Can the platform co-op model revolutionise the world of retail?

Platform co-operatives are aiming to provide a viable alternative to the “winner takes all” internet model which saw the rise of Amazon and eBay and helped Uber and Airbnb revolutionise the way we access transport and accommodation.

In New York in November 2015, more than 1,000 activists, academics, co-operators and business leaders met to discuss a different kind of  web business – combining the rich heritage of co-ops with 21st-century technologies – but free from the usual monopoly, exploitation and surveillance.

Writer and activist Nathan Schneider, who co-organised the conference, is at the heart of the platform co-operative movement.

He says the capitalist organisations dominating online trade are “incredibly convenient and appealing tools that are in some ways tremendous advances on how things were before.

“However, they are not willing to be accountable to the communities in which they operate and to the labour protections that workers have fought for.

“Platform co-ops aim to provide the same convenience and innovation, but with responsibility and accountability baked into their DNA.”

Mr Schneider is now organising the follow-up, to be held this autumn. There are other conferences planned in Europe, Toronto, and Australia.

And in February, London hosted the Open 2017 conference, which looked at ways of building a more collaborative economy.  Platform co-ops were a key part of the agenda, with software developers, politicians, businesses and NGOs joined by co-operators like Simon Borkin, programme development lead at Co-operatives UK.

He says: “What makes platform co-operatives unique, as opposed to individual web-based co-operatives, is that they are a marketplace of stakeholders that come together to engage in a particular activity with values embedded through shared ownership.”

Related: How can governments help build the platform co-op movement, asks Open 2017

In the US, one of the most successful platform co-operatives is Stocksy – an online stock photo co-operative that pays at least 50% of every photo licensed to the photographer. Because it is a co-operative, every contributor receives a share of the company.

“Stocksy is a good example of how platform co-ops work,” says Mr Borkin. “Photographers provide a marketplace where stakeholders can come together and the value of that platform is embedded within a co-operative approach, which means  photographers share the benefit.”

He adds: “In the last few years there has been a growing recognition that the platform co-op model can work and that there are better ways to organise.

“What platform co-ops rely on is building a network – and if you look at something like Uber, they have needed a huge amount of venture capital to start out.”

Co-operatives UK is interested in emerging sectors, he adds, and has provided “dedicated support” to platform co-ops.

“I think in the coming period you will definitely see more platform co-ops emerging. I am under no illusions that you will see them on the scale of Airbnb, but with the right community they can interact and engage with everything from retail to transport or energy.

“Co-operatives UK has already been involved in digital platforms for co-ops like 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.”

A new model for retail

 Another area which offers scope for co-operative growth is online grocery shopping, which currently accounts for 6% of the market and is expected to grow to 9% by 2021.

Last month, Coop Alleanza in Italy launched online food shopping for 10,000 products through an online portal, www.easycoop.com.

In the UK, the Co-op Group’s plan to enter the lucrative home delivery market has been on the shelf since the company’s financial crisis in 2013. But as the online retail market grows, there is scope for a co-operatives to make their mark – and there is already a small new player on the block, with big ambitions to rival Amazon.

Fairmondo UK wants to provide an online marketplace for buyers and sellers with strong ethical commitments – connecting ethical producers and sellers with like-minded consumers.   

The Fairmondo brand began life in Germany in 2012 as a co-operatively owned marketplace promoting fair goods and services. The UK launch is the next step in building a global network of co-operative platforms for trading goods and services.

And it has already received a boost to its plans, after beating a host of other tech start-ups in #DigiDen, a Dragon’s Den-style competition at the  Open:2017 Platform Co-op Conference.

The contest was run in partnership with The Hive, the business support programme for co-ops set up by Co-operatives UK, the Co-operative Bank, and the Open Co-op. It netted Fairmondo UK the prize of specialist business support from Co-operatives UK and £2,000 in start-up funding.

Members are also learning more about online distribution from the UK’s largest worker co-op and wholefood wholesaler, Suma.

First steps to a new internet

Founding member Jack Thorp says: “We became aware of Fairmondo in Germany and, as we were not looking to reinvent the wheel, we reached an understanding with  them. Our visions are closely aligned, so we work together and share branding.

“We have met up a few times to develop our shared understanding of what we are trying to do. We support each other financially because neither of us is sustainable on our own at the moment.”

Mr Thorp says work on Fairmondo UK has been on a voluntary, spare time basis until now, because of a lack of major funding.

“We have opened a test marketplace in the UK,” he said. “It’s a talking point and a way of engaging with people. We have been running that for a year and managed to build up a group of sellers and more users. For the marketplace to work, we have to have lots of goods and attract more sellers. So we are now crowdfunding, and we are planning to have everything from clothes to sustainable goods and artisan products.

“It’s been difficult all the way along but we are sticking at it. There is a popular movement forming around this idea of platform co-operatives and we hope that will help us.

“There is a general appetite for change and lots of concern over data ownership and privacy issues. People see how things like Facebook manipulate them. We are doing a lot of messaging and getting the word out. We are very optimistic.”

As for the long-term future of platform co-ops, Nathan Schneider believes the UK is particularly well-placed to take the idea forward.

“The phenomenon is relatively new,” he says, “and it’s essential to connect with the legacy institutions that have kept the co-operative movement going strong for so long.

“The UK has a number of such institutions, and they’re well poised to help take leadership in this movement. The London platform co-op event in February was an important step in this direction.”

Welcoming Labour leader Jeremy Corbyn’s adoption of platform co-ops in his Digital Democracy Manifesto, Mr Schneider says: “He joins many political leaders around the world who have been interested in developing policy to support a more inclusively owned and governed internet. The economic challenges we face can’t be addressed adequately without the reorganisation of how online platforms are owned and governed.”