From Firms to Platforms to Commons
Esko Kilpi
762

Hi Esko,

I noticed some of the following about this area:

  1. Platforms, let’s take specific examples, Airbnb, Lyft, Uber, I contend are not decentralized management. Instead, there is a top level management who decided the form and process of what the offering would be. This is then carried out by many, many nano-factory like units that all produce the same basic offering. [This is not the same as other platforms that let many different people make different diverse requests, e.g. Innocentive]
  2. The offering is a loosely designed or minimal in specification. E.g., a car that will deliver someone to a destination, a place someone can stay, a spare-capacity resource someone can use for a given price and cost. This allows for variation. But in essence it is still ‘a product’
  3. The management of this type of platform still has ultimate control who can participate and who cannot. The workers have freedom of when they can deliver, but the workers do not become management. Just because you drive for Uber doesn’t mean you get to decide how the company is run.
  4. Some of the traditional 1st-line management functions (assignment, oversight, etc.) has been replaced with software and coded rules.
  5. It relies on volume, to make up for localized unavailability. Unlike strict hierarchies where every single worker resource and team unit can be crucial to delivery. This relies on oversubscription. So if one team/worker doesn’t pick up the assignment, then another worker/team might.
  6. This oversubscription of workers is what platforms and commons truly rely on. If you used the old hierarchy model, then this would be very costly/inefficient — you’re paying for too many people to do the task. But here because they are employed only on-demand (at specific time-location-space-skill combinations) and not permanently to the company. So it is not costly to the company.

So there is still management but it is a very flat hierarchy. This isn’t the same of all platforms, but certainly the very successful and prominent ones today to provide fairly basic services. These seem peer-to-peer because anyone can be a worker, and customer, but if you look at the distinctive existence of roles as workers, managers, and customers, they aren’t. They are a flat-hierarchy which uses networks for provisioning and production.

[I’m all open to debate on this. I may write this up as a separate post too.]