Caring for workers
Labour platform cooperatives are naturally worker-centric. They aim at ensuring decent working conditions, guaranteeing access to social protection, and enhancing overall job satisfaction. As a result, platform cooperatives are changing the platform business model from a highly hierarchical and market-driven structure into a collectively owned organisation.
This shift in aims entails the fair distribution of financial resources among members as opposed to the typical exchange of work for pay that characterises typical platforms. It also entails collective management. Cooperatives are getting rid of opaque algorithms that control and coordinate work on platforms. Instead, the members – who can be workers, producers or users of the platforms – take decisions collaboratively through democratic procedures and thus exert control over the operations of the cooperative. Such collaborative spirit has been proven to establish solidarity among members, as well as increase the motivation and productivity of workers. Since workers are involved in the work organisation, cooperatives show lower absenteeism rates, less staff turnover, a more efficient work organisation and higher levels of trust.
Caring for the environment
Platform cooperatives are leading the way towards a local and sustainable economy by addressing local needs and demands while promoting responsible consumption. Most cooperatives operate in an explicit eco-friendly way, seeking to reduce carbon emissions and aiming to save resources.
An example is the French platform cooperative Les Coursiers Nancéiens, which operates in the city of Nancy, France. The delivery platform relies solely on cargo bikes and supports local businesses. It reduces transport miles by keeping deliveries within a cycling-friendly radius and promotes sustainability by prioritising organic products. Rather than competing with commercial platform businesses, these types of cooperatives aim to serve the local market, reduce value chains and support responsible consumption.
Caring for local communities
As platform cooperatives are locally anchored, they are not only oriented towards the specific requirements of their workers, but they also enhance sustainable local development, benefiting the communities they operate in. They do so by creating links between social enterprises, public organisations and local communities. For example, Fairbnb, an Italian cooperative with a telling name, is a short-term rental platform that dedicates a share of its profits to community projects that benefit the municipality. In this way, it creates an alternative to mass tourism that meets sustainability goals.
- Platform economy repository: Fairbnb
Following these three elements, cooperatives are changing the platform economy landscape, helping to diversify it. Across the EU, however, the establishment of cooperatives varies significantly by Member State. Although Eurofound’s platform economy repository does not include all existing cooperatives in Europe, it does show that platform cooperatives are predominantly established in western Europe.
Figure: Number of platform cooperatives in selected Member States
Source: Eurofound- platform economy repository
What should be done to promote platform cooperatives?
One reason for the high number of platform cooperatives in France is that the national legal framework is cooperative friendly. As a good practice example, this provides insights into effective policy support for the creation and sustenance of cooperatives. The French regulatory framework includes precise legal definitions of different kinds of cooperatives, rules to safeguard cooperative principles, and guidelines to address financial and investment shortages; however, it does not explicitly refer to platform cooperatives yet.
The biggest challenge faced by cooperatives is access to funding. Since shared ownership by workers and members is fundamental to the model, cooperatives cannot rely on venture capital. Even if they could, investors and banks would have little interest in financing them since cooperatives are not primarily profit-driven. This presents an enormous disadvantage particularly in the platform economy, which is based on intense competition and has a tendency towards oligopolistic behaviour. Policy measures should, on the one hand, prevent platform businesses from competing with each other by relying on cheap and precarious labour and, on the other hand, support social enterprises to ensure their financial sustainability. With the right policy support, cooperatives could become alternatives to typical platform businesses that offer sustainable solutions and create fair jobs.
Image © Kristina Blokhin/Adobe Stock Photos
