Platform ownership and governance (Driving force)
The research project ‘Future scenarios of platform work’ explores the economic, labour market and societal impacts of two types of platform work – platform-determined routine work and worker-initiated moderately skilled platform work – by 2030. The project identified eight key driving forces deemed to substantially influence the development of these two types of platform work. These driving forces and associated hypotheses were used to derive potential platform work scenarios, and, from these, pointers were developed on what policy could do to make a desirable future happen and to avoid an undesirable one. This is the definition of one of the eight key driving forces identified.
The ownership of the online platform or app that matches supply and demand for paid work determines the strategic orientation of the platform in terms of, for example, profit orientation (profit or non-profit), geographic scope (such as local, national or international) and growth strategy (such as sustainable or quick growth). Platform ownership is also relevant to the governance model – for example, how to treat workers and clients affiliated to the platform.
From a macroeconomic perspective, trends concerning ownership and governance structures can affect the competitive situation within the platform economy.
From a regulatory perspective, it may make a difference whether a platform is headquartered in the EU or not. Most of the longer-standing and better-established labour platforms in Europe have non-European (for example, US) ownership and are profit oriented. The vast majority of European platforms are of much smaller scale and scope, and often target a local market.
Nevertheless, other ownership models are emerging. Some platforms across Europe are run as cooperatives (see PlatformCoop Directory), with the affiliated workers being members who have stakes in the platform decisions and governance. Such cooperative platforms are either non-profit or characterised by distributing the accumulated profit among the worker–members. In several cases, platform cooperatives emerge due to the dissatisfaction of the workers with the governance structures of platforms, notably how workers are treated. This seems to be more relevant for on-location platform-determined routine work. However, in countries with a stronger tradition of worker cooperatives, it can be assumed that cooperatives mediating on-location worker-initiated moderately skilled work might gain importance, as professionals are to some degree used to coming together in such organisation forms.
- The Internet of Ownership: PlatformCoop Directory
Similarly, the first platforms run by government are emerging. They are, for example, organised by the public employment service as a tool to assign tasks to registered unemployed and could be considered a form of ‘social temporary work agency’, not (exclusively) aiming at achieving a profit but at facilitating labour market integration. Due to the applied matching mechanism and the often lower-skills level and smaller scale of the tasks involved, such an approach is most likely to be more relevant for platform-determined platform work than for worker-initiated platform work.
Employer-owned platforms are another new trend. These exist within individual organisations and are used as a way to organise work. These platforms are accessible only to staff. With employer-owned platforms, the ‘clients’ are within the organisation (for example, line managers who are responsible for task allocation). This trend seems to be more relevant for the platform-determined type, because a higher level of intervention by the platform is sought. Nevertheless, if this trend extends to supply-chain management rather than being limited to company-internal work organisation, it could also be applied for the worker-initiated type.
The project applied a foresight methodology to derive possible future scenarios. As part of this, at least two realistic and mutually exclusive hypotheses were drafted for each of the key drivers to depict their potential future development.
Three hypotheses were identified for this driver.
1. Dominance of non-European shareholder-value model platforms
The European platform economy is dominated by non-European platforms that are profit-oriented and whose scale and scope make it very difficult for new platforms to enter the market.
- Platform work scenario: Business as usual
- Platform work scenario: Technological dystopia
- Platform work scenario: Worst case
- Platform work scenario: Regulate to innovate
2. Dominance of European shareholder-value model platforms
The European platform economy is dominated by European platforms that are profit-oriented. They act mainly at the national level and are of such scale and scope that it is very difficult for new platforms to enter the market. However, across Europe, there exists a larger number of equally competitive platforms.
- Platform work scenario: Matching, only matching
3. Market maturity of new platform ownership models (stakeholder-value models)
New platform-ownership models like cooperatives, company-internal or publicly owned platforms –where the platform’s purpose is not or not exclusively profit-oriented but also serves a social objective – succeed in becoming sustainable and competitive next to shareholder-value model platforms.
- Platform work scenario: Robust and consistent response by the EU
- Platform work scenario: Clear employment status benefits all workers and worker cooperatives
- Platform work scenario: Worker and trade union power
- Platform work scenario: Regulation-driven and emphasis on public platforms
- Platform work scenario: Economic downturn and partial regulatory response
- Eurofound (2018a), Employment and working conditions of selected types of platform work, Publications Office of the European Union, Luxembourg.
- Eurofound (2018b), Platform work: Types and implications for work and employment – Literature review, Publications Office of the European Union, Luxembourg.