Good day! I have since returned from my trip around the world. With my family with 3 children (5, 8 and 10), I travelled through Namibia, Botswana, Zimbabwe, Mozambique, South Africa and Indonesia. We closed the trip in Istanbul. I am grateful to have been able to do this. Meanwhile, I have been back at work for a couple of weeks and it seemed high time for a new edition of my English-language newsletter.
Last week, I visited London for an interview for a new episode for The Gig Work Podcast, which I produce for WageIndicator. Here I interviewed James Farrar, founder of the Worker Info Exchange and the App Drivers and Couriers Union. This impressive story will appear as a blog and podcast at the end of September.
It was nice to get out and about by train again. We also had many nice meetings about platform cooperatives and new research, among other things. Most recently, we made great strides with the WageIndicator team in developing the Living Tariff tool for Kenya, Pakistan and Indonesia. We are currently in the design and pilot phase. When the tool is live, I will elaborate on this. After all, it is a very cool and relevant project 😉
In this newsletter, I have again collected some articles and share the findings of a recently published paper on data portability in the gig economy. Have a great day!
How valuable or worthless is data to the platform worker?
The debate around data portability is dominated by many assumptions. Do workers want to take their data with them? And if yes: under what conditions? What do they then do with their data? And does the receiving party also see this data as valuable? With GigCV we have launched a project that, in addition to having a real impact (+100,000 platform workers in the Netherlands have access to their CV data and 20,000 CVs have already been downloaded!!), is also fertile ground for research to validate these assumptions.
In this first and recently published scientific paper “The role of contextual and contentual signals for online trust: Evidence from a crowd work experiment”, we (Rense Corten, Timm Teubner, Judith Kas and yours truly) looked at the influence of a platform worker’s taking data to another platform on the client’s ‘hiring intention’. This is because it is very nice when, as a platform worker, you can take your data with you, but is it perceived as valuable by the party that has to receive it? A pretty crucial question that is conveniently forgotten in many debates. To sum up: taking data with you to another platform does contribute to the client’s trust in the worker under the condition that the experience gained from similar work has been compared ánd at the time when the worker on the new platform has not yet accumulated work experience (ratings). Or in other words:
“This study reports the results of an online experiment among 180 actual clients of five gig economy platforms to disentangle the importance of two dimensions of worker reputation: (1) contextual fit (i.e., the ratings’ origin from the same or another platform) and (2) contentual fit (i.e., the ratings’ origin from the same or a different job type). By and large, previous work has demonstrated the potential of imported ratings for trust-building but usually confounded these two dimensions. Our results provide a more nuanced picture and suggest that there exist two important boundary conditions for reputation portability: While imported ratings can have an effect on trust, they may only do so for matching job types and in the absence of within-platform ratings.”
Perhaps not an entirely surprising, but an important finding. Why? Because this (and yes, ‘we always need more research….’)
- shows that imported data does add value to the working under certain conditions;
- helps in designing systems for import. After all: if it is clear that the imported data is only of value when the worker does not yet have experience on the new platform, it is plausible that this data only needs to be shown on the first few jobs;
- shows that the value of this data is limited, which could potentially persuade (digital) mediators to share this data with the worker. After all, the harm risk is small. Here, and conclusion could be that (digital) mediators overestimate the value of their data. Fine, I am happy to help them out of this illusion 😉
Very nice that this study has now been published (with great thanks to my co-authors) and can be used as source/input for other studies and researchers.
As for research around GigCV, this is not the end of it. I am currently working on a scientific paper on the relationship between the possibility of taking data on the worker’s commitment towards the platform. And for 2024 (and early 2025), studies are planned on under what condition platform workers download their data, what workers do with the data taken, and how non-platform employers or intermediaries value the data taken take place.
The paper can be downloaded via this link:
From Twitter to X: chance or no chance
If there is one issue that has kept the media busy during my trip around the world, it is the rebranding of Twitter to X. In no time, the familiar blue bird had disappeared from both the headquarters and the App store and was replaced by the much-discussed X.
That Musk has other ambitions with Twitter has been obvious for a long time. And exactly what those ambitions are, that was actually known much longer than anyone now thinks. The idea for X goes back to 1999 and was the forebear of what later became PayPal. Back then, Musk already had ambitions for a “financial superstore”: an idea he eventually lost a lot of money on and had to put on ice, because he couldn’t get any further support for it internally. This entire story is nicely summarised in this thread on Twitter. Meanwhile, the ambition has expanded from ‘financial superstore’ to ’the everything store’. In which the financial part does still play a crucial role.
Musk is inspired by China’s WeChat: a ‘super-app’ used by 1.4 billion people in China. A BBC article describes this app as follows:
Its services include messaging, voice and video calling, social media, food delivery, mobile payments, games, news and even dating.
It is like WhatsApp, Facebook, Apple Pay, Uber, Amazon, Tinder and a whole lot more rolled into one.
It is so woven into the fabric of Chinese society that it is almost impossible to live there without it.
Clear. Although the article also makes it clear that even WeChat has snags.
WeChat is every entrepreneur’s ultimate dream. That Musk has this ambition is therefore not at all surprising from an ambitious business perspective. And by buying Twitter, he has a group of several hundred million users who regularly log on to the platform. That’s a nice and strong start.
The big question is: will this entrepreneur, who has got things accomplished ‘against all odds’ before anyway, manage to make this a success?
Why this is a hopeless story
Let me start realistically. I think it is virtually impossible to get such a ‘global super-app’ off the ground. Of course, it is a question of what definition for ‘success’ you want to use, but for the purpose of this analysis, I will assume mega success. Not a nice profitable platform with a few services, but the platform where everything comes together. A platform as Dave Eggers describes in his book ‘The Circle’. A moonshot, to talk in Musk terms.
The BBC article discusses the differences between WeChat and Musk’s attempt:
For one, most people in China access WeChat on smartphones, rather than desktop computers, due to the relatively late development of the internet in the country.
“Which means they live in the walled gardens of apps rather than the open web. It is much easier to build an ‘everything app’ on smartphones than on computers,” he says.
Mr Fang also says that China’s lack of competition regulation – which contrasts with most Western countries – allows an app like WeChat to effectively block rival platforms, such as shopping platform Taobao and video app Douyin.
Then my thoughts on why this is going to be hugely difficult:
- Timing: WeChat started at a time when there was virtually no competition. There is now. In all the domains where WeChat operates, there are already dominant platforms operating outside China. Something that also varies by country or continent.
- Complexity: WeChat is a single-country app. With one set of regulations and one currency. If you want to spread this across multiple countries, you already have to deal with a lot (!!!) of extra variables. Complicated, but not an insurmountable hurdle.
- Regulation: many platforms, certainly not only in China, became big in a world where there were (virtually) no platform-specific regulations. Regulations did exist, it was just that platforms were so clever (and the receiving party so naïve) to profile themselves as being ‘new’. This has since changed, adding to the complexity of it all. To get an idea of how some platforms positioned themselves differently and were well aware that regulations applied to them: check out this video from 2016 (if you don’t have 2 minutes, start at 1:45) where Booking.com founder Kees Koolen talks about ignoring regulations (“if you let that stop you from growing then you’ll never get big and that’s your own fault”) during the time he was (briefly) COO of Uber:
- The power of the niche: a platform tends to work best when it maintains focus on a specific niche. When you focus on an isolated problem, you can focus all your energy on solving it as best you can. Go broader: then you lose focus and give room for others to carve out a niche.
- Many users is not a recipe for great success: Twitter has hundreds of millions of users. The idea is to entice these users, who use the platform regularly, to buy other services, thus increasing the pie bit by bit. This sounds nice and logical, but in practice this is very difficult even within the same category. For instance, Booking has many millions of people booking accommodation, which you know will also require things like transport, insurance and more. Yet Booking (not the example of a platform with technical superiority) fails to integrate this properly into the platform and generate higher revenue per customer. This while there is a very clear opportunity. Also, Uber’s ambition to become “the app for your daily mobility”, I described in this 2019 piece why this makes the platform stronger, has so far not really taken off. Meta too has noticed this when introducing their Twitter alternative Threads. After a flying start, we see “a nearly 70% decline in the number of daily active users since its July 7 peak”. Bringing users along is a “nice start”, but really no more than that.
- A shaky base: if you want to build on from a base, that base needs to be rock solid. And that is precisely what seems to me to be a problem at Twitter. In recent months, Musk has pretty much battered Twitter’s foundation by demolishing / cutting away important departments that should contribute to a solid foundation.
- (Un)reliability: a platform is not a standalone thing. It is a web of connections to countless other stakeholders. Large platforms have typically become successful after opening up their platform to others to build their own businesses. These external partners are at great risk when they start building their own tools based on your infrastructure. This requires trust and stability: you don’t want the platform to change regulations or API access and conditions overnight, causing your business to collapse. To talk in cliché terms: it’s about building an ecosystem, not an ego system. And the latter is precisely what Musk has been doing with Twitter lately. Musk has changed the platform’s rules and terms with very great regularity without any announcement or explanation, and his definition of “free speech” has also proved questionable, to say the least. Few entrepreneurs will now take a risk in building – and investing in – products in the ecosystem when there is no trust.
What could make this a promising story
It is usually easier to think about why something will not succeed rather than the other way around. You can dismiss this as ‘whining from the sidelines’, but you can also turn it around by using these points as inputs to get it right. It’s just how you look at it.
Is X doomed to disappear? I don’t believe so. Although many users complain, very few put their money where their mouth is and cancel their account. Besides, alternative platforms have so far failed to gain a serious foothold. And as long as there is no interoperability (which, by the way, is now defined in European law!), it will be difficult to set up a serious competitor. The moment there really is interoperability (for a phone call, it also does not matter if you are both with a different provider), then it becomes much easier for others to build competing services. Even better: then being a dominant platform is no longer a prerequisite for existence. Interoperability is often seen as a threat to platforms, but I think it actually brings an awful lot of opportunities. It is just how you look at it and it also depends on whether you really want to add value, or sit back and milk a dominant position in the market.
Back to Twitter/X: what does it take to make X successful?’ I think by creating valuable services for some of its current users. It is an illusion that you will get all 300 million-plus users on board with a new service, but if you start with ten per cent, you already have a substantial ‘kick-start’ to deal with. You can already see this happening to some extent, with programmes for ‘creators’ who can offer donations and subscriptions to followers and providers, and the ‘Creator Ads Revenue Sharing Program’ in which you as a Twitter/X user share in the ad revenue around your reach. From there, you can build on to other services, suck the creators’ followers into the ecosystem, perhaps build your own wallet with your own currency and so, bit by bit, develop your own ‘super-app’. What might help is a link to Musk’s other companies. For instance, I assume that all those satellites flying around must also be able to produce something (maps? Combine this with data from all the Tesla cars driving around), so that he is not initially dependent on other parties for establishing the first services.
The question then becomes what will remain of social media network Twitter. If only the ‘valuable’ users are used to kick-start its own ecosystem, the social media platform Twitter may well become a lot less relevant to X. The other 10% will then only be relevant to create its own ecosystem. The remaining 90% will then only be relevant to serve as an audience for the 10% ‘super users’. The fact that Musk has already removed many functions to ensure a high-quality network that also complies with (European) legislation (don’t tell me that he really believes that AI will solve everything for him), shows me that this is not his priority and future.
Whatever the outcome will be: it won’t happen overnight. Rolling out a ‘super-app’ simply takes an awful lot of time and money. And so does scrapping a successful social media platform. So for now, it’s mostly speculation and complaining. And let that be two things people on Twitter are incredibly good at 😉
Doordash pushes for tips for delivery drivers.
Tips, especially in the US, are an important part of delivery drivers’ income. This was the case before platforms and platforms have adopted this ‘standard’. About adopting standards (and not bringing solutions), it is interesting to read the piece and book ‘Uber pitched itself as a solution – instead, it’s ‘a symptom of a very broken job market’.
There are several ways to entice customers to tip via a platform. In the article ‘Tipping ‘nudges’ are now popping up on DoorDash. If you don’t leave a gratuity, you’ll hear about it‘ describes how this US delivery platform is going to further ‘entice’ customers to tip the delivery driver.
You could call this a sympathetic development: using technology to generate more earnings for the delivery driver. Kudos! If you know a little more of the company’s history, you might also be more sceptical about this. For example, Doordash was a key driver behind a group of platforms that invested over $200 million (!!!) in California to lobby for its own law around worker status and previously counted tips in a discussion when it had to pay delivery drivers a minimum rate.
Besides, it is of course incredibly questionable for a big company to put the responsibility of ‘fair pay’ on individual consumers. Even if that means the company adopts the ‘standard’ of an industry. That the standard in a market is to pay workers poorly does not make it legitimate to adopt it 1-to-1.
Is this surprising? No. This is because these kinds of platforms shift almost all risks, including the risk of no work, onto the worker. In that respect, it is therefore not surprising that they do not take responsibility for a ‘fair pay’ themselves. Very consistent. And a shame.
Urban Company Lured Women Into the Gig Economy—Then Pushed Them Out
Home services platform Urban Company helped Indian women get into the gig economy. Now they say it’s setting impossible targets and then abandoning them.
An interesting article on the rise and ‘fall’ of a gig platform in India.
Paris says tough Airbnb rules ‘working’ as violations fall
Interesting piece on the Airbnb regulations in Paris. Nice how it manages to strike the right balance here between safeguarding public values and commercial rentals.
Event alert: Navigating the Sharing Economy and Its Transformative Impact
On Tuesday 19 September, the event ‘Navigating the sharing economy and its transformative impact’ will take place at Spui25 in Amsterdam. I will be moderating this event. With this line-up, it is sure to be a great discussion.
Have you ever shared your house, your car, your household items or borrowed a dress via a sharing platform? Or are you curious, but still a bit weary to try it?
Although sharing isn’t a novel concept, the emergence of online platforms has magnified the scale of sharing, connecting individuals locally and globally and enabling the exchange of resources without direct ownership. However, the reliance on the behaviours of others for one’s own sharing experiences, makes sharing much riskier than buying outright. What if someone does not return your car on time, or damages what was originally your property? These are serious concerns that prevent curious consumers from participating. During this programme, we embark on a journey through the dynamic landscape of the sharing economy, making a valuable link between its theory, practice and current research.
The emergence of online platforms fosters a new type of consumer who leans towards temporary access rather than outright ownership of resources. This shift has positive outcomes, but also challenges. This evening, Nicole Stofberg will discuss the main findings of her dissertation, demonstrating that responsible sharing behaviours in the sharing economy drive continued participation and prevent consumer churn. To ensure that consumers treat others’ property with care and respect, a platform needs to implement governance mechanisms that create expectations regarding the underlying relational norms, rules and values that are expected of other sharing consumers. After Nicole’s presentation, Martijn Arets will lead the discussion with her and four top experts in the field of the sharing economy: platform founders Daan Weddepohl and Gerjan den Hartog, and two sharing economy pioneers Harmen van Sprang and Ananda Groag.
Participation is free of charge. More information and registration can be done via this link.
About and contact
What impact does the platform economy have on people, organisations and society? My fascination with this phenomenon started in 2012. Since then, I have been seeking answers by engaging in conversation with all stakeholders involved, conducting research and participating in the public debate. I always do so out of wonder, curiosity and my independent role as a professional outsider.
I share my insights through my Dutch and English newsletters, presentations and contributions in (international) media and academic literature. I also wrote several books on the topic and am founder of GigCV, a new standard to give platform workers access to their own data. Besides all my own projects and explorations, I am also a member of the ‘gig team’ of the WageIndicator Foundation and am part of the knowledge group of the Platform Economy research group at The Hague University of Applied Science.
Need inspiration and advice or research on issues surrounding the platform economy? Or looking for a speaker on the platform economy for an online or offline event? Feel free to contact me via a reply to this newsletter, via email ([email protected]) or phone (0031650244596).
Also visit my YouTube channel with over 300 interviews about the platform economy and my personal website where I regularly share blogs about the platform economy. Interested in my photos? Then check out my photo page.