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Uberization Meets Organizational Theory: Platform Capitalism and the Rebirth of the Putting-Out System
Abstract
During the 20th century, the large managerial corporation became the dominant economic institution of capitalism. However, the current emergence of peer to peer online platforms entails major economic, organizational and social transformations. While these platforms are often depicted as radically new organizational innovations born of the digital world, this essay develops an alternative analysis rooted in the history and theory of organizations. The central argument is that the emergence of platform capitalism should be understood as a digital reincarnation of the putting-out system, a pre-industrial organizational form that preceded the emergence of manufacturing and the managerial corporation. After drawing the analogies between the old putting out system and platform capitalism, we discuss the implications of such a return. While the digital putting-out system stands in stark opposition to the managerial view of the corporation, it appears to be fully coherent with financial capitalism, as it fits in perfectly with the financial theories of the firm. This process of financialization not only affects organizations but also profoundly reshapes individual identities by transferring processes of strategization and financialization to the individual level. Implications are discussed in terms of individual transformations and social and legal responsibilities of platforms.
... Platform work is performed within the triangular structure, involving the person performing work (the worker), the end-user (the customer), and the company or companies providing the digital intermediary service (the platform). This is the form of employment that uses an online platform to enable organizations or individuals to access an indefinite and unknown group or other individuals to solve specific problems or provide specific services or products in exchange for payment 1 , the matching of the supply and demand for paid labor through online platform 2 . ...
... So, the main challenge in platform work is the unclear employment status of platform workers and the risk of the precariousness of their work which includes: the absence of some or all forms of labor-related security: labor market security (adequate income-earning opportunities), employment security (protection against arbitrary dismissals), job security (ability and opportunity to retain a niche in employment), work security (protection against accidents and illness at work), skill reproduction security (opportunities to gain skills), 1 Eurofound, New forms of employment, Publications Office of the European Union, Luxemburg, 2015, p. 107. 2 Eurofound, Automation, digitisation and platforms: Implications for work and employment, Publications Office of the European Union, Luxembourg, 2018, p. 3. 3 European Commission proposals to improve the working conditions of people working through digital labour platforms, [https://ec.europa.eu/commission/presscorner/detail/en/ ip_21_6605], accessed on 03/12/2021. ...
... The general objective of the proposed Directive is to improve the working conditions and social rights of people working through platforms, including with the view to support the conditions for the sustainable growth of digital labor platforms in the EU. The specific objectives through which the general objective will be addressed are: (1) to ensure that people working through platforms have -or can obtain -the correct employment status in light of their actual relationship with the digital labor platform and gain access to the applicable labor and social protection rights; (2) to ensure fairness, transparency, and accountability in algorithmic management in the platform work context; and (3) to enhance transparency, traceability, and awareness of developments in platform work and improve enforcement of the applicable rules for all people working through platforms, including those operating across borders. 31 Furthermore, we must say that as a follow-up to The European Pillar of Social Rights, the Council of the EU adopted a Directive on Transparent and predictable working conditions (Directive 2019), which also covers all new forms of work and stated that the CJEU has established criteria for determining the status of a worker and in case those criteria are met, platform workers could fall within the scope of this Directive. ...
... Several competing terms are used in the literature to describe this major contemporary transformation of capitalism: 'uberization' (Fleming, 2017), 'platform economy' (Acquier, 2018;Kuhn & Maleki, 2017), 'on-demand' economy (Sundararajan, 2016) and 'gig-economy' (Friedman, 2014). All of these terms refer to the rise in the number of companies using digital platforms to connect clients (whether institutional or individual) with self-employed workers. ...
... In the previous section, we highlighted three dimensions of the cognitive sustainability of firms: the integration, preservation and creation of knowledge. This enables us to explore the future of digital labour platforms, a question which, to date, has mostly been investigated without considering organizational and cognitive sustainabilities, with the exception of a few studies (Acquier, 2018;Fleming et al., 2019;. Here, we investigate the capacity of platforms to take charge of these functions of integration, conservation and creation of knowledge. ...
... Several authors have emphasized the hybrid nature of platforms, which are said to be positioned halfway between the firm and the market (see, for example, Acquier, 2018;Casilli & Posada, 2019;Mosmann & Klutt, 2020). This is demonstrated, in particular, by the fact that platforms, while reproducing the functioning of the market (matching supply and demand, evaluation of the service by consumers, pricing by the market, etc.), generally have the same legal status as firms and have permanent employees to perform strategic, support or technological development functions. ...
While digital labour platforms are booming, their ability to constitute a sustainable alternative to the managerial firm and to salaried work is questionable. To date, this debate has been approached mainly from legal or political angles, and the organizational sustainability of such platforms remains underexplored. We respond to calls to study more specifically the cognitive capabilities of platforms by mobilizing knowledge-based theories of the firm. We contribute to the literature in three ways: (1) we introduce the concept of ‘cognitive sustainability’, which we define as the capacity to ensure the integration, conservation and creation of knowledge; (2) we develop a set of propositions aimed at identifying the activities that platforms are most likely to carry out in a cognitively sustainable way; (3) we argue for the possibility of an increased hybridization of digital labour platforms to perform complex activities. Mobilizing knowledge-based theories of the firm to explore new objects such as platforms and taking such hybridization processes into account adds to this body of literature by extending its application domain and taking a more dynamic perspective.
... However, as a mechanism of inclusion, ICT faces the important challenge of overcoming access gaps to foster the ability of communities to dominate technology and empower them in sharing activities to prevent an organization-such as Uber (Acquier, 2018)-from centralizing technology, thereby giving rise to new forms of exclusive-inclusion via the monopolization of decisions regarding fees, prices, and employment conditions. ...
... These sharing economy organizations take up traditional community practices based on sharing and exchanging (Sundararajan, 2016), incorporating concepts such as innovation communities, practice communities, and mediation communities, as well as markets based on multiple segments and multiple ways of creating value, removing intermediaries and reducing operating costs through economies of scale while providing access to historically marginalized groups (Castor, 2016). They also include flexible and automatized production processes with organizational structures that comprise prosumers (consumers and producers) and self-control logics (Stępnicka & Wiączek, 2018), with little state intervention, where control is mediated by algorithms and technology (Acquier, 2018;Karatzogianni, 2018), bringing together social responsibility practices, sustainability principles and energy efficiency (Bocken, Short, Rana, & Evans, 2014). Furthermore, they are oriented towards productive transformation processes and they dynamize social change (Goñi, 2012), expanding from the logic of network externalities with medium and long-term investment returns (Cerro, López, & Arroyo, 2005). ...
Latin-American countries have high rates of inequality and social exclusion that reflect issues such as the lack of opportunities as well as disparities in growth, development, and well-being between the center and the periphery. This leads to a permanent struggle between defenders and critics of the traditional capitalist model which feeds into the expansion of illegal economies and armed conflict that further affects the well-being of communities and environmental sustainability. Digital platforms have enabled the social inclusion of diverse communities in trade and transactional mechanisms. However, the emergence of economies based on internet platforms has resulted in the appearance of almighty corporations such as Uber that, instead of helping to close the social gap, create new work domination devices, and mistake inclusion for access to digital technologies as a means to seize development opportunities. This article reflects on social inclusion as facilitated by information and communication technologies (ICT)—in the context of sharing economies—to discuss and think about the advantages and disadvantages of disruptive changes following some cases of organizations in Colombia that showcase progress in terms of access and others that evidence improvement regarding inclusion.
... The dilemma for regulators is the question of how to regulate these 'new' forms of economic activity in a way that manages risks to citizens and incumbent commercial interests, whilst at the same time capitalising on the potential benefits to the economy and society generally (Kornberger, Pflueger, Mouritsen 2017;Acquier 2018; 2. The platform ecosystem revolution 2.1 Defining the digital platform Digital platforms are an important building block of the digital economy (UNCTAD 2021a). They also play an ever-expanding role in our social, cultural, and educational environments (Jordan 2019). ...
Digital platforms are facing a wave of regulatory activity in the UK and EU, primarily targeting their dominance, anti-competitive nature, and misconduct facilitated by their networks. Implementation of the new regulatory regimes is heavily reliant on the cooperation of the platforms themselves and use of their digital architecture, highlighting a potential weakness in the efficacy of the regulatory approach adopted. Though reference is made to the desire to deliver growth, innovation, and competition while minimising burdens on business, the prevalent regulatory tone is one of command and control with a punitive regulatory pitch targeting platforms’ financial interests. This paper presents the hypothesis that pitching towards the more practical motivations of regulatory targets, with a cooperative tone, will yield more successful and economically beneficial outcomes. A context-specific mix of regulatory modes combined with an understanding of the specific characteristics of digital platforms should be the foundation for regulation.
... Digitale Plattformen können als radikalisierte Version der Idee der "Firma als Nexus von Verträgen" mit dem Potenzial, Industrien, Arbeitsbeziehungen und Wohlfahrtsstaaten, wie wir sie kennen, zu verändern, verstanden werden (vgl. Acquier 2018, vgl. Arnold et al. 2021, vgl. ...
Aulenbacher, Brigitte/Friedl, Walpurga/Langthaler, Ernst/Maric, Sara/Meyer, Uli/Pillinger, Anna/Raible, Stefanie/Schüßler, Elke, Die digitale Transformation von Arbeit im Kapitalismus: Narrative, Praxis und Gestaltungsoptionen, Vortrag im Track 7 „Arbeit transformieren. Veränderungen in der Arbeitswelt“, Momentum-Kongress 2022 „Transformation“, Hallstatt, 13.-16.10.2022
... They also include flexible and automatized production processes with organizational structures that comprise prosumers (consumers and producers) and self-control logics (Stępnicka & Wiączek, 2018), with little state intervention, where control is mediated by algorithms and technology (Acquier, 2018;Karatzogianni, 2018), bringing together social responsibility practices, sustainability principles, and energy efficiency (Bocken et al., 2014). Furthermore, they are oriented toward productive transformation processes and they dynamize social change (Goñi, 2012), expanding from the logic of network externalities with mid-and long-term investment returns (Cerro et al., 2005). ...
Two Caribbean Hope Spots were declared as bottom-up protection scheme based on communities governance to improve coral reef conservation effectiveness in Colombia. Data acquisition through a citizen science program with the participation of scuba diving operators, fishers and other volunteer observers since 2008 received 1958 geo-referenced reports of observations and semi-structured interviews with videos and photos. Applying the transdisciplinary conceptual dimensions of the Sustainable Development Goal 14—Protection of Life below Water—was measure the performance of ecological, social and economic indicators illustrated with three cases studies: (1) Spatial Collaborative Multicriteria Decision Support System to evaluate the National Park Corales del Rosario per dive sites Varadero Reef had higher performance indicators under all the perspectives. (2) Opportunity Cost of Dredging vs. Protecting Varadero Coral Reef; the minimal benefit of protection was US$244 million/Km² with an expected Annual Revenue>10%. (3) Change in Fisheries Productivity in Hope Spot Capurganá Reefs shows a decline with industrial fisheries and after the appearance of the lionfish Pterois volitans of commercial important native stocks up to 2013; afterwards a gradual replenishment was due to exclusive artisanal fisheries and biological control of the invasive species. Compared with the Park, coral reefs in the Hope Spots have higher healthy coral cover>70% and more frequent sightings of vulnerable species listed on the IUCN Red List (7–10 per). They also have higher fishers’ community stewardship, effective bottom-up schemes of protection and less visitors in contrast with the Park. More ecological complex food webs of resilient coral reefs in the Hope Spots with open seawater currents at the bottom, mixed at the surface during the rainy season with run-off producing a natural shadow that avoids impact from climate change, and low sedimentation rates make them potential climate change refugia. These results point out the urgency to connect the case studies within an effective protection framework, increasing governance to guarantee ecological connectivity.
The COVID-19 pandemic has had a negative impact on the working conditions of so-called platform workers that have faced the lack of labour and social protection deriving from their formal status of independent contractors. Seeking for protection, numerous claims have been filed by the riders and drivers of digital platforms that were asking for a recognition of the subordinate work. The aim of the present article is to give a critical and brief overview of the latest European jurisprudence regarding the legal status of platform workers. The article focuses on the methodology and criteria applied by the judges in order to examine the particularities of the new forms of work and new forms of surveillance as well. Special attention is paid to on-location work performance by low-skilled individuals conducting services for the digital platforms operating in food delivery and transportation sectors.
Welche Rolle Organisationen für die gesellschaftliche Entwicklung spielen, ist seit Max Webers Thesen zum Zusammenhang von Bürokratisierung und gesellschaftlicher Rationalisierung eine soziologische Schlüsselfrage par excellence. Ein derartiger Einfluss von Organisationen und jeweils vorherrschenden Organisationsweisen lässt sich auf unterschiedlichsten Gebieten wie zum Beispiel Migration, Umwelt, Digitalisierung, Arbeit, Bildung und Landwirtschaft erkunden. Das Sonderheft zielt deshalb darauf ab, mit einer bisher nicht-vorgenommenen Neubündelung klassischer und neuerer Ansätze zum Zusammenhang von Organisation und Gesellschaft als Impulsgeber für die Erforschung eines breiten Spektrums soziologischer, aber eben nicht unbedingt organisationssoziologischer Themen zu fungieren. Für ein derartiges »reloading« bieten sich zwei Zugänge an: Einerseits können klassische Theorien zum Verhältnis von Organisation und Gesellschaft »umgeladen« und vor dem Hintergrund jüngerer Entwicklungen neu interpretiert werden. Andererseits können neuere Angebote der Organisationstheorie »nachgeladen« werden, um sie für das Thema Organisationsgesellschaft nutzbar zu machen. Diese beiden Zugänge stehen im Fokus dieses Sonderheftes.
Scholarly discussions of the consequences of the on-demand economy on work mainly focus on precarity. Using a case study of Didi Chuxing, this article moves beyond this conventional approach to highlight coercion as a striking feature of labor relations in China’s ride-hailing industry. Drawing upon the conceptual tool of neo-bondage, this article foregrounds the central role played by forced labor in securing a cheap and docile work force during Didi’s rapid market expansion. This article advances the existing literature in two ways. First, it highlights the need for a more robust analysis of the productive forces in the on-demand economy. Second, it argues that the on-demand economy not only represents an intensification of the ongoing trend toward precarity, but also an extension of forced labor regimes from electronic assembly lines to the service industry.
While a few platforms have garnered significant attention both in the popular press and among academic scholars, there is much we do not know. How many large platforms are operating around the world? Where are they based? What sectors do they populate? How many people do they employ? To better understand the global growth and scope of platform companies, this study has sought to provide the first comprehensive global survey of platform companies. Through collaboration with scholars and experts with expertise in platform companies in Europe, Africa, India, and China, the study focused on identifying companies with a market valuation of at least $1 billion. To ensure broad coverage of types and location of companies, the study included privately-owned platform companies as well as those that are publicly traded on stock exchanges around the world. Finally, the study examined a broad range of industries to reveal where platform business activity has become established across sectors.
The so-called sharing economy is one of the most important and widespread manifestations of technological progress, reflecting the growth of the “new economy.” It can be understood as a socio-economic model based on the grassroots initiatives of individual people (P2P relationships) that refer to not fully utilised resources, with sharing taking place through technology platforms, for a fee or free of charge. The aim of this article is a detailed description of trust, which is a foundation and an inalienable element of the sharing economy. The definitions and features of the sharing economy are presented, followed by the concept and functions as well as selected mechanisms of trust building. Subsequently, the concept of the so-called inter-intermediary trust, characteristic of the sharing economy, is introduced and outlined, and the mechanisms of its creation are described. Next, we discuss differences between trust and credibility and problems with building the credibility of digital platform users. The study finds that intermediary trust is inseparably connected with the sharing economy.
In this article, we take stock of the ambivalent and contested nature of the sharing economy. Considering the ‘sharing economy’ as an umbrella construct and an essentially contested concept, we position the sharing economy as resting on three foundational cores: (1) Access economy, (2) Platform economy, and (3) Community-based economy. We show how each core holds distinct promises and paradoxes. This organizing framework shows how combining the cores can help sharing-economy initiatives to navigate certain tensions, but can also lead to new ones. We highlight the paradoxical nature of the sharing economy and make a case for balanced initiatives that combine the promises of each core while mitigating contradictions. We conclude by introducing the nine articles of the special issue, connecting their contributions to our organizing framework.
The rapidly growing number of people who find work via online labor platforms are not employees, nor do they necessarily fit traditional conceptualizations of independent contractors, freelancers, or the self-employed. The ambiguous nature of their employment status and its implications for worker well-being have attracted substantial controversy, but to date most empirical research in this area has focused on the market efficiency of a single platform rather than on workers themselves and related human resource management issues. Research progress will require understanding how online labor platform work differs from other types of nonstandard employment arrangements, as well as critical differences across different labor platform firms in how work and workers are managed. This paper proposes a conceptual classification framework to facilitate research on the attitudes, experiences, and outcomes of workers who use these platforms. We explore how labor platform firms' operational choices shape how control is allocated across workers, clients, and the firm, and how they influence workers' autonomy, incentives, and degree of economic dependence on the firm. Implications for theory development, research, and managing worker-firm relations are discussed.