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Albert Hirschman Centre on Democracy
15 April 2021

How can we democratise the platform economy?

Contribute to the Centre’s new commentary series.

As part of its activities in the research pillar Transformation of work, inequalities and solidarities, the Albert Hirschman Centre on Democracy is launching a new series of commentaries on the need to redesign the platform economy on a more democratic and sustainable basis.

 

The context

An important component of the platform economy is digital labour platforms which includes both web-based platforms, where work is outsourced through an open call to a geographically dispersed crowd ("crowdwork"), and location-based applications (apps) which allocate work to individuals in a specific geographical area, typically to perform local, service-oriented tasks such as driving, running errands or cleaning houses. Since 2010, there has been a five-fold rise globally in the number of digital labour platforms that facilitate online work or directly engage ''gig workers'' or ''platform workers'' to provide taxi and delivery services.

Digital labour platforms have created unprecedented opportunities for workers, businesses and society by triggering innovation on a global scale. However at the same time, they pose serious threats. The companies at its heart face severe criticism over inadequate employment protections (unfair work), free-riding on conventional businesses (unfair competition) and inadequate consumer protection.

Core to these fundamental imbalances are free-riding mindsets, embedded deep within the platform economy. Throughout the years, in markets across the globe, platforms have been benefiting from freeriding on the security provided by conventional employment. The pandemic has further exposed this dark side. During the early lockdowns, digital platforms successfully externalised responsibilities on to governments for financial support and on to platform workers for their own protection. Some have even increased surveillance of workers during the pandemic—with the potential this will become ‘normalised’ in its aftermath.

As certain platform-type practices degrade the norms that define decent employment and responsible business conduct, we need to look at where an economy dominated by an ever-growing class of digital free-riders—and an underclass of insecure ''freelances''—will take us.

A big reset is necessary, as the balance has tipped too far in the platforms’ direction.

Such a reset would engender a robust, democratic dialogue about the moral foundations of the platform economy—with the primary goal a more equitable and engaged society, which rebalances power in digital workplaces.

We need public debate and reflection on the limits of platform markets, reasoning together about the right ways of embedding the platform economy in the digital age, distilling what principles governing work we want to protect rather than let perish.

 

The purpose

This commentary series will address the following topics/questions:

1. The challenges for platform workers relate to working conditions, the regularity of work and income, and the lack of access to social protection, freedom of association and collective bargaining rights. Working hours can often be long and unpredictable. In addition, some platforms have significant gender pay gaps. For traditional businesses, the challenges include unfair competition from platforms, some of which are not subject to conventional taxation and other regulation.

  • What will be the effects of economic insecurity on political participation? Moreover, will emerging platform economy inequalities and digital divides cause in the post-pandemic era cause a new wave of populism threatening to plunge democratic societies into crisis?

2. Recent research suggests that emerging post-covid-19 inequalities risk widening platform work inequalities (labour, social, gender, and ethnic, etc).  It has been argued that when inequalities are growing, social conflicts are swelling and the gap in the political scene is filled by populists. Political participation is an important, channel through which economic insecurity, reductions in trust, and changes in cultural attitudes all affect populism.

  • How can governments and international agencies put in place effective frameworks that can lead to rebalancing power asymmetries in platforms' cross-border operations, and support more inclusive participatory models,  and a formal role for labour and civil society in these frameworks?

3. Work on online web-based (crowdwork) platforms is outsourced by businesses in the global North, and performed by workers in the global South, who earn less than their counterparts in developed countries. This uneven growth of the digital economy perpetuates a digital divide and risks exacerbating inequalities. The growth of globalised crowdwork platforms poses new challenges for existing national and international regulatory systems and frameworks, while presenting a need for international policy dialogue.

  • Will trade unions be successful in enabling ''data labourers'' to organize and collectively bargain with platforms. What will be the key challenges they will face? What role, potentially, for traditional employers' organizations?

4. Creating value through collecting and monetizing data is probably the biggest shift of platform business. Platforms continuously mine data, transforming economic activity to a level beyond the capacity of traditional business. Workers' demands for data compensation and justice are likely to become one of the most confrontational issues with platforms in the years to come.

  • How should the right to collective bargaining be conceived in the context of online web-based platforms?

  • What role can cross-border social dialogue and participatory models paly in finding a new balance between the right of platform companies to move across borders and the right of platform workers to organise cross-nationally?

  • If the platforms remain hesitant to engage in social dialogue, what should be the response of workers and governments?

5. Social dialogue, worker organizing, the development of agency, voice and representation, and its expression through collective bargaining, are the surest way of achieving a more democratic future of platform work. Yet, the goal of setting in place national or global frameworks for structured dialogue and collective bargaining between governments, platform business and workers, which allow for much greater democratic influence from workers, employers and their organizations, is still not being sufficiently met.

  • Are platform cooperatives the way forward? If so, how can we create an enabling environment for platform cooperatives in the future? What will be the key challenges?

6. Recent years have shown the emergence of platform cooperatives which are owned by their members (platform workers). Given that involvement in these platforms is based on participatory democratic processes and work is co-determined, platform cooperatives are likely to be more transparent and accountable to platform workers than digital platform companies in which many functions are algorithmically manage.

  • How can we ensure transparency and democratic control of platform economy?

7. Platforms use algorithms to match workers with clients and customers. Algorithms monitor, track and evaluate workers, and thereby organize their work processes. Excessive surveillance through algorithmic controls, combined with reduced bargaining power stemming from legal restrictions on platform workers, has been found to effectively undermine the freedom the platforms tout and their workers desire. ''Algorithmic management'' entrenches a power imbalance between management and worker.

  • How can the platform economy be shaped to provide decent and inclusive work opportunities, and create fair competition?

  • In seeking to regulating digital platforms for labour and social protection, what should be the goals?

Raising migrant's and women’s voices in conversations about work is an important aim. Therefore, we would welcome contributors addressing these aspects.

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The series aim to include contributions from scholars, policy-makers, practitioners, and other stakeholders. Proposed contributions are expected to be from 500 to 2500 words long and can be submitted on a rolling basis to Dr Maria Mexi (maria.mexi@graduateinstitute.ch).

 

Published contributions:

26 May 2021, The platform economy - Time for more democracy at work, by Maria Mexi

16 June 2021, Managing complexity in the platform economy: self-regulation and the cross-border social dialogue route, by Konstantinos Papadakis and Maria Mexi