December 16th, 2016Tags: platform cooperative
by Arthur Röing Baer
Global taxi networks have undergone monumental changes. Legacy taxi companies are being replaced by digital labor platforms like Uber, Didi Xiao, Lyft, Gett, and Ola. These platforms expand their reach into ever more logistical infrastructures. As a designer who has followed the controversial practices of some of these extractive enterprises, I will introduce the Commune model and discuss how platform cooperativism can offer a viable, near future alternative.
Initial enthusiasm on Uber has continuously faded with each additional article on driver exploitation and each misuse of power reported. It is clear now that Uber and its clones follow a predatory model of circumventing local regulations to undermine worker rights, exploiting drivers with the goal of finally replacing them with self-driving cars. The first semi-self-driving cars are already on the streets of Pittsburgh and San Francisco. We need to work on models to provide increasingly precarious drivers with higher income and mutualize the risks they take. The distribution of capital and risk is at the core of platform cooperativism. Fair distribution of ownership would allow (1) self-governance and (2) distribution of capital to all that contribute to the network.
Annually, Uber is dedicating $2 billion of its venture-capital funding to taking over infrastructure. Passengers currently only pay 41% of real costs when traveling with Uber. It should not surprise us that the legacy taxi companies cannot compete. Increasingly, these new transportation companies have also entered into sectors other than the taxi industry. Uber, for example, has expanded into: 1) food delivery with UberEats, 2) package delivery with UberRush, and 3) commuting/ride-sharing with UberPool, and UberHop. Uber understands that their new transportation networks benefit from the network effect. If something moves from A to B, why not take another package/hamburger/person going in the same direction with you in the car? With each added node in the network, the value of that network grows exponentially, resulting in market dominance.
And with automation around the corner and drivers thus far still at the wheel, we have a closing window to instill an alternative model of ownership.
Inside an UberHop in Manila, Philippines. UberHop is a shared ride with other passengers, following predefined stops, similar to a public bus. Photo: Arthur Röing Baer
As these networks start moving into the area traditionally covered by public transportation, they risk to undermine the principle they are based on: a shared responsibility to provide mobility to citizens, which is also linked to job opportunities. A platform co-op that counts passengers among its owners would keep citizens in control of their logistical infrastructures. Giving passengers themselves the possibility to govern the future algorithms that structure their daily movement.
Commune is a proposal for a logistical infrastructure that is organized as a platform cooperative. The main proposed model consists of three parts: 1) shared movement as model for ownership distribution, 2) partial ride-fee distribution and 3) share-decay as guarantee of relevant representation.
Shared movement as model for ownership distribution
When two or more users move together (initially driver and passenger), their location data can be mutually validated. Mutually validated location data and the energy cost associated with movement between points acts as proof of use which is then employed to distribute non-transferable ownership-shares to both passengers and drivers. This results in a network that will automatically promote shared movement by its contributors and reward them in financial ownership and voting rights. Shared movement becomes a distribution mechanism for a new platform cooperative, where both the driver and the user are recognized as legitimate contributors. And as the distribution of ownership is based on the movement of its users, it also creates a flat distribution. Because differences in individual movement have a natural cap.
Partial ride-fee redistribution
All ride-fees in the network get forked into two parts; one part going directly to the driver and the other distributed to all users through ownership-shares. This means that use of network results in financial kickback, where users effectively ‘mine’ shares of future income through their use (and thereby support) of the service. This gives guaranteed income for taxi drivers and for financial kickback similar to air miles to passengers. For drivers this is a revenue stream that can be used to pay off fixed costs like car insurance and health insurance.
Share decay as guarantee of relevant representation
Ownership-shares have a time-based decay mechanism. This is one of the only fixed values that can not be changed by the shareholders (as they would have perverse incentive to extend the lifetime of their own shares). This devaluation is beneficial for the network as it negates the possibility of control by inactive users.
The result is Commune, a platform cooperative model where ownership is distributed to active drivers and passengers via their shared movement. Through distribution of governance and capital it gives agency and mitigates individual risk. Above all it proposes an infrastructure where value is distributed to the people that contribute to and take advantage of it by–and through — their shared movement.
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