President of Brazil Calls for the Creation of Hybrid Public-Cooperative Ride-Hailing Platforms

It was a chilly night in Rio Grande do Sul last Wednesday when Luiz Inácio Lula da Silva, better known as Lula, addressed the cooperative movement. Lula started his stirring speech to a crowd of co-op enthusiasts by emphasizing the importance of cooperatives, then urging the creation of platform worker co-ops in partnership with municipalities as a way to address rising income inequality and precarious work. Given Brazil’s 17 million co-op members, his public support for cooperatives may not be surprising.

Lula stated that we must go beyond simply observing the unemployment situation, and that it is necessary to present proposals that can provide answers to questions about the contemporary world of work, frameworks that provide access to dignified work for all, regardless of gender, race, or social class. He demanded immediate help for these discontented gig workers, citing a lack of benefits and protections, as well as a lack of paid rest and vacation time, as well as insurance in the event of an accident or damage to their car, bike, or motorcycle.

Lula da Silva went on to say that while there has been much analysis of the new world of work and its ills, there have been few concrete, in-depth proposals. It’s easy to lament the loss of traditional jobs, he said, but it’s much more difficult to devise viable solutions that will create meaningful work in the rapidly changing digital economy.

Araraquara

Lula referred to a taxi platform cooperative run by a drivers’ cooperative in Araraquara, a city in the state of São Paulo with over 256,000 residents, as an example of a concrete alternative. Cooperatives and the solidarity economy have long been supported by the municipality, which also funds an incubator that helps social enterprises to get started, particularly cooperatives. The city’s warm climate and breathtaking sunsets earned it the moniker “the sun’s abode.” Araraquara may soon also become known for its platform cooperatives.

The cooperative of drivers behind this project is called Coomappa. It was founded with the help of City Hall in 2020 in an effort to assist drivers facing new challenges such as high fuel prices. The company behind the software that they are using is called Bibi Mob. With its app freely available for both Android and iOS, Bibi Mob is a socially-minded tech startup that franchises its mobility software across 67 cities. But its implementation in Araraquara, run by Coomappa, has been the most successful of them all. Why?

The app, socialized by the Coomappa co-op, allows anyone to become a taxi driver, motorcycle taxi driver, or food delivery courier. It offers a panic button feature that helps keep drivers safe. And with an option for women to request female drivers, the app is also looking out for the safety of all users. Fares start at R$2.50, about 0.50 US dollars. And with no surge pricing and low cancellation rates, it’s also one of the most reliable transportation options in Araraquara. It is changing the way people get around in the city. 

Unlike traditional companies like Uber and the Brazilian taxi app 99, Coomappa only takes 5 percent of the revenue, with the rest going to the drivers. When it set up operations with Bibi Mob, the co-op insisted on 95 percent of the revenue going to the drivers and 5 percent going to the co-op. Bibi Mob agreed as it is financed through in-app advertisements. Drivers on the Coomappa-operated platform are making 40 percent more than they would on other platforms. Not only is this great for drivers, but it also helps to support the local economy in Araraquara. With most of the profit staying in the hands of drivers, it means that more money will be circulated within the community. The partnership between the co-op and the city government improves the life of many residents.

Drivers pay a monthly co-op membership fee of R$50, or about 10 US dollars. In return, Coomappa not only provides the digital platform, but it also gives discounts based on its close relationships with local businesses, allowing them access to cheaper car washes, gas stations, and car repairs. Coomappa also grants its drivers a variety of other benefits, such as insurance discounts and legal services.

Brazil & Beyond

When President Lula da Silva visited the city of Araraquara, he was so impressed that he suggested that other cities would do well to replicate the city’s approach. But first, it’d be good to connect what is happening there to the efforts of Drivers Cooperative and its 6,000 drivers in New York City or Cotabo in Bologna, among many others.

The Araraquara example is truly commendable for a number of reasons. First and foremost, the city has taken a proactive approach to addressing the concerns of gig economy workers by establishing an incubator to help launch and promote cooperatives. This is very much in line with the recommendations in our recent PCC/Berggruen Institute policy report on cooperative ownership for the digital economy, which was primarily aimed at municipalities.

The challenges ahead for Coomappa’s platform are many and varied. For one, Bibi Mob is not a cooperative, meaning it is beholden to its investors rather than being owned and governed by a group of users. Coomappa does not own its digital platform. But in terms of access and control, the relationship between Bibi Mob and the co-op seems rather rare, unique even. But nevertheless, this could pose problems down the line if the Araraquara model is scaled to other cities, as Bibi Mob’s investors may not be willing to just stick to in-app advertising as a source of revenue. Could Bibi Mob become employee-owned or convert into a multi-stakeholder cooperative? The platform co-op Fairbnb is currently going through this process. Bibi Mob could benefit from their experience.

Next, the Araraquara example is a good place to start, but keep in mind that not every community will operate in the same manner. Municipalities should encourage the formation of these cooperatives but then take a step back, as evidenced by examples from around the world, including Kerala in southern India. This allows residents to make their own rules based on their specific requirements. In his speech in Rio Grande do Sul, Lula admitted to making policy mistakes during his presidency. He conceded that he had not recognized that successful cooperatives must be built from the bottom up rather than the top down. Now he insists that they must be based on people’s needs rather than the objectives of government.

Lastly, Coomappa’s project should be linked to the platform co-op ecosystem all over Brazil with existing platform co-ops such as Senoritas Courier, App Justo, Contrate quem luta, and Pedal Express. Also Sistema OCB has long experimented with a taxi platform cooperative for all of Brazil and supported the broader movement.

In 2017, my book on platform co-ops was published in Portuguese, introducing platform co-ops to Brazil. Since then, support organizations like Digilabour, Cootravipa, Coonecta.me, Instituto Lula, Fundação Rosa Luxemburgo, Co-operative Faculty of Technology (ESCOOP), and Mundukide, SESCOOP-RJ, Sistema OCB, and Observatório do Cooperativismo de Plataforma have helped to accelerate the progress of platform cooperatives. The legal scholar and former PCC/ICDE research fellow Rafael Zanatta has written a report on the evolution of platform cooperativism in Brazil. 

President Lula’s comments last Wednesday couldn’t have come at a better time. In November 2022, the Platform Cooperativism Consortium at The New School in NYC and the Institute for Technology and Society in Rio de Janeiro will convene a 3-day conference on platform co-ops in Brazil. An exploration of progressive municipalism just like what we see in Araraquara, but also in Preston, Kerala, California, and Bologna, will be front and center of this event. 

For the past five years, a dedicated group of individuals and organizations have been working tirelessly to promote the adoption of platform cooperatives in Brazil, not solely in Araraquara. And their efforts are about to pay off: they will come together at the first-ever conference on platform co-ops in Brazil. The upcoming conference will be a pivotal moment in the history of the Brazilian co-op movement.

Image credit: Crédito: Tetê Viviani/Prefeitura de Araraquara