The infrastructural power of platform capitalism

We can’t go back to a world without labour platforms, so their proprietary digital infrastructure must be recreated as a public good.

A new ecosystem of digital labour platforms has emerged over the past decade—transforming the very infrastructures of capitalism. The growth of platforms represents a double movement, whereby certain platforms, in key areas such as logistics, food delivery and mobility, are becoming so pervasive and central to the functioning of economies and everyday lives that they are becoming not just corporate behemoths but infrastructures themselves.

In this new system, the platform business model dominates not only how production is organised but also how it is distributed and valued. In this process, platforms also begin to push other, more traditional infrastructures to adopt their business model, as profit possibilities and margins as well as the efficiency of other systems are called into question. The pandemic especially sped up this process, with a rapid platform-isation of work in a range of sectors, from finance to hospitality, as the space and scope for other labour-market structures diminished or became impossible to sustain under lockdowns.

In short, platforms now shape labour markets around the world—and there is no going back.

Financial hinterlands

Despite its infrastructural role, platform technology is ‘neither good nor bad; nor is it neutral’, as Melvin Kranzberg put it. Technologies come with their own hinterlands, carrying the biases, fallacies and stereotypes of those who designed them. They are also situated in, and reflect the logics of, the organisations and institutions—the political and economic structures—in which they are embedded.

Yet some of these hinterlands are treated as less problematic than others. While the data hungriness of platforms is well-known, where this hunger stems from is not. While the role of algorithms in shaping and obscuring metrics and processes such as price-setting, remuneration and commission rates is widely acknowledged, the global flow of finance—including venture capital, ‘angel’ investments, national pension funds, hedge funds and so on—supporting these platforms to develop these technologies is less so.

This neglect of attention to the financial hinterlands has important political consequences: it restricts the field of critical thought and social action needed to tame the infrastructural power of digital labour platforms. A focus on capital flows also highlights the power imbalance between those who establish, finance and run these platforms and those who work for them or consume their services.

Proposition 22

Contemporary political and legal disputes highlight the increasing financial dominance of platforms in shaping public opinion and their subsequent influence on regulation. The recent success of platforms with Proposition 22 in California is indicative of their pivotal role in lobbying and campaigning to exert influence and make space for themselves in regulation, while establishing themselves in the eyes of funders and customers.

Prop 22 was a ballot measure exempting platform companies from AB5, a labour law passed by the state assembly last year which would have extended labour protections to platform workers. What distinguished this proposition from others was just how much platforms spent to make their case and the pervasive marketing tactics they used to ensure a favourable outcome.

A coalition of gig-economy platforms, including Uber and Lyft, spent more than $200 million promoting their campaign—the largest sum spent on a ballot in United States history—while labour advocates raised barely a tenth (although $20 million was in itself not an insubstantial amount). The day Prop 22 passed, Uber and Lyft shares rose by 18 and 22 per cent respectively, adding $13 billion to their combined market value.

Interests of capital

Platforms have been effective in pressuring regulators across the board to develop legislation favourable to their business strategy, at the cost of workers’ rights. How can we push for fair platform work, if public discourses around it are shaped by the interests of capital as a force majeure?

Our research on platform work around the world shows that asymmetries between labour and capital do not always play out in the same way. In some cases, platforms adopt other strategies than the blatant misclassification—of workers as ‘independent contractors’—they pushed for in California. In Germany, for example, Uber had to adapt its strategy and instead subcontracted with private transport intermediaries, which in turn employed drivers. These subcontracted employment arrangements can be extremely precarious for workers, with several drivers earning below the minimum wage, and others expressing uncertainty about whether they would be insured by the platform if they got into an accident.

Our fieldwork in South Africa and India echoes these findings, suggesting that platforms intersect with regional contexts in unique ways, avoiding, evading and circumventing regulatory frameworks and the unionisation efforts of workers. It is therefore paramount to challenge these exploitative logics beyond the realm of labour law.

Points of leverage

There are many points of social, political and regulatory leverage to move towards a fairer future for platform work. The platform co-operative movement shows promise, though worker-owned platforms are unlikely to outcompete multinationals, in terms of market share and financial resources—given how current funding structures supporting platforms favour market disruption and unfettered expansion, rather than labour rights.

Sanjukta Paul, professor of Law at Wayne State University, argues that there is an antitrust case to be made for platform-worker rights. The aim would be to reallocate co-ordination rights ‘toward the smaller players and away from the dominant ones’, so that ‘a municipality could run the app and publicly coordinate the market, taking into account public interest’.

Looking to the bigger picture, Francesca Bria and Evgeny Morozov contend that the dominance of venture-capital-backed, proprietary platform technology in directing and redirecting economic processes urges us fundamentally to rethink and recreate digital infrastructure as a public good.

Without significant state investment and engagement on national and regional levels, however, such ideas remain well-meaning abstractions and endeavours. As platforms become infrastructural, they begin to serve an increasingly public function—yet without the public accountability to challenge their fundamentally undemocratic governance and ownership structures.

With financial markets rewarding platforms for successfully evading labour-law responsibilities, the stakes for reshaping the trajectories of platform capitalism are higher than ever. Without a matching social and political challenge, it will be impossible to avoid a future of work where a race to the bottom is the only option.

This is part of a series on the Transformation of Work supported by the Friedrich Ebert Stiftung