Shaping the Future of E-Hailing in Kenya

The Role of Institutional Frameworks in Promoting Platform Cooperatives

_{image credit: Facebook Account of  Nairobi Uber, Faras & Little Cabs Drivers And Partners Kenya}

Since platform cooperatives emerged about a decade ago, there has been a compelling reason to promote and develop them in Kenya alongside the expanding platform economy. The country’s cooperative response to platform technologies is feasible, supported by favorable conditions such as a tech-savvy youth population. A notable example is the transportation industry, particularly within the e-hailing transport platform ecosystem. Leading organizations in this sector include the Digital Taxi Association of Kenya (DTAK) and the “Ubba” Savings and Credit Cooperative Society (SACCO). However, platform cooperatives are not fully developed or defined in the strictest sense in Kenya – as collective, worker-owned, and democratically controlled computing platform businesses utilizing the internet, websites, online platforms, and mobile applications to facilitate the sale of goods and services. The e-hailing transport platform business ecosystem remains complex, characterized by relationship challenges among stakeholders – transport network companies, car owners, drivers, and passengers. A robust institutional framework is needed to establish solid and explicit platform co-ops in the country. As an ICDE research fellow, my project is to explore the institutional framework through which strong platform co-ops for e-hailing drivers can be promoted and developed in Kenya.

The e-hailing business ecosystem, involving drivers, car owners, and digital platform owners, frequently faces relational, transactional conflicts, and exploitation. E-hailing drivers, in particular, suffer from fragmented relationships, underscoring the urgent need for visible and credible Platform Cooperatives supported by a robust institutional framework.

The development of an institutional framework for platform co-ops is crucial for several reasons:

1. Democratic Governance: Cooperatives offer a participatory model where each member has an equal voice, promoting a more democratic governance structure. This approach empowers individuals and communities, ensuring their interests are represented and protected.
2. Integrative Approach: Platform co-ops combine technological advancements with strong governance mechanisms. This integrative approach addresses the complex dimensions of the e-hailing sector, balancing innovation with member welfare.
3. Digital Rights Protection: Platform cooperatives provide a framework for individuals to collectively assert and protect their digital rights. In an era where data exploitation is a significant concern, this collective protection is vital.

To foster the growth and development of platform cooperatives for e-hailing drivers, policy actions and programs at both national and subnational levels are necessary. These policies should adapt to accommodate cooperative features such as shared ownership, democratic governance, limitations on profit distribution, and the digital and cross-border nature of platform co-ops. Accommodating these features in ongoing policy actions and existing law review programs will be pivotal in supporting the establishment and growth of platform co-ops, ultimately contributing to a fairer, more equitable e-hailing business ecosystem.

Experts from the Institute for Digital Cooperative Economy (ICDE) and international bodies such as the International Labour Organization (ILO), United Nations Department of Economic and Social Affairs (UNDESA), and the Organization for Economic Cooperation and Development (OECD) have made significant findings and recommendations regarding the institutional frameworks for platform cooperatives. These insights serve as benchmarks for the processes and contents to consider in establishing ideal institutional frameworks for platform co-ops of different formations and in various societal contexts.

Governments in the Americas, Europe, and Asia are increasingly using legislation to shape transactions, interactions, or employment relationships in the platform economy. This legislative push has stimulated the emergence of sub-typologies of platform co-ops – ‘Type A’ and ‘Type B’. Countries like the USA, France, and Germany have developed institutional frameworks that reflect autonomy, circularity, and self-referencing, adapted to their societal contexts. In Canada, which has a clear and robust institutional framework, e-hailing drivers tend to participate in “Type A” platform cooperatives, such as Distributed Cooperative Organizations. Meanwhile, in countries like Japan and South Korea, drivers tend to engage with “Type B” platform co-ops, known as Open Platform Cooperativism. These examples show that autopoietic institutional frameworks, which are self-creating and evolving, are key to developing and operating diverse forms of platform cooperatives by e-hailing drivers.

Experts suggestthat the institutional frameworks for platform co-ops in each country have their unique characteristics, while also sharing features with public institutional systems. These frameworks should be distinctively self-organizing in different societal contexts, becoming explicit on critical issues. Firstly, the frameworks should acknowledge that the challenges of competing in digital markets will require innovative institutional approaches – including strategy, policy, legal, and regulatory frameworks – not just for the benefit of e-hailing drivers but also other actors. Such solutions might encompass antitrust and interoperability laws, government loans and tax incentives, working group policy and legal provisions for platform cooperatives, cooperativism exemption regulation, employee ownership legislation, city task forces, conditional bailouts, technological partnerships, and a regulator for platform co-ops. Secondly, the frameworks should promote digital inclusion, open standards, and data governance, encouraging platform workers to participate in platform cooperatives and fostering an equitable platform economy. Emphasizing trust and transparency, innovation and adoption, stakeholder engagement, data sharing and access management, data quality and standardization, governance and decision-making, technological infrastructure and scalability, education, financing, and capacity building is crucial.

It is noteworthy that the institutional framework for platform cooperatives should be self-adaptive, responsive, and reflexive concerning actors, objectives, and processes to enable and promote platform co-ops in a manner that cannot be entirely pre-designed. Furthermore, “self-referencing” with positive best practices and models from other contexts is essential for cultivating a supportive ecosystem for platform cooperatives.

Towards Institutional Frameworks for E-Hailing Drivers’ Platform Cooperatives in Kenya

Therefore, the development of Kenya’s platform co-ops for e-hailing drivers should be observed in terms of their perceived benefits and the development process of institutional frameworks that address crucial emerging issues of the platform economy. Policymakers in both national and county governments should monitor this process, recognizing that policies and laws need to be developed or adjusted to support cooperative development. Based on the tenets of the Constitution of Kenya (2010) and Vision 2030, the government has been actively developing and reviewing institutional framework interventions for the platform economy, ICT, transport sector, and cooperatives. The country has adopted the Digital Economy Blueprint of 2019, which provides a framework to leverage digital business and employment in alignment with the goals set out in Vision 2030. As informal workers, e-hailing drivers are pivotal in developing a robust marketplace for the digital trade of services, such as taxiing. The Sessional Paper Number 4 of 2020 on National Cooperative Policy lays the foundation for advancing platform co-ops for e-hailing drivers. It recognizes the importance of transport cooperatives, the role of ICT in cooperatives, and the promotion of worker-owned and youth-involvement cooperatives, among other factors.

Moreover, the National Transport and Safety Authority (NTSA) has developed regulations (under Kenya Subsidiary Legislation Legal Notice No. 120, 2022) for Transport Network Companies, including owners, drivers, and passengers, under the NTSA Act of 2012, in response to the concerns of e-hailing drivers. These regulations outline the application and annual license fees, cap commissions for e-hailing platforms, and establish annual licensing requirements for e-hailing drivers and their vehicles. The Cooperative Bill (2023) further strengthens the role of the Cooperative Commissioner in ensuring the growth, development, and regulation of cooperatives in the country, in addition to the development of county cooperative laws.

Therefore, policymakers in Kenya must navigate a complex array of policies, legislation, and regulations to develop and enforce a robust institutional framework that supports the promotion and development of platform co-ops for e-hailing.

• Firstly, legislation for platform co-ops should include provisions for the protection of labor rights for e-hailing drivers, as anticipated under Article 41 of the Constitution of Kenya (CoK).
  

• Secondly, the framework for platform co-ops should address emerging security risks for e-hailing drivers and passengers, such as carjacking, robbery, burglaries, abductions, sexual harassment, and murders.
  

• Thirdly, it should incorporate provisions for the social security, welfare, and collective bargaining rights of e-hailing drivers.
  

• Finally, the framework should offer financial and capacity-building incentives for creating on-the-ground solidarity networks, ensuring decent working conditions for e-hailing drivers, and countering vulnerability and precarity in the platform economy.

Suffice it to say, the institutional framework governing platform co-ops by e-hailing drivers in Kenya should regulate the behavior of actors in transport, cooperatives, ICT, and other socio-economic domains. Therefore, such frameworks must be harmonious with existing national and county legislation and regulations across cooperatives, ICT, labor, taxation, competition, transportation, and security sectors. The more robust and supportive these enabling institutional frameworks are, the better the promotion and development of platform co-ops. Thus, the institutional framework is vital for shaping e-hailing drivers’ intentions and boosting their participation in platform co-ops. It’s imperative for Kenya to embark on this journey now!

Accordingly, cooperative policymakers in the country need to ‘think sustainably’ by quickly adapting to the new ‘rules of the game’ brought about by platform co-ops. This calls for a radical reinvention of cooperatives, which includes defragmentation and recapitalization to address current weaknesses in the institutional framework, mitigate internal digital competition, and rectify cooperative identity misconceptions or damage.

As policymakers ‘think sustainably,’ they must also ‘think exponentially’ (Think X). Just as they have historically focused on agricultural, marketing, housing, consumer, and savings and credit cooperatives, they now must pivot to embrace the platform economy as a foundation for new platform co-ops. Platform co-ops represent a disruptive but promising cooperative taxonomy, offering an inclusive avenue for the youth demographic that had previously been alienated from the cooperative space. Whereas the cooperative movement in the country was once perceived as ‘ageing,’ the advent of platform co-ops introduces an opportunity for rejuvenation and ‘youthfulness,’ thereby deepening cooperative identity and expanding social and solidarity enterprises (SSEs). The key to unlocking this transformative potential lies in a robust institutional framework for platform co-ops!

As a research fellow at the Institute for Cooperative Digital Economy (ICDE) at The New School in New York City, I will be focusing on producing a report derived from a segment of my doctoral research. This report aims to shed light on the extent to which institutional frameworks impact e-hailing drivers’ intentions to participate in platform cooperatives.

I am keen to connect with researchers and cooperators who share an interest in exploring the dynamics of cooperative platforms. If you have inquiries similar to the ones I plan to address, or if you’re investigating how these platforms operationalize their principles , especially in Kenya, I encourage you to reach out.

Let’s collaborate to explore the intersection of technology, labor, and cooperative principles in shaping a more equitable digital economy.