How cooperative gig economy companies managed to flourish during the pandemic

In the Italian city of Bologna, bicycle couriers delivery bread, freshly baked at local bakeries, to nearby businesses every morning. The same network of couriers deliver books from the city’s libraries and food from grocery stores to residents’ homes. Unlike other delivery platforms, businesses don’t pay a commission to be a part of the delivery service, and the riders earn about 9 euros ($10.19) an hour after taxes versus the traditional gross hourly wage of 5.5 euros ($6.23) that workers for other apps like Deliveroo or UberEats make; they also get insurance for both accidents and illnesses.

This service didn’t always exist; it was a direct response to the trials of Covid-19. An economic development arm of the city brought people together—shopkeepers, students, urban planners, a union of food delivery couriers, the local library system—and interviewed them about what they needed in the pandemic, and how a business could fit into their needs. From their responses, the city helped create a platform co-op—a version of a cooperative, where workers are also part owners of a company, that uses a website, app, or some other kind of online platform to sell its services.

Called Consegne Etiche (“Ethical Deliveries”), the courier platform isn’t just a delivery service. It’s a way to deepen the “social fabric” of the community; there was even talk of the couriers spending time with elderly people who were lonely during the pandemic, says Trebor Scholz, founding director of the Institute for the Cooperative Digital Economy at The New School and coauthor of a recent white paper on policies for cooperative ownership published by the Berggruen Institute.

Consegne Etiche is just one of many platform co-ops that has formed in recent years, but “it’s a really interesting example,” Scholz says, “because you see what a city can do.” By convening all those people together, the city helped create “synergistic solutions” to benefit businesses and residents alike.

The promise of the gig economy was that workers could break free from the 9-to-5 grind, setting their own hours and making money on the side as they pursued their passions. The reality has looked different; these apps quickly became full-time jobs for gig workers, but as contractors and not employees, they’ve been denied benefits; gig companies have lobbied to erode worker protections, such as the right to unionize; and rather than “sharing” in the success of these new businesses, workers have gotten just a small piece of the pie.

Platform cooperatives, Scholz says—and local policymakers—can help foster their creation. “What is the hope for gig workers who are underpaid and exploited?” Scholz says. “Cities, in a way. Cities can have a chance to intervene and actually get things done, and [create] policies that can be felt in the lives of people.”

Scholz first introduced the concept of “platform cooperativism” in a 2014 paper in which he suggested bringing co-op principles into the digital economy. “Worker-owned cooperatives could design their own apps-based platforms, fostering truly peer-to-peer ways of providing services and things,” he wrote. In a co-op, workers or members, are also owners of the company, and the company is democratically controlled by all these member-owners, rather than by one person at the top. Platform co-ops are worker-owned cooperatives that use a website, app, or some other kind of online platform to sell their goods or services. Scholz now helms the Platform Cooperative Consortium, an alliance of universities and co-op organizations. As the idea of platform co-ops has spread, the group has been approached by city councils around the world asking what they can do. This most recent white paper lays out ways that governments, from municipal to national, can empower platform co-ops through policy.

Cities, in particular, are in a unique position to help. They can convene people to learn how a platform co-op may help residents. They can offer solidarity loan programs to finance early co-ops, create co-op incubators, provide tax benefits, and expand legislation to better support co-ops over private businesses. Some places are already doing variations of this work: the city of Barcelona funds incubators that help platform co-ops. The United Kingdom has a “Co-operative Party” in its government (the only country to do so) with 26 members of Parliament, which works to promote democratic ownership of services and utilities. Current proposed state legislation in California, called the California Cooperative Economy Act, would allow workers to group together in a co-op that then “provides staffing services to gig companies“; those workers would be W-2 employees of the cooperative.

Co-ops are not new; they have an almost 200-year history. There’s debate about which was the first; one report says it was a mutual fire insurance company founded in 1752 by Benjamin Franklin. They’re also commonplace; co-ops own and run 42% of U.S. electricity lines, the first of which was organized in 1937. “With the opportunities of the internet, you can really scale those principles that can really help people and diversify the economy,” Scholz says—particularly the digital economy, which “really needs more diversity, not just this one model that dominates everything.” And platform co-ops can be a part of so many industries. In New York City, Co-op Ride is a worker-owned rideshare company, where drivers also own a share of the company. In California, NursesCan is a co-op of licensed vocational nurses providing on-demand care. Headquartered in Belgium but in nine European countries, Smart.coop turns any independent contractor—artists, dancers, musicians—into employees that get benefits and pension funds (members have to buy at least one share to join; the co-op also takes a small percentage of client payments as a fee).

The pandemic, in part, may have increased the popularity of co-ops, motivating people to start building this economy just as it spurred an increase in union support and higher participation in mutual aid. And to expand it even further, policy makers should step in. “This is an international movement,” Scholz says. Some are still small; others have grown to be pretty large (Smart Cooperative makes $200 million a year). Still, he says, “Without policy support, this can’t be a winning solution. And I think it’s a nice chance for cities to show their values, and how they support communities in this difficult time.”