Challenges and opportunities of the irruption of the platform economy | Innovation

Challenges and opportunities of the irruption of the platform economy | Innovation


The conflict facing the taxi sector and the platforms that offer transport services with driver (VTC) is related to a transformation of the production model. The new technologies gave rise to the emergence of the platform economy, an economic model based on the production of goods and services mediated by a digital portal.

Transportation services in the city such as those offered by Uber or Cabify are just one of the areas of economic activity in which the platform economy is disrupting. Other areas that undergo a similar transformation are the distribution model of culture – be it music, film or books (think of Spotify, Filmin or Amazon) -, rents (Airbnb case) or delivery services (like Globo or Deliveroo). It will emerge almost in any area of ​​economic activity.

The platform is the heart of the model, the meeting place between supply and demand, the scorecard from which the activity is organized. Connected through the platform, a decentralized network of infrastructures is generated, be it a bicycle park (as in the case of Deliveroo or Globo offering distribution activities) or a large hotel room distributed throughout the city (as is the case with Airbnb).

The platformization of the economy is a trend that is growing rapidly and exponentially, it is a central pillar of the digital economy, and everything points to it being the prevailing model in the economy of this century.

Digital platforms can take very different forms. The disruption in the taxi sector has no turning back. Only resist the challenges will not have much travel, it is better to take the initiative to take advantage of new opportunities. The debate is not only VTC versus Uber or Cabyfy, but there are other platform models that could be a more beneficial reference for the platformization of the taxi sector with initiatives to create cooperative platforms among taxi drivers.

  • What model of work organization?

Digital platforms are disrupting the prevailing industries. It could be asked if and to what extent they represent an improvement. On the one hand for the consumers. Returning to the case of VTC versus taxi, we found that the platforms introduced new features, but these have been incorporated to a large extent into the taxi sector, from applications such as MyTaxi, and at this point the services of the taxi sector versus Uber or Cabify each They are more similar.

But the quality of the service from the perspective of the consumer is not the only element to be taken into account. Where differences most stand out is in the way they organize work. While in the taxi sector SMEs predominate, Uber and Cabify are large multinationals that precariously work. They have at their disposal huge bags of workers for the allocation of demand, but those who do not consider as such. The business model of multinationals such as Uber is maintained only after the dismantling of labor conditions and tax evasion financed by speculative venture capital such as Goldman Sachs.

Digital platforms can give wings to savage capitalism or open new horizons of economic democratization"

But Uber or Cabify it's not the only platform economy model. When we rethink this economy and its challenges, it is important to differentiate between models. Digital platforms can give wings to the wildest capitalism – as is the case of Uber – or can open new horizons of economic democratization. Returning to the tradition of social and solidarity economy, is the case of cooperatives that offer their services through platforms that reach a much larger scale than we know so far, as the case of Green Coop, the main actor of taxi services in Denver. The number and importance of cooperatives of new type -which has been called platform cooperativism- that offer their services through digital operators, preserving the advantages for consumers of the services of the platform, but at the same time maintaining the rights, is growing of workers and the system of social guarantees. Another example is Som Mobilitat in Barcelona, ​​a cooperative that offers electric car sharing services.

In this way, the dilemma is not restricted to Uber or Cabify versus taxi, but there are other innovative models, while democratic, that offer a good horizon for the platformization of the taxi sector. The debate is not so much VTC versus taxi, but what model of digital platforms, and how to carry out the transition to the economy of platforms of the taxi sector so that the change produces the least damage. And that, in the process, consumers, workers and citizens earn more than they lose.

  • What governance of the platform economy?

Another substantive debate is the role of the Administration. It does not make sense to confront the conflict by simply putting patches (based on regulating the possibility of geolocation or the waiting time for contracting it) in order to ensure a market share for the taxi sector and the VTC. These solutions are momentarily appeased, but in a short time the conflict re-emerges. The taxi sector will undoubtedly go through great transformations.

The Administration should help us to face how society can face the fundamental transformations, ensure a good transformation to the platform economy, innovate in services, that does not lead us to lose labor rights, that respects the tax system and does not put in risk habitability in the city. The promotion of digital platforms owned by taxi drivers' cooperatives could be a way forward.

But for administrations to do so, we can not lose sight of the fact that the Administration itself, the governance model, is also challenged by the platform economy.

Cities, where the activity of the platform economy is concentrated, are those that receive the disruptive impacts of the most aggressive platform models; On the other hand, most of the time they are not the ones that have the competition with respect to the policies to be applied. And precisely one of the great debates that is taking place is what model of multilevel governance to apply so that cities and local administration can have a greater role. This was one of the requests of the European Parliament in its position on the European Agenda for the Collaborative Economy.

The Administration should help us ensure a good transformation to the platform economy"

On the other hand, digital platforms as a model scale more easily to a global dimension and this aims to revalue the role of global governance institutions. In order to obtain a global vision and join efforts, last November a summit of 50 cities from all continents took place in Barcelona (Sharing Cities Summit), promoted by the City Council of Barcelona, ​​together with Amsterdam and NYC, which resulted in the signing of a joint declaration and a package of actions to share visions and joint strategies regarding the challenges and opportunities of the platform economy. A single city negotiating with Airbnb does not have the same margin as if they do many together. The same threat of Uber and Cabify to stop serving in Barcelona loses weight when it is present in these meetings that have a situation of brake to their aggressive models in many other European cities. At the same time, the cities agreed to jointly promote the internationalization of platform economy models that are more respectful with the city.

Be it from cities or global institutions, the decisive element would be between all levels of government to confront the broad and far-reaching debates on the challenges and opportunities of the economic transformation of the economy, with courage and breadth of vision.

Mayo Fuster Morell is the director of the Dimmons research group at the UOC.

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