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Project 9.6. Platform Cooperatives: Are User-Owned and User-Governed Platforms Viable? 

CHALLENGE 9: RECONCILING STAKEHOLDER INTERESTS 

Aim of the project

The project aims to describe and explain if -and under what conditions- platform cooperatives can be a viable and scalable alternative to current forms of independent worker organizations.

Theoretical Background

Commercial platforms such as Airbnb, Uber and TaskRabbit, reshape traditional organizations by connecting large crowds of (private) supply and demand by the use of apps, algorithms and reviewing mechanisms. Platforms may not only pose a threat to traditional business with respect their revenues and autonomy, they are also disruptive social-economically: their focus on servicing precarious professions erode standard social protection, minimum earnings and working conditions of suppliers. Moreover, commercial platforms threaten public values such as consumer safety and privacy (EC, 2016). As a response, alternative forms of organizing platforms arise: platform cooperatives (Scholz and Schneider, 2016; Como et al. 2017). Owned, democratically controlled and managed by their users, cooperative platforms aim at sustainable cooperation between suppliers and users, and tending the needs of their members, in particular those who are dependent on the platform in acquiring their main income, such as taxi drivers and cleaners. Although the number of (newly founded) ‘platformcoops’ increases, the conditions under which they successfully safeguard costumers’ and ‘decent work’ for their members (ILO, 2017). This project aims to systematically identify the conditions under which platform cooperatives can be viable alternative to commercial platforms with regard to their success, which we define as (a) their survival in the long-run, in comparison to traditional platforms, and (b)      their ability to provide and safeguard costumers’, and ‘decent work’.  

Theories explaining traditional (worker) cooperatives success allow for at least three hypotheses on the variation in success between platformcoops (Staber, 1989; Cheney et al. 2014). First, given the rigidity of organization structures and governance, platformcoops founded during recession are better adapted to harsh economic circumstances than those founded during abundant economic periods, and therefore more successful. Second, given that cooperatives have less financial flexibility than (large) commercial businesses, platformcoops are likely to be more successful in stable markets, and less resource-intensive sectors, such as services and transport. Third, given that membership stability is crucial for members’ investments, commitment and democratic involvement, success is more likely for platformcoops servicing professions that have fewer (attractive) opportunities for regular employment or self-employment (e.g. taxi drivers, cleaners). Platformcoops in creative industries may suffer instable membership because their members use platformcoops as stepping stones for their own company. Finally, one of the major advantages but at the same time also vulnerabilities of traditional, democratically controlled (workers)cooperatives - the high involvement of members in decision making – allows for a hypothesis on the variation of success between traditional and platformcoops: Technology eases these demands by allowing for less time consuming virtual involvement (Cheney, 2014). Though platformcoops are likely to be more successful in democratic governance (and conforming norms on decent work and consumer rights) than traditional cooperatives because of the role of technology, they may also suffer from lesser direct social control due to the technological interface.

Research design

The project develops and tests hypotheses on the effect a. platformcoops characteristics, such as founding date, business, type of work; b. platformcoops governance characteristics (e.g. democratic involvement of members) and c. technology use. The project combines the collection of a midsize N data-set of platformcoops and a wide range of relevant characteristics with three comparative case-studies: 

Comparing platformcoops:

1a. The landscape of platformcoops will be mapped by constructing a systematic database. Preliminary work (funded by seed money under the strategic area “Institutions” at Utrecht University) has now lead to 150 platformcoop initiatives worldwide. The database includes success factors (survival, brand name recognition, number of users, technology use) allowing us to explain success by both business model characteristics and platform governance characteristics.

1b. In depth case studies of about 10 platform coops will be conducted with a focus on local services sector (taxi, cleaning, courier, etc.) to get an understanding of the success factors, (including providing decent work to suppliers and consumer rights) and motivations behind these initiatives. The case studies allow for a comparison across sectors and countries while also contributing to theory development by contrasting problems as well as success.

Comparing platformcoops with traditional cooperatives:

2.  A comparison between platformcoops and cooperatives. This comparison will focus on the influence of technology use and the degree of membership involvement in decision making and the ability to provide decent work for suppliers of work and coherence of safety and privacy norms for consumers. Keeping contextual factors constant, this comparative case study will focus on (platform) cooperatives in the sectors like insurance and agriculture, in which sufficient traditional cooperatives exist.

Literature

Cheney, G., Santa Cruz, I., Peredo, A. M., & Nazareno, E. (2014). Worker cooperatives as an organizational alternative: Challenges, achievements and promise in business governance and ownership. Organization, 21(5), 591-603.

Como E, Mathis A, Tognetti M, Rapisardi A (2017). Cooperative platforms in a European landscape: an exploratory study. ISIRC Conference, Glasgow, September (pp. 1-35).

EC, 2016. A European Agenda for the Collaborative Economy. Brussel: Europese Commissie, 2 juni.

ILO (2017) Cooperation in a changing world of work: Towards a cooperative future. The Future of Work Centenary Initiative Issues Note Series No. 6.

Schneider, N. (2018). An internet of ownership: democratic design for the online economy. The Sociological Review, 66(2), 320-340.

Scholz, T., Schneider, N. (2016) (eds.) Ours to Hack and to Own. The Rise of Platform Cooperativism. A New Vision for the Future of Work and a Fairer Internet. New York: OR Books.

Staber, U. (1989). Age-dependence and historical effects on the failure rates of worker cooperatives: An event-history analysis. Economic and Industrial Democracy, 10(1), 59-80.

Van Dijck, J., Poell, T., De Waal, M., 2016. De Platformsamenleving. Strijd om publieke waarden in een online wereld. Amsterdam: Amsterdam University Press.

Project initiators

Tine de Moor & Agnes Akkerman

Location

Based at the Economic and Social History group at Utrecht University

Expertise

History and Sociology.

How to Apply

For background information on this vacancy and further instructions, click here (portal opens June 1).

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