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I know this is probably impossible because the "actual" investors wouldn't be able to cash out, but it would seem to make sense to me for companies like AirBnB
by CamTin 8y ago
I know this is probably impossible because the "actual" investors wouldn't be able to cash out, but it would seem to make sense to me for companies like AirBnB and Uber to be organized as host/driver co-ops, with the "corporate" services like ops/marketing/engineering being subordinate to the interests of the workers (hosts/drivers), who also happen to be the owners of the majority of the actual capital stock (apartments and cars). Nothing would even need to change from the customer perspective, very little would need to change in terms of the technology. AirBnB employees would just be working for hosts instead of the other way around.
Many agricultural co-ops work like this. You probably are more familiar with the brand names these co-ops employ than their actual organization: Oceanspray cranberries and Florida's Natural orange juice are two you probably know about. These are co-ops where the farmers who produce the oranges and cranberries have pooled to do all the things necessary to actually sell their product on a national market, like advertising and running processing plants (i.e. squeezing the oranges, packing the cranberries) but farmers still own and harvest their own crops. It's not really that radical an idea, and seems to make even more sense in the case of AirBnB where the actual capital needs of the centralized entity (an app) are much less expensive than the physical plant needed to handle gigatons of produce.
- Aloha 8y agoYou said pretty much what I was going to say. The gig economy starts to look a whole lot more equitable with employee ownership, or a co-op structure. I'll point out, there are several very large companies that are partially, mostly, or wholly employee owned - most notably Graybar.
- tomp 8y agoIsn’t one of the (rare) benefits of the gig economy it’s “on again, of again” nature? How would coownership work if/when hosts/drivers decide to stop working for AirBnB/Uber, or even start working for a competitor? What if they resume after some time? How is this solved with existing coops?
- hendzen 8y agoIf you quit you have to sell your shares back to the company. That's how it works at law firms, for example, when a partner leaves or retires.
- walshemj 8y agoFor coop's you just cease to be a member
- toomuchtodo 8y agoYou should retain your equity but lose voting rights upon separation, perhaps through a conversions event between share classes.
- CamTin 8y agoDo you mean "Should a driver still have a vote/share in the co-op if they quit driving for 6 months?" If so, then there are various ways to handle it. I'm not an expert but in agricultural co-ops like Oceanspray, the problem simply doesn't arise: there's no scenario where it is in the farmer's best interest not to harvest his cranberries at all, and they contract for delivery before the harvest season (they can go it on their own or sell to a different processor next harvest if they want, in which case they leave the co-op). For worker co-ops like grocery stores, there are various solutions: some give credit (including voting power and dividend) per hour worked, others just pay regular wages but have tiers of ownership that you move up with tenure. There are infinite possible models. For Uber specifically, I can see miles=votes for each election period. IOW, if you've driven 10,000 miles since the last election, then you get to cast 10,000 votes. The fact that all the work is tracked mechanically makes it easier in Uber's case than in others.
- walshemj 8y agoWell it would not be a coop then its one member one vote
- 8y ago
- walshemj 8y agoThe trouble is how do the members (coperators) obtain capital and remain ownership.
- Aloha 8y agoSelling equity is not the only (or even primary way) that companies obtain capital.
- buttcoinslol 8y agoI'm a Graybar customer, the employees I've talked to love it, outside sales guys in particular. I work for a top 20 national electrical contractor that has an ESOP as well, it's great.
- Alex3917 8y agoThat's what the platform.coop movement is all about. C.f. Arcade City for an example of a company doing this in rideshare. The new legislation that Joseph Blasi and Gillibrand just got passed as part of the tax bill makes it even easier for startups to be organized as co-ops. Of course you won't see TechCrunch writing about this even though it's one of the biggest startup-related bills to pass in decades, but regardless: https://money.cnn.com/2018/08/26/news/economy/employee-stock-ownership-plans-cooperatives/index.html https://money.cnn.com/2018/08/26/news/economy/employee-stock...
- walshemj 8y agoThis isn't really about coops just making employee share schemes easier presumably by better tax treatment.
- Alex3917 8y agoThe bill doesn't have anything to do with tax treatment. It lets employees take out a loan from the government to buy the stock of their business from the current owners, and then pay back the loan using the profits from the business. It's how the Twitter employees are currently trying to buy Twitter.
- moorhosj 8y agoHow is it different than a traditional ESOP?
- Alex3917 8y agoI think this is just a way to make it easier to set up ESOPs. Blasi created an alternative structure called an EWOK, but afaik that wasn’t included in this bill.
- walshemj 8y agoI think there might be a limit as to how much you can borrow.
- lambda 8y agoCabot Creamery in Vermont is another fairly well known example of this; it actually happens to have joined with a larger but less publicly visible coop known as Agri-Mark.
- harryh 8y agoWhy do you have "actual" in scare quotes when Uber investors have put in something like 20 billion dollars worth of investment and AirBnB have put in about 4.5 billion? You also mention that hosts & drivers own apartments and cars. This is, of course, true. But those assets are owned by the individuals and not by the company. So I don't see how this sort of personal ownership would be any sort of reasonable claim for ownership of the company.
- nicoburns 8y agoMaybe because the only thing those investors put in was cash. Which doesn't actually generate any value outside of our economic system.
- CamTin 8y agoI meant to imply that Uber and AirBnB have other investors which aren't really treated as such by the legal system: the drivers and hosts who have invested their time and capital driving, hosting guests, buying cars, and renting or buying property. I never meant to imply that the "actual" investors weren't real investors, only that the other sort is just as "actual" despite the legal reality where they are considered the only investors.
- harryh 8y agoThis has very little to do with the legal system[1] and much more to do with voluntary exchange. Investors voluntarily gave money to Uber in return for equity. Drivers voluntarily signed up and started driving in return for cash. Either of those exchanges could have been negotiated differently by either side but they chose not to. Such is the world we live in. 1. Obviously not zero, as this AirBnB request makes clear, but for the most part these sorts of restrictions can be dealt with if both sides really want it.
- EGreg 8y agoAlso, crypto tokens are exactly for that sort of thing.
- xapata 8y agoWith a token, a legal contract is still necessary. With a contract, a token is unnecessary.