Platform Cooperatives

Author: Shang Yat Lam

Short Summary

A platform cooperative, sometimes called platform co-op, is a business that provides commodities and services through a platform, often a digital/online one. Its structure is highly democratic, often built on co-ownership by members of the platform; its operation values the inputs of different stakeholders, including workers and customers. The revenue it generates is accrued to and shared by its members.

Location: Worldwide

Creators: Trebor Scholz and Nathan Schneider

Profile

To understand what a platform cooperative is, we need to break down the phrase into its constituent parts: platform and cooperative. A platform is a digital medium, like a mobile app or website, that is used to distribute commodities and services and enhance interconnections between individuals. A cooperative is a business model: a group of stakeholders with shared economic, social, and cultural desires and backgrounds come together voluntarily to pursue their common goals through a collectively-owned and democratically-managed business. As its name suggests, platform cooperatives use digital mediums to facilitate cooperative enterprise.

Platform cooperatives share some common characteristics:

  • Their ownership is broadly defined and inclusive.
  • The workers have the right to design digital attributes and the production mode of the platform. This ensures that the platform best serves the interests and goals of the workers.
  • The enterprise is democratically managed and every stakeholder participates in the governance of the platform.
  • They rely on open-source development: the operation of the digital platform is based on open-source algorithms.

YOUTUBE 4OXhOXULEbA TED Talk by Trebor Scholz: "Stuck in the gig economy? Try platform co-ops instead"

Governance

Although they are similar, one must not confuse the platform cooperative with the gig economy or sharing economy (e.g. Airbnb or Uber). The platform cooperative exists as a response to the dissatisfaction brought by platform capitalism. While the traditional gig and sharing economy seems to provide a high degree of flexibility and freedom to workers, and has become a new normal, especially during the COVID pandemic, they are not as open and fair as some people think. The platforms are owned and operated by big enterprises. They run on a hierarchical structure in which managers at the top of the pyramid determine the daily operations, such as workers’ wages and working hours. Most of the profits go to the leadership team, as they receive commissions from both customers and workers.

In contrast to these limitations, platform cooperatives emphasize democratic governance and collective ownership of workers. The decentralized approach allows for a higher degree of autonomy for workers to design the platform that best suits their needs.

Notable Examples

  • Resonate (USA): Resonate is a music platform cooperative, a collectively-owned music streaming service. It is democratically managed by stakeholders: artists, listeners, and workers. These stakeholders elect their own governing board and share the profits. The barrier to become a stakeholder is low. Listeners earn membership with a $10 contribution, artists earn membership after their first upload, and workers earn membership by helping the platform develop.
  • Union Cab of Madison Cooperative (WI, USA): Taxi cooperatives have become more common in different parts of the United States, and Union Cab of Madison is one of these. Its structure prioritizes workplace democracy: instead of being governed by a centralized hierarchy, the drivers decide how to run the service and distribute profits and revenue. The most prominent example is that the drivers, who were collective owners of the cooperative, decided to cut their own salaries to help the company deal with fierce competition.

Origin Story

The term “platform cooperative” was coined by Trebor Scholz, Associate Professor of Culture and Media at the New School, in his 2014 article “Platform Cooperativism vs. the Sharing Economy." Journalist Nathan Schneider later echoed his thoughts and identified some examples of platform cooperatives in his article “Owning is the New Sharing.”

See Also

  • Other commons categories that are related to this one's, or specific similar examples

Sources