What if companies competed with each other not to extract more data from their users or suppress working conditions, wiping away rights that people have fought for over generations, but instead to offer better deals through shared ownership?
Behind the veneer of Silicon Valley ‘digital disruption’ lie traditional, hierarchical organizations that perpetuate social inequality. Coops and worker owned models counteract concentration of wealth and abusive treatment of workers.
Platform coops connect producers with consumers, but are owned and controlled by those participants, rather than a board of directors or shareholders whose primary interest is to extract profit.
Examples: Fairbnb, TaxiApp, Resonate, CoopCycle
But competing with Big Tech is hard, because they have deep pockets lined with VC cash, and network effects from being early to the game. VC funding and abusive employment practices also allows them to keep prices lower than a coop can. Low prices means costs are passed on to workers.
How can these models scale? Policy regulation: stick of regulation, carrot of incentives for coop models. Apart from policy change and government backing, there is a huge opportunity for conscious investors, such as unions, to put their money where their mouth is.
Some coops are providing the software and support while local entities run the business, creating a new digital commons. There are also workers coming together to ‘cheat’ the algorithms to benefit them, creating unions or advocacy groups.
“Trying to graft the lessons of old worker-owned factories and member-owned credit unions into the online economy.”
In 2016, a group put forward a proposal to Twitter to ‘exit to community’ and got 5% of the vote (more than expected).
Some companies, like Airbnb and Uber, have been buying into the idea to distribute shares amongst users/participants, mostly because they think it will strengthen their IPO.
Right now, there are two exit options: sell to a bigger company to gut the business for parts, or sell shares to the market where people speculate on the value of them, hoping it will be worth more later.
“This model of success is all about big payouts for investors and keeps wealth concentrated in the hands of people who are already in positions of structural power (investors, CEOs, etc.)”
This system forces startups to “extract as much as they possibly can from their users on behalf of their investor-owners”
If a company can’t live up to those exit strategies, they are “zombies,” a dead weight on their owners, even if they are providing value to their users.
Companies can exit to community instead of to the market, using a variety of strategies including user ownership, federation and tokenization.
“As long as we rely on financing models that depend on maximum power and privilege, the participants will keep on looking like those with the most power and privilege.”
“These businesses belong to the commons, serving their purposes and the interests of all the stakeholders who contribute to their successes, and helping to build a more equitable, regenerative economy. In this sense, they democratize capital.”
https://medium.com/zebras-unite/pivot-to-people-its-time-to-build-the-new-economy-75a624eaf38a
“A new cooperative, MIDATA, allows members to grant selective access to their personal data for medical research. People may become members of, and thereby control, the cooperative.110”
“Establish data trusts. A data trust is a structure where data is placed under the control of a board of trustees with a fiduciary responsibility to look after the interests of the beneficiaries—you, me, society”
“Though Datavakbond has not made any noticeable progress since 2018, the plan was to have people sign up to be part of Datavakbond and be able to go to tech companies to bargain for collective rights or “strike” from the platform.112”
“Driver’s Seat is a data cooperative owned by gig economy workers. By downloading the Driver’s Seat app, drivers can opt-in to having their data collected, which allows them to learn from their own driving data. The data is also pooled together and sold to entities like local transit departments to inform transit improvements. When Driver’s Seat receives money from the sale of the data, those profits are shared amongst the driver-owners in the co-op.113”
Data Capitalism and Algorithmic Racism