Platform cooperativism, a sharing economy movement that aims to distribute power and value more broadly, is emerging in response to the sheer dominance and perceived flaws of platforms like Airbnb and Uber. In this paper, Bruno Carballa Smichowski explores the budding movement and argues that while platform coopertavism could “fix” some of the sharing economy’s flaws – through better income distribution, transparency and working conditions – it cannot do so without significant policy change.
Platform cooperatives share three common characteristics. First, they “clone” the technological heart” of popular platforms. Second, they are more typically “owned and operated by unions, cities, and various other forms of cooperatives”. Lastly, platform cooperatives focus on benefiting a wider range of users and owners, instead of a limited few. However, despite the potential benefits, four market mechanisms make it difficult for such platforms to compete and grow. They are:
- Network effects
- Switching costs
- Data collection and storing fixed costs as a barrier to entry
- A large enough amount of personal data as an essential facility
Carballa Smichowski argues that most of these competition problems arise from the fact that platforms have private and exclusive property over the databases they create with users’ information. In response, the author proposes a policy solution for data as a common, and outlines the mechanics, challenges, legalities and opportunities underlying the policy.