In recent years freelancer platforms such as Upwork and Freelancer have grown substantially and have built massive online communities with over 10 million (registered, though not all active) users each. These platforms are successfully enabling the outsourcing of specialized, knowledge-based services to individual contributors. However, the International Labor Organization succinctly notes an enduring problem with current platforms: “While digital labor platforms are a product of technological advances, work on these platforms resembles many long-standing work arrangements, merely with a digital tool serving as an intermediary.”

Existing platforms are central ledgers that rely on intermediaries and are therefore burdened by the middleman’s costs and inefficiencies. They suffer from many challenges, including substantial platform fees (up to 20%), the risk of not getting paid or getting paid late, a de-humanizing watchdog approach, missing legal protection, a matching based merely on demonstrable hard skills and relevant experience, the inherent ability to monetize information asymmetries and most importantly, an exclusive focus on independent (as opposed to interdependent) workflows assigned to individuals, and only enabling goals that are so simple and modular that their path can be entirely predefined. With technological progress, those specific tasks will become automatable, and the case for existing freelancer platforms will mostly be gone. Current approaches are not capable of dealing with open-ended and complex problems like innovation, production, and engineering.

Besides, workers on existing platforms find themselves without the traditional protection or safety net of an employer-based social contract. The platforms provide their workforce with little or no training or direction for fear of jeopardizing their status as independent contractors, not employees. Mark Graham offers a positive vision for the platform economy, characterized by democratic ownership: “The platform cooperativism movement shines a light on some of the real potentials for worker-owned and -managed platforms for every possible service. We can also think about running platforms as civic utilities. In many places, platforms are becoming utilities. Think, for instance, of Uber’s desire to become an operating system for the city. Our cities will undoubtedly need operating systems. […] We aren’t going to turn back the clock to a world with no platforms. But by looking to strategies that involve transparency, accountability, worker power, and democratic ownership, we have in front of us the tools to move towards a less exploitative and more just platform economy. The platform economy in 2030 could be one in which consumers know more about their impacts, regulators are enforcing minimum standards, workers are exercising their collective power, and we have all found ways of building, supporting, and using democratically run and accountable platforms.”