Platform Cooperatives: Workplace Democracy for the 21st Century?

by David Schwertgen

Worker-owned ‘Deliveroo alternative’ Kolyma2 offers a potential blueprint for transitioning the platform economy to a post-capitalist world.

The platform economy — as the business model of Deliveroo, Lieferando, UBER and Airbnb is called — is a relatively new phenomenon. When it appeared, traditional unions did nothing to protect the workers from the new forms of exploitation that came along with it. It appears as independent, freelance work, but in reality it is not. Class struggle still lies at the heart of it: Some platforms like e.g. UBER do employ ‘freelancers’ because they don’t want to pay social benefits like health insurance, sick leave, vacations etc. This disruptive behavior has fierce effects on national and global economies.

A delivery rider earns 10,50 Euro on average, which is more than minimum wage in Germany, but in fact it’s less: If no order is dispatched to you, you don’t earn anything and flat hourly rates are rare. Most riders pay their own gear — smartphone, bike, maintenance — and  don’t have paid holidays or sick leave.

In big cities like Paris most of the delivery riders are (illegal) migrants that do the job because they simply won’t find another one. They often work as subcontractors for other bicycle couriers that have a legal status and don’t perceive the flexible working conditions as a benefit. This not entirely the fault of the platforms, however, but also a result of the general situation of migrants that politics failed to address. Also there is a fierce competition between different platform companies, as they aim for market dominance.

When food delivery giant Deliveroo left Berlin for good in August 2019, a group of bike riders founded their own cooperative: Kolyma2.

This caught my attention immediately because it touches on many of the topics that we at DiEM25 discussed in our seminal policy paper: Technological Sovereignty – Democratising Technology and Innovation. I couldn’t wait to observe our theoretical concepts in real life. In early summer 2020 I finally got to talk to some people of Kolyma2 in a video conference.

Stefano Lombardo — the prolific founder of Kolyma2 — had been working for Deliveroo for more than four years. He was already planning to form a cooperative during his Deliveroo years. While riding for the multinational company, however, the idea never kicked off. But when Deliveroo left Berlin, he seized the opportunity. This is how the food delivery cooperative Kolyma2 started: with a tiny landing page and a telegram channel.

As adorable as this lo-fi approach was, technology seemed to play a crucial part, as it was really complicated to complete an order. The amount of communication between customers and riders was enormous. As a result, in November 2019, Kolyma2 had to close down operations. Apart from the technology there have been other issues. It simply was too much work on the shoulders of too few people.

But that wasn’t the end of Kolyma2. In January 2020 they returned, equipped with better infrastructure. They teamed up with the French developer Alexandre Segura, who goes by the moniker Mex, and the platform Coopcycle. For once the COVID-19-Shutdown came in handy and business boomed in spring 2020.

The Coopcycle app brought in new customers that insisted on using a real app. From 60 orders on one weekend, the turnover rose to 80 orders per day. This was important to sustain Kolyma2, says Stefano.

“You need to generate revenue, because dedication and idealism alone don’t sustain your life. In 2019 we just imploded. We burnt out.”

Mex’ platform Coopycycle — the new app that is at the core of Kolyma2 — has been built upon the remains of another failed startup: The Belgian delivery company Take Eat Easy. Mex tried to wrap his head around the fact that this billion-dollar startup could fail so badly and lose all its money. He felt that it couldn’t be so complicated to build a food-ordering app. So Mex cloned the application and played around with it. Meanwhile, the idea of rider cooperatives with collective bargaining power started circulating across Europe.

A cooperative for the 21st Century.

Until then, Mex had thought that cooperatives belonged in the 19th century, as he vaguely remembered some socialist writings by thinkers like Charles Fourier or Robert Owen. However, he suddenly realized that the concept makes perfect sense in the modern world.

The idea arose that he could develop an app that belonged to delivery riders and that it could act as the “factory” they commonly own. Riders could run the platform on a local scale without global structures involved. “Technology is not everything, for sure”, he adds, “but you need to have an app and a functional website to compete.”

So why not build an open source solution and spread it around? For cooperatives like Kolyma2, this means having a boilerplate code for a monthly fee that is based on their turnover on the platform.

Kolyma2 teamed up with Coopcycle and returned to the scene.

The idea of (publicly financed) open source software platforms that don’t belong to a private entity but can be used by all citizens is something that DiEM25 already identified in the Technological Sovereignty paper. Such a commonly usable tool is a crucial means to “level the playing field”: To make sure that newcomers like platform cooperatives have a fair chance to compete against global players.

Bike messaging organised as a cooperative has been a thing in urban areas for some time now. The individuals working in this field are particular, as they are often left-leaning, anarchist and ecological. In that regard, e.g. UBER drivers really are a different crowd.

Mattia and Dana — early members of the Kolyma2 collective — think that the difference between a cooperative like Kolyma2 and a company like Deliveroo is the level of group engagement. It is different to work for a collective that you are part of, as opposed to working for a boss that you will probably never meet. At Kolyma2 there are no regular meetings, but they communicate via text messenger as this feels more organic in terms of chaos and flow. Not everyone likes to get involved at the same level. Some people only want to ride a bike for a living. Self-organization can be a lot of work. 

“There is a benefit to getting to know the work process”, says Mattia, “because at a company like Deliveroo you always feel kept at bay and there also was a kind of anxiousness about how long your job was about to last.”

The gig economy, however, isn’t a one way street. At least in the world of bike messengers.

Most people value their freedom more than a fixed contract. There can be flexibility for everyone, not just for the upper echelons of these emerging economies. For Dana, for example, security isn’t really an issue when it comes to her job. She prefers to live in the now and not in a possible future. Mattia, on the other hand, did have a fixed contract while working for Deliveroo. In reality, however, he wasn’t secure in his job. It was a six-month contract with automatic renewal, but when he became sick near the end of one contract it turned out that the contract hadn’t been renewed. Now, he prefers to work for a cooperative that he trusts and where he — despite his freelancer status — feels safer.

As of now, Kolyma2 is just a network of freelancers, but that is going to change soon as the company is now joining Smart Cooperative. Smart is a legal structure that enables freelancers to employ themselves in a cooperative. You make a contract based on your projected income and they pay you a monthly wage. Smart will host Kolyma2 under a legal umbrella until they are ready to fund themselves.

Reputation and Source Code.

An important issue in the platform economy is the agency workers have over managing their ‘reputation’. Even liberals will agree that someone that has a good working biography should be able to use it in the labor market. If you work for platforms like UBER or Deliveroo, however, your reputation or rating belongs to the company and it disappears as soon as you stop working for them. That’s one of the reasons why DiEM25 argues for data unions — representative organisations of platform workers that make sure that they can negotiate the terms and conditions of their contracts and prevent such bad business conducts.

Furthermore, the software itself is a crucial tool for platform cooperative like Kolyma2. Coopcycle’s app runs on a license inspired by Dmytri Kleiner’s Copyleft concept – Coopyleft. To prevent that a giant like Lieferando just comes and takes away the software, in the Coopyleft license, the source code can only be used by entities who stick to certain ethical principles. To use software protected by a Coopyleft license, you need to use a cooperative model and fit the definition of a social economy actor as defined by the European Union.

Are platform cooperatives like Kolyma2 the walkthrough solution that ensures the transition of the economy to a post-capitalist world?

This certainly has to be explored in more detail, as the world of delivery drivers is a unique ecosystem that doesn’t necessarily translate to other work areas. In any case platform cooperatives can play a crucial part in helping to imagine new models of workplace democracy and workers organization.

Nick Srnicek argues in his book “Platform Capitalism” that the state should act as a kind of Venture Capitalist in the platform economy to ensure competitiveness. Stefano doesn’t agree, because he thinks the state should stay out of these issues. Workers should learn to run a company the hard way, instead of learning to fill in funding applications. Otherwise you don’t learn to get to know your customers and their needs. 

In our Technological Sovereignty policy paper we demand to make EU funding for research and innovation more easily accessible for civil society organisations, non-profit technology projects, cooperatives and other actors with a clear mission of green and social change. With that and a Universal Basic Dividend — that makes sure society gets a fair return on its public investment — future cooperatives might have the financial means to explore these possibilities in a safe space.

 

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