Platform Cooperatives Driving Change from the Margins
How to make the sharing economy more equitable
Platform Papers is a blog about platform competition and Big Tech. The blog is linked to platformpapers.com, an online repository that collects and organizes academic research on platform competition.
By Aleksandrina Atanasova, Giana Eckhardt, and Mikko Laamanen.
When the sharing economy first emerged fifteen years ago, it promised a new and more equitable way of consuming. As the sharing economy has grown, platforms, such as Uber and Airbnb, monopolized the market. These (and other incumbent) platforms have not delivered on their utopian promises of equitable market practices and social benefits of connection—consequently, these results are not likely to materialize in the now-mature sharing economy. In response, alternative sharing economy platforms, such as platform cooperatives, have emerged.
Authors are hopeful about the potential of these platforms to manifest and materialize a better sharing economy, particularly for workers. Often, however, the role of the consumer is overlooked. In our recent article published in the Journal of the Academy of Marketing Sciences, we address the question ‘how can a responsible marketing strategy be viable and effective for market challengers’ by exploring the ways in which alternative platforms may be able to change the game in the sharing economy.
Only a few platform cooperatives have been able to ‘make waves’ in the competitive set.
In the current platform economy, incumbents have ‘cornered the market’ by mechanisms that lock in consumers and resources. This makes it difficult for users—both workers and consumers—to freely move between platforms. Such monopolistic tendencies do not serve the interests of sharing economy stakeholders, since platform mechanisms effectively hinder the emergence of competition, including alternative platforms focussed on worker, consumer and community wellbeing. Only a few platform cooperatives have been able to ‘make waves’ in the competitive set. Stocksy, the most prominent cooperative platform to date, emerged as a viable competitor of mainstream stock image providers by pooling content creators and hosting 1,800 artists in over 80 countries.
Focussing on the puzzle of viability and effectivity of alternative platforms to challenge the market, our study explores two platform cooperatives—Fairbnb and Drivers Coop—and their role in reshaping the sharing economy, specifically with regards to their prosocial impacts on participants, providers and consumers. These platforms introduce a different kind of playbook. The ways in which such platforms are reimagining marketing strategies not only benefits the focal platform and its users, but also contribute positively to the development of a more prosocial sharing economy. This is what we call change from the margins.
About the research: Our qualitative research design included 17 semi-structured interviews, participant observation and fieldnotes as well as netnography. We particularly wanted to understand the lived experiences of users and managers within platform cooperatives. We employed a grounded theory research approach to identify emergent themes. Our initial coding set includes both strategic challenges and opportunities for platform cooperatives; during our theoretical coding, were refined the opportunities to the three core analytical categories of (1) Decentralizing the marketplace; (2) Shaping authentic narratives, and (3) Building institutional partnerships that are illustrative of “Change from the margins” as a responsible marketing strategy in the sharing economy.
Changing the sharing economy from the margins means that while platform cooperatives may not be able to overhaul the marketplace, they can instigate change. We outline the nature of responsible marketing strategies in three core dimensions that drive said change:
Decentralizing the marketplace - refers to the process of disrupting centralized platform power by diversifying offerings and promoting localized, networked collaborations among smaller service providers. The ‘community powered tourism’ model of Fairbnb looks to connect short-term rentals to other sustainable and locally connected offerings in the area—this is operationalized by allocating half of the platform commission to local projects. Decentralization aims to cater to the niche needs of consumers while creating connections between providers who seek to advance more equitable sharing. The diversification of offerings expands the range of available local services aligning the diverse interests of various stakeholders while local collaborations encouraging partnerships among smaller service providers to create a networked marketplace that is less dominated by large, centralized platforms. This taps into consumers' desires for alternatives to mainstream offerings, especially by fostering community engagement.
Shaping authentic narratives - involves creating and promoting resonant value narratives that highlight the social interest and authenticity in the platform experience. Platform cooperatives can reignite the original sharing economy narratives to serve as benchmarks for responsibility and authenticity. Narratives become a central part of the responsible marketing strategy. The NYC-based Drivers Coop amassed a loyal usership of drivers and riders by vocally drawing attention to the unfair treatment of drivers by market giants like Uber and Lyft—the cooperative positioning is “Drivers steer our company” and the mission is to give drivers control of the decisions that affect their lives. Thus, the use of narration can raise awareness about alternative, prosocial platform models and motivate consumers to scrutinize dominant players in the market.
Building institutional partnerships - focuses on creating collaborative relationships with various stakeholders, including governments, local authorities, and interest-representing organizations. In this way, the change-from-the-margins strategy emphasizes the importance of interdependency and mutual benefits among societal actors. Fostering long-term interactions promotes shared value and mutual benefits while establishing connections for collaboration with regulatory bodies that shape policies. The main idea is to garner support for responsible market practices. An example here is how Fairbnb negotiates with the City of Paris with regards to the extension of their operations to less touristic and more ‘local’ neighborhoods: the argument is to relieve stress that overtourism can cause on the human and urban infrastructure. Leveraging partnerships can enhance the impact of responsible marketing strategies and can advocate for systemic change within the marketplace through aligning with the goals of institutional actors to amplify the potential support.
Our findings underscore the importance of the platform’s interface and functionality to work as well as the mainstream platforms to ensure consumers can utilize responsible marketing platforms with as much ease of use as the mainstream ones.
Following these three strategies results in stakeholders perceiving the commitment to responsibility in platform cooperatives as genuine, which can help attract support from partners and consumers. However, while stakeholders express a desire to support responsible alternatives, the long-term use (and sometimes even adoption) of these services is hindered by functional and experiential limitations. Our findings underscore the importance of the platform’s interface and functionality to work as well as the mainstream platforms to ensure consumers can utilize responsible marketing platforms with as much ease of use as the mainstream ones.
Future research can explore the boundary conditions for successfully approaching change from the margins. This entails, among others, understanding stakeholder expectations and experiences, and assessing the strategic vision of platform managers. Further in-depth studies can also provide insights into the dynamics of platform cooperatives and their role in the broader sharing economy. Our findings also offer several implications for practitioners seeking to implement responsible marketing strategies in this evolving landscape. By focusing on authenticity, engagement and decentralization, platform cooperatives can carve out a niche in the competitive landscape as well as drive change among established incumbents through changing consumer expectations around their practices.
This blog is based on research published in the Journal of the Academy of Marketing Science, which is included in the Platform Papers references dashboard:
Atanasova, A., Eckhardt, G. M., & Laamanen, M. (2024). Platform cooperatives in the sharing economy: How market challengers bring change from the margins. Journal of the Academy of Marketing Science, 1-20.
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