Digital platforms are growing in popularity as a business model. What are the differences and where could political regulation be used to enhance the individual possibilities and economic potential offered by the platform economy and to ensure “good work” in the platform economy?
To date, there is no clear definition of the term platform. Reports of the European Commission, for example, use the following definition: “Online platform refers to an undertaking operating in two (or multi-)sided markets, which uses the Internet to enable interactions between two or more distinct but interdependent groups of users so as to generate value for at least one of the groups. Certain platforms also qualify as intermediary service providers"  The German Monopolies Commission simply describes platforms as “intermediaries that bring together different user groups so that they are able to interact economically or socially".
In the case of work placement platforms – i.e. platforms that perform work and services directly or subcontract these out to self-employed individuals – a distinction is customarily drawn between non-stationary activities (“cloud work”) and stationary activities (“gig work”). Stationary gig work can be awarded to the “crowd”, i.e. all users registered on a platform, via a call for proposals, or to individuals in the form of a contract. Examples of gig work include ride-hailing, logistics services, delivery services, household-related services and residential and repair services. At the moment, public debate frequently focuses on gig work: what are working conditions like at food delivery services, how much pay do cleaning staff placed via platforms receive?
Non-stationary “cloud work”
Adistinction between jobs for a broad “crowd” and for contracted individuals is also a useful approach for differentiating between different types of “cloud work”. Examples of contracts awarded to the crowd particularly include “microtasks”, i.e. small-scale activities such as tagging and cataloguing images according to certain criteria. Contracts awarded to individuals may entail design, text or IT activities, for example.
Types of platform work
There may be major differences in the structure of platforms and the way in which relations between the platform, clients and the platform workers are organised. What is more, the business models underlying platforms are constantly evolving. At the same time, it is possible to discern different groups of people and interests among those offering their services on platforms. They include those offering unskilled or highly qualified activities, contracts entailing low and in some cases also higher income opportunities as well as people for whom working on a platform is a secondary source of income and people who make a living from platform work. One important goal in discussing the political structure of work on or via platforms entails agreeing on a uniform definition of this concept. Given the fact that platforms and the people who work on them frequently operate on a cross-border basis, a uniform European definition is also desirable.
The graphic shows a schematic overview of the different forms of platform work in Europe. It is broken down into the criteria location dependency, person dependency, and scope of activity. The image makes the platforms’ various business models clear as well as the variety of relationships that exist between platforms, customers, and individuals working via the platform. Paying close attention to these differences is an important starting point for policymaking where platform work is concerned.
In terms of model classification, the different forms of platform work can be judged by three criteria:
- Location dependency: this concerns the question of whether the activity is location-independent – if this is the case, we refer to it as “cloud work” – or it is tied to a certain locality. In this instance, we speak of “gig work”.
- Person dependency: where cloud work is concerned, it is possible to both issue assignments to the “crowd” – i.e. everyone on the platform eligible to be considered for a particular activity – and commission specific people with work individually. The same classification can be applied in the area of gig work.
- Scope of activity: with regard to cloud work, allocating activities to the crowd can take the form of both splitting the work up into a large number of smaller tasks or even inviting people to submit entries for creative competitions. Commissioning work on an individual basis via the platform is very similar to the freelance model. In the area of gig work, the most conceivable activities assigned to the crowd are small, location-dependent tasks. Allocating individuals with this type of work could involve, for example, delivery services, domestic activities, or passenger transport.
The image shows a structure similar to that of a tree if it were lying on its side; the structure has a total of three levels that branch out continuously from left to right. The three levels are broken down into greater and greater detail according to the previously mentioned criteria of location dependency, person dependency, and scope of activity
The starting point for possible rules for the platform economy could be a decision to focus only on those platforms that determine the rules regarding the contractual conditions and payment arrangements and thus in some manner or other exert influence on the structure and execution of the contract. Accordingly, this would exclude platforms that operate solely as marketplaces. This follows from the fact that a marketplace that does not exert any influence at all on the terms of the contract and, for example, leaves pricing entirely to the parties does not have any responsibility for the platform workers’ employment conditions and income opportunities. This kind of constellation does not exhibit the defining features of a platform economy business model. Work placement platforms are developing dynamically. Platforms offer many people a good way of working in alignment with their individual circumstances. At the same time, it is clear that, rather than merely acting as an intermediary, platforms frequently exert decisive influence both directly and indirectly on the way in which the work is performed and recompensed. The aim should be to promote the new individual opportunities and economic potential afforded by the platform economy while simultaneously ensuring that “good work” is available in the platform economy.
This text has been taken from a publication by the Federal Ministry of Labour and Social Affairs released to mark Germany’s presidency of the Council of the European Union from July to December 2020. In scientific articles, interviews, viewpoints and infographics, the thematic publication describes the main thrusts being pursued by the ministry during the German presidency of the Council of the European Union. In this way, the ministry is seeking to strengthen dialogue within the EU and to join European labour and social-affairs ministers in identifying issues requiring EU-wide action. The full digital publication can be found here.
↑ European Commission. (2016). Public consultation on the regulatory environment for platforms, online intermediaries, data and cloud computing and the collaborative economy, ec.europa.eu/digital-single-market/news/public-consultation-regulatory-environment-platforms-online-intermediaries-data-and-cloud
↑  Monopolkommission. (2015). Sondergutachten 68: Wettbewerbspolitik: Herausforderung digitale Märkte, www.monopolkommission.de/images/PDF/SG/SG68/S68_volltext.pdf