A New Way to Share: Platform Cooperatives

↑ Weaver Street Market, a cooperative for producers, workers, and consumers with fluid roles.

Multi-stakeholder cooperatives that combine producers and consumers are starting to emerge as a means to move toward sustainability.

The contemporary sharing economy—at least as construed by mainstream media and Silicon Valley—is centered on familiar websites like Uber, Airbnb, and TaskRabbit, and came to public prominence during the aftermath of the 2008 financial crisis. With prodigious infusions of venture capital and timely boosterism from marketing-savvy champions, these Internet startups scaled up rapidly by mobilizing casual workers, monetizing underutilized assets, and disrupting sclerotic industries. The firms have also attracted sharp criticism charging that they contribute the erosion of labor standards and are at the heart of a new “gig” economy that promote exploitation under the guise of enhanced flexibility.

These claims have given rise to vocal demands in some cities in the United States and elsewhere to curb the sharing economy, both through vigorous application of existing regulations and creative design of new frameworks. The ensuing political battles are destined to continue for the foreseeable future, and the eventual result will likely be a patchwork of inconsistent and contradictory arrangements. While we can be hopeful that these legalistic interventions will temper the most insidious practices, it is improbable that they will alter the basic trajectory of the sharing economy. The overall effect will be a protracted war of attrition where ideologues argue about the vices and virtues of the ersatz communalism inherent in platform-driven sharing practices.

Present-day commercialized sharing falls mainly into two categories: mediated micro-entrepreneurship and serialized rental.

Mediated micro-entrepreneurship entails the brokerage of individual assets and/or labor and irregular work opportunities for which the match-making platform receives a commission. Applied within the field of urban mobility, this is the strategy operationalized by Uber, which relies on itinerant drivers to provide on-demand taxi services using their own cars.

Serialized rental, by way of contrast, is common to anyone who has picked up a car at the airport from Hertz or one of its competitors, but the business model has more recently been adapted for intra-urban travel and spur-of-the-moment city trips by ZipCar (a subsidiary of the Avis Budget Group), Car2Go (a subsidiary of Daimler AG), and a host of other companies.

By contrast, a third alternative—communitarian provisioning—promises a more credible form of sharing. With respect to mobility services, this option includes “transit oriented” nonprofit and cooperative providers like City Car Share in San Francisco and Modo in Vancouver.

Development of a more efficacious sharing economy will require constraining expansion of mediated micro-entrepreneurship and serialized rental in favor of modes consistent with communitarian provisioning. Fortunately, the last year has given rise to a few interesting propositions and many innovative social enterprises (first reported by Shareable in “Owning is the New Sharing“) with the potential to steer us in a more democratic and accountable direction. Especially notable is a recommendation by Nathan Schneider and Trebor Scholtz urging workers to become owners under the aegis of what they call platform cooperativism. The movement they intend to catalyze through an upcoming event in New York City calls for a deep reconfiguration of the sharing economy premised on producer collaboration and a vision of progressive economic transformation. And Schneider and Scholtz are correct to counsel urgency. Decisive action is indeed necessary before the current VC-backed frontrunners solidify impregnable monopolies in their respective markets. In moving toward platform cooperativism, the availability of open-source software like Sharetribe, which enables social entrepreneurs to easily create new sharing networks is likely to be an important new development.

While this idea is unquestionably laudable, there is opportunity to push it a little further. Why limit cooperation only to producers while implicitly treating consumers as little more than a mass of aggregate demand? Why elevate workers over their customers when the distinction is artificial and rarely static? A more creative and ambitious application of platform cooperativism would embrace consumers as co-equals and seek to formulate novel business models that span production and consumption. The uniting of these two domains would dissolve predispositions that treat buyers and sellers as rivals rather than allies, prioritize return on investment rather than solidarity, and emphasize value appropriation rather than community improvement.

In the non-digital world, so-called multi-stakeholder cooperatives that combine producers and consumers are starting to emerge, especially in conjunction with local food movements.

A prominent example is Eroski, a subsidiary of the venerable Mondragon Corporation, which operates more than 1,000 supermarkets in Spain. The Weaver Street Market is a worker- and consumer-owned cooperative based in North Carolina that runs three stores specializing in organic produce and fair trade products, as well as a restaurant. Applying this hybrid approach to a revivified sharing economy would involve the payment of an annual subscription fee by consumer-owners who would then be entitled to a predetermined number of, say, taxi trips or overnight stays provided by their producer-owner colleagues. Since few people are exclusively producers or consumers, affiliation with a multi-stakeholder cooperative would facilitate seamless shifts between roles. On some days, a particular member would find herself working as a producer and on others she would be consuming goods or services provided by the mutual association.

The Quiver

↑ The Quiver, a peer-to-peer surfboard rental company is a Sharetribe success story. Photo courtesy of Sharetribe.

A sharing economy that apportioned control to both producers and consumers instead of platform investors could also help to move us toward a more socially equitable and ecologically sustainable future.

Let me first make an obvious point. Consumerist lifestyles in affluent countries are driven more by a quest for social distinction than by a desire to satisfy biophysical needs. (This does not discount the existence of perverse inequalities due to political circumstances.) An emergent body of research suggests that involvement in more solidaristic modes of production suppresses status competition by orienting people toward less individualistic aspirations. If correct, participation in a producer-consumer cooperative could be a useful way to reduce outsized consumption that is impelled largely by cultural imperatives.

Moreover, the antagonism between producers and consumers that is inherent in predominant systems of exchange frequently results in consumption in excess of genuine needs—often through the use of tempting volume discounts and the manufacture of goods that become prematurely obsolete. By stressing their continuously shifting—and oftentimes reciprocal—relationships, producer-consumer cooperatives could bring the intentions of production and consumption into closer alignment.

It also merits noting that to be successful, producer-consumer cooperatives would need to resist powerful impulses to expand their scale by pushing down the retail cost of the goods and services on offer. While lower prices are attractive from the standpoint of consumption, they undermine the livelihoods of producers. In the business-as-usual economy, workers at the lower rungs of the economic ladder are more vulnerable to continual pressure to cut prices. There is also the problem of perverse rebound effects as lower expenditures in one product category almost always increase demand for other items (unless one also proportionately works less, deposits the difference in a non-lending financial institution, or sets fire to the surplus cash). A cooperative ownership model where producers and consumers are equally empowered and, ideally, difficult to differentiate because they are regularly swapping responsibilities, should help to discourage these untoward outcomes.

As we consider options to overhaul the sharing economy so that it enhances rather than weakens social cohesion, it is important not to set producers against consumers as, after all, the distinction is predicated on pretense. Normal routines require continuous rotation of roles and we should not fall back on outmoded commitments that privilege the sphere of production as the only reliable driver of social change.

This post first appeared in Shareable.

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