Platform Economy As A New Form of Capitalism: A Régulationist Research Programme
Platform Economy As A New Form of Capitalism: A Régulationist Research Programme
Platform Economy As A New Form of Capitalism: A Régulationist Research Programme
doi:10.1093/cje/bez017
Advance Access publication 14 May 2019
The terms ‘platform economy’ or ‘sharing economy’ have become widespread with
the development of digital platforms like Uber. This economy is transforming capit-
alism and raising important questions about its nature. Is it a new process of embed-
dedness or is it the next step for deregulation following the crisis of the financialised
regime of accumulation (RA)? Is it a possible new Growth Regime? Using the
approach of the French Régulation school of thought, we describe the nature and
transformations of the form of competition inherent in platforms. Although this
may favour some forms of re-embeddedness, we show that it will accelerate some of
the trends and characteristics of the institutional forms of the financialised RA and
that it is an endogenous product of its crisis. This raises further questions and un-
certainties related to the ability of platforms to generate stable long run growth due
to the dysfunctionality of the mode of régulation and the conflicts it could generate.
1. Introduction
The terms ‘sharing economy’, ‘collaborative economy’ or ‘platform economy’ have
spread quickly since the creation of several well-known digital platforms such as
Airbnb, Uber, TaskRabbit etc. that contest and ‘disrupt’ the incumbent firms of regu-
lated sectors. The digitalisation of data and the diffusion of smartphones are factors
which have contributed to creating the conditions for developing new services through
applications that match users or professionals and consumers, and allow them to
‘share’ (freely or not) the use of assets. The aim of this paper was to study the im-
pact on the current capitalist system of the platform economy and, more specifically,
the ‘platformisation’ of the economy, defined as the process of resource exchange via
the use of centralised digital tools. Most of the proponents of this platform economy
evoke a technological and social revolution that unreservedly promotes a radically new
1
Régulation is understood as all forms of rules, norms or mechanisms insuring the coordination of agents
and the reproduction of prevailing capitalist social relations. It must be distinguished from regulation, which
is only one form of régulation.
2
Monetary and financial regime, wage–labour nexus, form of competition, form of the State and inter-
national regime.
Platform economy as a new form of capitalism 807
endogenous dis-embeddedness transformation linked to the crisis of the financialised
RA. The platform economy is growing particularly quickly in the service sector and
is not yet present throughout the economy. Nonetheless, the diffusion of platforms
may impact the MR by extending commodification, thus justifying the use of the
régulationist framework to interpret this systemic transformation.
The remainder of this paper is organised as follows. In Section 2, we analyse the
main impact of the platform economy on forms of competition by focusing on how it
transforms markets. In Section 3, we explore how it is related to the financialisation
3
ICOs are a form of fund raising: start-ups issue cryptocurrency tokens instead of stocks in exchange for
‘real’ fiat money. The token gives the owner the right to buy future products or services of the company or it
can be used as a speculative asset such as a stock.
812 M. Montalban et al.
They can thus be considered as an alternative financial asset to money. It is, nonethe-
less, possible that the transformations brought on by these innovations will go further,
but this will depend on the reaction of Central Banks, the extent to which non-geek
and non-speculating households overcome worries about legal uncertainties (Enyi and
Le, 2017), and the reactions of private banks. States and Central Banks have sover-
eign and fiscal interests to maintain state money and one easy way for government to
ensure that its money is used is to oblige individuals and firms to pay their taxes with
it. Private banks are seeking ways to seize the opportunities offered by the blockchain
4.1 Digitalisation of labour, uberisation and platform economy as the next stage of an
on-going process of individualisation and flexibilisation of the labour force
The development of the platform economy is transforming the wage–labour nexus,
capital/labour relationships and the business models of firms. It involves the develop-
ment of self-employment and freelancers in place of regular wage-earners/employees.
This may involve highly skilled freelancers for platforms such as Upwork or low-skilled
entrepreneurs for platforms such as Uber or Deliveroo. There is no clear distinction
between professional labour such as full-time Uber drivers or delivery men and ‘oc-
casional’ labour such as drivers who work from time to time for platforms such as
Uberpop, Amazon Mechanical Turk, or TaskRabbit at the same time as they have an-
other job. Depending on the level of qualification of the labour force, ‘uberisation’ has
different effects and we can expect that the process of individualisation, flexibilisation
and dualisation of capital/labour relationship already in place in financialised RA will
increase.
The emergence of the platform economy has clearly favoured the development
of freelancers. The Silicon Valley model is partly based on freelancers and their mo-
bility and professionals such as coders, engineers, accountants, advertisers, and de-
signers develop their own activity with short-term contracts and moving from one
firm to another. By extending the model of freelancers to low skilled workers, however,
platformisation replaces labour contracts with commercial contracts, and outsources
the risks and costs previously borne by capital to labour. The platform economy is thus
a new form of ‘dis-empowerment’ of the labour force and a new stage of neoliberal
capitalism. Uberisation, in the form of crowd working, is another stage of outsourcing
of workers and reducing their ability to engage in collective organisation. As such,
uberisation is not a new system of labour organisation as it is not very different to the
putting-out system that prevailed during the early years of proto-industrialisation. In
the putting-out system, workers were self-employed and worked at home with their
own means of production and the capitalist who provided the raw materials was simply
an intermediary between workers and consumers. This system was replaced initially
by the factory and subsequently by manufacturing systems. The manufacturing system
and Taylorism were invented to increase the control over the labour force and reduce
the risks of opportunism (Marglin, 1974; Tinel, 2004).
Platformisation is re-organising a putting-out system 2.0. Capitalists organise the
matching and selling process and the control of labour is easier due to digital applica-
tions. In addition, most of the services involved do not involve indivisibility in produc-
tion and this limits problems related to team work (Baudry and Chassagnon, 2016).
By replacing employment contracts with commercial contracts, by controlling access
814 M. Montalban et al.
to the platform to match supply and demand and by removing the distinction between
professional and non-professional labour, firms such Uber have created competition
between low-skilled workers. Without the status of wage-earner, incomes are more
volatile and previous forms of remunerations such piece-rate payment are reappearing.
This competition between low-skilled workers decreases their incomes and deterior-
ates their working conditions.
The main concern in relation to this new form of putting-out is that workers who
are not wage earners are not protected by labour laws and have no social protection. If
4.2 Crisis, poverty and inequalities as a source of development of the platform economy
and free lancing
There is a self-reinforcing relationship between inequalities and the development of
the platform economy. Poverty and inequalities encourage the development of plat-
forms and platforms, in turn, may increase poverty by the dis-empowerment of low-
skilled labour and the rise of very high-paid ‘stars’.
During the Great Recession, unemployment and poverty increased in most OECD
countries, weakening the balance of power for employees and unions, although in-
siders still have strong social benefits and strong employment protection. It was when
unemployment grew and median income stagnated or decreased at the beginning of
the 2010s that Airbnb or Uber rose to prominence (Rippe-Lascout and Ternisien,
2016). In a very competitive international context with high unemployment and stag-
nating wages, the only option to increase purchasing power is to decrease prices or
to supplement primary income with new activities. This is typical of a deflationist re-
gime. Schor (2017) highlights how the platform economy increases inequalities among
the poorest 80% of the population. For high-skilled workers with rare qualifications,
digitalisation and jobbing platforms can increase their incomes if they choose to be-
come freelancers. This is also the case for high skilled workers who use some jobbing
platforms to supplement their incomes by practicing low-skilled work as a secondary
activity. Workers who are not dependent on the platforms can thus use it to increase
their income. However, for low-skilled workers dependent on platforms and struggling
to survive, the relationship is reversed and the inherent competition generated by the
platform decreases their incomes.
The rationale that is often given for why people are using the platform economy
tends to be positive and suggest that it is because it is ‘more fun’, ‘more green’, ‘more
Platform economy as a new form of capitalism 815
collaborative’ or ‘more inclusive’. However, a recent French study has shown that the
dominant reason for using such platforms is financial. Their attraction lies primarily
in the fact that their services are less costly or that people can earn additional income
by renting their home or by working as driver. This is clear from the fact that 80% of
users in the study reported that they use platforms to save money, while only 24% re-
ported that it was to ‘consume differently or in non-traditional channel’. Only, 15%
reported that platforms were used in order ‘to protect the environment’ and 7% re-
ported that it was for the human contact. On the other side of the platform for people
5. The ‘silicolonisation’ of public policies: the final pillar in the edifice of
the Schumpeterian Workfare State
The state is defined as ‘a set of institutionalized compromises that ensures the me-
diation of violence and conflicts to produce public policies’ (Delorme and André,
1983). Its role has been significantly transformed by changes that have taken place
in the other IFs that have been adapted to facilitate the development of the platform
economy. The dominant stakeholders express two political demands. One is that gov-
ernments deregulate industries and the other is to reduce spending and both these
recommendations are complementary to efforts for financial liberalisation and the
associated transformations of monetary regimes. ‘Platformisation’ thus reinforces
dis-embeddedness by giving it a new form and by proposing new restrictions on the
domain of States. Morozov (2013) explains how financialisation and platformisation
occupy roles as ‘bad cop’ and ‘good cop’, respectively, at both a political level and as
drivers of the transformations of the form of the State. The trajectory underway com-
bines a simple reduction of the public domain with public policies organised by states
that ensure the hegemony of worldwide digital giants such as the GAFAs and Uber.
To interpret these changes in theoretical terms, it is important to bear in mind the
large diversity of ‘institutionalised compromises’ that generates the forms that states
may take and that explains their imperfect coherence (Théret, 2006). The ‘Fordian
State’, for example, cannot be reduced simply to the ‘welfare state’ as it also had an
ability to distribute productivity gains along with Keynesian policies. Divergent forms
of ‘Fordian States’ emerged in different national capitalisms as a result of bundles
of regulations and public policies that were both central and local. These sectorised
public policies are not simply local versions of economic policies, but they are de-
veloped to stabilise more subtle compromises in multiple sectorised policies such as
transport, education, health or housing. In each domain, the State has to produce rules
and forms of taxation and subsidisation not only to solve market failures but also to
organise compromises between social and territorial groups with conflicting interests.
816 M. Montalban et al.
The activities concerned are largely ‘mixed’ because private initiatives and compe-
tition are embedded in rules to stabilise local political compromises. Fligstein (2001)
underlines the necessity of such embeddedness for firms to limit competition and price
wars, and he introduces the concept of ‘conception of control’. This is a shared repre-
sentation of how to control/adapt to competition and organise firms. The concept of
‘conceptions of control’ is also relevant to our understanding of the form of the state
and its key role in stabilising the relations among stakeholders. This could involve, for
example, mediating between patient needs and those of the pharmaceutical industry
Monetary and Pure credit money, central banks as lender of last resort Financialised monetary regime plus:
financial regime and guaranty against financial crises; dominance competition of private cryptocurrencies (?); small
of private banks and institutional investors; high disruption of private banks and asset management
development of financial markets; money managed industry by blockchain &fintech (??) and
capitalism; dominance of shareholder value crowdfunding to complement VC
management; VC and PE
Form of competition Outsourcing; financialised and globalised competition Financialised form of competition plus:
(take-overs; M&A; role of stock prices etc.); focusing extension of competition and commodification
on intangibles; dominance of MNCs; growing due to platforms; outsourcing as crowdsourcing;
commodification and financialisation of activities; tax dominance of MNCs and GAFA/large platforms;
and regulation avoidance as competitive strategy first mover/winner takes all and disrupting
competition
Wage–labour nexus Individualisation, flexibilisation, de-unionisation; Financialised form of wage–labour nexus plus:
financialisation of rewards; (stock options); pension pay to piecework, new form of putting-out system
funds; erosion of social and employment protection; with ‘independent workers dependents’
slow growth of wages compared with productivity
Form of the State Neoliberal State; Austeritarian-neoliberal and silicolonised-
Erosion of Welfare State; schumpeterian State; organised impoverishment
Competitiveness, credibility and attractiveness as mantra of indebted State by outsourcing to platforms;
of public policies; silicolonisation and technicisation of public
Technicisation and depoliticisation of public policies policies; digitalisation and platforms as technical
solutions to political problems
International regime Free trade and free movement of capital; dominance of MNCs and institutional investors; competition between States;
declining hegemony of USA and growth of emergent countries
Platform economy as a new form of capitalism 819
Wage-labour
nexus
Fig. 1. The institutional hierarchy in financialised regime and platform economy
policies, financialisation and stagnant wages from the demand side, it is hard to im-
agine that this new context could generate a new stable and high growth RA.
It would appear that the likelihood of a real surge of productivity will depend the
progress made in artificial intelligence and robotics by Google, Facebook or Uber.
The development of these technologies has been made possible by access to big data
and their widespread application would increase the substitution between capital and
labour. It is often claimed that this is what will lead to a significant increase in labour
productivity (Brynjolfsson and MacAfee, 2011; Frey and Osborne, 2013). However,
this will further exacerbate the inequalities between low- and high-skilled workers—
depressing the growth of wages and demand—and will increase the conflict between
capital and labour. If no regulations are invented to address such conflicts, there will be
potential for the emergence of neo-luddite forms of struggle. The net effect of robotics
on labour productivity and employment (Arntz et al., 2016), however, has generated
much debate involving some more alarmists commentators and others who are more
optimistic from a productivity point of view (Brynjolfsson and MacAfee, 2011); Frey
and Osborne, 2013).
The emergence of a new platform-led RA is, therefore, highly dependent on the
contingent transformations of the MR and the associated socio-political compromises.
This ‘new’ MR and the silicolonisation process are an attempt to depoliticise the
economy and to make the state obsolete, by substituting digitally organised markets,
‘pragmatism’, ‘technical adaptation’, ‘innovation’ and ‘problem solving’ to policy
making and politics. Morozov (2013) calls this ‘technical solutionism’. Rather than
organising deliberation about collective ends, it predominantly promotes adaptive
and competitive behaviour along with technical solutions. This is the essence of dis-
embeddedness. By trying to invalidate the role of politics, this approach is, in fact,
imposing a form of libertarianism policy and the domination of capital. It particu-
larly works in favour of highly skilled workers such as the geeks, coders, freelancers,
managers and the capitalist class and against the interest of low-skilled and low-paid
workers from services and industry.
Platform economy as a new form of capitalism 821
As a result, the story has not yet been played out, and uncertainty about the future
development of this process of platformisation remains high. As the dis-embeddedness
deepens, the tensions are growing along with the threat of political reactions. Platform
capitalism thus generates conflicts by disrupting sectors where we are witnessing the
re-emergence of politics and re-embeddedness. This is the case, for example, with
taxi drivers opposing Uber or Airbnb in conflict with city administrations. In the
French presidential debate in 2016, some candidates such as socialist B. Hamon, far-
left J-L. Mélenchon and even far right M. Le Pen spoke out against ‘uberisation’,
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De-
unionizaon
Unemployment Growing
internaonal
compeon
Plaorm economy
De-
industrializaon
Slow and unstable
growth