How Can Cooperatives in the Platform Economy Shape the Future of Work?

The idea of cooperative governance in the platform economy is not so far-fetched, write Simel Esim and Waltteri Katajamaki from the International Labour Organization (ILO).

Much of the discussion on the changing nature of the world of work has recently focused on the so-called collaborative or sharing economy. Often this refers to companies using online platforms to facilitate delivery of goods and services between individuals.

Criticism towards this model frequently highlights decent work deficits in the manner in which many of these companies are managed and operated. Less attention is being paid to an emerging business model in the platform economy that is built on solidarity and reciprocity and is well-placed to become part of a solution to these challenges: cooperatives.

A recent UK report of experts on Alternative Models of Ownership proposes new models of collective ownership where prospective benefits of digital economy are widely shared and democratically governed. The report suggests looking at cooperative ownership to increase employment stability and productivity levels, as well as to make firms more democratic.

While some argue that these alternative business models will always stay small and marginal with respect to the mainstream economy, there have been efforts for cooperative governance in the platform economy that could hint at vertical growth.

For instance, in 2017, we observed a campaign by cooperative researchers and activists proposing a study on cooperatives and other broad-based ownership structures to draw lessons on how Twitter, a popular microblogging platform, is governed. This proposal was voted during an annual shareholders meeting of the company capturing support of 5 per cent of the company’s stock held by eligible shareholders. The resolution will likely be brought forward again in the next shareholder meeting in 2018.

The idea of cooperative governance in the platform economy is not so far-fetched if we think about a wide variety of cooperatives in what may seem as unlikely sectors, including the FC Barcelona football team, outdoor clothing maker REI, Zed Books publishing house and the Associated Press news services.

Small is beautiful?

It is often argued that cooperatives and other social and solidarity economy enterprises should stay small by nature as they start and flourish at the local and community levels. This argument may be extended to cooperatives in the platform economy as well. But such arguments do not negate the expansion and adoption of the cooperative business model by other communities resulting in horizontal growth. Platform cooperatives are online businesses jointly-owned and -managed by their members using a protocol, website or mobile application to facilitate the sale of goods and services. Based on cooperative principles and values, they are emerging as viable alternatives to the standard internet business model.

Online applications of cooperatives have gained momentum among taxi drivers, domestic workers and freelance photographers – just to name a few examples. Alliances between cooperatives of the workers in the platform economy with trade unions, local governments, legal practitioners, software developers, funders, cooperative development experts and other businesses that share similar ethical standards and vision have helped create an ecosystem which has spread around the world.

Similar alliances are being increasingly encouraged by researchers, educators, policy makers and activists in different settings where alternative economic models are being discussed in the context of the future of work.

Dialogue between ILO constituents and platform cooperatives can help move toward more decent work practices devised by and for workers in the platform economy. Further research is needed to better understand the implications of platform cooperatives on working conditions, the organisation of work, production and the governance of work. Applying the democratic ownership and governance model, transparency and self-determination, platform cooperatives could make a relevant contribution to the ongoing discussion on advancing decent work practices in the sharing and collaborative economy.

About the authors: Simel Esim is the manager of the Cooperatives Unit at the ILO in Geneva, which recently published this Future of Work report. The unit serves the ILO constituents on cooperatives and other social and solidarity economy enterprises through research, policy advice, training and technical cooperation in partnership with the cooperative and social and solidarity economy movements. Before she joined the Cooperatives Unit, Esim worked as a senior technical specialist in the ILO’s regional office for Arab States between 2004 and 2012. Her professional experiences prior to joining the ILO include working at the International Center for Research on Women, Development Alternatives, Inc. and the World Bank in Washington, D.C. on a range of issues including informal economy, women’s economic empowerment and labour migration.

Waltteri Katajamäki works at the ILO’s Cooperatives Unit as a technical officer. His main areas of responsibility include agricultural and rural cooperatives, research, tool development, and supporting the Unit’s development cooperation activities. Waltteri first joined the ILO in 2013, and in addition to COOP he has worked at the ILO Country Office for Zambia on rural youth enterprise development. Prior to the ILO, Waltteri has worked with the Finnish Ministry for Foreign Affairs, IFAD, and fair trade organisations, among others.