As Uber, AirBnB and Others Give “Sharing Economy” a Bad Rap, “Cooperative Economy” Gains Traction

coopAs someone who has long been interested in trying to help establish and promote sharing (or giving) economics, I have become dismayed in recent years as so-called “sharing” services like taxi competitors Uber and Lyft and and hotel competitor AirBnB have been touted as if they were contributors to the Social Good by their very business models.

In point of fact, as this excellent article from one of my favorite sites, Truthout.org, clearly explains, these services and their ilk are really thinly disguised “fronts for millionaires and billionaires to opportunistically ride off the backs of everyday people, while also exacerbating many economic inequalities.” Co-authors Brian Van Slyke and David Morgan of Grassroots Economic Organizing do a careful, thorough and revealing dissection of these companies, which try to convince us that they are all about leveling the economic playing field. They clearly are not.

I highly recommend this article if you share my interest in creating non-market options to the essentially unregulated capitalist economy which is destroying the American middle class and with it the American Dream.

The remedy Van Slyke and Morgan propose is the creation of more cooperative business ventures. Such businesses are owned and operated by their employees and/or customers/clients rather than by investors whose sole interest is (and should be) profit-making. According to a University of Wisconsin study, nearly 30,000 cooperatives of all kinds (consumer, producer, worker, etc.) operate within the United States at 73,000 places of business, own over $3 trillion in assets, and generate over $500 billion in revenue annually. Cooperatives employ over 2 million people and pay out an estimated $75 billion annually in wages, according to the study.

The Truthout piece focuses much of its attention on taxi coops, of which there are quite a number. Worker cooperatives provide services in all of the following economic sectors, as extracted from a 2005 “Snapshot” report on cooperatives produced by the University of Wisconsin:

  • Business services, such as personnel and benefits management, and group purchasing of goods and services ƒ
  • Childcare ƒ
  • Credit and personal financial services ƒ
  • Equipment, hardware and farm supplies ƒ
  • Electricity, telephone, Internet, satellite and cable TV services ƒ
  • Food and grocery services ƒ
  • Funeral and memorial service planning ƒ
  • Health care ƒ
  • Housing ƒ
  • Insurance ƒ
  • Legal and professional services ƒ
  • Marketing of agricultural and other products

That same report lists the following seven internationally recognized purposes for engaging in coop business enterprises:

  • Voluntary and open membership ƒ
  • Democratic member control ƒ
  • Member economic participation ƒ
  • Autonomy and independence ƒ
  • Education, training and information-sharing ƒ
  • Cooperation among cooperatives ƒ
  • Concern for community

One of the most recent analyses and discussions of the worker cooperative as an expanding business model comes from the folks at Shareable. In this article from July 2014, they provide a great deal of insight into the means and reasons for forming cooperatives, several case studies and resources for getting started in the coop business.

I see this model as the possible savior of the American middle class, but it needs much greater attention and expansion. One great way to bring it about might well be to proselytize workers in companies like Uber and AirBnB who are now being ripped off by their corporate owners who own none of the company assets, take none of the risk, and scrape large percentages off the top of their workers’ revenues with no more justification than a smartphone app.

In fact, worker coops creating those apps may well be another disruptive business model worth considering.

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