How Platform Cooperativism Can Unleash The Network

by Trebor Scholz

19 February 2017

Flickr / Chris Jones

In 1998 I moved into a small Buddhist temple in San Francisco’s Mission District. My spiritual comrades in this commune could not understand why I would spend all the money that I had saved on an IBM laptop when the community already owned a computer. As someone who studies the social impact of the internet, I was surprised by the proposal to collectively use one computer. For me, up to that point, thinking about the internet meant thinking about individual use, not communal ownership. This episode showed me how a culture of genuine sharing can also mean sharing technology, just like anything else.

Over the past five years, the technological ingenuity of the ‘sharing economy’ deeply resonated with the zeitgeist. Emphasizing community, underutilized resources, and open data, the genuine sharing economy was initially presented as a challenge to corporate power. Just like my Buddhist friends, the pioneers of this economy proposed to split the use of lawn mowers, drills, and cars. But soon, the non-commercial values behind many platforms were rewritten in the boardrooms of Silicon Valley, turning the so-called sharing economy into a misnomer. Today, facing various prophecies about sharing and the future of work, we need to remind ourselves that there is no unstoppable evolution leading to the uberization of society; more positive alternatives are possible.

In Average Is Over, the economist Tyler Cowen foresees a future in which a tiny ‘hyper meritocracy’ would make millions while the rest of us struggle to survive on anywhere between $5,000 and $10,000 a year. It already works quite well in Mexico, Cowen quips. Carl B. Frey and Michael A. Osborne predict that 47 percent of all jobs are at risk of being automated over the next twenty years. And I have no doubt about the vision of platform owners like Travis Kalanick (Uber), Jeff Bezos (Amazon), or Lukas Biewald (CrowdFlower)— who, in the absence of government regulation and resistance from workers, will simply exploit their undervalued workers. I’m all on board for Paul Mason’s and Kathi Weeks’ visions for a post-capitalist, post-work future where universal basic income will rule the way we think about life opportunities. In the United States, however, unlike in Finland, the chances for this scenario becoming a reality over the next two years are not high. The question then becomes what we can do right now, with and for the most precarious among the contingent third of the American workforce, which is unlikely to see the return of the traditional safety net, the forty-hour workweek, or a steady paycheck.

Today’s internet bears little resemblance to the ARPA-designed, non-commercial, decentralized, post-Sputnik network. We are finding that the sources of our entertainment, the platforms where we are logging on to work every day, and the apps that constantly draw us into feedback loops are all owned by a small number of deeppocketed founders and stockholders. That’s simply unacceptable, and it is for this reason that I proposed a theory of platform cooperativism in 2014. Workers in the on-demand economy are called upon to “live like lions”, but with slightly more flexibility have come more risks and harsher taskmasters. The average on-demand economy worker earns $7,900 a year through labor platforms, which indicates that many of them work only part-time in this digital economy. Often disregarded in this discussion are those who are pushed out of the market by, for example, Uber drivers, who are 40 percent college-educated and more likely to be white than legacy taxi drivers who may lose their jobs.

Many of the business models of the ‘sharing economy’ are based on the strategic nullification of the law. Companies knowingly violate city regulations and labor laws. This allows them to undermine the competition and then point to a large customer base to demand legislative changes that benefit their dubious modus operandi. Firms are also activating their app-based consumers as a grassroots political movement to help them lobby for corporate interests. Privacy should be a concern for workers and customers, too. Uber is analyzing the routines of its customers, from their commutes to their one-night stands, to then impose surge pricing when they most rely on the service. Navigating legal gray zones, these deregulated commerce hubs sometimes misclassify employees as independent contractors. They are labeling them ‘turkers’, ‘driver-partners’, or ‘rabbits’, but never workers. Hiding behind the curtain of the internet, they would like us to believe that they are tech rather than labor companies.

In the decade between 2000 and 2010, the median income in the United States declined by 7 percent when adjusted for inflation. In 2014 51 percent of Americans made less than $30,000 a year, and 76 percent of them had no savings whatsoever. Since the 1970s, we have witnessed concerted efforts to move people out of direct employment, which has led to the steady growth of the number of independent contractors and freelancers. Digital labor, a child of the low-wage crisis, is part of that process.

What has the “sharing economy” really gotten us? Beyond the consumer convenience and efficiency in creating short-term profits for the few, it has demonstrated how, in terms of social well-being and environmental sustainability, capitalism turns out to be amazingly ineffective in watching out for people. Seemingly overnight, the gains of more than one hundred years of labor struggles, dating back to the Haymarket Riots in 1886 and the protests after the Shirtwaist Factory fire in 1911, have been stalled. Also, the Fair Labor Standards Act of 1938 suddenly has far less pull because the number of employees is shrinking rapidly.

Among all the problems of the twenty-first century that are related to workers—inequality, stagnant wages, loss of rights—the biggest predicament is that there seem to be so few realistic alternatives. But there are. I will identify four approaches.

The first two approaches are based on the belief in negotiation with corporate owners and with government. The Domestic Workers Alliance, for example, formulated a Good Work Code in hopes that policy makers would endorse their guidelines and that platform owners would follow them. Seattle imposed a tax on Uber and gave drivers the right to unionize, Mayor Bill de Blasio of New York City made attempts to curb the number of Uber cars, and the city of San Francisco tried to regulate Airbnb. A third pathway is to move production outside of the market altogether. Yochai Benkler labeled this “non-market peer production,” with the most successful example being Wikipedia. And, finally, for the compensated labor market, there is a fourth approach, which is platform cooperativism, a model of social organization based on the understanding that it is hard to substantially change what you don’t own.

My thinking about platform cooperativism owes much to the Digital Labor conferences at The New School. These events started in 2009 and one of the recent ones was Platform Cooperativism in 2015. Initially, at these events, discussions focused on the Italian Workerists, immaterial labor, and ‘playbor‘. Artists like Burak Arikan, Alex Rivera, Stephanie Rothenberg, and Dmytri Kleiner played pioneering roles in alerting the public to these issues. Later, debates became more concerned with “crowd fleecing,” the exploitation of thousands of invisible workers in crowdsourcing systems like Amazon Mechanical Turk or content moderation farms in the Philippines. Over the past few years, the search for concrete alternatives for a better future of work has become more dynamic.

The theory of platform cooperativism has two main tenets: communal ownership and democratic governance. It is bringing together 135 years of worker self-management, the roughly 170 years of the cooperative movement, and commons-based peer production with the compensated digital economy. The term ‘platform’ refers to places where we hang out, work, tinker, and generate value after we switch on our phones or computers. The cooperativism part is about an ownership model for labor and logistics platforms, or online marketplaces that replace the likes of Uber with cooperatives, communities, cities, or inventive unions. These new structures embrace the technology to creatively reshape it, embed their values, and then operate it in support of local economies. Seriously, why does a village in Denmark or a town like Marfa in rural West Texas have to generate profits for some fifty people in Silicon Valley if they can create their own version of Airbnb? Instead of trying to be the next Silicon Valley, generating profits for the few, these cities could mandate the use of a cooperative platform, which could maximize use value for the community.

Platform co-ops already exist, from cooperatively owned online labor brokerages and marketplaces like Fairmondo, to video streaming sites that are owned by filmmakers and their fans. Photographers co-own the stock photography cooperative Stocksy and massage therapists in San Francisco started the freelancer-owned online labor market Loconomics. Students at Cornell University built Coopify for (and with) co-ops of low-income immigrants in Sunset Park, Brooklyn. Platform co-ops could be attractive options for home health care professionals and also low-income residents, or pensioners who need to earn extra cash. In the United States, the 650,000 people who are released from U.S. prisons every year would be likely to welcome dignified work. And finally, platform co-ops might be attractive for refugees, for whom it often takes as long as eight years after their immigration to find a job, even in a country like Sweden. With this model, workers can become collective owners; they do no longer have to subscribe to the pathology of the old system that trained them to be followers.

Few people will feel drawn to build a platform co-op based on abstract principles. But for the already committed, common principles and values matter. From the Rochdale Society of Equitable Pioneers, to African-American cooperatives in the South of the United States, to the Mondragon Corporation in Spain, forming any kind of cooperative endeavor has always started with a study group. Political scientist Elinor Ostrom reminded us that aspiring to create alternatives without rigorous study is a pipe dream, a vain hope. Being realistic about cooperative culture is essential. From the history of cooperatives in the United States, we learned that they are indeed able to offer a more stable income and a dignified workplace. While the necessary enthusiasm of makers doesn’t always sit well with justifiably skeptical scholars, their dialogue is important. Jointly, they could rewrite the Rochdale principles for the digital economy, for instance. Education is an essential cornerstone of platform cooperativism.

Platform co-ops should consider the following principles. The first one, which I explained already, is communal ownership of platforms and protocols. Second, platform co-ops have to be able to offer income security and good pay for all people working for the co-op. And history shows that co-ops are able to offer this. Emilia-Romagna, an area in Italy that encouraged employee ownership, consumer cooperatives, and agricultural co-ops, has lower unemployment than other regions in Italy. The flagship of cooperatives, Mondragon, is a network of co-ops that employed 74,061 people in 2013. But in the United States, despite its dominance in areas like orange juice production, the cooperative model has been faced with many challenges, including competition with multinational corporate giants, public awareness, self-exploitation, and the network effect. So, it is essential for platform co-ops to study the communities they’d like to serve and get their value proposition right.

In opposition to the black-box systems of the Snowden-era internet, these platforms need to distinguish themselves by making their data flows transparent. They need to show where the data about customers and workers are stored, to whom they are sold, and for what purpose. Work on platform co-ops needs to be co-determined. The people who are meant to populate the platform in the end must be involved in its design from the very beginning. They need to understand the parameters and patterns that govern their working environment. A protective legal framework is not only essential to guarantee the right to organize and the freedom of expression but it can help to guard against platform-based child labor, wage theft, arbitrary behavior, litigation, and excessive workplace surveillance along the lines of the “reputation systems” of companies like Lyft and Uber that “deactivate” drivers if their ratings fall below 4.5 stars. Crowd workers should have a right to know what they are working on instead of contributing to mysterious projects posted by anonymous consignors.

At its heart, platform cooperativism is not about any particular technology but the politics of lived acts of cooperation. Soon, we may no longer have to contend with websites and apps but, more and more, with 5G wireless services (more mobile work), protocols, and AI. We have to design for tomorrow’s labor market. In the absence of rigorous democratic debates, online labor behemoths are producing their version of the future of work right in front of us. We have to move quickly. Together with cities like Berlin, Barcelona, Paris, and Rio de Janeiro, which have already pushed back against Uber and Airbnb, we ought to refine the discourse around smart cities and machine ownership. We need incubators, small experiments, step-by-step walkthroughs, best practices, and legal templates that online co-ops can use. Developers will script a WordPress for platform co-ops, a free-software labor platform that local developers can customize. Ultimately, platform cooperativism is not merely about countering destructive visions of the future, it is about the marriage of technology and cooperativism and what it can do for our children, our children’s children, and their children into the future.

This is an extract from Ours to Hack and to Own: The Rise of Platform Cooperativism, A New Vision for the Future of Work and a Fairer Internet., published by OR Books. 

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