“As ‘Death Star platforms’ such as Airbnb and Uber continue their pursuit of global domination, an alternative is rising in its wake,” wrote Cat Johnson in an introduction to 11 Platform Cooperatives creating a real sharing economy. She was referring to platform co-operatives, which work on the simple co-operative principle of putting power “back in the hands of the people”.
In November, over 1,000 people gathered at a conference in New York to explore how this could be achieved and, since then, discussion around the idea has blossomed. The term itself was coined by author and academic Trebor Scholz, to “give a name to what a lot of people have been longing for – and even working on already”.
“Platform co-operatives, which share the value they create with the users they depend on, are on the rise,” added Ms Johnson.
“As Shareable co-founder Neal Gorenflo writes in How Platform Co-ops Can Beat Death Stars Like Uber to Create a Real Sharing Economy, ‘platform co-ops combine a co-operative business structure with an online platform to deliver a real-world service’”.
The 11 inspiring platform co-operatives Ms Johnson lists cover ride-sharing/car-sharing organisations (Juno, New York; Modo, Vancouver; Tapazz, Belgium), taxis (Union Taxi, Denver; VTC Cab, Paris) and technology (Enspiral, New Zealand; Timefounder, Barcelona; Backfeed, Israel), as well as Peerby, a Dutch neighbour-to-neighbour goods sharing platform; the stock photo site Stocksy; and Fairmondo, an ethical alternative to eBay.
But not all those would be considered “true” co-operatives under the structures of their countries.
“I and, I imagine, the vast majority of people in the global co-operative movement feel quite strongly that to be described as a co-op (platform or otherwise) you should, well, actually be a co-op,” says co-op activist and writer Josef Davies-Coates.
“One of the strengths of the word co-operative is that, in contrast to terms such as ‘social enterprise’, it has a well-defined and internationally agreed meaning, which makes co-option and weakening of the meaning much harder.
“I would really hate for the term ‘platform co-operative’ to result in a blurring and weakening of the meaning of the word ‘co-op’.”
Mr Davies-Coates says the key thing is that “to be considered a co-op you ought to uphold the internationally agreed co-operative values and principles”, as detailed by the International Co-operative Alliance.
“Ownership really matters,” he adds. “A lot.”
Appropriation and perceived misuse of the word has ruffled feathers before. In 2014 American fashion chain Urban Outfitters trademarked ‘Cooperative’ for a range that features “polka-dots, Breton stripes and whimsical prints” and “oozes naïve and quirky charm”.
Urban Outfitters confirmed to Co-operative News that the brand “has no involvement with any co-operative at design or production”.
It seemed as though Urban Outfitters was “trying to capitalise on the work of one billion co-operators worldwide, which we think is just a cheap fashion shot,” said Ed Mayo, secretary general of Co-operatives UK, at the time.
In the same year, it was confirmed that the UK’s Co-operative Bank would be allowed to keep its name, despite being 80% owned by institutional and private shareholders.
Much of the public concern around this appropriation lies with the intention. If Urban Outfitters had committed to donate a percentage of profits from its Cooperative collection to charitable, community or co-operative causes, rather than piggybacking on co-operative heritage for profit, would it have been less of a issue? The intention of initiatives under the platform co-operative umbrella is focused on people power and community ownership. In this context does their set-up matter? Is it just semantics?
The legal business structures of co-operatives varies by jurisdiction. Co-operatives UK recognises as co-ops enterprises that are incorporated as: co-operative societies; community benefit societies; companies; community interest companies; limited liability partnerships; and credit unions.
James Wright, policy officer at Co-operatives UK, adds that “some friendly societies also look very co-operative”, while “building societies are of course a very specific mutual legal form”. Charitable incorporated organisations “are unlikely to look very co-operative, though some with democratic membership-based structures might do so”, he says.
Trebor Scholz’s interest lies in labour, digital and media activism, and in his primer on platform cooperativism quotes John Duda, who spoke at the first platform cooperativism conference in New York.
“How can we take lessons from the long and exciting history of co-operatives and bring them into the digital age?” he asks.
While the UK is one of the leading locations for social tech, the ‘social’ continues to focus on the product or the service offered, rather than the governance and ownership of the organisation
Simon Borkin, programme development lead at Co-operatives UK, adds: “At its heart, platform cooperativism is advocating a co-operative internet, built of platforms owned and governed by the people who rely on them.”
He led a session on platform co-ops at the 2016 Co-operative Congress in Wakefield with Mr Davies-Coates, which explored what can be learnt from the US, and how the idea can be applied in the UK.
“While the UK is one of the leading locations for social tech, the ‘social’ continues to focus on the product or the service offered, rather than the governance and ownership of the organisation,” says Mr Borkin.
“In the 2015 Nominet Social Tech 100, which celebrates the world’s most inspiring projects using digital technology for social good, not one was structured as a co-operative.”
But this needn’t be the case, he adds. “Silicon Valley’s venture capital-driven ecosystem has significantly reduced the considerable cost and risk of starting a venture. Venture capital is about picking winners and capital gain, but in the UK, we have a unique ingredient that you can’t find in the US – social capital. We also have institutional finance (‘big society capital’), intermediaries, tax relief and also, importantly, a growing retail arm, ie socially motivated investors.”
“In particular, community shares can offer the equivalent risk capital to platform co-ops but is socially aligned in that it does not undermine members control and limits the ability for capital gain.”
Co-operatives UK is looking to support this, says Mr Borkin.
“A lot of the theory coming from the US suggests that setting up an incubator model for platform co-ops is a valuable starting point. Co-operatives UK is keen to raise awareness of this approach and bring interested parties together to help develop ideas and proposals. With this, we are hoping to get involved in a forthcoming Platform Co-ops event organised by UnitedDiveristy, Defacto Design and Focal Point, due to be held in January 2017.”
Neal Gorenflo believes that what is needed is “a small number of incubators in different global cities”, working together to give birth to the first wave of platform co-ops.
“The trick is to get the first few platform co-ops off the ground, and then develop a global ecosystem that encourages replication of working models across industry verticals and geographies,” he said.
Mr Borkin agrees. “Co-operatives UK has already been involved in digital platforms for co-operatives, including One Click and Microgenius.
“We want to build on this experience and work with the sector to help create the conditions for other new platform co-ops that are directly owned and controlled by their members.”
He says that one approach would be to set up an incubator for platform co-ops in the UK, offering:
- An application process that is open to all, yet highly competitive
- Provision of pre-seed investment, in exchange for social equity aligned with a co-op structure
- A focus on small teams, not individual founders
- Time-limited support comprising programmed events and intensive mentoring on the co-op model
- Cohorts or ‘classes’ of start-ups rather than individual companies.
In this article
- activist and writer
- Cat Johnson
- co-operative internet
- Co-operatives UK
- Digital technology
- Ed Mayo
- Housing cooperative
- James Wright
- Josef Coates-Davies
- Neal Gorenflo
- Simon Borkin
- term Platform Co-operative
- United Kingdom
- Urban Outfitters
- North America
- United Kingdom
- United States
- Top Stories