Platform Cooperatives x Fairwork

Jointly improving platform work via (re) organization and evaluation

Criticism of the hyper-exploitative modalities of work ushered in by the platform economy,
once relatively niche, has now become mainstream. In turn, attempts to challenge the future
of work as designed by Uber et al, have emerged from various directions according to diverse
theories of change. Assuming that success is not going to be a case of either/or, but and/also,
it is necessary to consider and create spaces for convergence between such theories of
change. (1) This piece will contribute to that via an assessment of two different but
complementary approaches: Fairwork and Platform Cooperativism. (2) The former seeks to
establish basic minimum standards of fairness in the platform economy and hold companies
to account via annual evaluations, while the latter advocates for an alternative ownership
structure that puts workers in control of the labor process. In seeking the creation of a
platform economy that serves the interests of the workers themselves, the two approaches are
value aligned. The question then, is how might the two might be brought into dialogue for
mutual enrichment?

To begin to answer that question, it is necessary to carefully outline each approach. Platform
Cooperativism, as the longest standing of both, will be considered first. This was
conceptualised by Prof. Trebor Scholz in 2014. In a widely known essay – Platform
Cooperativism vs. The Sharing Economy – he called upon readers to “imagine that the
algorithmic heart” of digital labor platforms such as Uber, Handy and Task Rabbit “could be
cloned and brought back to life under a different ownership model, with fair working
conditions, as a humane alternative to the free market model”. The alternative – platform
cooperatives – has henceforth been defined as “businesses that sell goods or services
primarily through a website, mobile app, or protocol” which “rely on democratic-decision
making and shared platform ownership by workers and users”. In other words, platform
cooperatives are a fusion of something with a long, established history – the cooperative –
and something and that is very much of the twenty first century – the platform.

In the relatively short time since its conceptualization, the idea has gained significant traction.
According to the Platform Cooperative Consortium – established by Scholz as a “hub” to
support those seeking to “start, grow or convert to platform co-ops” – there are presently
546 manifestations of the model, across 50 countries worldwide. That includes a thriving
ride-hailing coop, a multi-stakeholder food delivery coop that brings together riders and
restaurants, domestic-work coops , a co-op that pools patient data for collective use
and many more. As this short list demonstrates, there is great variety amidst such
manifestations, but each is united by a shared set of principles. They are as follows:

1) Voluntary and Open Membership

2) Democratic Member Control

3) Member Economic Participation

4) Autonomy and Independence

5) Education, Training and Information

6) Cooperation Among Cooperatives

7) Concern For Community

The seven cooperative principles are commonly attributed to the Rochdale Pioneers – a group
of weavers that banded together to form a consumer cooperative in England in 1844.
They have, however, developed quite significantly from then. Described by historian Brett
Fairbairn as “precise, detailed organized and businesslike” (p. 7), the initial iteration provided
concrete directives for economic action. It was only in 1895, following the formation of the
International Cooperative Alliance (ICA), that they evolved into a set of international
principles. Developed multiple times thereafter, through global ICA consultations, most
recently in 1995, the contemporary principles are broad value-based guidelines rooted in
“self-help, self-responsibility, democracy, equality, equity and solidarity”.

The contemporary cooperative principles do not specifically target the platform economy or
work; rather, they offer a framework for cooperative governance and community engagement
that emphasises decentralization and democratic member control. Recently identified as the
most important principle to contemporary co-operators – in a survey that was conducted as
part of an ongoing global consultation by the ICA – democratic member control enables
workers (in the case of worker-owned cooperatives, which are one form amongst others) to
collectively shape the conditions of their work. This, in theory, facilitates the provision of
fairer work.

Take pay, for example. Though corporate platforms are not monolithic, the pay that platform
workers receive is, often, deciphered by complex and opaque algorithms. Legal scholar
Veena Dubal has described how companies such as Uber and Lyft utilise “data extracted
from drivers’ labor” to generate “unpredictable, variable and personalized” rates of pay. ^[xv]
Platform cooperatives operate differently. Worker-members can democratically decide on the
rate of commission (in the case of the gig-work model) or on the hourly rate (in the case of an
employment model). As per principles three (Member Economic Participation) and four
(Autonomy and Independence) members collectively control the capital of the cooperative,
which is at least in part common property, and there are no external figures that can
contradict that, to, for example, extract any surpluses. So, fairer work is a product of the
organizational structure that is established by the principles.

Fairwork follows a different approach; rooted not in the advocation of a particular form of
business organization, but in business evaluation. Underpinned by the belief in the value of an
informational intervention in the platform economy, Fairwork evaluates the working
conditions provided by platform-companies. That evaluation (out of 10) is based on the
Fairwork Principles. Established in 2018 through a multi-stakeholder dialogue, comprising
platform operators, policy makers, trade unions and academics, the Fairwork Principles
directly target working conditions in the platform economy; outlining a standard that all fair
work should be characterized by regardless of how it “is classified, organised, managed, and
carried out”.

That standard is spread across five key areas of work – pay, conditions, contracts,
management and representation (described in detail below) – with a different set of principles
for each of the two main types of digital labor platforms: cloud-work platforms, and
location-based platforms. Each principle has two sub-principles, one basic and one that is
more advanced and within each of those sub-principles, there are a set of conditions that
platforms must satisfy to be granted a point. Currently applied across 39 countries, the
Fairwork Principles have been used to rate 213 platforms and have generated 275 pro-worker
changes to the platform practices and policies. 3 They are as follows:

1. Fair Pay: Workers, irrespective of their employment classification, should earn a decent
income in their home jurisdiction after taking account of work-related costs and active hours
worked. They should be paid on time, and for all work completed.

2. Fair Conditions: Platforms should have policies in place to protect workers from
foundational risks arising from the processes of work, and should take proactive measures to
protect and promote the health and safety of workers.

3. Fair Contracts: Terms and conditions should be transparent, concise, and always
accessible to workers. The party contracting with the worker must be subject to local law and
must be identified in the contract. Workers are notified of proposed changes in a reasonable
timeframe before changes come into effect. The contract is free of clauses which
unreasonably exclude liability on the part of the platform, and which prevent workers from
seeking redress for grievances. Contracts should be consistent with the terms of workers’
engagement on the platform.

4. Fair Management: There should be a documented due process for decisions affecting
workers. Workers must have the ability to appeal decisions affecting them, such as
disciplinary actions and deactivation, and be informed of the reasons behind those decisions.
The use of algorithms is transparent and results in equitable outcomes for workers. There
should be an identifiable and documented policy that ensures equity in the way workers are
managed on a platform (for example, in the hiring, disciplining, or firing of workers).

5. Fair Representation: Platforms should provide a documented process through which
worker voice can be expressed. Irrespective of their employment classification, workers have
the right to organize in collective bodies, and platforms should be prepared to cooperate and
negotiate with them.

The fifth principle – Fair Representation – specifically mentions coops as a route to
operationalization:

“To realise fair representation, workers must have a say in the conditions of their
work. This could be through a democratically governed cooperative model, a formally
recognised union, or the ability to undertake collective bargaining with the platform.”

Reiterating the idea, embedded within cooperativism, that democratic member control
facilitates fairer working conditions, this reference highlights the complimentary nature of the
two approaches. But, as one element of a wider framework, it simultaneously demonstrates
that workplace fairness is not defined by that alone.

There are, in other words, several things to consider when assessing fairness in a worker-
owned business. How, for example, should we view a situation in which workers collectively
decide to reduce their own pay to ensure business longevity? This is a practical possibility
that might be induced by the “market pressures of investor-owned competitors with
established network effects and vast resources”. Against the first Fairwork Principle –
Fair Pay – a reduction of worker-member pay below local minimum wage (after costs) would
be classified as unfair.

Certainly, such a scenario would raise questions about the viability of the alternative model,
and the commitment of the particular cooperative to the “social mission” of improving the
working conditions of its members, but the question of fairness in this context is a more
complex consideration than it is with corporate platform company where profits produced,
because of workers efforts, are flowing elsewhere. Ultimately this reflects the universal
nature of the Fairwork Principles. They establish a basic minimum standard regardless of the
of the model; as such, while they are broadly applicable, they are not specifically designed to
capture the unique challenges and benefits posed by the cooperative model.

Yet, the benchmarks established by Fairwork do provide a particular utility for platform
cooperatives. As previously noted, the Cooperative Principles are not attuned to the
specificities of work in the platform economy. This is not a bad thing, but it has led some
scholars to question how they might be rethought, adapted, or added to, to ensure that they
enable a navigation of the new challenges (and opportunities) posed by the digital
technologies of the twenty first century. Considering this, the Fairwork Principles could
provide a mechanism for such organizations to hold themselves to account and ensure that, in
their bid to compete in the corporate platform economy, they do not fall short of their
intention to provide a fairer form of work. Or to put it differently, the Fairwork Principles
could provide a litmus test for platform coops. This is particularly important since certain
claims to represent cooperativism are not always entirely accurate.

Contention around the suggestion that the cooperative principles may require a re-think
abounds. However, absorbing new benchmarks and undergoing adaptation would not be
without precedence. As demonstrated above, the history of the cooperative principles is one
of development and change which, in the words of two scholars, has been guided by “the
different experiences and demands of cooperating in different historical contexts” (p. 1237).

But how exactly could the Fairwork Principles be brought into dialogue with the Cooperative
Principles? What would this look like? This situation would require significant thought and
experimentation, but one can imagine the creation of a framework for cooperatively governed
fair work that contextualises the benchmarks established by Fairwork in accordance with the
intrinsic values and self-regulatory nature of platform coops. This is imaginable because there
is significant value alignment between the two sets of principles. For example, the more
advanced sub-principle of the fourth Fairwork Principle (Fair Management) states that
platforms must provide equity in the management process. Equity is, of course, one of the
key cooperative values that materialised by the principles. The conditions specified by the
Fairwork sub-principle – such as effective anti-discrimination policies, measures to promote
diversity equality and inclusion and mechanisms to reduce the risks of service users
discriminating against workers – could provide a means of concretising this within the
context of the platform as workplace.

And the benefit of dialogue would not simply be one-directional. The Fairwork Principles, as
mentioned at several points in this piece, lay out a basic minimum standard of fairness.
Cooperatives could provide a practical means through which to experiment with and extend
the Fairwork imaginary towards a more utopic standard. Take the fifth Cooperative principle
(Education, Training and Information) this may offer practical examples of how the second
Fairwork principle (Fair Conditions) could be developed upon, to provide – with regards to
training specifically – not just the “necessary safety training” (as the more basic of the two
sub-principles specifies) but training that allows for extensive development for workers
within the platform cooperative.

There is far more to be considered, but as demonstrated by this brief foray, putting the two
approaches in dialogue would allow for a thoughtful consideration of workplace fairness in
the cooperative context. This would not simply have implications for platform cooperatives,
but for a fairer future of work more generally: with the lessons taken from such a dialogue
providing new material for a platform work imaginary that serves both workers and wider
communities.