Platform Capitalism

Evgeny Morozov doesn’t like it, but his portrait certainly makes it look attractive to those who do:

Some prominent critics even speak of “platform capitalism” – a broader transformation of how goods and services are produced, shared and delivered. Instead of the tired conventional model, with individual firms competing for customers, we are witnessing the emergence of a new, seemingly flatter and more participatory model, whereby customers engage directly with each other. With a smartphone in their pocket, individuals can suddenly do things that previously required an array of institutions.

Such is the transformation we are witnessing across many sectors of the economy: taxi companies used to transport passengers, but Uber just connects drivers with passengers. Hotels used to offer hospitality services; Airbnb just connects hosts with guests. And this list goes on: even Amazon connects booksellers with buyers of used books.

The differences from the old, pre-platform model are easy to spot. First, these companies have extraordinary valuations but suspiciously light balance sheets: Uber doesn’t need to employ drivers and Airbnb doesn’t need to own houses. Second, instead of adhering to a precise and rigorous code that spells out the rights of customers and the obligations of service providers – the cornerstone of the modern regulatory state – platform operators rely on the widely distributed knowledge of participants in a service, hoping that the market will eventually punish those who misbehave.

9 thoughts on “Platform Capitalism

  1. without government/tax support for infrastructures, law/trade/contract-enforcement, etc, how much of this sort of mobile-market would you guess could survive?

    • That’s the experiment-in-process, isn’t it?

      The reason blockchain technology is exciting people is the implicit answer to your question: a lot. Trustless tech makes oversight coordination solutions obsolete (which is why all the anticipatory squealing right now).

  2. A hitchhiking website is sharing. Couchsurfing and Hospitality Club are sharing. In the case of Uber and Airbnb the owner of an app makes obscene amounts of money parasiting on labour of people who lack any kind of security. It is ubercapitalism.
    When I go to a hotel, I pay a company that employs people who have insurance and social security and hopefully a steady income. The hotel pays local taxes with which roads and sewers can be maintained. And, yes, mr Hilton gets filthy rich.
    When I, as a Dutchie, rent a room somewhere in a poor Asian country through Airbnb, 12% of our transaction flows to America, to some mr Airbnb who does not make any contribution to the local economy in this poor Asian country. Probably no taxes are paid. Mr. Airbnb becomes at least as filthily rich as mr. Hilton, but with less trouble and without any benefit fir society.

    Mr Airbnb makes up a nice story about sharing and a gets rich laughing his ass of at all the people who fall for it.

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