The Challenges Facing Platform Co-operativism in South Africa

By Fazila Farouk

Given the dominance of tech monopolies that are increasing inequality through wealth concentration and labour exploitation, in 2022, I conducted a study on platform co-operatives, i.e., worker-owned and managed enterprises in the platform economy, as an alternative to venture capital driven start-ups, which currently dominates the digital economy.

Drawing on lessons from abroad, my study found that the success of platform cooperatives is highly dependent on a nurturing environment created by supportive government programmes. Sadly, this is not the case in South Africa where co-ops are treated as anti-poverty or welfare interventions by local government, which is the implementing arm of the state. It became clear from my investigation that given the programatic design and governance structure at this level of government, funds allocated to co-operative development are open to abuse for patronage purposes.

The bigger problem, however, is the framing of the co-operative agenda. Given that poverty alleviation is the framework for co-op development in South Africa - not economic development - this has resulted in a failure of the co-op sector to take off.

The result is a weak co-op sector where the concept of distributed ownership for a democratised economy is neither understood nor promoted. Consequently, there is no serious challenge being mounted to the dominance of neoliberal approaches to enterprise development.

The upshot of this situation is a weak foundation for the emergence of platform co-operatives in the digital economy, as South Africa does not have an established tradition of co-operativism to draw on.

Thus, while some groups have attempted to launch platform co-operatives in South Africa's digital economy, they have failed due to a weak policy environment and poor institutional support for social impact innovation.

Read more about this issue in my study on platform co-operatives in South Africa.