Today, seven of the world’s 10 largest companies, by market capitalisation, are essentially online platforms — digital ecosystems through which individuals or groups connect or organise services. Such is their influence that they have shaken the foundations of industry business models and altered cultural norms about sharing and property.
Though such platforms have come to define business, platform giants have faced increasing criticism around the fairness of their operating models and the treatment of their workers. In response, a number of innovative cooperative platforms, supported in some cases by governments or non-government organisations, have emerged to challenge the purpose and role of the profit-making intermediary, exploring entirely new means of connecting people and work.
A cooperative, or “co-op”, is an old idea: an association formed to meet common economic and social needs. They can be big and dispersed, such as France’s Enercoop, a national electricity supplier, or small and local, but they are uniformly characterised by joint ownership and democratic control. “Platform cooperatives” simply take that ethos online.
Advocates of such organisations reckon that these initiatives could give rise to alternative economic and political structures, or even break the link between ownership and consumption. Professor Trebor Scholz, an activist and professor of culture and media at New York’s New School, estimates that the ecosystem of platform co-ops takes in some 240 projects at the moment, with initiatives right across the globe.
Stength in numbers
Owned and democratically controlled by their workers, digital co-ops are co-designed with users’ needs, capacities and aspirations in mind, and are often committed to open source development so that others can use their code and spread the co-operative ideal.
This ethos is spreading. There are successful online platform co-ops in all manner of markets and geographies such as Resonate for music streaming (Germany), Up&Go for house cleaning (New York City) and SMart in freelance and independent workers’ support services (Belgium and across Europe). Many have attracted the attention of investors. Some grow fast, too. Stocksy, a stock photo and video cooperative founded in 2012, was profitable by the end of its first year and today counts 100 Fortune 500 companies among its clients.
There are plenty of potential applications yet to be realised. “Imagine a social network owned by groups of its users or a cooperatively owned cloud service,” says Scholz. He sees platform cooperatives not just as an alternative organisational model, but as a movement to allow often marginalised individuals and groups to take more control over their lives.
“Garbage pickers and recyclers in the informal economy in Brazil and Egypt could use a platform co-op to organise pick-ups while at the same time using the platform to give themselves a political voice,” he says. “A group of childcare professionals in Illinois could use a platform co-op not just to increase their commercial power, for example with collective purchasing, but also to coordinate political participation.”
This diversity of use cases could suggest that platform co-ops have the potential to become a mainstream, popular alternative in developed economies. The main barrier is likely to be cultural — through diffidence about participation in an unfamiliar form of economic organisation — rather than practical. But for relatively unbranded services in unconcentrated markets, such as photography and childcare, platform cooperatives provide an alternative that has the potential to change norms.
Online platforms are also starting to change the economy and society in other ways, such as breaking the traditional link between ownership and consumption.
Fractional ownership
In the past, if consumers wanted to use goods or services, they had to buy them. Today, thanks to online platforms, they can use other people’s household items, cameras, cars, gardens for camping, or driveways for parking—without ownership.
“I think peer-to-peer sharing will offer substantial additional supply and activity in most markets where you're dealing with relatively higher value assets,” says Richard Laughton, chair of Sharing Economy UK, a trade body for the UK’s sharing economy industry.
“We've seen sharing develop most rapidly in areas where the underlying asset value is relatively high, like cars and houses. One business, Fat Llama, enables people to rent a variety of household items to each other, but found a particular niche in high-end camera equipment, a big capital outlay for an individual. If you're buying an expensive camera but are only going to be using it for a few weeks a year, it makes sense to monetise it.”
Although Laughton doesn’t see peer-to-peer sharing becoming the dominant kind of supply for most markets, he believes that the experience of sharing could change cultural norms over time. “One of the key drivers of people using sharing economy platforms is building a feeling of trust with the others on the platform. So by acquiring that level of trust, people might become more willing to share things at a local level.”
It is not hard to imagine an economy in which consumer items are settled into two distinct types: those people prefer to own and those people prefer to share. For the latter, industry growth might plateau as replacement rates fall. In the US, 52 per cent of consumers are already questioning whether they need to buy a car. In India, that number is as high as 61 per cent. Sectors relying on consumer growth in high-value assets might see growth slow, or even go into reverse as replacement rates fall.
These trends might give producers a stronger incentive to make their products more durable and sharing-friendly. Competition could also emerge around the trackability of devices designed for sharing, with Internet of Things-enabled objects facilitating sharing in a local area, trackable via an online platform.
It would be unwise to dismiss the possibility that non-commercial online platforms might alter consumer behaviour and social norms around sharing, control and ownership in the future. After all, over the past decade or so, commercial platforms have already done just that.
