Community Wealth Building through Digital Platform Cooperatives: A Strategy for Scotland

The economy has been transformed by the rapid expansion of digital platforms. These platforms include ubiquitous brands such as Spotify, Youtube, Google, Uber, Deliveroo, AirBnB and a range of smaller ventures operating across diffuse industry niches. While platforms can bring about cheaper, faster, and better services, we argue this comes at a cost that is often underacknowledged. Specifcally, we identify tax and regulatory arbitrage, exploitation of the labour market, manipulation of user data,\ud anticompetitive practices, and reduced choice for consumers as negative outcomes of platformization. These problems are compounded by the network effects dynamic found in multisided markets, which results in winner-takes-all outcomes. For consumers, this means only a few large platforms tend to dominate markets, and there is little room for choice or competition. We analyse platformization ‘on the ground’ and fnd that many popular platforms engage in exploitative practices that can have negative welfare effects on users. Our case study of the food delivery sector in Glasgow reveals that restauranteurs can pay up to 36% commission per transaction, with additional fees charged for favourable in-app search result placements. Many businesses report they are planning to raise the overall cost of food orders (both delivery and sit-in) to absorb the signifcantly increased operating costs they face as a consequence of platformization