networks + planet / finance + society / tech + art

Why is Uber not a Coop?

A short essay for Geo Coop on what makes worker-on-demand (WoD) service Uber unique and what it would take for the cooperative world to do the same. Some extracts:

Uberfication has become shorthand for many new concepts—from the sharing economy to any significantly disruptive digital business model. But what exactly did Uber do that was materially different to earlier disruptive digital businesses? In short:

  • It created software…
  • To replace existing industry-wide operational structures…
  • That created huge cost and efficiency savings at the supply end (by removing human operators and taxi stands)…
  • And created significant user-experience benefits at the delivery end (by providing an interface and fixed fee structure)…
  • Which together has allowed the company to rapidly scale globally, threatening traditional taxi companies in every territory in which it operates

… Of course, the question remains, why is Uber not a coop? In principle, it would be the perfect model for a worker coop: a piece of software owned by drivers around the world that helped them do their work better with the costs and surplus or profits shared. In reality, it required the high-risk VC (Venture Capital) environment to finance and build such an innovative and disruptive piece of software. Public agencies, NGOs, social enterprises and coops do not have a strong track record building innovative technology. Even the great and successful collaboratively made pieces of technology—from within the open source community—are regularly criticised for not having a great user interface. Open source exceptions to this, such as Wordpress, are run as private, profit-making companies.

… Interface machine management, as used by Uber, is a shade different because it acts as an interpreterbetween consumer and worker. The consumer creates a command, ‘I want a lift’, and the machinere interprets that into instructions for workers, who compete to do the task. Finally, the consumer takes on the role of manager, writing the worker’s job assessment and inadvertently helping collectively decide how likely the driver is to stay in the job or not.

So humans are still vital. But the machine has become line manager, while the consumer has become empowered by the machine to have the final signoff, irrespective of their expertise. 

More info: 
http://www.geo.coop/story/cooperatives-uber-moment