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Challenging the Corporate Sharing Economy
Trebor Scholz - January 2016
The “sharing economy” wasn’t supposed to be this way. Aided by the tiny computers most of us carry with us all day, every day, we would be free from the burdens of ownership and making money in our spare time by renting out our unused possessions. The vison was—or at least appeared to be—an idealistic one. Even before they enter kindergarten, every child learns the value of sharing, and here were the beneficent forces of Silicon Valley bringing us innovative new tools to strengthen our communities, disrupt outdated ways of doing business, and maybe even reduce our carbon footprints.
The reality turned out to be a little different. Sure, Uber and its ilk offer remarkable convenience and a nearly magical user experience, but their innovation lies just as much in evading regulations as in developing new technology. Behind the apps lies an army of contract workers without the protections offered to ordinary employees, much less the backing of a union. This new economy is not really about sharing at all. Rather, as Trebor Scholz argues in this study, it is an on-demand service economy that is spreading market relations deeper into our lives.
With these new middlemen sucking profits out of previously un-monetized interactions, creating new forms of hyper-exploitation, and spreading precarity throughout the workforce, what can we do? Scholz insists that we need not just resistance but a positive alternative. He calls this alternative “platform cooperativism,” which encompasses new ownership models for the Internet. Platform cooperativism insists that we’ll only be able to address the myriad ills of the sharing economy—that is to say platform capitalism—by changing ownership, establishing democratic governance, and reinvigorating solidarity. In this paper, Scholz breathes life into this idea by describing both actually existing and possible examples of platform co-ops, outlining basic principles for fairly operating labor platforms on the Internet, and suggesting next steps.
Trebor Scholz has lived and worked in co-ops for over a decade. The author of The Internet as Playground and Factory (2013) and Uberworked and Underpaid: How Workers Are Disrupting the Digital Economy (2016, forthcoming), Scholz is an associate professor at The New School, where he teaches courses on Internet and society. Together with Nathan Schneider, he has been focused on creating a campaign to challenge the system of value extraction that fuels the “sharing economy.” In November 2015, The New School hosted “Platform Cooperativism: The Internet, Ownership, Democracy,” which brought together more than one thousand people to plant the seeds for a new kind of online economy. The results of this conference are reflected in this study.
Platform cooperativism is possible, and it is necessary, but it is by no means inevitable. The current owners of online platforms are willing to offer us seemingly everything except ownership. It is time for us to instead create an online economy based in democracy and solidarity.
What is Platform Cooperativism and Why is it Important?
by natematias|Published November 13, 2015
(this blog post was written with Katie Arthur)
What is platform cooperativism and why is it needed?
Today, we’re here at the New School in New York City for the Platform Cooperativism conference, which is bringing together a remarkable range of speakers on the theme of creating online platforms that are owned and operated by their users and workers. These two days feature speakers from a wide range of academic disciplines alongside people sharing their experiences of running co-ops and advocating for fair work in platform economies.
Trebor starts out his jeremiad telling us that the missing element in discussions of economic problems is the lack of something we can say yes to — something that people could actually build and support. In this first session of the day, Unpacking Platforms, Trebor Scholz and Janelle Orsi offer a set of principles and platform examples that they hope will frame our conversations over the next two days.
Consequences of the Sharing Economy in the US
Software companies, says Trebor, have created new markets where none existed before– for people with surplus resources. And consumers like this, because the so-called sharing economy is really an on-demand labor system. These companies that create these monopolies manage to create empires off other people’s infrastructure. They’re running off your car, your apartment, your labor, your emotions, and your time. They are logistics companies where all participants pay the middleman.
The on-demand economy illustrates a shift away from employment by restructuring work so they can categorize it as independent contracting. This shifts the burden of major life risks — unemployment, health, and old age — onto workers. This sector uses the language of entrepreneurship and flexibility to talk about a system that is centrally controlled. At the same time, Trebor says, these companies are undermining organized labor and public infrastructure.
This on-demand economy is not a minor part of the U.S. economy, says Trebor. One in three US workers is an independent contractor. Without employment, these workers are rightsless. Should we use terms like “innovation” and “efficiency” to celebrate this state of play? How can we call the sharing economy innovative and efficient if it promotes a reduction of rights, classism, and racism. These companies, he says, dodge taxes, route around labor laws, and operate illegally in some cities.
Trebor also argues that academics who do work on platforms often focus on understanding and extending the power of these companies rather than trying to understand the long-term implications of these systems or imagine alternatives.
Is it really so unthinkable to escape companies like Facebook, Google, Crowdflower, and others? Trebor argues that none of the issues of fairness, labor rights, healthcare, and privacy can be changed until we reimagine shared ownership, democratic governance, and solidarity. Even when companies try to be nice to workers, there’s a distrust, he says, in those companies. Is it really impossible to shift structures of the Internet so everyone can reap the fruits of their own labor?
What is Platform Cooperativism
Platform cooperativism, says Trebor, is about cloning the technological heart of online platforms and puts it to work with a cooperative model, one that puts workers, owners, communities, and cities — in a kind of solidarity that leads to political power.
Trebor offers a series of types of platform coops.
Cooperative online labor brokerages & marketplaces
In Germany, Fairmondo started as a global marketplace owned by its users — like a co-operative ebay. In SF, Loconomics is a freelance co-operative where freelancers have shares and have a voice in running the company.
Produser-Owned Platform Cooperative
These sites, like Resonate (music), Members Media (film), and Stocksy (stock photography), allow producers to co-own the platforms to which they are selling their work. The objective of these co-operatives are to create careers for their producers, who co-own systems.
Trebor notes that even in the US, cities own hotels, hospitals, and many public services. He describes work by Janelle Orsi to imagine publicly-owned platforms: muni-bnb would be a city-owned airbnb system that invests profits into city projects. all-bnb would be modeled after the Alaska Permanent Fund and would pay residents for the profits made by sharing hosting. Another idea is the “sharing city” Seoul, who offer a city-operated taxi hailing system.
The California App-Based Drivers Association unionizes drivers who participate in sharing economy platforms. In New Jersey, the Union Taxi Cooperative also operates its own platform.
Cooperatives From Within
Trebor talks about the idea of worker cooperatives forming “in the belly of the sharing economy” if governments decided to break up these monopolies and convert them into co-ops.
The Institution as Peer to Peer Protocol
Another option is to create infrastructures, an idea promoted by advocates of blockchain architectures, including the “Resources” system in Israel.
Principles of Platform Co-operative Ecosystems
Co-operatives don’t exist in a vacuum. They need funding schemes, lawyers, software engineers, workers, and designers.
like the Worker’s Lab and Mondragon. In Spain, Mondragon works like a development bank.
Platform co-ops need to be open source. Workers need to be able to understand and order the code that shapes their environments. Why couldn’t there be a foundation that coordinates all of these open source efforts?
Platforms for consensus building and democratic governance are needed (like Lumio or Intertwinkles)
Platform as protocol: Perhaps people could use the blockchain in interesting ways to support shared rather than centralized ownership.
Some examples of interesting work in this space include commons-based reciprocity licenses
What should we ask and implement within this economy?
Trebor asks us to imagine how the Internet could be owned and governed differently? Here are things we would have to consider:
... Decent Pay
... Acknowledgment and appreciation
... Communication between workers and platform operators
... A Protective Legal Framework
... Worker-owned reputation systems
... Constant surveillance and reviews should be rejected
... Decent digital work has to have clear boundaries
Trebor concludes by talking about why it’s important to have these ambitious conversations: to help ourselves be able to imagine an economy that benefits all. Rather than thinking about apps, we should be thinking about well-paid and well-cared-for people, who are the foundation for stable businesses. There are endless objections and challenges, says Trebor. Platform cooperatives may have their own problems and aren’t a silver bullet for society. But they are a vehicle for like-minded people to organize and fight for basic democratic rights for workers.
Janelle Orsi’s Response
After Trebor’s opening talk, Janelle Orsi gets on stage to respond and react. Janelle is the executive director of the Sustainable Economies Law Center in Oakland.
Platform companies like Uber don’t actually own many things — they own people’s captive attention and loyalty, getting a $50 billion valuation purely on the beliefs of people. That can change, she argues. Taking back platforms is actually easier than change in other areas — rather than contest over resources, we just have to clone the heart of these platforms and use them instead.
The fight for better pay and benefits are important, agrees Janelle. Ultimately however, we need to rethink these structures. As a lawyer, Janelle has studied labor law, which assumes a master-slave situation that assumes that the person in control also is maximizing their own profit. By democratizing platforms, she argues, we have an opportunity to unbundle that combination.
Janelle opens up by talking about common things she’s heard when people discuss platform co-ops.
Does the design of co-op platforms need to be as fancy and pretty as big corporations? No, Janelle says. We can also choose platforms for their justness.
Should corporate platforms be nicer to workers? Janelle says that it’s risky. You can’t have a co-operative with investors who try to maximize their wealth, nor could you do so with a company that’s trying to maximize its wealth.
Some people say that co-operatives are slow, difficult, and have long meetings. Janelle thinks that the biggest challenge is actually to stop people from saying that. Legal issues, getting financing, creating governance structures are possible– we can figure these things out, she says. The main challenge is to build literacy over what is a cooperative and convince people that they’re possible.
See the original material on the Civic.MIT webpage
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