Juha Sääski: Elämänhallintaa, öljy kankaalle, 140 x 190 cm, 2017

TalousKuvat Juha Sääski

On the verge of platform failure

Once the coordinated exchanges are not beneficial to the actors involved, the platform will fail.

Lukuaika: 3 minuuttia

On the verge of platform failure

Juha Sääski: Elämänhallintaa, öljy kankaalle, 140 x 190 cm, 2017

Voima-talous-logo: Talous-tekstin O-kirjaimen sisällä teksti "Voima".

Artikkeli on julkaistu Voiman visionäärisessä talousliitteessä.

Ensimmäinen Voima-talous julkaistiin Voiman 5/2021 välissä ja Issuussa.

Löydät muut verkkosivuillamme julkaistut talousliitteen artikkelit täältä.

I was recently offered free lassis with my Indian takeaway for not ordering it through Wolt. For the restaurant, it was simply more viable to give things away than having the margins eaten up. On Christmas Eve, an eager driver insisted on us cancelling our ride on Uber and paying him directly. For him, Uber was indeed a platform of opportunities though not quite in the same way the company seems to imagine it.

I started to wonder what these encounters had in common, and if they possibly could tell us something about the current state of the platform economy. For is not the celebrated promise of companies such as Wolt and Uber to increase connectivity, productivity and prosperity? Why is it then that actors, who are supposed to benefit from the platforms, go out of their way to avoid them?

We know these companies often fail to provide decent pay, basic rights or security for their workers. Simply because they, according to themselves, are not employers and, therefore, not responsible for the individuals their operations depend upon. They prefer to think of themselves as facilitators of exchange.

This function as a discursive shield towards critique related to the labor conditions, which is legitimized through a societal entrepreneurial ethos. More importantly, however, it allows platform companies to put themselves forward as ‘coordinators’ stepping into existing markets. This explanation is downplaying how they also govern the relations between the different actors and thus constitute the market as such.

Platform companies do, however, not ‘just’ connect customers with producers, but connect them in ways that allow them to profit from the interactions. And yes, this is their business model and they should, arguably, be offered fair compensation for their efforts.

This essay is published in English, as then the platform workers of whom many speak English, are provided for a better access to a discussion concerning their position.

When actors begin to sell their work directly, outside the platforms, it must be a sign that something is not working. Perhaps, one could even call it a platform failure? In contrast to a market failure, where resources are not allocated efficiently at equilibrium, a platform failure may be understood as a situation where the coordinated exchanges are not beneficial to the actors involved. The value is distributed asymmetrically. Based on the aforementioned encounters, it would ironically seem as if it may be the platforms themselves that offset the possibilities for actors to form satisfactory relationships.

This as they are coordinated to meet at a price that is not viable once the companies’ commission has been deduced. Thus, while the companies offer their ‘partners’ the opportunity to ‘increase sales’, it does not, necessarily, mean that it is profitable for them. Just as little as ‘being one’s own boss’ automatically would translate into freedom for a courier (phrases borrowed from Wolt’s website).

These are narrations and not reflections of the material circumstances. This is of further importance as the companies often emphasize the ‘freedom’ of participation, which may be true if one does not account for the broader socio-contextual circumstances of the exchange. For example, over a year into the Covid-19 pandemic restaurants have basically become dependent on platforms. The freedom of choice is thus highly questionable.

The same goes for the many couriers and drivers who struggle finding other forms of employment on the Finnish labor market for structural reasons.

The solution? Some might say that platforms should be left alone to self-regulate, which is not, necessarily, compatible with the companies’ coordinating efforts and the resources they allocate. An alternative is to properly investigate the current situation from the perspective of all parties involved, and hold the platform companies accountable for their role in governing the relations.

A final, and arguably more intriguing, option would be to further explore the possibility of collectively owned platforms, driven by reciprocity and with, perhaps, a healthy dose of skepticism towards the idea that everything should be offered on-demand. For if free lassis and cancelled rides tell us anything, it is that there is an urgent need to create a better system outside of capitalist control, and where recognition and respect is given precedence. Such relationships may not only survive, but thrive in the ruins of failing platforms.

The writer is a PhD Student at the Department of Management Studies, Aalto University School of Business. Her research focuses on the relationship between digital technologies, work and society, and platform work in particular.

  • 18.6.2021
  • Kuvat Juha Sääski