Ueberschlag Leila on Sun, 9 Oct 2016 18:28:41 +0200 (CEST)

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<nettime> MoneyLab latest blog post on Platform co-operativism

Platform co-operativism: Short-term security in the on-demand economy; find
below the latest MoneyLab blog post by Max Dovey.

< http://networkcultures.org/moneylab/2016/10/06/platform-
co-opervatism-short-term-security-in-the-on-demand-economy/ >

*Platform co-operativism*

Short-term security in the on-demand economy

Last month I witnessed a chanting mob of disgruntled Deliveroo riders who
had gathered outside the company's headquarters in London to protest
against an intended pay cut that would reduce their hourly wage from £7 (*€
*8.30) to £3.75 (*€*4.45) per delivery. The demonstration was the latest
eruption of employee dissent within the on-demand economy as workers
respond to severe wage cuts and other challenges to their employment

Platforms such as Uber and Deliveroo operate at the forefront of the
recently established 'gig economy'. As the popularity of on-demand apps
increases, more and more young people are attracted by the short, flexible
working arrangements offered by these platforms. Uber claims to have over
160,000 drivers globally, while the food delivery company Foodora has gone
from 3 to 600 employees in the Netherlands in under a year. However, rapid
expansion comes with hidden costs. Many on demand companies circumvent
traditional employment rights by hiring staff as independent contractors on
zero hour contracts that give employees little or no entitlement to
holiday, sick cover or changes to pay. In addition, freelancers (or
independent contractors) are required to possess their own insurance,
complete their own taxes and encouraged to work on a fixed rate rather than
an hourly or minimum wage.

By offloading the traditional maintenance costs of running a business to
individual employees, on-demand business can reduce usual costs and avoid
the legal accountability that accompanies long-term contracts. The
Deliveroo drivers on strike in London celebrated a small success in their
protests and the managers offered to postpone the intended paycut until
further notice. Undoubtedly we will witness more protests like this, as the
on-demand economy expands in a wider context of ongoing austerity cut backs
and youth unemployment, many find the casual work offered to anyone with a
smart phone short term relief from the ongoing search for full time
recruitment. Do strikes and mass walk-outs like these signal the beginning
of a workers' crisis in the on-demand economy or can the rights of the
worker be improved to prevent the share economy depending on an exasperated
and exploited on-demand employee?

One possible resolution is the reintroduction of workers' co-operatives and
common ownership in business and platform services. Platform
co-operativism, a term introduced by Trebor Scholz and Nathan Schneider
from the New School in New York, presents a practical solution for workers,
business and start-ups in the digital economy.  Workers' co-ops were
introduced after the industrial revolution in an attempt to manage business
more democratically and protect the rights of the worker. While some of the
most successful examples of workers co-ops exist in the wholefoods sector
(see Suma & Essential Trading), the concept is undergoing a renaissance
among start-up businesses and digital platforms. Fairmondo, established in
2013, is a p2p marketplace similar to Ebay that aims to create a ‘fair
economy’ by distributing its profits between all of its members. After
crowdfunding the investment capital needed to get going, Fairmondo then
established a set of rules titled co-operative 2.0. These guidelines
include only making decisions with 9/10 consensus, distributing profit
evenly between its members and even publishing all their accounting online.
A similar co-operative venture is the lift sharing service Lazooz which
attempts to turn shared transportation like Uber into a co-operatively
owned platform, while using a crypto-currency token system to reward
drivers and passengers equally. Peerby, a sharing platform based in
Amsterdam, has also used crowdfunding to restructure the traditional
start-up model and turn all investors into equitable shareholders of the

Platform co-operatives present a viable alternative to on-demand capitalism
but their success deeply depends on their scale and diversity. Working
co-ops in the past have been known to limit participation in order to
protect themselves from market expansion and this unfortunately can lead to
a few privileged members preventing diverse inclusivity. Can platform
co-ops now utilize the network to become more a more inclusive and
democratic collective organization than the co-operatives of the past?
Currently, the aim is to raise awareness about these alternatives to start
up businesses and national governments in order to protect and improve the
standard of work for the low-waged, on-demand worker. And some political
parties seem to be listening. In August, Jeremy Corbyn, the leader of the
Labour Party in the United Kingdom, put platform co-operativism at the
center of his Digital Democracy Manifesto in an attempt to re-establish
trade unions in the digital economy.

The ambition to create a co-operatively owned version of the share economy
is there, but I fear that without governments offering support to
co-operatives they are at danger of getting wiped out in the tide of
on-demand platform capitalism. If forced to compete with other apps without
government subsidies, tax reliefs or other incentives, platform co-ops may
be forced to market their values only to compete and offer an ethical or
‘worker conscious’ alternative. This could potentially lead to a rise in
sustainable consumer choices in the on-demand app market, similar to the
rise of organic produce or locally sourced food, making the platform co-op
little more than an ethical alternative to the platform monopolies of Uber
and Deliveroo. In this scenario, the important values of the platform
co-operative (commonly owned, collectively governed) become fetishized
buzzwords with little or no structural change to employment rights, worker
unionization and collective organization.

In order to avoid the commodification of co-operative values regional
governments should look to support the growth of platform co-ops and
continue to discuss how the trade union can be updated and incorporated
into crowdfunded and crowdowned enterprises. The ideas are already
beginning to take hold in cities that have already been damaged by the
affects of share economy businesses such as Berlin, which has a strict
limit on Airbnb rentals, and Rio de Janeiro, which banned Uber all together
last year. In areas such as these, where the repercussions of unregulated
digital platforms have already impacted social welfare, the platform co-op
may offer a promising sanctuary from the destructive expansion of on-demand

Best regards,

*Leila Ueberschlag | Intern MoneyLab#3*
Institute of Network Cultures
Amsterdam University of Applied Sciences | HvA
MoneyLab <http://networkcultures.org/moneylab/> | 1&2 Dec 2016 | Pakhuis de
Zwijger, Amsterdam
@INCAmsterdam  <https://twitter.com/INCAmsterdam>

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