[P2P-F] Fwd: Analysis: Platforms in the midst of a crisis
Michel Bauwens
michelsub2004 at gmail.com
Thu Jun 25 16:10:21 CEST 2020
---------- Forwarded message ---------
From: Martijn Arets <platformtalks at getrevue.co>
Date: Thu, Jun 25, 2020 at 9:01 PM
Subject: Analysis: Platforms in the midst of a crisis
To: <michelsub2004 at gmail.com>
Good morning! I sincerely hope everything is well with you, given the
circumstances. Due to the devel
[image: Platform Talks]
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Platform Talks
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June
25 ¡ Issue #13 ¡ View online
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The platform economy gets so much media attention, but what is really going
on? In this bi-weekly newsletter, Iâll 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 âPlatformrevolutieâ*
<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 didnât 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, Iâll
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 âprivate regulatorâ more than ever. Along
with the risk that vulnerable groups could get hit extra hard;
4. Platforms can use their âlegacyâ 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 âtheâ economy*
As soon as the demand for a certain service or product diminishes, it
doesnât 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
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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
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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 âstartâ 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 âcorona helpâ-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:
âSpreadsheets arenât 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.â 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 âonlyâ 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 âDigital 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>â
researcher Eva Mos strikingly summarizes her view, â*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 questionâ.*
And further on,* âHowever, 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.*â
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 *âmany 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
âtraditionalâ 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.â*
*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
âfast shiftâ of platforms becomes especially clear in the way they, as
âprivate regulatorsâ, 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 âcancellation
policiesâ individual landlords had imposed. This led to major discontent
among lessors, half of which are, according to Airbnbâs 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 âprivate
regulatorâ. 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
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could transport corona tests. DoorDash cooperated with pharmacies
delivering drugs and cut a deal with the government of New York to deliver
food to âmedically fragile studentsâ.
What stood out for me is that these platforms who arenât specifically
linked to certain industries were able to âdeployâ 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: âTodayâs 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.â During a crisis, these platforms position themselves as moralists
and legitimize their imperfect model as indispensable and innovative.
Smart, from the platformâs perspective, an A+ for their public affairs
department, but it is essential for other stakeholders to boldly crush that
marketing bubble.
Did you enjoy this issue?
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