---------- Forwarded message --------- From: Martijn Arets <[email protected]> Date: Thu, Jun 25, 2020 at 9:01 PM Subject: Analysis: Platforms in the midst of a crisis To: <[email protected]> Good morning! I sincerely hope everything is well with you, given the circumstances. Due to the devel [image: Platform Talks] <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6nfV-nStt3kVsgZH5NOVlm1le-pNiepHC3cnaBGlDEGDkBGO5ZeMd_sgIRsv1y7Z4Zh6tjhp5eHohOayoufHbtI68oVYwpJsgpMD5YB_DbgKCV64MG3paNb203ajxa5gIzLOsZNTuKl_oydRb4IyYHlq-wb4KSZjASBXyWkBsOMZ/32x/UoQXNhjFQnaoA5cKbyKGZg/h0/EkvKlsfnEG4EMaH5pnZ8JAaYYGWNRBj_5fb8P2n5yX8> Platform Talks <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6nfV-nStt3kVsgZH5NOVlm1le-pNiepHC3cnaBGlDEGDkBGO5ZeMd_sgIRsv1y7Z4Zh6tjhp5eHohOayoufHbtL_rteG3rSRtKSlyvFS1uCMwqzong14a1lVg-54gAx-EtOJRm91J-LHOVOa3BTZrsLSssVYDPETiFDlwBuegXv8/32x/UoQXNhjFQnaoA5cKbyKGZg/h1/jAx9dOpTKZY34IiEFN9JZl7Kv7UG2DOwefpByIQoG6k> June 25 · Issue #13 · View online <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6nfV-nStt3kVsgZH5NOVlm1le-pNiepHC3cnaBGlDEGDz0bxEIFYG_lPoqKkDruxh2InkMlAjdBuWGNswdZ0ULbrwVsxYA7Rlb4QXUGA1CDxoFIqSpXWcASoSNc7kVzTdOGziaYoQANFUotbn6IfiZp7dw2LGY4Au_l46ULXtRRJ1mC32QnVCgccOaiPL2GSwxU2Hbb6NqqjqxLI5SrliCIrMLqXcfp3MDf7bt42sU5Bps5nnnmSBkG9YHuoaUxH2g/32x/UoQXNhjFQnaoA5cKbyKGZg/h2/PAugkJfuUCN2Ui_iIx_5AbROjspFXSu3JXuatNiI9L0> The platform economy gets so much media attention, but what is really going on? In this bi-weekly newsletter, I’ll select the 5 best or most disputable articles and serve them well-seasoned with my opinions and insights. ------------------------------ *Good morning! I sincerely hope everything is well with you, given the circumstances. Due to the developments regarding the coronavirus crisis, this newsletter has been postponed for a while. Personally, I focused on what happened on the Dutch market and was busy finishing **my Dutch book called ‘Platformrevolutie’* <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6qx6uPj5UZntf44lxo1OE4u7jodk6HF5x-y4GXQtScNdQutj5SBpGcB8H9j5TwekM0wbdhLtrcu1w6HuFpf58mWMaSiKVGC5fRHYu2MBGa5qP6aJAwAZBXFI-1Xw_YZQ-bKO8YMYE5KiZyhpqCNSK2K0j94NX9F7Z55pOqHm09wSt3rcNIgX9qS4Y5L-BG64JE3a8i653x6WzA_ZyfPCbISG4Y7phxix_p9FtBCAgb9J/32x/UoQXNhjFQnaoA5cKbyKGZg/h3/bPpR_Uza553yDfr4BdYk7hu4XOoLe00Gvozij8KIZ2M>* (Revolution of the Platform Economy) which will be released on July 10th. The book is supposed to lay a new foundation for the platform debate in the Netherlands. Of course, there is the ambition to release it in English as well. In case you have any ideas, please let me know. Besides that, life in general got more demanding with 3 kids (2, 5, 7 y/o) at home 24/7. I enjoyed it completely, but it didn’t contribute to my focus.* *In this edition, I share my analysis of the reaction of platforms (marketplaces) on a crisis like this one. Have a nice day!* ------------------------------ *What is the impact of economic changes on the platform economy? Does the platform economy majorly thrive during economic upturns? Or is it a persistent value adding phenomenon independent of the economic circumstances? Are platforms better than non-platform organisations in adapting their model in times of economic headwind? In this blog post, I’ll make an analysis with 5 lessons about the development of the platform economy in times of crisis.* 1. Platforms are (not very surprisingly) a reflection of the economy. Difficult times for an industry mean difficult times for a platform; 2. Platforms are a good instrument to match local supply and demand of gigs that become available due to a crisis; 3. Platforms take on a role of ‘private regulator’ more than ever. Along with the risk that vulnerable groups could get hit extra hard; 4. Platforms can use their ‘legacy’ to offer their supply in other markets; 5. Platforms have an even greater ambition to profile themselves as indispensable and as critical infrastructure *Reflection of ‘the’ economy* As soon as the demand for a certain service or product diminishes, it doesn’t matter whether you are a platform broker or not. At Helpling, a platform broker for home cleaning services, already 40% of the jobs were cancelled <http://click.revue.email/ss/c/TzfyQfvFfgo-vTkXDZQg101_3-Lyq1DLv3lvNYUnHR8rxOv7v8ASFPVPIFesCTgBwI_F3aAbA9yhF3oGTjJxBWAGsWQLhEamlba_WB6BVZTdgVYzHEnf-PSeSatsMwZ5aXs0upCnx3dQV0Eusr_5pDgseVw1NPfM2pDw6-pUBpzjKxoiDzIdaXawCZXrfLQOpYccbd1YpIX0ApQC29MLDg/32x/UoQXNhjFQnaoA5cKbyKGZg/h4/SUAC1sJI4TiaLqLbb6yjt72TdHIGxc7XdlwKQSH4dY0> during the first week of the intelligent lock-down in the Netherlands. This figure was expected to rise quickly to 50-60 percent. By that time, 80% of the bookings in Italy had already been cancelled. The non-platform colleagues at Homeworks reported the number of cancellations in the first week <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6jHMWnNYLW3oKDMwiQLvUnrQF2SzEVCtGJb5p6Mj0-X_Wm-9YwcPqDbOQpUQAUPsMYQBvPyvPdEJSk6sKWC8ikQgZ1CzHw5mOqhiTMOWptRGEyhXd6sOT7FUNMavU6Au9pBMM8nsdwfYJQi8X9tVFO3FLzU14FQYcOxJSSu_ncbrcLqCHQB2zvncJFVT6GY3hlRLPEpUzFBC3nAzu0MrrbE/32x/UoQXNhjFQnaoA5cKbyKGZg/h5/DbzXTNBYILmHAyldVdldrZsSQP1zgzAOv2J9UhCptuM> at 60 percent. Also the black market, the usual place for home cleaning service deals, suffered a lot, although there are no figures of this invisible market. Also Uber drivers complained about a huge decline of work and hardly covered their costs. Uber reported a fall in demand of 70 to 80 percent during that first period. A similar setback was noticed by drivers not working through an app. Research shows <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6hyvxeHzaUzCCUTIR0w0SkwxO9aKqdKyvW7nwapV6tAg7s3jpcpw8fmPxNOgouMizPapri3pmTP4yT7wtIHfHvUaaMJwpz9u4KGK_aZcjIWlv1JFJflgzwm1tymdIYMvHZc0tM80OjZ3zpl3syKjPXfTxXioTOukSFAKVWGK0NRNqF8ARyCdJD7pdBYfmhfUM8ZMNkCjhTQl2TQGRCnPFOvWrdyNswdnElaJxSzLD5jyNELrxZ7TFAyi2EOBN8HGeg/32x/UoQXNhjFQnaoA5cKbyKGZg/h6/2TAWROAwti9we4y4lMUWcMwQ-C_LGEO_LJdv0LHJzek> that 71 percent of the cab drivers expect to quit within a year, among Uber drivers this rate is as high as 76 percent. Also platforms within the tourism industry saw an unprecedented drop in demand: Booking noted a relapse of 85 percent and Airbnb suddenly saw its demand dry up too. Many larger platform organisations were forced to fire a significant portion of their own employees and made a claim on governmental support measures. These examples clearly show that a crisis is hitting a platform broker almost just as hard as non-platform brokers. These outcomes are no surprise, but good to underpin assumptions. *Matchmakers in the social domain* Besides the question how platforms deal with a (sudden) crisis, it is also relevant to look at the ways platforms may contribute to urgent societal issues caused by the very crisis. The four biggest platforms matching supply and demand of voluntary work in the Netherlands all came with their own initiatives during the first week after the ‘start’ of the lock-down in order to match willing volunteers. Volunteering platform NLvoorelkaar launched a dedicated Corona page <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6lhtY_rnsfp-Wo8msSSamhZ32W3jGXbIKZ7POAklL3xmGH4XEA2O8Qpl6jnNzC2p4ElFOMj5unmsY2PhWDEbL5kSyqcWoiBHL1-8l3oLlsTYea-Aipqf7lZSpkIy0XyMlWynVX5I-iap9rNAcY3rI9w/32x/UoQXNhjFQnaoA5cKbyKGZg/h7/K56kWQl_uqC-H1lKoiWc_VBUZi0wUWrr2szc8KWIeUM> on their platform. This platform makes smart use of their already existing network of about 80,000 active volunteers. In the first six weeks of the crisis, the platform itself and the seventy connected partners received 480,000 online visitors, resulting in 13,800 matches. Besides, people found one another on an immense scale on existing social media channels. The three largest Dutch ‘corona help’-Facebook groups have almost 24 thousand members combined. Platforms also helped in solving capacity issues within organizations. The team of Part-Up, a platform matching work with talents within organizations, went ahead facilitating healthcare institutions with their platform software. Laurens Walling, co-founder of Part-Up, said: “Spreadsheets aren’t sufficient anymore to organize work that has to be redivided. As healthcare personnel are deployed in intensive care units, we match the remaining employees with all the work still left undone in order to keep our healthcare system up and running.” That is, finding an optimal solution to use the available capacity within an organization. By focussing specifically on tasks, and not roles, Part-Up was able to roll out a working platform for a healthcare institution within two days and hence contributed to the solution of a capacity issue. The platform was also used by a few healthcare institutions to match non-healthcare related tasks with volunteers who had offered their service to the hospital. Through the platform, an immediate pool of volunteers opens up to the employees of a hospital. No more central matching, but a much more efficient and quicker process than before. And exactly that speed in times of crisis adds great value. *Sustainable or not?* How sustainable are the initiatives and movements created during the coronavirus crisis? Are they ‘only’ temporary phenomena, bound to fade when everything goes back to normal? Or are they part of a sustainable transformation? To determine the latter, it would be good to start looking in how much these solutions offer an inclusive approach and really focus on the underlying problems. Or are they rather solutions maintaining the underlying issues? In her article ‘Digital platforms and the (re)organization of solidarity <http://click.revue.email/ss/c/LCzjJVqW3iU4uG4vv7g712L7IdgTNNQHa39wymmXPpzdLFL1CTm_-1t037-Y6zxIYNva9dYeiRCVYy-PYwS-mGjWDvnGNTtmWpq-k5mTBi9SwS-6xwxwjNfdtBIyWGr69Kb6GfJ-1IOiMUcZyJbMyxPg1wZtLsGkjnPuV9EEO2xnD6SEcqvlM8F1XzpjGRj7MdsJ4CvG4US2_9Lvji0ZdMoloa9H39E5MMPK1By2YTk/32x/UoQXNhjFQnaoA5cKbyKGZg/h8/ulvTBD4eHD48KWq4lqBDjbtaV7AvR9Y_Qu_Q6DMJI3A>’ researcher Eva Mos strikingly summarizes her view, “*While platforms do play a crucial role in the mobilization and processing of volunteers and voluntary acts, they risk producing what we may call a logistical imagination of solidarity, in which solidarity is primarily about bringing supply and demand together. It risks foregoing underlying and more structural questions, or, as one platform provider expressed it, 'the question behind the question’.* And further on,* “However, this vision is particularly directed at (and suited for) potential volunteers, and less engaged with finding and including citizens in need of help, nor addressing more structural social problems and inequalities. When solidarity becomes an affair organized through match- and market-based charitable acts, some groups risk falling through the cracks.*” In this regard, Mos further illustrated in another Dutch article <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6idFhuNnY91iTeBruQr-Xg6dnQLchUQkRICMIOy-c5wuNbP0Lk5kBGEfp0CNbPM9HqjDHwJIFuMmutAvVM9Npg1vKHsJP8-bLPnYZPG8z7dcE_QjN2xG0MvccAAMj0rUCwH4ly6lz-97EMrJ8MAxyCcgkDIAUu5Mms_8d05k_X6dea_KsKlHz53_8Yx8GH_n0qhuHVX8c5cYvjfTDsxFqiE/32x/UoQXNhjFQnaoA5cKbyKGZg/h9/EOv7ZOm76_KWt4SAg0fHjrjuTzRDvbTcndli1Wh_Qaw>, how *“many platforms are keen on (technical) approachability, but a huge crowd of vulnerable people is just (socially) **unapproachable* <http://click.revue.email/ss/c/XN2t88CAhalHja1RClwc6s139CvQyp70Fn2PQlvQY9JEisZ-BK-NiFsuyB1cu04iixOyZHEFa-7rRQ43QifobYF-Kfp84sNxEhfe2hUmq1MIVdAHWUCehj2IshrD53wnwRCCSjYQs84IUH_PXN64xikS8Fe0sgcXJDuwwVKqVod95IzCTYRTYjIL78W4f8HuYcQihkbfhCHJRpeSVc3d9MsGRq0TfV8rcjXvA8ppVFhZZVXPKaRdx7MQowR0Z6jL/32x/UoQXNhjFQnaoA5cKbyKGZg/h10/FDPdkim6VPMF-n3Y3TAQncG1fNijfqkCYN7m9ZOwyGQ>*. You may think of the illiterate or even computer illiterate, as well as others who experience social or psychological thresholds. Although ‘traditional’ healthcare workers may not be as good in quickly and automatically scaling up the supply and demand, they are better at reaching the vulnerable people groups, because of their time and labor intensive way of working. Digital platforms are first and foremost mediators and NOT social or community workers. This affects these types of services, the reached target groups, and possibly the quality and sustainability of solidarity organized by platforms.”* *Platforms as private regulators* Platforms are used to 24/7 testing and development. As private regulators, they are able to quickly change the rules and conditions of the game. The ‘fast shift’ of platforms becomes especially clear in the way they, as ‘private regulators’, change the terms and conditions of their platforms one-sidedly in order to quickly adapt to changes in society. Whereas usually platforms facilitate the user with abundant freedom to create transactions as he pleases, many platforms took a more leading approach of late, oftentimes at the costs of one of the sides of the marketplace. Initially, Airbnb chose the side of the renters and overruled ‘cancellation policies’ individual landlords had imposed. This led to major discontent among lessors, half of which are, according to Airbnb’s own reports, dependent on income from Airbnb to pay their monthly bills. Also many other platforms followed through with changes in their general terms and conditions. During a crisis platforms assume more than ever the role of ‘private regulator’. This underlines that our idea of platforms as independent notice boards is the first thing to be thrown overboard. It is merely a question for which side, supply or demand, the platform will choose in such situations. Logically, a platform puts their own interest and its continuity first. Hence, vulnerable groups may be hit even harder during a crisis. It would be beneficial to have agreements on how vulnerable groups who are depending on a platform can be protected. This could possibly be an argument in easing certain competition legislation, so suppliers can unite more easily and fight for their collective interests. *Legacy-based switching * Despite drastically lower revenues, the crisis holds as well an incentive for platforms to launch new services or to scale up initiatives. Moreover, platforms used this crisis to explore new markets. Uber competitor, Lyft, started partnerships with several organizations to deliver medical supplies and other critical goods, and even people to hospitals. Amazon and Uber researched whether they <http://click.revue.email/ss/c/LCzjJVqW3iU4uG4vv7g712L7IdgTNNQHa39wymmXPpyvglATOGL6sZlkMAIytJFg2uCbqFfQmIRx73gEIM1qaNl2_wh2vqdAAanlD8ur7OM46YPF1c1KWMizwUYNNrCNVth0Qs2uC_-GqlV5V3Z8gZgqs0VzjvbqtVN5Xme42DntOM6voNTDgLsKUNCxaXUI/32x/UoQXNhjFQnaoA5cKbyKGZg/h11/ZEIBxzO2TRV9ut5HY3Ux0gfQFFEbfQk_bFKafsGfUpg> could transport corona tests. DoorDash cooperated with pharmacies delivering drugs and cut a deal with the government of New York to deliver food to ‘medically fragile students’. What stood out for me is that these platforms who aren’t specifically linked to certain industries were able to ‘deploy’ their supply pool in other industries than usual. Whereas some industries or certain kinds of services showed a strong dip, as less people took taxis, other work areas faced a huge peak in demand, as people stayed home. Although earned income from these new services and industries could not make up for the loss of profit elsewhere, it still helped pay the bills during the crisis. And planned concepts could be validated under market conditions with a higher pace. *Platforms as public infrastructure?* A crisis shows which important place platforms have in what we formerly would call our public infrastructure. To what extent would we like to be dependent on the goodwill of platforms as society? Should certain infrastructural platforms be taken to the public domain or run as public-private partnerships? Platforms like Amazon and Deliveroo use the crisis as an opportunity to penetrate all levels of public infrastructure. As DoorDash got sued in San Francisco for classifying delivery workers as independent contractors, the company responded <http://click.revue.email/ss/c/OvZMTmFNG_ogo9mVNMFA3_tzGU9xCSwTj4BgoKR78RmkBWaj53awcpRjFlqZ40RDQpeR_N3-dP-yWT1zlDKNm3oyk4BG6ODNcrgRBMwL-WeMDduvMd8hvwpWnONVu59_QwwwNQkzLNxzJMvuVh4FfFLCIWfxFbmM0kIbPKksmfqwPYEzJ3GY80CKnOq7cN228pYxRp_HCjlDXxhhaqYv7OdRCoUH1W-emepJh5LlRaFVvwqjPqPsaATzNuhG0ILKWRL7zdR94BQDGol3kkOCQQqijfsywyZEhVB8l3cs4OU/32x/UoQXNhjFQnaoA5cKbyKGZg/h12/DfxWL_PUDfFFendYV-rnstmLpNBTmq_z-E18-BNosKQ> with: “Today’s action seeks to disrupt the essential services Dashers provide*, *stripping hundreds of thousands of students, teachers, parents, retirees and other Californians of valuable work opportunities, depriving local restaurants of desperately needed revenue, and making it more difficult for consumers to receive prepared food, groceries, and other essentials safely and reliably. We will fight to continue providing Dashers the flexible earning opportunities they say they want in these challenging times.” During a crisis, these platforms position themselves as moralists and legitimize their imperfect model as indispensable and innovative. Smart, from the platform’s perspective, an A+ for their public affairs department, but it is essential for other stakeholders to boldly crush that marketing bubble. 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