What is it?
- A platform cooperative is a digital platform — a website or mobile app that is designed to provide a service or sell a product — that is collectively owned and governed by the people who depend on and participate in it.
- That includes those who deliver the underlying service by contributing labor, time, skills, and/or assets.
- Where corporate “sharing” platforms extract value and distribute it to shareholding owners who seek a return on their investment, platform co-ops distribute ownership and management of the enterprise to its participants — those working for the platform or those using the service.
- Platform co-ops bring the longstanding tradition of cooperative enterprise to the online economy. The two key traits that these digital co-ops must realize are democratic control and collective ownership. Platform co-ops are organizing in diverse sectors such as childcare, data entry, urban recycling, and home services.
- Platform cooperatives are rooted in the seven doctrines of cooperatives laid by the International Co-operative Alliance, 1995), —
- (1)voluntary and open membership, (2) democratic member control, (3) member economic participation, (4) autonomy and independence, (5) education, training, and information, (6) cooperation among cooperatives, and (7) concern for the community.
How it works
- The tenets of platform cooperatives strike a balance between access economy, community based economy, and platform economy.
- These cooperatives catalyse a set of initiatives to intermediate decentralised transactions or exchanges.
- Blockchain-affiliated smart contract, for example, enables this kind of transaction and restore immutability, fault-tolerance, and data provenance through distributed ledger technology.
Typology of platform cooperatives
- The emergence of platform cooperatives traces its roots to asset sharing. It aspires to extend its reach through a local node
- Local and remote “gig work”
- Online market.
- Suite of financial services — savings or remittances, credit, and payment. This NBFC closely works with agri-tech platform start-ups to cater to smallholders a suite of financial products and services.
- Farm Management Information System integrated platform cooperative.
- Software development offering cloud storage and scalable services through a web-based office suite, chatbot, project management software.
- Platform co-operative can be a game-changer to enable community, cultural, ecological, and economic resilience during or after the pandemic period.
- Drawing from the seven principles, platform cooperatives seek to alter the technological heart of the sharing economy and put it to work under a communal ownership model, foster solidarity, and reframe efficiency and innovation for the economic or financial benefit of the many rather than a few capitalists
- Platform co-ops introduce introduce economic fairness, training, and democratic participation in the running of online businesses.
- Platform co-ops give stakeholders a say in what happens on the platforms.
- Higher quality jobs
- Productivity benefits
- More resilient than other business forms
- Lower worker turnover
- More control over privacy and transparency
- Fair pay
- Opportunities to benefit from the ecosystem of cooperatives
- Control over the direction of the business remains with worker-owners
- Complex governance
- Lack of funding
- Dominance of Big data companies
- Aligning the value proposition with member participation is a key to fostering and sustaining platform co-operatives. The value creation and delivery should be distinct from a platform capitalist that intends to optimise the option value of “data.”
- Platform co-operatives should collaborate with cloud services and data analytics firms and redefine the value creation, value capture, and value proposition for local economies.
- These co-operatives should appreciate the digital privacy and data access rights and reuse the data or combine them with other assets for related diversification.
- They need to enjoy the economies of scale and scope leveraging their co-opted technology backbone for better database marketing and other business decisions in a community-based economy.
- The government should create an enabling environment in promoting a thriving network of platform co-operatives for the producers and consumers. However, membership and services added on the platform would decide the context-specific scaling and viability of such businesses.