The Uberization of Politics: the Success of the Five Star Movement explained by 10 analogies with the Sharing Economy

We can better understand the current, and growing, political success of the Italian Five Star Movement by virtue of its analogies with the current, and growing, economic success of so-called “sharing economy” platforms, such as Uber and AirBnB. I will try to show that the success of both enterprises is driven by similar mechanisms, exemplified by the following 10 points.

[Executive summary, read only the parts in bold]

Analogy 1: the Five Star Movement and companies of the “sharing economy” have a horizontal structure of peer production, product promotion and surveillance, organized through an online platform. But the real power and control stay in the hands of an agile management structure placed outside and above all peers, an elite which controls the platform. Beside the “horizontal” level of citizen (peer) participation and the “vertical” one of platform management, very little opportunities exist for “intermediate bodies”: a middle class of wealth (or power), that can mediate between the two.

Everybody kind of knows how internet platforms such as Uber(Pop) and AirBnB work. A relatively little group of managers, IT architect and highly skilled (and well paid) employees administers a platform that acts as an intermediary between peers (=citizens), creating new opportunities for them, and helping them to satisfy their mutual needs. The platform is a source of market power. For example, citizens who want to rent their room or flat, or to find a room or flat to rent, find great opportunities thanks to the AirBnB platform. UberPop (UberX in the US) empowers individual car owners to work as part-time or full-time taxi drivers. It provides the online platform that matches the demand and supply of rides, while running the infrastructure of discipline and control. AirBnB offers the greatest opportunity to rent and find a nice room or apartment, while Uber provides a capillary ride service, able to compete with taxis in every major city in which it has not been made illegal. In both cases, the app is fundamental not only as an online marketplace, but especially because it confers to clients the power to write public feedback and report problems, and therefore to discipline, the peers providing the service. It turns out that the discipline generated by peer control through the tools provided by the Uber platform can be much more effective — and therefore much more oppressive — than the discipline exercised by ordinary managers towards their employees. The latter is regulated and constrained by labor laws that have no counterpart in the sharing economy. (Here a list of 10 things that can get you deactivated as an Uber driver.) But while the “dirty job” of surveillance is crowd-sourced, the power to make such decisions rests entirely in the hands of the platform owners/controllers, and is not shared with peers democratically.

The Five Star Movement works in a similar way. The Movement lacks a statute and even a registered office in the ordinary sense. It provides a platform, initially Bebbe Grillo’s blog, now Rousseau, the so-called “operating system” of the Five Star Movement. The function of these online tools is to allow “peers” — the Five Star Movement sympathizers — to express their political views, evaluate their “spokesmen/women” and, in Rousseau, aggregate ideas and votes for policy proposals. At the same time, the “peer platform” has the usual function in the sharing economy disciplinary system: the web is used as a tool to allow peers to monitor the behavior of their representatives, to run fake (in that non transparent) votes on punishments for activists and MPs, when they are charged (by management) of violations of the internal rules of the Movement. In this way, the Five Star Movement can keep a much tighter control over at least the most outspoken of its representatives, and avoid the profligate use of political resources (e.g. MP wages and reimbursements for parliamentary operations). This is a great achievement in so far as many people in Italy currently see tackling the problem of the costs of politics as the no.1 criterion for ethical politics. On the other hand, the most crucial seat of control of strategy and punishment lies outside and above the platform. As in online sharing platforms, the platform owners and founders play an altogether different role from the peers engaged in the platform. Beppe Grillo, one of the Movement’s founders and its only truly charismatic personality — called its “loudhailer” — is not formally the party’s president or secretary and refrains from running from political office. And a web-communication company (the “Casaleggio Associati”) oversees the operations of the Movement and acts as hidden, external, non-transparent source of organization, discipline, and quality control. Moreover, internal political conflicts are often described and dealt with as problems of quality control. The power to punish is firmly in the hands of the political platforms founders/controllers/owners, who exercise it behind closed walls, alone or with a restricted elite (the Movement’s “magic circle”) and without sharing this power with ordinary activists, through clear procedures of democratic legitimation. For example, since the early era of the Movement, many affiliates have been expelled for apparently minor violations of the Movement code of conduct (the Movement self-described “non statute”). Some have been expelled for violating the prohibition (in the first years of the Movement’s life) to participate to political talk shows or make statements on TV, after summary trials run on Beppe Grillo’s platform. Pizzarotti, the popular first Five Star major of a large city (Parma) has been suspended and then expelled without anything resembling due process.

Analogy 2: The Five Star Movement and the Sharing Economy Companies employ the assets and labor of the peers, exploit their desire for participation, but the larger share of the advantages/power goes to the platform owners and controllers.

AirBnB is potentially today the greatest hospitality business in the world, but it owns none of the property sustaining its core business. Uber has a 68 Billion valuation, bigger than GM, Ford and Honda and but all capital and labor used to deliver the service it is famous for, are the autos and willingness to work of the app users. The way the sharing economy works is by using the so-called “excess capacity” of the assets already owned by “peers”. Facebook, which is not exactly part of the sharing economy, embeds a similar mechanism in so far as the content on the platform — which is what engages users to stay on the platform, generating advertising revenue — is provided entirely by its users in their free time. YouTube also earns a formidable amount of advertising money thanks to the content uploaded, when not generated, by its users.

The Five Star Movement is similar in this respect too. For its political marketing, it relies on unused assets of the movement sympathizers: their free time, political passion, and internet connections. While the Movement management may play a role in generating seminal political communication content, peers sustain the costs of its replication and dissemination. Unlike other parties, the outstanding majority of these volunteers is not engaged in any path across intermediate governance bodies (e.g. local party organizations and local government), which would enable them to acquire finer political skills, leading to a possible career as full time politician. Resources are provided for free by the sympathizers on their Facebook wall, but most sympathizers are offered no chance of accumulating any cultural and social capital to spend in active political life. The main occupation of the “peer” of the Five Star Movement is to hide behind an internet connection and campaign for the party on Facebook or in the comment section of online newspaper. A great amount of content, such as the (in)famous “internet memes”, is also produced in a local, distributed, uncontrolled, effective and cheap way by volunteers, often lacking professionalism and sophistication. But that’s OK, since it is exactly the kind of content that political “consumers” appear to want.

Analogy 3. Like other sharing economy companies, the Five Star Movement is cheaper to run than a traditional political party. It exploits its lower operational costs as its key advantage in competition with its rivals.

Thanks to owning very little assets and hire relatively few laborers compared to the service provided, sharing economy companies such as Uber and AirBnB are extremely cost-effective compared to traditional ones. Their lower operational costs — which is achieved by shifting the cost to volunteer labor and asset enrolling of the peers — is the key for their competitive edge. Thus, it is extremely hard for ordinary taxi companies, traditional hotels or BnB to offer similar products at a comparable price. And offering a slightly better product for a slightly better price does not seem to work.

Analogously, the Five Star Movement adopts an organizational framework that reduces the costs of operation compared to any traditional party. In a country plagued by economic stagnation and impatient with the costs of politics, such as Italy, that is the key reason for its success. It is only thanks to these lower operational costs, that the Five Star Movement can afford to renounce to a share of the public resources legislated in favor of covering the costs of party-based democratic organization. The Five Star Movement exploits this advantage with maximal efficiency, by heralding “restitutions days” in which MPs declare the proportion of their wage devolved for charitable purposes outside politics (e.g. a micro-credit fund for struggling small and medium-sized firms). Its political offer is instantly recognizable in so far as it involves, first and more loudly, measures to cut the “costs of politics” (e.g. cutting MP wages, a substantial proportion of which most Italian MPs return to their parties in order to sustain their operations, and cutting reimbursements for political parties). By so doing the Five Star Movement achieves two results: first, it capitalizes over its lower cost of operation, gaining political support in a country whose political discourse, fueled by years of austerity, is all about reducing non strictly necessary public spending. And second, it creates a political pressure to enact norms that would undermine the different “business model” of its political competitors, creating the foundations for its own political hegemony.

Analogy 4 The Five Star Movement and Sharing Economy Products’ selling point is not the quality of their products/services, but their lower cost. The above-described cost-effectiveness is also key to understand the features of the product of sharing economy companies. Most Uber customers like it because it’s cheaper and more widely available than taxi, not because it is intrinsically better. Uber can hardly offer the same level of security of taxis due to its lack of serious background checks. And AirBnB room or flat can be much cheaper than an ordinary hotel, but the service offered by a private landlord is hardly superior to the one a hotel reception can offer. Except for all features associated with discipline — which is easy to “crowdsource” by placing the stick in the hands of customers — all other features of sharing economy companies tend to be low quality, often lower quality than their traditional counterparts. However, the difference in quality between such products and middle-range consumer products is too little to really matter to the increasingly budged-constrained middle-class customers searching for the best bargain on the web. Thus, sharing economy platforms compete frontally with the merely “average” service providers, such as your usual b’n’b or small hotel. These players just are unable to compete on quality — they provide some extra perks but that is not valued enough by their kinds of customers to compensate for the higher costs.

By analogy, the Five Star Movement is not particularly renown for the competence and skill of its political personnel. Some of the lead figures (or “spokesman”), such as Di Maio, (potential future candidate for the Prime Minister Office) are not university graduates; some appear to have had a hardly successful professional life, at least judged by their income declarations prior to joining the party (think of Virginia Raggi, the current major or Rome, with a very low income for a lawyer). But it is especially the low quality of the administration (as testified for instance by the low popularity of the major of Rome shortly after her election) that suggests that the party members have no special skills to offer. (Here a website containing all the weirdest declarations from the Movement’s politicians.) Yet, their electorate does not seem to care, because they are used to expect very little from politicians, even those who can brag about several years of experience and are allegedly highly skilled. Feeling that Five Star politicians are no worse than others as representatives, the Five Star politicians are preferred since they cost less.

Analogy 5 The Sharing Economy Companies (=the Five Star Movement) disrupt traditional middle-class services or products (= parties) leaving the upper class establishments unscathed

Uber and AirBnB services may lack appeal for those upper class customers who enjoy virtually no budget constrain while travelling, can afford five star hotel chains and personal drivers.

Just as the sharing economy companies are great at undercutting the business model of providers of low- and middle-quality, low- and middle-class services, the Five Star Movement is excellent at stealing the traditional (low- and middle-class) electorate of left and left-of-center, progressive, or liberal parties, while presumably attracting little electoral support from the upper class and the elite.

Analogy 6 The moral responsibility if something goes wrong is never of the platform company, always of the individual peer-provider.

If a Uber car or AirBnB apartment is below the quality standards advertised, Uber and AirBnB are never to blame, since they are only the company providing the platform. With this architecture, the customer is induced to blame the individual peer-provider, rather than the company. The products are offered with the usual “buyer aware” limitations and the platform owners do not take any responsibility for defective products or services. If the Uber driver car stinks and the driver smells of alcohol or AirBnB apartment looks very different from the pictures in the online ad, you are invited to complain with the user and report him.

Perhaps most surprisingly, the Five Star Movement has also adopted this feature of the sharing economy as well. This is nowhere more visible than in the current Palermo signature scandal, where it has been established that many of the signatures necessary to submit a local Five Star party list, as required by electoral laws, were falsified. The approach of the party leadership in this and similar cases has been to deny any allegation of awareness and responsibility for the misconduct in question and to ask for the immediate “suspension” of the Movement associate, explicitly justified on the basis of the “reputational harm” inferred to the movement. The mantra of the Movements’ supporters, when facing criticism of being “like all other parties” in spite of the alleged “moral diversity” is to point out that the “rotten apples” cannot be identified ex ante, in the process of recruiting, and to emphasize that the Five Star Movement, unlike all other parties, is very severe in warding off disappointing administrators. This is similar to the quality control process of sharing economy platforms, which associates a poor quality of background checks with crowdsourced surveillance and strict ex-post punishments.

Analogy 7: the sharing economy and the Five Star Movement initially benefitted from positive press, soon translated into an authentic ideology.

The positive recognition immediately acquired by the so-called sharing economy starts with its very label. The idea of sharing evokes associations with communal ethos, egalitarian ideas, and environmental protection. For too long a time, pundits have been praising the innovation brought about by companies of the sharing economy. For a long time, innovation of this kind benefited from an almost immediate and automatic positive press. Advertising was not needed as word of mouth through social networks would amplify any initial enthusiasm from the press. Only more recently has the “dark side” of the sharing economy attracted the attention of journalists and academics. As these debates are still somewhat geeky and for a cultivated public, the PR of these companies is excellent at preserving and exploiting the symbolic association with environmental, futuristic, and egalitarian values. This makes it more difficult to show that the companies do not really live up to these values. Sharing platform companies are excellent at commercially exploiting the “ideology” behind sharing, which, as every ideology, is instrumental to hide some aspects of reality, such as the threat to traditional middle-class jobs, the reticence to take responsibility and legal liability for inappropriate quality standards, the unwillingness to hire workers providing them with adequate workers’ benefits.

Analogy 8 Millennials, not Generation X-ers are the generation of the sharing economy (and of the Five Star Movement)

It is a commonplace that consumer attitudes towards services provided by the sharing economy differ greatly by generation. Most commentators seem to agree that the so-called Millennials, the generation turning 18 roughly around the year 2000, are attracted to the sharing economy solutions because they are more frugal and have developed a different mentality with regards to ownership and consumerism. And this is clearly not a bad thing in itself! However, that also means that Millennials may have developed lower expectations with respect to the quality of services.

By analogy, the Five Star Movement seems to be especially strong with younger demographics. Politicians from the X Generation, such as former Italian Prime Minister Matteo Renzi, by contrast, have apparently failed to deliver a political platforms able that such demographics finds convincing. The relevant analogy is between the different political experience in formative years between members of the X Generation and Millennials. X-ers (to which the author of this piece belong) grew up in years in which the struggle for power between the Eastern Communist Block and Western Liberal Democracy was still real, and political ideologies were the bread and butter of high school political talk. By contrast, Y-ers (AKA members of the Millennial Generation) were too young be influenced by political events occurring before the fall of the Berlin Wall. Moreover, the Y Generation had its politically formative years at a time while the former left was steered, by such globally influential politicians such as Bill Clinton in the US, Tony Blair in UK and Gerhard Schroeder in Germany, to a kind of “third way” that made the contrast between traditionally socialist and economically conservative (or liberal, in the European sense) policies, much harder to grasp. As a result, political distinctions that may still appear meaningful to X-ers’, such as “right” and “left”, “liberal” (progressive) or “conservative”, “socialist” or “fiscal conservative” (EU “liberal”) do not resonate that much with Millennials. Persons in this generation are, as result, much readier to embrace the “transversal messages”, such as the fight against political corruption, crony capitalism, and to care first and foremost for cutting inefficient or cliental public spending. They are comparably harder to engage through the familiar ideological semantics (or buzzwords) of justice, equality, free markets, or socialism.

Analogy 9 The sharing economy companies (and the Five Star Movement) both resist definition and regulation through the categories of the “old economy” (politics).

Companies such as Uber are notorious for their fights against the regulations to which other service providers of public transportations are obliged. This fight is conducted, on both the legal and PR front, by heralding a single, all powerful message: “we are different, we are something else entirely (hence the old rules do not apply to us)”. This is a powerful rhetoric, in that it shifts the burden of proof, concerning the need for regulation, on their critics and political authorities. Moreover, it is instrumental to portray critics as people in the grip of nostalgia, enemies of innovation and progress, and persons too old, and therefore too stupid, to be able to regulate appropriately novelties that they do not fully understand. This is a powerful rhetorical weapon given the grip of the rhetoric of progress and innovation, in western culture. It is also functional to establishing a privileged link, almost an identitarian one, with members of the Millennial generation: the young vs. the old. When affected categories (typically: baby boomers), critics, or regulators try to implement policy, the PR of such companies exploits this ideological link with their user communities. It establishes a privileged level of communication through those values that Millennials understand the most, such as, cost (i.e. “abiding to the proposed regulations would make our services more expensive for you”), understanding of internet, associated with being younger, (“regulators do not understand the difference between what we are and traditional companies”) and the idea that the proposed regulations just are motivated by obscure, or illegitimate interests, painting politicians as strangled by established political lobbies of the old economy, (“this regulation is driven simply by taxis owners trying to defend their privileges”). On the other hand, some major cities (Berlin, New York with AirBnB, Italy with UberPop) have managed to overcome such resistance and regulate the services of this global, corporate, sharing economy multinationals. Indeed, being treated as “ordinary business”, being shown to be not special and just major corporate business like everyone else, and being forced to abide to regulations that limit the operations of others, seem to be the greatest scare for such companies. And indeed, it may be the only obstacles against the effectiveness of their structural innovations to compete. In Alaska, Uber paid the STate over $77’000 for misclassifying drivers as contractors. In Austin, Texas, Uber decided to interrupt its service after city voters backed the city ordinance requiring drivers to submit to the same background checks as other providers of public transporation, in a referendum. Uber has fought hard against the attempt of some drivers to have their status as employees (and associated economic compensation) recognized, agreeing to pay up to $100 millions to settle a class action law suit that threatened its business model.

Again, the Five Star Movement is very much analogous to “sharing economy” companies in this respect as well. The insistence with which members of the Five Star Movement demand that they not be cited as “onorevole” (“honorable”, the complimentary title customarily used for Italian MPs) but rather as “citizen” or “spokeman/woman” may appear a curiosity, but it is actually coherent with the analogy I’m making. The Five Star Movement is sustained by its rhetoric of being “different from parties”, it is truly their most fundamental mantra, the key message that they always repeat for their electorate. The parallel runs deeper than that however. The Five Star Movement rejects all the legal frameworks that have been designed to apply to traditional parties. Their statute is not really a statute but self-described as a “non-statute”. They require candidates for public office to sign private contracts limiting their freedom of expression and of political decision, with an economic counterpart for contract breach. And just like Uber or AirBnB, this resistance to regulation appears to be their potential Achilles heel. Recently, a court as ruled out that the expulsion of some activists was legally void, in that it was based on a rule in a statute that had no legal validity, as membership to the Five Star Movement should be considered regulated by the same rules as ordinary parties — irrespective of how the Movement prefers to call itself.

Analogy 10. Beyond analogy, towards more a structural relation?

I may, or may not have convinced you that the analogies between Beppe Grillo Five Star Movement and sharing economy companies exist and, if so, are anything other than a coincidence. If not merely coincidental, may they be the result of a structural relation between the Five Start Movement and the Sharing Economy? In other words, the sharing economy may be not only a model, but also one of the leading causes of the success of the Five Star Movement. This structural cause operates at different levels: psychological, as users of sharing economy platforms are used to the kind of disintermediation in the fruition of services, that the Five Star Movement provides in politics. Economic, in that the disruptive impact of the sharing economy on traditional companies — especially those run by middle class owners for the middle class customers — contributes to the impoverishment and reduced opportunities of the middle-class of Millennials. This enhances support for a party that, thanks to its agile organization, can be seen as requiring “less expensive” support from the state, matching the public perception of the (neoliberal) policy priority of cutting “unproductive” public spending. The influence may also be cultural, in that values high in the rhetoric of the sharing economy, i.e. horizontal organization, equality between peers (in the participation dimension, but not in the organizational one), sharing, environmental consciousness, cost-cutting, economizing, are also values that the Five Star Movement stands for and which it — arguably better than any other party — manages to live up to. The fruitfulness of this research hypothesis can only be tested by engaging with a serious empirical analysis, something which goes beyond the ambitions of this modest opinion piece.

References:

As I have written this as an opinion piece, not as an academic article, you will not find the usual accompanying texts of footnotes with bibliographic references to academic debates. For the interested reader, at least the below three texts are fundamental:

Zuboff, Shoshana. “Big Other: Surveillance Capitalism and the Prospects of an Information Civilization.” Journal of Information Technology 30, no. 1 (March 2015): 75–89. doi:10.1057/jit.2015.5.

Scholz, Trebor. Digital Labor: The Internet as Playground and Factory. Routledge, 2012.

Schor, Juliet. “Debating the Sharing Economy.” A Great Transition Initiative Essay, October 2014.