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There’s no real ‘sharing’ in the platform-based economy, but cooperatives offer a solution

By Dr. Yanto Chandra 

We are in the midst of the platform-based economy. From Uber and AirBnB to TaskRabbit and Etsy, platforms allow the so-called “sharing” of un- or under-utilised assets, or resources or people’s time, in a way that generates economic (and sometimes social) value.

Hence, the “sharing economy”, also known as the gig economy, or digital labour economy. But how much sharing is really taking place in today’s sharing economy?

Is the sharing economy genuinely about sharing with all its benefits as pundits claim it to be? How should we all –– ordinary citizens –– react to the recent craze in sharing economy?

Evidence: research by Trebor Scholz — a professor from New York’s The New School — reveals that the notion of “sharing” in sharing economy is more of a utopia, or more precisely a gimmick, than actual sharing. This sharing economy is driven by a force worse than the current capitalistic system, deep rooted in the shareholder-driven principle.

It’s a “trickle up” not “trickle down” economic model. It boils down to two points: a lack of fairness to the sharing economy workers (unfair wages, unemployment insurance etc.) and threats to the traditional service sectors (think of the global movement of taxi drivers around the world against Uber). In other words, the workers are merely a tool of the platform capitalists.

deliveroo

Strike launched by deliveroo drivers in Hong Kong. File Photo: inmediahk.net.

Protests in response to perceived unfairness as well as threats posed by the sharing economy have mushroomed around the world. One notable example is Uber’s drivers –– and conventional taxi drivers adversely impacted by Uber –– protesting against Uber in London, New York, Cape Town and Hong Kong.

A similar global movement against AirBnB has taken place in the past several years. In Hong Kong, a strike took place against Deliveroo –– a leading local food delivery app –– earlier this year in response to an e-matching system that limits the working hours (and daily income of) Deliveroo riders, and the riders being asked to absorb the maintenance and fuel costs of the vehicles used.

An answer to the problematic platform-based sharing economy manifests in the rise of the so-called platform cooperativism –– cooperatives (co-ops) that run on and in online platforms owned by the workers. In the past few years, platform cooperatives are popping up globally.

Examples include Stocksy, a Canada based artist-owned cooperative where contributing artists receive 50% of a Standard Licence Purchase and 75% of an Extended Licence Purchase – and every single co-op member receives a share of the company.

Another example is Fairmondo, a Germany based online supermarket coop that adopts a 4/4 profit distribution model, where 1/4 is shared among members according to their shares, 1/4 is shared through a points system for members, 1/4 is given to nonprofits, and 1/4 is kept for future expansion.

GreenTaxi, based in the US, is a co-op alternative to Uber, while FairBnB, based in Netherlands, is a co-op alternative to AirBnB –– and there are many more platform co-ops in various categories: online newspapers, data services, food, home services, music, consulting, web services and financial services.

Fairmondo team

The Fairmondo team. Photo: Twitter.

Platform cooperatives are essentially social enterprises, which enable a genuine sharing economy. Sharing here means the fruits of shared assets or time or resources trickle down to those who need them the most: the majority of workers and those marginalised from the mainstream labour market.

What’s interesting is that platform cooperatives take the social enterprise concept to the next level, by allowing all workers as co-owners (not as mere employees), to have a voice in determining (or voting) how the platform should work or contribute to the workers’ lives and how it can improve its business model.

It operates based on two logics: the logic of commons (where many people participate and become owners) and the logic of business (where innovation and business are tools to achieve commons’ welfare).

Platform cooperativism is in itself a social innovation, in that it seeks to harness innovation and business to create societal value for all stakeholders, not just a tiny number of shareholders. There are existing infrastructures for social innovation and social enterprises globally and in Hong Kong. Efforts can be made to champion platform cooperatives within the social innovation sector as well as the nonprofit and philanthropy sectors.

FairBnB

FairBnB website. Photo: Screenshot.

Taxi drivers, food deliverers, estate owners, digital workers (from students, photographers, authors, to journalists) and any self-employed individuals can now collectively organize themselves in a platform cooperative. They can create an alternative economic sphere that is more just, and where the substantial sum of the fruits of economic labour trickle down to all workers.

Imagine if platform cooperatives can make housing more affordable for members, convenience goods cheaper and more reliable, and all kinds of services from air travel to room sharing, taxi and food delivery improve our living standards. It would be exciting to see the world’s 99% own 99% of the world’s wealth – a utopian dream which may one day become a reality.

Platform cooperatives may be an effective way to achieve this “shared prosperity”. This will be capitalism at its best: where prosperity is shared by the majority and everyone is an owner and thus a winner.

Yanto Chandra is an Associate Professor at the Department of Public Policy, City University of Hong Kong. The opinions represented here are the author’s own.

There's no real 'sharing' in the platform-based economy, but cooperatives offer a solution