Creating Technology for Social Change

9 Working Examples of Platform Cooperatives

Having spent a day here in New York City discussing the idea of platform cooperatives, the conversation shifted this evening with a showcase of nine actual cooperative organizations and technologies.

(image by Jojo Karlin)

Starting out the conversation was New York City Council Member Maria del Carmen Arroyo. She talked about first hearing about the idea of worker-owned businesses at a conference by the Federation of Protestant Welfare Agencies, and then took the idea forward with the New York City Council. For 2016, the city approved of a $2.1 million Worker Cooperative Business Development Initiative. Arroyo talked about her hopes that they would be able to promote similar initiatives at a state and federal level.

Next up, Janelle Orsi of the sustainable economies law center talks about the wider context in which co-ops matter. She shows us data on inequality in America, where 20% of people control 93% of the wealth, and where white households have 13 times the wealth of black people (in 2013), and where the gap has widened from 8x in 1983. It’s time to change the rules of the game she says, rules that aren’t necessarily government rules, but rather rules that are between people.

What rules should we change? The first thing to change is that the people with the most money should get the most money out of something, even if they’re not putting labor into something. The next rule to change is the idea that money equals power, where people who invest the most have the greatest power in the company, even though they’re not part of the company. An alternative would be that money doesn’t buy profits and power. That’s the only way, she says that we can change this wider issue of inequality.

In cooperatives, surplus goes back to people based on how much they work. Cooperatives typically give one person one vote, so money doesn’t equate to power. “Old school” companies typically give workers as little as they can get away with, while worker owned companies give to employees from the surplus.

According to Orsi, Good co-ops need clear, legal, financial, and governance structures to ensure shared control, shared wealth, and shared responsibility for the common good. She outlines a wider set of qualities that should go into bylaws for co-operatives, as well as the kinds of decisions about financial structures, and safeguards to prevent the co-op from being purchased by a wealthy buyer.

How do we get from current platform economies to co-operatives? It’s not so hard as typical political mobilization, Janelle says. The first step is to organize. The second step is to leap to the new platform. The third step is to delete the old platform, and then repeat. Janelle concludes by drawing an analogy from the problem of redlining; she argues that co-operatives offer an opportunity to “greenline” buying power and investing power to systematically funnel resources to projects that we want to succeed.

Next up is a showcase of nine projects that are doing the work of creating cooperative platforms.

Ali Alkhatib presents work from Microsoft FUSE Labs on designing worker-centric labor markets (slides). Ali is a PhD student in computer science at Stanford and has a background collaborating on the Dynamo platform for collective action by mechanical turkers.

Ali argues that we all want to see better ‘gig’ labor markets. Unfortunately, laws protecting these workers have been slow to emerge. He argues that ideas can propagate faster than laws and regulations can. He set out to demonstrate that cooperative markets can compete with adversarial ones on their own terms. Over the summer, he spent weeks finding participants, did a lot of participant observation working dispatch, and participatory design, where he designed with partners, not clients. Ali talks about issues for workers to work through: how to design for constructive feedback, the social dilemma of work dispatch, managing customer expectations– issues that came up in conversations with the national domestic workers alliance who they made a prototype with.

What’s next? Ali is focusing on the collective governance question. It’s also important to create technologies that include the answers that come out of conversations with workers.

Brianna Wettlaufer of Stocksy talks to us about putting power into the hands of workers, artists, and creators — sharing profits and ownership among them. Stocksy is an artist owned co-op that sells stock photography. They built this company after starting and selling iStock to Getty.

To reinvent the work, they had to reinvent what stock photography looked like, which meant reaching out to many people who hadn’t sold photos before. By 2014, they had revenues of $3.7 million dollars, and over their history, they’ve paid out several million dollars in surplus to their artists.

Brianna talks about key principles they’ve learned over the years as staff members in a co-op that has clients and artists as stakeholders: listen to their worker members, always be positive in their responses, always base their responses on evidence, and make sure that clients always feel heard.

Felix Weth of Fairmondo, which tries to create a co-operative alternative to ebay and Amazon marketplace. In addition to functioning like an online market, the site also promotes a smaller number of fair trade and ethically sourced companies. He talks about the difficulties they have faced in building their community over the year– he wouldn’t call them a success quite yet. If you develop your own software, he says, you’re taking on a big challenge, which is good because you can create principled software that meets your needs. But you also have the risk of failing to create something that won’t effectively compete with other companies. They’ve spent a lot of money building this software, money invested by their co-op members. They have also done five crowdfunding campaigns. Each of them have been successful, but the have also been a big challenge, because Fairmondo needs double-digit millions of dollars to reach profitability, while they’re getting a maximum investment of 700,000 Euro. In his impression, large multinational corporations are better at cooperating with other firms than co-ops are less capable of cooperating with each other.

Felix concludes by talking to us about the idea of “co-ops 2.0,” a co-operative that can’t be corrupted, respects all stakeholders, is democratically accountable, and rewards people with points for investing time and work. He encourages us to join the session tomorrow to learn more.

Next, Melina Diaconis, a Cornell Tech MBA student, of Coopify talks about a project they built on behalf of Robin Hood. This is a device agnostic, mobile-first platform that is designed to allow them to scale and engage digitally. She talks about choices they made that allow workers to receive funds directly in cash. The system also allows people to continuously book with the same person. The system also supports a referral system. Finally, the system offers multilingual support.

Robert Benjamin of Member’s Media, a co-operatively owned media platform, argues that “independently-produced narratives has value in society because it has a chance to produce empathy.” Yet while the power to produce media is becoming more widespread and the power to reach people is more possible than ever before. Platforms like YouTube and other content systems are “free-ish.” They incentivize media that generates impressions, regardless of the personal or societal impact something might have. He argues that advertising is still shaping what content is made– just as in television. They’ve created a co-operative film fund that allows them to operate every part of the film-making process in a co-operative manner, as a “multi-stakeholder limited cooperative association” with investors, builders, creators, collaborators, supporters, and mentors.

Francis Jervis, an NYU PhD student, talks about TimesFree, which he created in Helen Nissenbaum’s class, a blockchain based labor system based on cryptocurrency. People mostly want to trade with a small circle of people who they really trust, Francis says. The most effective form of time sharing structures aren’t time banking; they’re things much closer to home. Babysitting co-ops, he argues, are a great model for the peer economy. They use form of scrip, a token system that allows people to share between themselves without using money. In these, a single token is worth 15 minutes of babysitting. Others just have a central log or spreadsheet, with a member acting as a secretary. Families who use these can save thousands of dollars every year, even if they just use it a few hours a week.

Babysitting can also fail for specific reasons. There was a babysitting co-op in DC that no one could use even though they had tokens. Either some people had so many tokens that they didn’t have incentive to contribute, or people had so few that didn’t claim them. In Arun Sundararajan’s NYU class on the sharing economy, Francis simulated different ways of setting up co-ops to understand how to prevent them from failing in this way. By introducing a matching algorithm, Francis was increase the probability that a given family would get what they needed.

Based on these simulations, the Timesfree system is a common ledger that tracks tokens and matches people to avoid the systems that causes time-share co-ops to fail. The system launched on the Apple app store in August, and there are several groups using in different parts of the US. Francis talks about the idea of applying TimesFree to many other parts of the economy.

Noemi Giszpenc tells us about Data Commons Cooperative, which brings together organizations building the cooperative and solidarity economy. The organizations believe in sharing information with each other: membership lists, measurements, opportunities – to give greater strength and resilience to all participating. The co-op, which started in 2012, now has over 30 member organizations. She talks about a collaborative mapping system that’s being used to map out co-ops in a region, as well as a system for comparing lists to one another. Their goal is to work together across co-ops to gather, share, maintain, display, and deploy data to serve their communities.

Peter Harris tells us about Resonate, a cooperative streaming music system. He tells us that revenue from streaming music services have passed CD sales, even though artists aren’t getting the money. He talks about the business structure of Apple, Spotify, and YouTube, where the deals between labels and platforms are not always transparent to artists, who have limited access to audience data. In Resonate, users “stream it until you own it.” The first time you play a song, it costs 0.002 cents, the second time it costs you 0.004 cents, and by the 4th or 5th play, you’ve started to identify with this music, become a fan of it, and build a bond with it. Eventually, as you play it more and more, you come to own it. Peter talks about upcoming challenges:

Joshua Danielson tells us about Loconomics, a group (in beta) that uses tech, shared ownership, and community to local economies, through a system that allows you to search for freelancing professionals. This system is worker owned, there are no markups, and no bidding. The system handles payments, does background checks (for work with kids, elderly, or cases of licensed professionals), and has a way to note your favorite professionals. He shows us a profile page that lists the person’s experience and bio, as well as the services they’re able to provide.

Service professionals get the tools they need to run their own business, a marketplace for finding work, and ownership of the marketplace. They’re also building accounting and performance tracking capabilities to help service professionals set and meet goals. Membership in Loconomics costs a $29.95 a month fee (or $300 per year). They’re now testing the app in the SF Bay Area in January and February, and will start to allow users from other markets starting in March.