Wednesday, March 04, 2015

More attractive labor platforms

Sangeet Paul Choudhary, in Singapore, is doing some excellent thinking and writing on platform. I can strongly recommend taking a look at his blog about Platform thinking.
In a recent article Choudhary looks at some of the elements of making labor platforms, like Uber and Taskrabbit, more attractive to work through.

Here's a slightly abbreviated quote:

"An increasing number of labor platforms, today, are employing contract laborers to power the supply side. They do not enjoy the benefits of full-time employment. To encourage them to participate on platforms on a sustainable basis, the platform owners need to move beyond acting like matching engines and understand the costs and benefits involved in producers participating on these platforms.

First, every platform player should lay out all costs and benefits involved in producers participating on the platform. These fall into three broad categories:

- Risk management: Platforms need to ensure that producers that are investing in the platform have capped costs of participation. This means that producers need to be insured against transaction risks.

- Learning and Improvement: Platforms need to ensure that producers constantly improve their ability to reap more benefits from the platform. This, in turn, involves community management measures that involve the sharing of best practices, an example being Airbnb’s community management programs with hosts.

- Well-being: Finally, platforms need to ensure that they guarantee well-being for producers in a manner similar to that in traditional organizations".

Platform capitalism - a term ripe for exploring

Clearly, platforms are the new giants of the economy. Global, efficient, scaleable, asset light, flexible, and with great power and a strong tendency towards monopoly. 
We're just starting to understand the game. 

NeverMind the Sharing Economy: Here’s Platform Capitalism, by Sebastian Olma, is a good explanation why the sharing economy is a mis-leading term for something completely different.
Despite the slightly shrill tone, the article has some important insights. Here are a few quotes:

 “These are digital platforms that roughly do two things: either making the old practice of re- and multi-using durable goods more efficient or expanding market exchange into economically uncharted territory of society”.

“While marketplaces connect supply and demand between customers and companies, digital platforms connect customers to whatever. The platform is a generic ‘ecosystem’ able to link potential customers to anything and anyone, from private individuals to multinational corporations. Everyone can become a supplier for all sorts of products and services at the click of a button”.

“It seems fairly obvious that the entire purpose of the platform business model is to reach a monopoly position, as this enables the respective platform to set and control the (considerably lower) standards upon which someone (preferably anyone) could become a supplier in the respective market. Instead of cutting out the middleman, digital platforms have the inherent tendency to become veritable Über-middlemen, i.e., monopolies with an unprecedented control over the markets they themselves create”.