Evgeny Morozov doesn’t like it, but his portrait certainly makes it look attractive to those who do:
Some prominent critics even speak of “platform capitalism” – a broader transformation of how goods and services are produced, shared and delivered. Instead of the tired conventional model, with individual firms competing for customers, we are witnessing the emergence of a new, seemingly flatter and more participatory model, whereby customers engage directly with each other. With a smartphone in their pocket, individuals can suddenly do things that previously required an array of institutions.
Such is the transformation we are witnessing across many sectors of the economy: taxi companies used to transport passengers, but Uber just connects drivers with passengers. Hotels used to offer hospitality services; Airbnb just connects hosts with guests. And this list goes on: even Amazon connects booksellers with buyers of used books.
The differences from the old, pre-platform model are easy to spot. First, these companies have extraordinary valuations but suspiciously light balance sheets: Uber doesn’t need to employ drivers and Airbnb doesn’t need to own houses. Second, instead of adhering to a precise and rigorous code that spells out the rights of customers and the obligations of service providers – the cornerstone of the modern regulatory state – platform operators rely on the widely distributed knowledge of participants in a service, hoping that the market will eventually punish those who misbehave.