William Morris’ News from Nowhere, written at the end of the 19th century during the industrial age, presents us a vision of the end of the 21st century rooted in common ownership, the abolition of capital as the founding tenet of modern society, radical notions of the meaning of labor, and flourishing cooperatives that reify democratic control over the means of production. Morris, a towering figure in the Arts and Craft movement, was also married to the idea of a deindustrialized society.
Ten years into the 21st century, the chickens of a rapidly deindustrializing society have indeed come to roost, but not in quite the way Morris perhaps imagined.
The Growing Woes of Labor
The International Labour Organization (ILO) estimates that around 70% of the Global South’s workforce is engaged in the informal economy, with a majority navigating underemployment and unemployment, bereft of any social security, as “wage hunters and gatherers”. The economic downturn caused by the Covid-19 pandemic has further exacerbated the conditions of this labor force. It is reported, that the initial stages of the pandemic led to a 14% loss of work hours worldwide, equivalent to 480 million full-time jobs. Existing maladies such as slack economies, a burgeoning workforce with shrinking opportunities in the labor market, and stagnant growth only stand to be prodded along by the attendant economic shock of the pandemic in the short- to mid-term in the Global South.
Conversely, the pandemic has only boosted the growth of the digital economy. There has been a dramatic upturn in the fortunes of e-commerce platforms. Latin America’s online marketplace, Mercado Libre’s sales doubled. African e-commerce platform Jumia reported a 50% jump in transactions. In Kazakhstan, the online share of retail sales increased from 5% in 2019 to 9.4% in 2020. In India, certain platforms deemed as providing essential services during the 2020 lockdowns witnessed 66% leaps in profits. Similar spurts of growth can be seen in delivery and home-service platforms.
These impressive numbers, however, have done precious little to ameliorate the conditions of workers within these supply chains, whose working conditions, low wages, and lack of access to social protection and collective bargaining rights have come into sharper focus during the pandemic.
The digital economy has driven transformations in the labor market, consolidating a model of on-demand, atomized gig work that locks workers into precarious livelihoods controlled by opaque algorithms. These platforms also increasingly employ the surveillance and data mining on their own workforces to engender a new form of taylorism that is poised to result in the long-term deskilling of various forms of labor. For instance, as a taxi driver’s intricate knowledge of the city is transposed through the data mining process into a learning algorithm, it diminishes the value of this knowledge. The market restructured by ride-hailing apps, thus, contributes to that driver’s disposability. Given these circumstances, working people the world over confront an increasingly hazardous reality.
Platform Cooperatives in the Global South
While bereft of the robust unions and labor institutions of an older generation, workers have continued to seek alternative forms of collective self-organization to challenge and mitigate against the brutal logic of the market.
To this end, one of the more notable burgeoning movements within the digital economy is that of ‘platform cooperativism’, the idea of employing the democratic governance and ownership structures of traditional cooperatives as a means to run digital platforms. As scholar Trebor Scholz evocatively defines it, “Platform cooperativism is a term that describes technological, cultural, political, and social changes. Platform cooperativism is a rectangle of hope. It’s not a concrete utopia; it is an emerging economy.”
Platform cooperatives are a recent phenomenon, with a history of less than a decade. However, there have already been several successful examples, particularly in Europe and North America, such as the online photo sharing platform Stocksy, Up & Go – the federation of domestic work cooperatives in New York – and the online, cooperatively-run market place Fairmondo, amongst a series of others. The movement remains at a more incipient stage within the countries of the Global South, but there are a host of interesting projects taking shape there as well.
The newly launched Yatri app, a taxi aggregator in the city of Kochi, in Kerala, India stands at an impressive 4.2 rating on Google Playstore at the moment. What is not immediately visible is Yatri’s origin as a cooperative comprising 1000 drivers from five trade unions under the initiative of the Kerala Metropolitan Transport Authority (KMTA), soon to be integrated into a single app as part of the Kochi Open Mobility Network (KOMN). Yatri is one of several initiatives from Kerala to challenge the hegemony of dominant platforms like Uber in the past few years. Such initiatives aim to keep workers’ interest at the heart of their business model, the latest attempt borne of the pandemic-induced fall in patronage in bigger platforms. Similarly, in Colombia, drivers who have become disenchanted with the exploitative conditions on dominant ride-hailing platforms are starting to build their own networks. Despite not possessing the resources to develop platforms of their own, these drivers have utilized communication tools like Zello, and other digital apps to calculate meter fares, in order to provide their services independently of dominant ride-sharing platforms. They have also developed a sophisticated framework of democratic, peer-to-peer governance norms for overseeing their own communities.
In Indonesia, where nearly half the adult-population continues to lack adequate access to the internet, the Koperasi Digital Indonesia Mandiri (KDIM) cooperative in Jakarta is working to confront the digital divide by building a locally-produced, low-end smartphone that can expand ownership of digital technology, and bring those excluded back into the fold. Over and above this, KDIM is also working on developing a digital platform that can facilitate the use of services from other cooperatives around the country.
A movement such as platform cooperativism represents a genuine force seeking to reclaim these digital technologies for the people’s interests. Such initiatives are absolutely vital, but in order for them to grow, particularly in a Global South context, the wider legal and economic terrain needs to allow them to flourish.
In Argentina, the Moneda Par project backed by the National Institute of Associativism and Social Economy envisions an entire ecosystem that hopes to be insulated from the vagaries of mainstream capitalism. It has experimented in using blockchain technologies to design a social currency system to uphold the purchasing power of workers and their capacity to access vital goods and services when the national currency is undergoing devaluation and hyperinflation.
Similarly, in the African continent, various small-scale initiatives are starting to emerge. In Rwanda, for instance, a farmer-owned platform is being used to expand the sale of local roasted coffee beans to new international markets. Meanwhile, a team at the University of Western Cape is in the midst of setting up a platform cooperative for the country’s vast domestic and care work sector.
These examples from various regions of the Global South represent a small sample of a host of novel initiatives. In different ways, they are rooted in a vision of the interface between labor and digital technology that pushes back against prevailing conditions of control, exploitation, and precarity. Moreover, they are part of a much wider ecosystem of workers’ efforts to organize, often being closely linked or allied with other modes of worker resistance such as mutual aid stations, algoactivism, worker-to-public campaigns and creative protest and subversion strategies like Indian cabbies on ride-hailing platforms switching off the air conditioning until their demands are met or African service workers adding dummy display screens to prevent workplace surveillance.
An Uphill Path to Viability
While these developments are positive, it is crucial to take stock of both the internal limitations and external obstacles that worker-led initiatives confront, particularly in a Global South context rife with informality, uneven development, ineffective regulation, the domineering presence of transnational platforms, and inadequate labor-rights frameworks.
Co-operatives in the South are beset with certain problems right at the outset since they rely on member contributions that may be unreliable. They also lack agility compared to their well-funded competitors when it comes to responding to the vagaries of the market. In addition, the principles intrinsic to the cooperative ethos – including democratic ownership, governance, and decision making – often find themselves constrained by the constant exigencies of market forces. Platform cooperatives also face distinct challenges in the South, where markets tend to be price sensitive. The lack of recourse to finance compared to the venture capital-fed ecosystem of startups and the attendant inability to leverage network effects and build a data advantage, thus, adversely impact their scalability and sustainability.
The developing country landscape often creates additional institutional hurdles that can be hostile to such initiatives. “In some parts of the world, cooperative entrepreneurship is encouraged and the laws are friendly”, says Revathi Kollegala, a technology advisor for SEWA Federation, the largest cooperative federation of unorganized women workers in the world. “In France you can create a startup and be registered as a cooperative and gain a series of incentives. But that is not true for India.”
In fact, as she points out, the legal regime for cooperatives in a country like India, which has some of the most successful cooperatives in the dairy and handloom sectors, have barely evolved since the first wave of cooperatives, which was nearly half a century ago. Today, starting a cooperative is a cumbersome process, with different regulations across different states, thresholds for minimum members, the need to have the organization’s bylaws ratified, and so forth.
Similar hurdles are also present with respect to finance. Approaching a bank to receive a loan as a cooperative enterprise is more difficult than doing so as a regular business. All of these factors point to the stark disparity in institutional support that platform cooperatives can access vis-a-vis technology startups for whom all types of subsidies, regulatory sandboxes, and financial pipelines are devised with great policy enthusiasm. In many ways, the two types of organizations work in the same space, and often build products and platforms that are in direct competition with each other. Despite this, much of the economic ecosystem remains broadly skewed in favor of the startup model.
Another persistent issue within the Global South context has to do with uneven access to digital technology, and a widespread mistrust of it – especially among the demographics that form the central constituency of a potential platform cooperative movement. Reflecting on her experience co-designing platforms with SEWA’s informal women workers, Kollegala says, “there’s a lack of trust when it comes to technology. Partly because of a history where it has been used for oppression, partly it could be the lack of literacy in the country, it could be any of these things…but there’s a need to build that level of trust as well as transfer that level of ownership that these women have in these groups into the platform or the cooperative technology that they own. That, I think, is a part of the design process which’ll help find the competitive advantage of any platform that will come out of this.”
The lack of recourse to finance compared to the venture capital-fed ecosystem of startups and the attendant inability to leverage network effects and build a data advantage, thus, adversely impact their scalability and sustainability.
Kollegala points to the insights from the team at CoLab Cooperative, that worked on the pioneering Up & Go platform cooperative in New York, claiming that one the keys to success in that endeavor was the kind of operational dynamic that the cooperative structure engendered. It was “almost psychological, the member-owners who are a part of it are less likely to compete and look at each other as cooperating with each other… That gave it a cooperative advantage”. She also observes that in many ways, the Global South’s history of cooperativism almost gives it a head-start in this regard; “In the Global South, a lot of that bond and cooperation already exists. SEWA’s cooperatives are formed by affinity groups and self-help groups. However, what has been hard is “translating that sense of cooperation onto a technological platform”.
Rebuilding trust in technology and bringing workers into the collaborative process of designing genuinely equitable and inclusive platforms requires a coordinated effort. One that would have to not only involve local communities, trade unions, and technologists, but also the state, which must help create the enabling conditions for workers to stake their futures in such initiatives.
Tackling the Data Disadvantage
Critical to the long-term success of platform cooperatives and similar initiatives is the mode of engagement they manage to establish with data-based intelligence. Indeed, as the platform economy has grown, the centrality of data as its driving force has become increasingly apparent. It has become “a foundational form of capital for everything from the ‘smart home’ to the ‘smart city,’ finance to governance, production to distribution, consumer devices to enterprise systems, and much more”, in the words of scholar Jathan Sadowski. Its extraction through various surveillance and tracking mechanisms, and its conversion to digital intelligence through AI systems, allows for the continuous optimization of platform activities, and through these efficiency gains in service-delivery, an increasing portion of market-shares.
Platform cooperatives, often in direct competition with these data-fuelled tech corporations, are placed at a severe disadvantage, unless they can find alternative ways to harness the resource of data to augment their own business models. However, currently, the platform cooperative movement has pre-dominantly adopted a position of ‘data minimalism’, where peer-based localized networks of market exchange rather than any intelligence advantage forms the organizing principle. As a strategy, this stacks the odds against such initiatives in being able to compete in a market place where data extractivism is the norm. It is, therefore, key that platform cooperatives are cognizant of this and work towards more democratic and accountable practices around collecting, processing, and using data.
Some experiments with data cooperatives have already started to emerge, especially in the Global North, wherein members of the cooperative pool their data and collectively determine stewardship principles. However, such small-scale efforts lack the means to generate digital intelligence and the advantages that it carries. They also pose the danger of upholding only the interests and solidarity of a particular group of workers, as opposed to a more general public interest. That said, a more ambitious framework for helping platforms and data cooperatives to genuinely leverage such digital intelligence will require enabling public policies and infrastructure – including mechanisms for enforcing data-sharing, digital marketplaces, and publicly-owned mechanisms for AI-based analytics.
A Digital Economy for the People
Digital platforms and data-related intelligence processes enable the coordination of vastly complex economic activities. The large-scale collection of data allows insights about macro-level societal dynamics – from traffic choke points to patterns of carbon emissions, evolution of public opinion on particular issues, and real-time disruptions in supply chains or financial markets. Such capabilities – at least in their degree of sophistication – are unique to the contemporary world, and they are a precondition to intervening in and being able to steer our collective life. Given this, they are far too important to be left to private interests and the profit motive. They must be brought within the ambit of democratic control.
A movement such as platform cooperativism represents a genuine force seeking to reclaim these digital technologies for the people’s interests. Such initiatives are absolutely vital, but in order for them to grow, particularly in a Global South context, the wider legal and economic terrain needs to allow them to flourish.
Reforming regulations around setting up and operating cooperatives and establishing an enabling policy environment, would be a crucial first step. What must go hand in hand with this process is facilitating access to new and sustainable sources of finance as well as instituting regulatory frameworks for the protection of data rights and institutional frameworks for the public appropriation of digital intelligence. Additionally, creating consumer awareness and incentivizing participation in these enterprises is necessary for wider buy in.
One should remember that many of today’s platforms evolved as part of the so-called ‘sharing economy’, a discourse that grew in the aftermath of the 2008 recession from the widespread discontent with prevailing capitalist reality. This idea was suffused with a populist and egalitarian spirit to mobilize digital technology to foster new decentralized, peer-based economic relationships that were free of older forms of exploitation and empowered the individual citizen. Looking at the incredible concentration of wealth within a handful of platforms that we have ended up with, it is clear that this vision was swiftly co-opted by Big Tech.
As the Covid-19 pandemic unleashes fresh waves of disillusionment, and renewed impulses towards change, it is imperative that movements like platform cooperativism are protected from a similar fate. This needs them to have a symbiotic relationship with the development of public policy. The project of wresting the digital economy from the grip of corporate power requires a cohesive movement between the creative multitude and the vectors of institutional reform.
