As the idea of democratically owned and governed platforms spreads across the globe, with projects like SMart, Fairbnb, Fairmondo or Coopcycle gaining momentum, the question of how politics influences the emergence and proliferation of such platform co-ops is of increasing importance. While it has become a commonplace notion to point towards policy as a decisive factor in creating beneficial framework conditions for alternative platforms, little research has been conducted on what such beneficial conditions could look like exactly.
To address this gap, Trebor Scholz (Associate Professor for Culture & Media at The New School) appointed Jonas Pentzien in early 2019 as research fellow at the newly founded Institute for the Cooperative Digital Economy (ICDE) at The New School in New York City (NYC). As part of his fellowship, Jonas Pentzien investigated the political and legislative drivers and obstacles for platform co-ops in different political contexts, with the hope of increasing our understanding of the role that policymakers can play in regards to democratization processes in the platform economy.
At the “Who Owns the World?”-Conference, which took place between November 7th and 9th at The New School in NCY, Jonas Pentzien was able to present first results of this investigation, which he conducted throughout 2019, to more than 700 people from over 30 countries. Based on a comparison of the framework conditions for platform cooperativism in the United States, Germany, and France, he not only demonstrated the obstacles that democratically owned and governed platforms face in different socio-political contexts, but also possible ways for addressing them. His full talk can be watched here. A short summary of the talk directed specifically at policymakers can be watched here.
To be able to take into account how platform co-ops perceive their political framework as well as what governments do in regard to the platform economy, Jonas Pentzien spoke with more than 20 founders and members of platform co-ops and conducted a thorough analysis of governmental activity relating to the policy fields of labor law, cooperative law, competition law, corporate tax law and financing in these three countries. By zooming in on these five policy fields, he was able to show the extent to which different political systems also create different horizons of possibility for platform co-ops.
For France, Jonas Pentzien made visible a rather two-sided situation: while labor law is employed by the federal government in a way that tends to intensify already apparent monopolization tendencies in the country’s mobility sector (making it more difficult for platform co-ops such as CoopCycle to compete), newly established funding opportunities in and tax rebates associated with the country’s third sector create incentives for organizations to incorporate as cooperatives. As a result, platform co-ops in France primarily incorporate as social organizations that see themselves as working towards the common good, rather than as businesses that compete with platform incumbents.
For Germany, Jonas Pentzien was able to show that existing funding opportunities disincentive the founding of democratically owned platforms. Because most of the country’s public loan programs are tailored to individual entrepreneurial personalities, platform co-ops are incapable of gaining access to most of them. At the same time, however, the government is frequently addressed by the existing platform co-ops as the primary actor that is supposed to provide economic support. This can be explained in light of the long-standing embeddedness and active intervention of the German state in its economy. As a result, many of the country’s platform co-ops aim at providing large-scale alternative to the platform incumbents, but struggle with securing the funds needed for building such an infrastructure due to the limited availability of non-state-based funding opportunities.
Lastly, for the US, Jonas Pentzien was able to point out how the budgetary and fiscal politics of the central government disincentive democratization processes in the platform economy. In particular, the country’s taxation rules (that tend to benefit platform incumbents) as well as the pronounced lack of governmental loan programs for cooperatives create a situation in which platform co-ops are made dependent almost exclusively on resources provided by the market.
Bringing these insights together, Jonas Pentzien concluded his presentation by emphasizing the need for analyzing platform cooperativism not only as a unified global whole, but also as a product of its particular socio-political context. He argued that only by focusing on the particularities of the various frameworks in which platform co-ops emerge are we ultimately able to understand where governments have room to move to strengthen democratically owned and governed platform alternatives. As such, he underscored the need for complementing already existing global visions for platform cooperativism with context-specific narratives that address drivers and obstacles for this nascent phenomenon on both national and local levels.
The full report containing all the results of Jonas Pentzien’s fellowship investigation – tentatively titled “Political and Legislative Drivers and Obstacles for Platform Cooperativism in the U.S., Germany, and France” – will be published in the spring of 2020. Due to the transdisciplinary approach adopted throughout the research process, the insights should not only speak to scholars interested in the state-market relations of the platform economy and platform co-ops interested in understanding the larger socio-political framework that they are embedded in, but also to policymakers interested in creating beneficial framework conditions for democratically governed and collectively owned digital platforms.