A version of this working paper will appear in the edited volume Platform Economy Puzzles: Unravelling the Gig Work Paradox, edited by Jeroen Meijerink, Giedo Jansen, and Victoria Daskalova.
The platform economy puzzle we attempt to solve in this chapter is how gig economy companies can continue to grow their business despite regularly incurring mind-boggling losses. While the first step toward solving this puzzle is easily made, by bringing into focus the crucial role of venture capital and investment firms, this immediately requires us to confront a more puzzling reality: the fact that these firms have continued to fund loss-making gig companies operating in industries with extremely thin margins. To make sense of this situation, we believe it is necessary to start by asking a deceptively basic question: What kind of work is platform-mediated gig work? Phrased differently, what kinds of value are created through platform labor? To begin solving our platform economy puzzle, then, we introduce the notion of “dual value production”, which describes how platforms capture two kinds of value from gig work: the monetary value associated with the service transaction and the more speculative and volatile types of value associated with the data generated during service provision. We elaborate on the construction of data as a specific asset class and consider the nature of the data asset. Shifting our perspective from the platform to gig workers, we subsequently discuss two grassroots initiatives that resist the unbridled data extraction from gig work and attempt to reclaim their data assets. The next section takes another step toward solving our puzzle, as we move up the value chain and examine the role of what we call “meta-platforms”. It is on this level that we are confronted with the true power brokers of the platform economy, and we therefore end our chapter by proposing an ambitious set of regulatory and policy measures that could curb this unprecedented power.