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Can cooperatives create fairer digital work for youth in Africa?

by Susan Njambi-Szlapka and Alexandra Lowe, ODI

As young people struggle to maintain their livelihoods under Covid-19 lockdown measures, many have turned to digital technology to mitigate income losses. Platforms such as Jumia and GetBoda have seen huge increases in demand for their delivery services as they partner with vendors to reach last-mile customers.

Platform work is providing income-generating opportunities for 4.8 million people in 7 African countries and this seems to be growing under Covid-19, however many platform workers experience precarious conditions. We need to consider how young people in Africa can participate in the digital labour market on fairer and more equal terms – cooperatives could offer a way forward.

Workers’ agency and bargaining power on digital platforms

Platforms can significantly constrain workers’ autonomy and power over their own labour through mechanisms such as feedback, ratings, workplace monitoring and payment methods. This is particularly problematic for young Africans in the informal economy, who lack the backing of a welfare state and/or alternative employment opportunities. As a result, young people are less able to negotiate their wage, withdraw from work at will or choose their working conditions.

Workers who do not have good ratings will spend years working for extremely low pay or even for free in return for good reviews.  This is particularly challenging on freelance platforms such as Upwork where these problems are compounded by prejudice from clients in the global north. How can young people gain bargaining power to negotiate better working conditions and get access to digital work?

Enter cooperatives

A cooperative is made up of autonomous individuals united voluntarily to meet common economic, social and cultural aspirations through a jointly owned and democratically controlled enterprise. They are underpinned by the values and principles of fairness, equality and social justice.  Cooperatives have traditionally emerged to provide access to resources that were not accessible through public sector and conventional businesses and have a long history in Africa. In Kenya, 45% of its GDP comes from cooperatives and in rural Uganda cooperatives have helped young people access loans and sophisticated financial services as well as markets. These numbers are likely to increase as historically membership in cooperatives surge during crises.

Cooperatives in the digital space

In recent years, digital cooperatives have begun to emerge where participative models may have a comparative advantage over corporate business models. They have sought to counteract the exploitative elements of existing online platforms, such as Uber, which make large amounts of money for their creators but little for their workers.

Types of platform cooperatives

Digital or platform cooperatives, though they have emerged as separate from traditional cooperatives, are still a continuation of previous, offline efforts. These platforms seek to sell similar services or products to other digital platforms, while broadening ownership to ensure a more equitable distribution of benefits. They are receiving political support from the likes of Labour Party in the UK or the Social Democratic Party in Germany to further workers’ rights in the digital labour market. There are four main types of digital cooperatives, as identified by Nesta:

  • A producer-led platform is the simplest form and provides member-owners a platform for the sale of goods;
  • The multi-stakeholder/community platform brings together users, producers, and platform developers as member-owners;
  • A consortia/worker platform links cooperatives (rather than autonomous producers) with the aim of increasing their market share and power;
  • A data consortium platform is focused on the ownership and use of personal data: individuals pool their data with the aim of being able to control and monetise its use collectively.

The potential to help youth in Africa

Many digital cooperatives, such as Green Taxi, Stocksy, Up&Go, Fairmondo, Fairbnb, are flourishing in Europe and North America, but in Africa’s development their role has been little discussed. While the digital divide means access to these platform cooperatives is limited (especially for rural populations), there are ways in which young people on the continent can benefit.

The simplest models with the greatest potential are those that allow producers to bring their produce to market at higher prices – in other words, producer-led platforms. This could be relevant for youth-owned small and micro enterprises that are already drawing on e-commerce platforms like GetBoda or Jumia to reach their customers.

Similarly, consortia or worker platforms could provide huge benefits to young people who rely on exploitative labour markets in both rural and urban contexts. One possible entry point where platform cooperatives could help to create fairer work conditions for young digital workers is the  Kenyan government initiative Ajira which aims to support one million young people to access digital work.  This echoes the finding of a recent study which found platform gig workers in South Africa already expressing the need for platform cooperatives to increase their bargaining power and improve working conditions.

While the advantages of platform cooperatives are numerous, the barriers to access are also significant for young people, including the capital required to finance digital platforms for new ventures. These require start-up funding, which platform cooperatives in the global North have attained through projects like the Open Collective, and similar funding sources are needed in Africa.

With sufficient capital, the necessary technical expertise can be purchased, but even this requires some technical literacy, and can represent another barrier to entry. Likewise, remote governance is likely to be challenging. Governments and private sector can support young people to build these platform cooperatives by providing resources (technical and financial) and starting with small pilots before expanding them. In the meantime young people can leverage social media as a way to organise themselves – something African platform workers are already doing, and doing well.