Trebor Scholz: Stuck in the gig economy? Try platform co-ops instead | TED

Meet Esmeralda Flores. She is a home cleaner in New York City. And like so many home cleaners, she's using a tech platform, an app, to connect to clients. But unlike other home cleaners, she's making $25 an hour, which is twice as much as she used to make at her previous company. And she makes a living wage. There's no algorithmic boss at her company that changes the pay or hours from under her feet, so she has some stability for her family. And every week, the workers at this company are meeting to decide how to run this company. They decide on the operations. Esmeralda receives training in finance and management, and in conflict resolution. And it really makes her grow as a person within that company. So now, you might be asking, like, "What kind of company is that? I've never heard of a tech platform that gives benefits like that. How do they do that?" So the answer is Up and Go, and it's not your typical tech platform. It’s what is called a “platform cooperative,” which means that the workers, the house cleaners, are sharing the governance and the ownership of this platform. They are deciding on wages, they are deciding on benefits, they are deciding what customers are charged. And it's a truly democratic workplace, and I think that's really what we need more of right now. If you think of tech platforms denying workers living wages, if you think about them denying them the right to organize, and expanding economic inequality in the process, I think platform co-ops are one way to change that. I know, that for some of you, when you hear the word "co-op," you immediately think of a white guy like me standing in a food cooperative in Berkeley, selling you vegan cheese, right? (Laughter)

And I love food cooperatives, but they are not the only type of cooperative. Co-ops are really just a group of people who have a shared need, be that vegan cheese or housecleaning, and they come together to address that need. And that might be a business, and sometimes, it takes on other forms, but it's always about shared ownership and democratic governance. So co-ops are nothing new. You've heard about them. The consumer co-ops as we know them today exist since 1844, when textile weavers in the north of England came together because their pay was cut in half and their families were starving, so they decided to sell oatmeal and sugar and flour through a store, a cooperative. Today, cooperatives of agriculture, not just food co-ops, are quite big, so you may have heard of Land O'Lakes or Ocean Spray. And so, platform cooperatives take the best from these tried-and-true models, the 200-year-old model of the cooperative and the much younger model of the digital platform, and bring them together. So here's what makes them different. They are made up of a group of people who get an equal vote in decision-making, and they are genuinely sharing that process, so when it comes to how much customers should be charged, how much workers should be paid, and also, whether or not data should be collected and to whom they are sold. And there is another thing that makes them different, which is that they are scaling equality.

And so, take Esmeralda Flores. That's where she works in the cleaning industry, which has an annual turnover of 75 percent. So Esmeralda has been with Up and Go almost since its beginning, so for three years. And one of the reasons that she stuck with the company is that she was paid more. So that is significant in the context of, typical tech platforms would take between 25 and 50 percent commission, which is an exorbitant amount for immigrants, who make up the majority of the gig economy workforce. So the women at Up and Go decided to take five percent commission, which they use to run the platform and pay for credit card bills. And 95 percent go to the women, go to the workers themselves. And one reason that the company can do that, that Esmeralda can be paid so much, is that there's no fiduciary duty to the shareholders to maximize profit. And here's another thing that makes platform cooperatives different: it is that everybody at this company owns it together, so it's a shared ownership, which means that also the intellectual property of the software is owned together. That means that they can create a small network of companies, like a social franchise, and scale up this company, to then compete against large tech companies. And lastly, consider that Up and Go is made up mostly of immigrants from Latin America, and if they were a typical gig-economy platform and they were out to look for venture-capital funding, then the research shows us very clearly that the chances of these minority-women-led founder teams to find venture-capital funding are very slim, in the single percentile, meaning that these women would have never been even able to build a platform in the first place, or add some much needed diversity to the tech founders' club. So, today, there are hundreds of platform co-ops like Up and Go, all over the world, and they work. And they work in more ways than one. They work because they are more resilient in times of crisis, they are more productive, they retain workers longer, and often, they pay better.

So I really believe that platform co-ops are a better, fairer alternative, and that's why a few years ago, together with a few friends, I started the Platform Cooperativism Consortium -- try to say that three times, fast -- at The New School in New York City. And essentially, what we do is we support platform cooperatives, digital cooperative projects, all over the world. We are working with 500 projects and businesses in over 30 countries. But let me just give you a bit of a taste of this. I have two examples that are really close to my heart. One is Co-op Ride, which is a driver-owned taxi platform with some 3,500 drivers that make between 10 and 30 percent more than the drivers on these large ride-hailing platforms. The passengers pay five percent less. And already, despite this being a very new company, it's already one of the largest worker cooperatives in the United States. Second, Fairbnb, which is a community-focused alternative to short-term rental platforms and will soon be available in 120 cities and villages with over 4,500 hosts. Half of Fairbnb's commission goes to community projects. One of those is a food-distribution center in Genoa, Italy. Now, I know, you might be wondering, when you hear about Up and Go, Fairbnb and Co-op Ride, you might be wondering, "How is this not a total mess?" So the entrepreneurs among you must be thinking, "God, democratic workplace?" And the answer is, "Well, they do what everybody else is doing," which is they are hiring management. And they are hiring tech workers. But there's one big difference, right? And that is that the rules of operation are decided by all. So the management executes the rules that were actually decided by all the people in this company.

I've told you about platform co-ops mostly in the labor sector, and also transportation, mobility and short-term rental, but they can also transform entire sectors, such as the care sector, culture and the arts, higher education and the data economy. I mean, just imagine, if our data would be managed cooperatively, cooperative data trusts, data cooperatives. Or imagine a social-media cooperative, where the users own the platform and decide what is done with the data, which data are collected and to whom they are sold, So one where there is no fiduciary duty to shareholders, to maximize profits, so that you can actually build in privacy and transparency and really bring the benefits back to those who actually generated the data. So I know we are here, near Silicon Valley, so I can see that, I'm sure, for many of you, you will think, "Wow, I'm not so sure about this. I mean, this would just never scale, right?" I've heard this many times. And it doesn't, right? It doesn't scale like traditional Silicon Valley companies. Well, it kind of does. Up and Go's sales increased by 97 percent, from 2018 to 2019, but that's really not the objective. The platform cooperatives are not about going public, they are not about maximizing profits. They scale differently, they scale more affordably than brick-and-mortar cooperatives. They scale by creating networks of companies that then compete against large companies. They scale more quickly, because their co-op can be anywhere in the world, and they scale democracy, because they can be decentralized through crypto networks and blockchain. And that is why I want instructors to teach about this model in law schools and business schools. That's why I want entrepreneurs to start one instead of another traditional tech platform. And that’s why I want incubators to include this model and also unions to start platform cooperatives. And that’s why I want ethical social impact investors to consider them and create an amazing legacy of equality. Now, I'm not here to tell you that this one model will eradicate economic inequality forever. It's not, right? But what we need is more variety in the economy. We need small, unionized private businesses, we need employee ownership, and we need platform cooperatives. We face big challenges. But here's what gives me a lot of hope. When markets fail and the safety nets of governments break down, people turn to each other, right? People start to cooperate by forming food cooperatives so that they can feed themselves during a crisis. They start to form platform cooperatives so that they can clean homes and still make a living wage. And when markets and governments for too long failed to address structural racism and inequality, people form institutions, like the Black Panthers' Free Breakfast Program for Children and the AFL-CIO, the largest federation of unions in the United States. So we saw democracy, or the aspiration to participatory democracy, spread across countries around the world, and now, it's time for it to spread in the workplace. Thank you. (Applause)