The Good News About Cooperative Platforms
Something Great Might Be Happening
Once upon a time, there was no platform for car service: consumers bought the service straight from the supplier, on the street, with a number. Then came the private platforms: Uber, Grab, etc. These let consumers find car service through their phones: what gets called a ‘platform’ could also be described as a virtual marketplace. These private platform take a “platform fee” or what could also be called a “rent.” The rent varies on the market situation. When moving into a market, the platforms charged low rent, then they raised it. This is a common pattern for the way private platforms developed.
Private platforms means that they are owned and controlled by secret associations of people coordinated through the powerful codes of venture financing. This financing allows for rapid entry and market domination. One organic intellectual behind the private platform movement describes this as “blitzscaling.” Blitz comes from the German word for lightning. Speed is important because of network effects: meaning that the existence of the network creates more users, meaning that users will use Uber because there’s already drivers on it: the existence of the network attracts more users.
The situation presents a riddle. All of the users of the platform - sellers, buyers, even the operators of the platform - would benefit from cooperative ownership. That is, instead of having a secret group of people own the site, have a cooperative of people own the site. There is no lack of attempts to create cooperative platforms. One can learn about many of these offerings on a wikipedia concerning cooperative platforms. And yet, none of these cooperative platforms seem to have achieved network effects. I would be happen to be disproven here, but to the extent of my research, no cooperative platform has achieved market dominance in any sphere.
Why is this? The example of a recent attempt can teach us something: “The Driver’s Cooperative” describes itself as a “driver-owned ridehailing cooperative in New York City….100% worker-owned rideshare company.” One limitation is immediate: why not mutualize the platform - that is, let the users of the platform share ownership in it? Given the choice between a platform that you own and a platform that you don’t own, the average imaginary rider will choose the “mutualized” option: that is the platform that they own. The other limitation is not so obvious: venture capital is a kind of superpower, with it, firms can scale very fast. Imagine if there was another cooperative, one that was 35% percent driver owned, 35% rider owned, 15% operator owned, and 15% venture capital owned: in a direct market competition, which of these two firms would triumph?
We can abstractly put the problem by comparing two models of cooperative business: purist and synthetic. The purist cooperative is cooperatively owned by only one function: a group of consumers, for instance, create a cooperative grocery. A synthetic cooperative has multiple overlapping cooperative function: consumers, sellers, operators, and (yes) venture capital is all involved: all working together to displace the private incumbents to lower platform fees, increase the collective wealth, act in a juicy, prosocial fashion.
Rudolf Steiner suggests that two forces act on humanity: one Luciferean, the other Ahrimanic. Lucifer calls us upwards, out of our individuality, towards the collective good, towards general right and abstract truths. Ahriman beckons us lower, towards a “material reality”, it wants us to be selfish, narrow; it makes us dry. The purism of the existing cooperative movement exhibits strong Luciferean tendencies; the private platforms evidence marked Ahrimanic influence. A path balancing the two, passionately idealistic, but also grounded in interest: that’s the way cooperative platforms will grow.
Let me end by describing how one cooperative platform might grow. It’s called Uccatara, and provides a platform for group purchases of high quality life essentials for a Bengali speaking market. The platform begins with interviewing a set of core consumers, identifying their essential needs, and then connects these needs up with suppliers. All of the existing parties are partial owners of the platform themselves: the suppliers, the consumers, and the operators creating the platform itself. Such an operation wouldn’t be outrageously expensive, but it requires initial investment: this is where the venture capital enters in. The Babas of Bengali contribute the initial rupees: should the platform work, they will get a very pleasant return on the capital.
Imagine that the present is a layer of dirt. Beneath this layer are multiple futures. In one of these futures, private platforms become the feudal lords of the future, and all of humanity exists as hunt for superhuman billionaire and their vicious kin. We have chosen to dig in another future towards a world of cooperative platforms. This is a world with a middle layer: that’s the topic of the next Good News essay.