Image courtesy of SUPERMARKT-Berlin

Previous installments in our series on what regions around the country are doing to support worker coops looked at ways to provide support to coops all across the economy. This final article in the series takes a dive into one important sector of the economy: services. Service workers in many fields are being squeezed by low wages, unpredictable hours, and increasingly precarious gig work. Direct care fields like home health care and child care face constant shortages of workers and high turnover. And across the service economy, the rise of platforms like Uber, Upwork, and Freelancer has further isolated workers from each other, reduced their control over working conditions, and limited their ability to organize. Democratic ownerships offer a way to transform some of these structural conditions, and coops are growing across the sector.

One of the oldest, and by far the largest, worker coop in the country illustrates the potential. Community Home Care Associates (CHCA) in the Bronx, founded in 1985, today has more than 2000 employees, about half of whom have become worker owners. CHCA pays near or above the national median wage for home health workers, and offers more and more reliable hours per week (36 compared to the national average of 30), along with better training and opportunities for advancement within the organization. As a result, they have a higher worker retention rate and better, more stable relationships between care givers and clients. But even a well-established coop like CHCA faces constant pressure from the low margins in their industry.

The University of Wisconsin Center for Cooperatives has documented a dozen more existing or emerging home care coops around the country, many of whom have been inspired by CHCA’s success. Worker-owned child care and house cleaning coops are also growing around the country, but they still have a low market share, despite the advantages they offer to their worker-owners and — by improving the quality of service — to their customers. As we discussed in Part 1 of this series, coops can be very time- and labor-intensive to start up, and building them one at a time makes for slow development.

The growing platform cooperative movement aims to radically change these dynamics. Like all cooperatives, platform coops are owned and democratically governed by their members, so that the platform is a tool for their work, rather than the other way around. Examples include Green Taxi Cooperative in Denver, owned by its drivers, Up&Go home cleaning in New York City, owned by workers, the Stocksy stock photography collection, owned by its contributing artists, the Resonate music streaming service, co-owned by musicians, listeners, and workers, and the FairBnB vacation rental platform, co-owned by hosts, guests, and community members. Ownership means control over major decisions, and can bring much better much financial outcomes for workers. Up&Go, for example, says it can pay workers 95 cents out of every dollar clients pay to the platform, compared to 50 to 80 cents on investor-owned platforms.

The Platform Cooperative Consortium at The New School is working to spread platform cooperativism by developing a Platform Co-op Development Kit, which will provide tools for managing coop labor, governance, and finances, along with tutorials, case studies, and other technical support resources. The kit is currently being piloted with several platform coops, including an elder-care coop in Australia, and a beauty services coop in India, and a refugee-run child care coop in Germany. And Brooklyn-based coop developer Center for Family Life, who helped create Up&Go, is now working on a model to combine customer-facing platforms with a franchising approach to developing child care and cleaning coops, to in order to greatly reduce the costs and time needed to start up. They aim to have cleaning coops in all 50 states within 10 years.

Anne McSweeney, program director of child care work at the ICA Group, points out that platform coops can offer their members more than ownership, governance, and a greater share of profits. Simply being employee-owned, she says, is not necessarily enough to create financial stability for workers in very low wage industries. ICA Group is working with the Platform Cooperative Consortium, the Service Employees International Union, and home-based child care providers in Illinois to create the CoRise platform cooperative. The CoRise design team has been working with providers to identify their biggest business challenges, looking to find ways that the platform can improve on structural inefficiencies and reduce providers’ costs of doing business. Their first solution: to develop a payment pool system to smooth out the state reimbursements that many providers rely upon. These payments come monthly and often irregularly, creating credit crunches and raising borrowing costs for businesses that already operate very close to the margin. Also in the works is a system to manage and streamline the multiple state paperwork requirements these providers now spend hours monthly fulfilling. The hope is that by reducing some of these structural costs, the coop can enable participating providers to gain much stronger financial footing.

Like all coops, platform coops face financing challenges. Especially in the tech sector, the promise of maximizing rewards to workers rather than investors can slow the process of attracting funding. A variety of fundraising approaches are being explored by platform coops, including crowdfunding, use of blockchain and alternative currencies, and seeking the support of unions. However difficult the growing pains, the promise of helping workers take ownership and control of their work and its rewards through platform coops makes this a very attractive nut to crack.