Ownership Matters|Issue 18
Giving Drivers Co‑op Power; Real Impact; What Needs Disrupting
- Editorial: What Needs Disrupting Today
- A Conversation with The Drivers Cooperative’s Erik Forman
- Books: Morgan Simon’s Real Impact
- Join Zebras Unite Cooperative!
- Union Power for Cooperative Solutions
- NPQ Event: Remaking the Economy — Thurs. Jan. 20
- Reader Response: About the Packers
Not yet a subscriber? Sign up — it’s free.
share this segment by right‑clicking icon to copy linkWhat Needs Disrupting Today
One sign of a social transformation is a change in the words we use to describe the new reality. Sometimes the new words are part of an effort to demystify the forces which need transforming.
A few examples:
Disruption: the term formerly suggested a rapid campaign, usually mounted by a platform business, to aggressively outcompete and even bankrupt other companies in a specific sector. The concept was related to economist Joseph Schumpeter’s famous “law of creative destruction” whereby the loss of certain businesses from the marketplace was offset by our gains in knowledge and in innovations from their failures. The fates of disrupted and displaced workers — thousands of taxi drivers, journalists, local merchants, etc. — were usually considered an “externality.” Schumpeter’s law spared no one, given the premium it put on innovation, consumption, convenience, and growth for the sake of growth.
Today the most important thing we can disrupt is the conventional thinking about business creation, investment, and equity. To disrupt ideas grounded in capital supremacy, for example, requires new concepts like capital reciprocity. Such ideas are not welcome in many quarters, since they threaten to disrupt the world of the disrupters.
Restructuring: a term associated with bankruptcies, swapping out new for old management, and the 1980s go-go trend of “down-sizing.” Historically, private equity firms have been the shock troops of this highly profitable technique in search of “efficiency” and “innovation” — at all costs.
The new restructuring we need means: 1) a different kind of leadership which values diversity and minimizes hierarchy; 2) a different kind of governance which increases the number of people making decisions; 3) a different kind of ownership which means a wider distribution of equity.
Due diligence: the phrase equates to “do your homework first” for asset managers who have a legal obligation to scour all available information on companies before investing.
But how about the diligence investors need to show in educating their social awareness by going beyond the numbers to the larger context of community?
This kind of diligence includes asking questions such as, How was the capital I’m investing originally accumulated? Is my investing addressing any of the prior harms which may have been done? What should be the personal impact of my impact investing? (It might also include attending community-focused webinars such as this one from NPQ.)
share this segment by right‑clicking icon to copy linkBuilding Worker-Centered Platform Ridesharing
A Conversation with The Drivers Cooperative’s Erik Forman
Erik Forman is co-founder of The Drivers Cooperative, the first driver-owned rideshare platform cooperative in the U.S., as well as People’s Choice Communications, the world’s first worker-owned ISP, launched by striking cable technicians. Before turning toward cooperative development as a strategy for system change, Forman was active in the labor movement for over fifteen years, leading unionization campaigns in the fast food industry and conducting organizing trainings and workshops across the world.
Great to connect with you. You’ve got a lot of fans these days.
Thanks — actually that’s been our whole strategy. Make a lot of friends and go after the bully.
Right, I like that. As a place to begin, I just read the July 15 article on Drivers Cooperative in Fast Company which seemed pretty good. One of the things I took from it is that you and your co-founders — Ken Lewis and Alissa Orlando — sort of looked up soon after you launched last summer and found yourselves in a war, right? Tell us about some lessons you’re learning from that.
Yeah, every day brings new lessons. My co-founder Alissa likes to say the learning curve is 90 degrees. I guess I could speak mostly to how I came into the project. My background is in the labor movement. I spent fifteen years trying to unionize different workplaces and getting fired a lot in the process. Which is what happens when you’re working with the IWW, trying to unionize the U.S. fast food industry. I was very involved in campaigns at Starbucks and Jimmy John’s — this is in the years before the “fight for 15.” So that was when only really crazy people like us were trying to take on these issues.
I learned a ton from doing that. And I would say we certainly made some gains. But for the amount of effort that went into these unionization campaigns, the gains were kind of minimal, pennies on the dollar in terms of raises, some improvements certainly in our worker power on the job. There are a lot more valuable intangibles — empowerment, solidarity, cultural change — but I had to be honest with myself that we hadn’t gotten as far as I’d hoped.
I took a bit of a break and traveled around, doing a lot of organizer trainings for unions in other countries. I moved to China for a little while and was involved in labor over there.
Then I came back to New York, became a teacher, and was involved in that union. Reflecting on my experience as a labor organizer, one of the things I kept thinking about was how workers would come to you and say, yeah, we need a union. And most people did in the abstract support that idea. But I was also hearing a lot of people say, I want to start my own restaurant or I want to open my own school. What I realized was that many working people want to own the place that they spend most of their waking lives. I really started to think — maybe we can change the world not just by fighting employers, but by creating better ones.
From that dimension, I got involved in the labor movement originally from the anti-war movement, because I was interested in broad and deep social change, which the labor movement has not really been at the forefront of in the United States, except perhaps at its best moments. For the most part, it’s been boxed in by employers to bargaining over a very narrow scope of bread and butter issues.
So I started thinking about worker ownership as a different strategy for worker empowerment. I think that’s something a bit unique about The Drivers Cooperative: it’s a very worker-centric organization, as you would expect from a co‑op. And it has to be in order to do what we’re trying to do. So that was my journey, more or less.
Tell us a little more about how that focus on workers plays out.
Sure. For example, we involve drivers in every single major decision in the company. Personally I don’t even have a share because I don’t make my living driving for hire, and I’m the person who has been involved the longest. In a normal startup, the founders hoard ownership. We decided to distribute equity to as many drivers as possible. Staff don’t own shares, but we are incorporated in the co‑op’s profit sharing plan, and a vote for representation on the Board of Directors.
This matters also because The Drivers Cooperative is now the largest worker co‑op in the country now, correct?
Yeah, I think we’re close to that. We had to pause issuing shares because we were applying for minority enterprise status and they need a snapshot in time in order to grant that. So if we continued issuing thousands of shares, it wouldn’t work, but we have about 3,800 drivers in the pipeline to become owners.
You asked about the worker democracy aspect of it. We’ve put a lot of thought into developing a structure. I don’t know if we got it right but we built in flexibility so it can change over time. We have a multi-stakeholder board of directors on which we have represented drivers, staff, and outside advisors who provide a third party perspective. No one group has an absolute majority so they have to compromise, which we think is necessary.
Because with the marketplace business like this, you have different stakeholders that all need to be satisfied in order for the business to function. If you orient your business only around what riders want, you end up with something which looks like Uber, which is extremely exploitative of drivers. And with Uber, it’s not even oriented to what riders want: it’s oriented to what outside investors want.
So I think that as time goes on, we’re probably going to diverge more and more from the Uber business model. Because, at our core, we’re based around a different set of interests.
share this segment by right‑clicking icon to copy linkMorgan Simon’s Close Look at Impact Investment
For more than two decades, Morgan Simon has worked at the intersection of social justice and social finance — i.e., the space where something new has emerged in the last decade in response to the perceived failures of both charity and finance. That new thing is called impact investing and Simon has a number of striking things to tell us about its relation to financial activism and social investing.
“Impact investment [a concept first popularized by the Rockefeller Foundation in 2007 — ed.] is an attempt to align money with values. . . . Rather than playing with the $46 billion that constitutes the annual spending of philanthropy, we can leverage the $196 trillion that circulates in the global economy every day for social justice.”
The quote is from Real Impact, a book Simon wrote in 2017 about her two decades of experience building four different organizations (mostly recently, Transform Finance), all of them aiming to influence how and where the billions now earmarked for impact investing are deployed. (The latest estimates of the size of the impact investing sector are around $715 billion.)
Her book raises — and deals with expertly — questions about the role of impact investment in creating social change. Is this strategy flawed either because it doesn’t make enough money — or because it seeks to make money at all. As Simon shows, impact investments have been able to outperform the market with lower levels of volatility.
As for those who ask whether investment is too implicated in the history of capitalism and exploitation to be useful in human liberation, Simon acknowledges that the origins of modern trade finance were designed to serve the business of slavery and that “given its historical legacy it needs exceptional guidance to succeed in not propagating injustice.”
Simon’s goals changed, as she notes, from “fighting poverty” to trying “to enhance community autonomy — and specifically economic autonomy — both domestically and globally.” She came to see her task as answering the question, How do we replace historically stolen resources within communities in a way that enhances autonomy? The answer, using the tools of investment, was in aligning the community and the investor around the common goals of sustainability and long-term self-sufficiency.
Along the way, Simon and her collaborators came up with three dramatically unconventional (because justice-grounded) principles for a new kind of investing. These tenets are elaborated upon in her book and now incorporated in the work of Transform Finance:
- Engage communities in design, governance, and ownership.
- Add more value than you extract.
- Fairly balance risk and return between investors, entrepreneurs, and communities.
Simon, now a founding partner with the Candide Group, has played an important role in changing the skewed incentives and unbalanced stakeholder mix in this sector. In addition to financial diligence, now impact diligence is part of the investment process. Rather than placing a singular focus on job creation, she and her colleagues — mindful of the three principles above — emphasize the link between employment and the ability to acquire assets in order to overcome intergenerational poverty.
Last month, Morgan Simon and Ownership Matters publisher Felipe Witchger recorded a 26-min. conversation about her background, ideas, and current work. We recommend giving a listen.
share this segment by right‑clicking icon to copy linkJoin Zebras Unite Cooperative!
The economy we want is already out there, a vast construction site in which we can spot a few foundations being laid and some beautiful new structures going up.
One of those sites is called Zebras Unite — and it’s going co-op! (In its other organizational arms, ZU is already a 501c3 non-profit and an investment fund.)
The Zebras (as they like to say, “zebras fix what unicorns break”) are a founder-led movement creating the capital, culture and community for the next economy. Since their founding five years ago, the ZU network has grown to some 8,000 members globally in about two dozen cities.
Some great things about the Zebras:
- The many talented and deeply engaged people in their worldwide hub for members
- An excellent and ongoing series of Crowdcast events
- Their collaborative approach — partnering is power!
Read further and sign up for a live information session via the Zebras Unite site. You can contact ZU’s Kate "Sassy" Sassoon, Director of Cooperative Membership, directly at email@example.com.
share this segment by right‑clicking icon to copy linkUsing Union Power for Cooperative Solutions
What if we combined the substantial resources of organized labor with the energies of the worker ownership movement — especially at the intersection of union education and cooperative development? Could we simultaneously expand union membership, create a more level playing field for high-road employment standards, and broaden the road toward economic democracy?
Authored by Rebecca Lurie and Bernadette King Fitzsimons, a new report from the Community and Worker Ownership Project at the CUNY School of Labor and Urban Studies includes an excellent collection of case studies which demonstrate that this collaboration has produced powerful results in the form of good jobs and higher rates of unionization. Its goals are to stimulate and support similar endeavors where hard fought union power can be used towards owning the companies where we work with a check and balance of union representation for deepening democracy at work.
The co‑op / union combinations in the case studies are:
- Cooperative Home Case Associates / 1199SEIU United Healthcare Workers East
- Lobster 207 / IAM District 4
- New Era Windows / UE Local 1110 / The Working World
- People’s Choice Communications Cooperative / IBEW Local 3
- Homeland / UFCW Local 1000
- LVN Cooperative / AlliedUP Cooperative / SEIU United Healthcare
- Co‑op Cincy / Co‑op Dayton / United Steelworkers Sub-District 5
The narratives of these case studies reveal the interesting ways in which several key tools from the union “toolkit” have resulted in successful outcomes for both partners. The tools include:
- Openness to innovative organizing
- Investment of union staff time and expertise
- Use of union facilities
- Union training funds and educational expertise
- Capital access and relationships with financial institutions
- Negotiation processes and collective bargaining agreements
- Sectoral analysis and legislative organizing
For another example of union “tools” being used to help build economic democracy, check out the Bargaining for the Common Good project, another labor / community coalition, in this case organized around a strategy of collective bargaining. (More on this work in a future issue.)
Upcoming : Thursday, January 20
share this segment by right‑clicking icon to copy linkAdvocacy and Community, the Delicate Balance
A Nonprofit Quarterly Remaking the Economy Event
Some readers may wonder at times: Which am I? A community-focused economic developer? Or an advocate for changing unjust laws and regulations impeding economic democracy?
NPQ has assembled a panel of practitioners to discuss this apparent dilemma and how their own organizations attempt to strike a balance between these two imperatives. The panelists are:
- Rudy Espinoza, executive director of Inclusive Action in the City, a Los Angeles-based community organization that advocates for street vendors, fights gentrification, and makes micro-loans for immigrant businesses
- Nia Evans, executive director of Boston Ujima Project, a nonprofit committed to building a community-controlled economy through building an ecosystem of grassroots community engaged investment and participatory governance
- Julia Ho, founder of Solidarity Economy St. Louis, co-founder of STL Mutual Aid, a network of over 2,500 neighbors, and a board member of the New Economy Coalition
This webinar will explore:
- How does a nonprofit advocate for policy change at the City Hall, while remaining responsive to its membership?
- What kind of ecosystem of support is needed to advance economic justice goals? If you don’t have that support, how do you build it?
- What stages are involved in developing a mutual aid network? How do you sustain the work over the long haul?
- What was required to legalize the status of street vendors in Los Angeles? What resistance did the campaign encounter? How was it overcome?
This event is scheduled for 2 PM ET, Thursday, January 20, and will be recorded. Sign up at the NPQ site to attend or receive further information.
share this segment by right‑clicking icon to copy linkPackers Ownership, the League, and the Players
So it is funny that you brought up the Packers. It is a little unfair. Yes, the Packers are not a co‑op, but they are the only publicly owned major league sports franchise (more on why this is important in a second) and located in Green Bay, the smallest market of any sports franchise in North America. Each year, the team holds a shareholders meeting at its stadium (imagine any consumer co‑op holding a membership meeting and getting the turn out that would require a stadium). So what is so significant?
In the 1970’s Ed Garvey, president of the NFL Player’s Association was able to use the statute of corporate ownership in Green Bay to access the team’s finances. With this information from the smallest market team, he was able to extrapolate the extraction of wealth from the players. This led to the success of the Player’s union and free agency in football and every other major league sport.
Because of Green Bay’s ownership structure, professional athletes quit being treated like chattel and gained rights and better pay (the base salary is very important to the players who aren’t super stars). As a result, in the US none of the major league sport franchises allow anything other than private ownership (no corporations, no co‑ops, etc). So scoff if you must, but Green Bay played a key role in protecting players as humans.
Also: a way for co-ops to help build a stronger community would be for them to follow Ed Garvey’s model and work with labor unions so that the unions can gain crucial industry information. This is a great way to honor the tradition of co‑op / labor solidarity.
Yes, I am a fan, but not an shareholder.
Senior Cooperative Development Specialist
Northwest Cooperative Development Center
Coming in Issue 19, January 25
- Interview: Molly Hemstreet of The Industrial Commons
- Books: Katherine Trebeck and Jeremy Williams’ The Economics of Arrival
Article ideas? Submissions? Helpful suggestions?
Contact the editor: firstname.lastname@example.org.
- Elias Crim, Editor
founder, Solidarity Hall; former business journalist and publishing consultant
- Júlia Martins Rodrigues, Contributing Editor
attorney (Brazil); visiting scholar, law, University of Colorado Boulder; PhD candidate, civil and constitutional law, University of Camerino
- Daniel Fireside, Contributing Editor
founder, Uncommon Capital Solutions; board member, Namaste Solar; capital coordinator, Downtown Crenshaw Rising
- Zoe Crim, Editorial Assistant
B.A., linguistics, Indiana University Bloomington; co-founder Fair Trade group
- Paul Bowman, Design / Content Mgr.
Disclaimer: The content of Ownership Matters is for informational purposes only. Such information should not be construed as legal, tax, investment, financial, or other advice. Nothing contained in these materials constitutes a solicitation, recommendation, or offer to buy, or a solicitation of an offer to sell, any securities. Subscribers / readers agree not to hold the authors, their affiliates or any third party service provider liable for any possible claim for damages arising from any decision made based on information published here.