin needs to be widely used or be a very niche plugin and needs to have a sufficiently complex application. But it happens.

Automattic, the company behind WordPress, provides managed enterprise level WordPress hosting for major names like CNN, Reuters, Forbes, New York Times.

Notable WordPress Users

Moreover, WordPress hosting is a specialized hosting area, with the average monthly hosting fee being around $20 to $45 – much higher than average web hosting industry rates. Many plugin developers offer hosted version of their plugin as well.

Donations and Sponsors

This works if you are big project like Linux. For medium projects it can have some impact, but it is mostly nonexistent when it comes to small scale.

Anything else that you can imagine

There are many more Open Source business models than what we examined here.

The spectrum and amount of activity in a large open source ecosystem are massive. Thus, any way to legally make money from anything you can imagine is legitimate. What is not known not practiced today, is discovered as a method tomorrow – just like how free + paid addon model was virtually unknown until a few pioneers applied it to much success. Tomorrow there will be new models discovered, new methods applied. A lively, thriving ecosystem is something that develops, enlarges and maintains itself. While enlarging, it also creates its own sub-spaces and sub-specializations, like how it happened with WordPress security, hosting, theme development, plugin development, site administration and the like.

Open Source is an ever-developing world which constantly creates new opportunities as people who participate create new things.

As demonstrated, there are multiple ways to make a lot of money with Open Source today, and they work pretty well. As the ecosystem grew in the past decade, the amount of jobs or customers did not decline – they increased. More developers enlarge the ecosystem, which makes it easier for more users to enter the ecosystem and do whatever they want in it. Many Open Source applications spawned an expertise area in themselves, moreover they spawned expertise areas inside themselves – WordPress Theme development, WordPress Plugin development, WordPress hosting, Administration are all their own specialties for example. Its the nature of software – as it grows and becomes more complex, it creates worlds inside itself.

Of course, not every Open Source ecosystem is as large as Linux or WordPress. However, innumerable projects exist, which have sizable ecosystems that create considerable revenue for their developers – ranging from shopping cart applications to CMSes. These developers make as much money as they could make working for any corporate behemoth as a wage slave. And their jobs are not on the line at any given moment like a corporate developer who could be laid off at the whim of any exec or any economic downturn. Throughout economic crisis, the Open Source ecosystems stayed mostly untouched – millions of websites offering immense array of services still needed their software and needed them working in good condition.

So, you can make money with Open Source. And good money, at that.

The post You CAN make a lot of money with Open Source appeared first on P2P Foundation.

Collaborative consumption allows everything from car-sharing to go to work to exchanging hours of language practice, from offering babysitting services to offering hospitality to people who speak other languages or are part of our network of hobbies. It’s all set of demands whose satisfaction is key to weaving social cohesion.

Dozens of centralized platforms have tried to turn these demands into a source of business. The main business model and way of monetizing was the monopolization of the tools to incentivize and facilitate these kind of collaboration and exchange practices and relationships.

If a group of friends or neighbors was looking for a platform to begin to share objects or services, they couldn’t install their own platform, personalize it, and start to respond to demand for exchange. They’d have that resort to one of the centralized services, which means losing their autonomy and control over their relationships. As we know well, centralization always betrays.

A free and distributed standard for the Sharing Economy

One of the main challenges for the first GNU social Camp was to develop an alternative to the centralization of the collaborative economy using GNU social, a free standard for the development of distributed web applications.

Over the days of the event, we developed the first prototypes, but above all we overcame the limitation of seeing GNU social as a mere alternative for microblogging. Starting there, we’ve been releasing pieces for an “operating system” for the collaborative city.

First was WP-GNU social, and then SocialCapital. Today, with the release of Sharings—a plugin for GNU social—we’ve taken the first big step towards promoting a distributed alternative to the centralization of the collaborative economy.

Sharings: a plugin to share objects and services on distributed networks

This new plugin creates the possibility of adding objects and services to GNU social to share them with the users on your node or, if they’re on other nodes, connected to you through federation.

The result is a catalog of objects that the members of the node offer to share, which may vary from node to node, depending on their users’ connections. Sharings is still in alpha, but it already allows you to share objects, and other users can show interest in the object that you’ve shared and get in contact with you to agree on the details of the exchange.

In this version, the modeling of the objects and services is very simple. Every object or service is identified by a name and detail space where you can explain everything about the object or service you’re sharing and give details on exchanging. Communication between the one who’s sharing and the interested party, for the moment, is public.

Open questions

To continue development, we need to make progress on integration with Qvitter, create tools to edit the shared objects that include the ability to upload images and a more advanced search function, to be able explore the catalog comfortably.

But we also need to decide some even more basic things, like if we should do a more complete modeling of objects and services, and if communication between the one who’s sharing and the interested party should be private, at least after a certain point.

But the important thing is that the platform can already be used to share all manner of things. The alpha version already works without a problem in laMatriz.org and will federate with no trouble when other nodes include the plugin. Feel like creating your own catalog of things to share?

Translated by Steve Herrick from the original.

Photo by colink.

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Automattic’s mission is to democratize publishing, and a fully informed citizenry is the foundation of any functioning democracy. Keeping our users and the public fully informed about our policies on responding to government requests has always been important to us — and now, more than ever, candor in this area is vitally important.

In keeping with these principles, we’re pleased to release our firsttransparency report. This initial report summarizes the number of government information requests, takedown demands, and national security requests that we received during the second half of 2013. In addition to giving our users full transparency about the volume of these requests, we also hope that publicly reporting our data will help hold all parties (including us) accountable.

A few highlights of our report:

Information Requests. For the second half of 2013, approximately 0.0001% of the 48 million sites that we host were subject to a government information request. Our policy is to notify you of any information request we receive regarding your account, so that you may challenge the request. The only exception is if we are prohibited by law (not just asked nicely by the police) from making such a notification. We also carefully review all legal requests we receive and actively push back on those that are procedurally deficient, overly-broad, or otherwise improper (i.e., those that target non-criminal free speech). In other words, we’ve got your back.

Takedown Demands. Just as importantly, our transparency report includes takedown requests we received from governments around the world. Governments sometimes seek to remove WordPress.com posts that they deem to be prohibited by local laws, such as posts that they judge as defamatory or those that discuss illegal subject matter. We aim to promote freedom of expression around the world, and are also mindful of local laws that might impact that expression. When we receive an order to remove content, we may remove it in only those jurisdictions where it violates local law.

National Security. We’re reporting the maximum amount of information allowed by law about the number and types of National Security Requests that we received. The disclosures we’re currently allowed to make are limited, and unfortunately, we’re not permitted to paint a more truthful picture.

We’ll update this report every six months so that we can compare the volume of requests we receive over time. In future reports, we’ll include information about the volume of copyright takedown requests we receive and process under the DMCA. We’ll also update you on the actions we’re taking on the internet, in the courts, and in Congress, to defend our users and promote a free and open internet. So stay tuned to the “News” tab of the report!

Share and Share Alike

Like all of our policy documentation, our transparency report is released under a Creative Commons Share Alike license (CC BY-SA 2.0) so that other sites can use and build on our work if they’d like.

We hope this report is useful to our users and that its data adds to the important public debate about the proper role of government in monitoring and policing activity on the modern internet.

Check out the full transparency report here.

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