How Innovative Funding Models Could Usher in a New Era of Worker-Owned Platform Cooperatives

Summary

For Socorro Aguirre Cruz, a home care worker in Staten Island, New York, with nearly 50 years of cleaning experience, many of the challenges faced by gig workers today have been part of her life for decades. Work has been precarious for her long before the emergence of massive, venture capitalist-funded gig platforms that began disrupting — and in some cases destroying — a number of industries.

“It was hard to find work, especially not speaking English,” Cruz says. “I was badly paid for a lot of work, and sometimes I didn’t get paid at all. They took advantage of my situation as an immigrant here.”

As the gig economy grows, more and more stories of worker exploitation are coming to the fore. And as reports of shady labor practices at Uber, Lyft, Taskrabbit, Postmates, and Amazon Mechanical Turk show, these issues run rampant across all sectors of the gig economy. In the home services industry, the platform Handy has made a name for itself, connecting people with pre-screened professional cleaners, fixers, and other professionals. Within three years of its founding, however, the company already faced lawsuits for allegedly underpaying workers and making them pay severe fees for minor transgressions.

To counter poor labor practices, gig workers and entrepreneurs are now taking matters into their own hands by launching their own digital platforms for various services. Called “platform cooperatives,” these businesses bring the structure of traditional cooperatives, including worker ownership and governance, to the digital world.