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2021-12-29 Issue Paper - Platform Cooperatives B
2021-12-29 Issue Paper - Platform Cooperatives B
DISRUPTING TOGETHER:
Exploring Platform Cooperativism
as a pathway to ensuring decent
work in the digital labor market
Due to the rapid technological advancement and With the growing significance of the
increased internet connectivity in the 2000s, platform economy in the structure of
people across countries have witnessed the rise in national and global economies, as well
the production and delivery of a range of services as social activities, several scholars have
coordinated through online marketplaces or digital proposed typologies and classifications
platforms (ILO, 2018). These economic activities to better understand various digital
are now referred to as the ‘platform economy’ platforms. The process of classifying
or ‘gig economy’ that have allowed us to carry platforms has been based on the
out various economic activities online, such as services provided, function or value
ordering of food and groceries, booking a ride or created, interactions arranged by the
home cleaning services, or buying other remote platform, and profit motive.
freelancing services. Indeed, digital platforms have
1
Cited in the ASEAN Post’s article titled, “Philippines’ fast-growing gig economy” by Liyana Hasnan. Retrieved from: https://theaseanpost.com/article/philippines-fast-
growing-gig-economy
2
Online Labour Index (OLI) is the first economic indicator that provides an online gig economy equivalent of conventional labor market statistics. It measures the supply
and demand of online freelance labor across countries and occupations by tracking the number of projects and tasks across platforms in real time. Results are published in an
interactive online visualization which is updated daily at:https://ilabour.oii.ox.ac.uk/online-labour-index/
3
Based on the data viewed on 06 May 2021
4
Included in the OLI is the requirement that the worker and employer are matched digitally, the payment is conducted digitally via the platform, and that the result of the work
is delivered digitally.
While the Philippines is one of the products and services resulting from
countries with substantially expanding digital computing technologies (World
platform economy, there is still no Bank, 2020). While measurement is
official estimates on platform workers, complicated and challenging, not least
including those in the local on-demand given that platform work is often an
platforms. However, it may be noted additional or secondary income source
that the World Bank, in collaboration (Hunt, Samman, and Mansour-Ille,
with the Philippine Statistics Authority 2017), the increased attention to these
(PSA), is in the process of measuring evolving economic activities opens
the size of the platform economy in the opportunity for the Philippines
the country. Until then, the Philippine to better understand its dynamics
System of National Accounts (PSNA) toward ensuring decent work for the
has yet to fully capture activities under participating workers.
the platform economy, as well as digital
The digital labor market is increasingly the decent work pillars, below are some
growing in importance in the Philippines of the concerns that have been pointed
that its impact on labor standards should out by the recent studies and reports on
not be overlooked. The platform work the platform economy:
is regarded by various organizations
such as the World Bank as one of the • Employment – The online labor
tools to promote self-employment or market or the platform economy has
entrepreneurship (Kuek et al., 2015), potential of creating employment
especially for individuals who face opportunities for women and
difficulties in finding employment in other marginalized sectors, such
offline labor markets (The Rockefeller as the youth and persons with
Foundation, 2013). Kuek et al. (2015) disability (PWDs), who are unable
indicate that the platform economy to find decent employment in
provides advantages such as broader the offline labor market. Ease of
access to specialized skills, more flexible access, low entry barriers, and
and faster hiring processes, and 24‐hour flexible work arrangements are
productivity. Further, it has the potential some of the key features of the
to be a channel for socioeconomic platform economy, which makes it
development for developing countries, a viable employment driver. Unlike
particularly in terms of youth traditional offline employment,
employment and services exports (Kuek platform work does not require a
et al., 2015). lot of eligibility requirements, thus,
it provides alternative employment
However, despite the convenience and opportunities even to those with
benefits of the platform economy, there limited education and professional
is a growing awareness of decent work experience. Technology is deemed
constraints associated with it (ILO, 2018; to be free of human biases.
De Stefano, 2016). Anwar and Graham Algorithmic management and
(2020) argue that platform work in its detailed monitoring ideally enable
current capitalist set-up can generate an objective comparison of workers’
and maintain situations of precarity productivity. Workers may also
and that some of the self-employed are choose to conceal aspects of their
forced entrepreneurs due to limited identity online to avoid bias. As a
choices available in the labor market and result, hiring processes should be
job losses in various sectors. Following characterized by greater objectivity
5
The International Labour Organization (ILO) Recommendation No. 193, defines cooperative as an autonomous association of persons united voluntarily to meet
their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
6
Figures as of December 2019, as presented in the video presentation titled, “State of Cooperatives in the Philippines and Contributions of the Cooperative Sector.”
Retrieved from: https://cda.gov.ph/videos/state-of-cooperatives-in-the-philippines-and-contributions-of-the-cooperative-sector/
7
Based on the organization’s overview at: https://fopsco.ph/about/
8
https://innovationmtl.com/2019/01/31/impact-driven-uber-in-montreal/
9
https://www.saluscoop.org/
This section looks into the main skills to operate a business, and limited
challenges and opportunities that market access. However, while seemingly
organizations may face as they seek daunting and difficult to overcome, these
to establish themselves as platform challenges may also be transformed into
cooperatives. There are three main opportunities.
areas of challenge, namely limited
access to capital, acquiring the right
ACCESS TO CAPITAL
Capital in all forms- financial, physical, One of the main criticisms against
and human- is vital for any business conventional digital platforms is that
to survive and thrive. The start-up they tend to pass on the costs to workers
phase of any business requires financial in order to create an artificially low
capital reserves as spending can often price for consumers (Scholz, 2016).
exceed revenue levels. While there have Because there is no employer-employee
been successful cases of traditional relationship, workers are not protected
cooperatives in the Philippines, survival against unjustly low wages. Since big
based on the same fundamental techs have the monopoly over the
principles has yet to be proven for digital market and remain to be appropriately
platforms. regulated, digital platforms are likely to
dictate standards and workers are often
Starting a platform cooperative entails left without a choice but simply accept
the integration of technology into the the terms. Where dominant capitalist
business model. More often than not, platforms operate, it is very difficult for
technology has to be built from scratch platform cooperatives, who have limited
which would need a considerable to zero venture capital funding, to
amount of financial capital. From the compete without having to put pressure
viewpoint of investors, the platform on workers’ pay.
cooperative can be quite risky because
it has less potential for quick and huge While it is tremendously tough for
returns compared to mainstream digital platform cooperatives to mobilize
platforms. Thus, platform cooperatives sufficient venture funding, there are
have to be innovative in terms of raising ways to do so. First is to rely on the
and sustaining financial capital. usual way offline cooperatives generate
Undeniably, platform workers possess Thus, to survive the early stage and
technical skills which they have acquired to continue to thrive, members of
through experience of working in digital the platform cooperative have to
platforms. However, they could be more seriously live by its core principle of
used to working by themselves and may social solidarity. Achieving this can be
not be ready to run a company, which overwhelming since within a dominantly
is certainly different from being self- capitalistic system, it is quite easy to
employed or independent contractors. end up duplicating the very capitalist
Starting a platform cooperative entails strategies that cooperatives seek to
both technical and entrepreneurial dismantle. Platform cooperatives need
roles- from technology development and to strengthen alliances with other social
financial management to ensuring that solidarity enterprise actors and the
business plans are effectively realized. community in order to create
10
Impact investors are institutions whose business model focuses on making a positive impact by investing in enterprises that seek to generate not only financial returns
but also specific social and/or environmental gains (British Council and PhilSEN, 2017).
WAYS FORWARD
11
The Jobs Summit was held in April 2021 to 1 May 2021 to identify concrete actions for inclusion in the National Employment Recovery Strategy (NERS). A series of
consultations with stakeholders, including platform workers, was conducted prior to the final event on 1 May 2021.
12
The Decent Work Country Programme 2020-2024 articulates the shared priorities of the government, employers, and workers. It includes demonstration projects, which may
be financially and/or technically supported by the International Labour Organization (ILO).
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The views expressed in this paper are those of the authors and do not reflect the
opinion of the Institute for Labor Studies and/or the Department of Labor and
Employment. ilsdoleofficial