Developing DAC7: 5 lessons for the workable regulation of the platform economy.

Uber taxi Amsterdam

Since 2023, platforms have had to share supplier data with tax authorities. What are the implications of this legislation? How can we achieve better regulation? Researchers Ahmed Darwish and Martijn Arets share lessons.

Since 2023, platform operators have been obliged to collect and share vendor data with the tax authorities. By imposing reporting obligations, this so-called Directive on Administrative Cooperation (DAC7) aimed to ensure more transparency regarding the income earned through digital platforms and aid tax authorities in countering fraud.

Does the legislation do what the Council of the European Union intended it to do? How can it be improved? As part of the Platform Economy Research Group at The Hague University of Applied Sciences, we, Ahmed Darwish and Martijn Arets, took a closer look at the development and effects of the legislation. While, at first glance, the legislation seems logical and practical, there are a number of questions and concerns raised by entrepreneurs. What can policymakers learn from this?

Five lessons for regulation in the platform economy:

  1. Provide clear guidelines
  2. Offer support
  3. Consult stakeholders in advance
  4. Implement regulations based on company size
  5. Make sure government institutions are ready for the new legislation

What is DAC7?

DAC7 is an EU directive aimed at improving tax transparency on income via digital platforms. By 1 January 2023, all European Union member states were required to incorporate this directive into their domestic legal frameworks (DAC7, Article 2.1). Since then, digital platforms have been obliged to identify, verify, and report the income of sellers that utilize their platforms.

The legislation applies specifically to platforms that bring together the supply and demand of products and services (DAC7, Article 1.8). They must share the details of suppliers on their platform with the tax authorities. These can be sellers of new goods (such as Bol, Amazon) and second-hand goods (such as eBay, Vinted). Platforms facilitating for booking hotels, holiday homes, and hospitality (such as Airbnb, Booking) are also covered by this legislation. It may also cover service providers, such as taxi drivers (such as Uber, Lyft), babysitters (such as Charly Cares) or food delivery (such as Thuisbezorgd, UberEats).

Any platform where sellers can offer certain services or goods to other users may be subject to the directive. As such, webshops that only sell their own products are not covered by the new legislation. It does not matter whether the platform is registered in the EU, as long as the sellers operate within the EU. The tax authorities of Member States also exchange the data gathered among themselves.

Digital platforms have access to information on markets that were previously highly fragmented. The EU is thus cleverly leveraging the immense power and information held by digital platforms. Indeed, before platforms brought supply and demand together digitally, people still traded products and services in ways that were less visible to tax authorities. Although they were, in certain cases, required to declare their income, many did not. In those cases, the tax authorities had no information. Platforms can, therefore, help governments obtain information about previously invisible highly fragmented markets (European Commission, Rationale).

Why this case study?

The idea of digital platforms sharing data with public authorities seems simple and logical. In practice, however, implementation proves more complicated. There are many differences between national governments and digital platforms. Although the platform economy consists mainly of small companies, legislation seems tailored at larger companies that have more resources to store and process data. Indeed, much of the platform market is an SME market. According to the ‘Monitor online platforms 2023’ (CBS, 2023), 64.2 per cent of the 1,600 Dutch platform companies have two or fewer employees. Only 5 per cent of these companies have more than 100 employees. 

We did an exploratory case study of DAC7, focusing on the Dutch context. We interviewed all sorts of stakeholders and experts, including platform operators, representatives, experts from the Tax Administration, and academics. We analyzed the directive, its implementation, and its impact on the platform economy. As a result, we produced five recommendations for future policy initiatives around the platform economy.

Benefits

The main benefits of DAC7 are:

1. Less fraud through data sharing

By sharing data, platforms and governments can work together to prevent tax fraud. DAC7 also promotes cross-border tax compliance, as some larger digital platforms operate in multiple countries. Data sharing leads to higher effectiveness and efficiency in monitoring revenues (European Commission, Rationale). By making data related to income transparent to tax authorities, they can better assess whether someone is a ‘seller’ for tax purposes or not. DAC7 applies only within the EU but promotes international cooperation with countries outside the EU, thanks to its alignment with OECD guidelines. It is important that platforms implement DAC7 properly and inform their users about the process. Since users know that their income data will be collected and shared with tax authorities, they will be more aware that they may have to pay their taxes. DAC7 thus helps not only detect fraud but also prevent it. However, success depends on the tax authorities’ ability to collect and reliably process the data.

2. Better cooperation between governments and platform operators

Technological developments are happening at a rapid pace and, as a result, policy often lags behind. Transparent cooperation between governments and the technology industry can help reduce the information gap and promote trust. In that vein, DAC7 is a step in the right direction. With their valuable data, platforms can help governments with enforcement and regulation, as long as the processes are workable and the impact on business processes and data collection proportional.

3. Improving KYC processes

DAC7 standardizes Know Your Customer (KYC) processes, since platforms must collect, verify, and report user data (such as name, address, and tax numbers) to national tax authorities in a uniform manner. This standardization reduces compliance costs, increases predictability for users, and can serve as a basis for further regulation (Vidal, 2024).

Disadvantages

The new directive has a lot of potential benefits, but it is far from perfect. Our analysis shows the main drawbacks:

1.A too broad definition, a tight timeline and a lack of guidance for platforms
The timeline of policy decisions and implementation was quite tight. For example, the Dutch Senate took a final decision on DAC7 on the 20th of December 2022 and companies had to have already implemented it less than two weeks later (1 January 2023). Adding to the confusion, DAC7 had to be implemented at a different deadline for each member state (Trolley, 2024). Although all member states had to be ready for DAC7 at the same time, some governments took more time than others (European Commission, 2023). This was especially difficult and costly for platforms operating in multiple member states.

Many platforms found the directive’s provisions unclear, leading to uncertainty. The directive used broad and vague wording. Moreover, the definition of what a platform meant in this legislation was abstract and unclear. Some operators were forced to incur excessive compliance costs, to avoid being fined or penalized. This uncertainty and lack of clarity also affected platform suppliers, who suddenly had to share more personal data than they initially collected and did not understand why it was necessary. 

Due to the high-pressure timeframe, the Tax Administration did give platforms much time and leniency, a so-called ‘soft landing’. The tax authorities tried to keep platforms well informed and provide them with support. With the implementation phase complete, the Tax Administration is slowly moving to stricter enforcement.

2. High compliance costs and inequality
DAC7 imposes a heavy administrative burden on platform operators, a group that mainly consists of small and medium-sized enterprises (SMEs). The directive seems to be tailored for larger platforms, but the obligations also apply to smaller players. For them, the costs of data collection, storage, and reporting are high. The labor and financial costs associated with compliance hinder growth and innovation. Whereas the OECD directive included an exception for small platforms, companies with up to €1 million in turnover, the EU decided not to include this exception in DAC7 (OECD MRDP, 2020).

3. Potentially discouraging participation
Stricter reporting requirements make digital platforms less attractive to sellers. Users become reluctant, as they cannot be certain about what the Tax Administration will do with the reported data and how it will impact their tax calculation. Some users even decided to work outside the platform out of uncertainty and fear. Research shows that knowledge of DAC7 regulations lowers the willingness to work utilizing platforms, noting a chilling effect. Users get the feeling that the government is watching them closely. This leads to distrust and fear (Mol & Molho, 2024).

4. Additional collection of privacy-sensitive data
To comply with DAC7, some platforms have to request and store additional personal data from their sellers. This is most relevant for platforms that specialize in facilitating the sales of second-hand goods. They store data that is not essential to the transaction, raising several significant privacy risks.

5. Limited capacity of Tax Administrations
Finally, platform operators doubt the Tax Administration’s ability to deal with the huge amount of data. The Tax Administration indicated that the DAC7 data is a new source of information for their inspectors. The Tax Administration aims to determine how reliable the data is, before inspectors use it for enforcement. In the future, if the Tax Administration has reason to think that people are not complying with legislation, inspectors will choose other enforcement tools, such as regular inspection. In doing so, the inspector can use the DAC7 reported data to check whether the tax information reported is correct. While the Tax Administration is optimistic about their ability to analyze large datasets, platforms are more critical. Until the Tax Administration is able to deliver on the goals set out by DAC7, compliance will feel like a disproportionate burden.

Conclusion – Five lessons for better guidelines:

1. Provide clear guidelines and a realistic timeline.
The first lesson is that legislation should be accompanied by clear, consistent, and accessible guidelines. This will make it easier for small- to medium-sized entrepreneurs to comply with regulations. Many problems that platforms encountered with DAC7 stemmed from confusion and a lack of legal certainty. This confusion concerned both the reporting requirement and the tax implications. A realistic timeline for implementation also proved important.

2. Offer support
The second lesson is that start-ups and other small businesses need support to be able to comply with complex legislation. These enterprises usually do not have a legal or compliance department. As a result, they struggle to understand how legislation can affect their business and how they can comply with regulations. Targeted support can help these businesses develop strategies for compliance. The government forced platforms to invest their own time and resources to obtain legal advice, hire compliance experts, and outsource data transmission. This discouraged their investors and hindered growth. Authorities should therefore develop targeted support for SMEs, such as:

  1. Simple checklists, timelines, and step-by-step instructions, such as the information page on DAC7 set up by the Dutch Tax Administration.
  2. Targeted compliance support programmes and advisory services. For example, the Dutch Tax Administration held informative presentations on DAC7 via intermediary days and umbrella organisations.
  3. Access to digital tools and solutions.

It is crucial to actively inform SMEs about this support. The government should also launch campaigns to inform platform users. After all, support in communication or a public information campaign can increase acceptance and awareness.

3. Consult stakeholders in advance
It is wise to engage with platform operators about new regulations as early as possible. That way, policymakers can develop legislation and guidelines that are well aligned with practice. In the case of DAC7, stakeholders did not always feel heard. The online consultation received hardly any reactions beforehand, as SME platforms were unaware of the consultation or did not have DAC7 as a priority. Large platforms felt that little was done with their feedback. An earlier consultation at the national level could add value here.

Collaboration improves the effectiveness of legislation, especially with complex business models and in unpredictable situations. It also gives policymakers insight into the processes and variables within a seemingly homogenous group of companies. Furthermore, it increases trust and transparent communication between entrepreneurs and policymakers.

4. Implement regulations based on company size
The fourth lesson is that the regulatory burden should not be disproportionate. While you can expect companies to perform KYC reviews, excessive financial and administrative burdens can discourage new investments and hinder growth. One recommendation is to apply rules proportionally based on the size of the platform. While the provisions were more suitable for larger platforms, medium and small platforms fell within the rules. 

A better approach would be a categorised structure, where reporting obligations are tailored to a company’s size or turnover. The cost and additional workload of complying with the regulations should be proportional to the size of the business. Thus, small business owners are not overburdened or unfairly disadvantaged compared to large, established competitors.

In addition, policymakers should be careful when determining the scope of legislation. For DAC7, many question whether the burden imposed outweighs the potential disadvantages.

5. Make sure government institutions are ready for the new legislation
The fifth and final lesson is that government institutions such as the Tax Administration must be ready for the new regulations in advance. The technology and team must be capable of handling and monitoring implementation. For example, platforms experienced a high barrier due to the complex reporting system. Platform companies must therefore develop a gateway in their own software that communicates directly with the Tax Administration’s systems or use intermediaries who charge between €1,300 and €1,800 a time for this (NRC, 2025). The Dutch Tax Administration now recognizes this and is working on a simpler system. Platform operators feel as though they have wasted their time and money on adapting to methods that will have to be adjusted later on. With small-scale tests being rolled out in advance, this situation could have been avoided.

Sources and thanks
We thank the experts who contributed to this research through interviews and feedback on this article. In particular, Chantal Malfeyt (Marktplaats), Joey van Angeren (Vrije Universiteit Amsterdam), Pepijn Niesten (Booka Rentals), Jasper van Schijndel (PwC), Dion Egiyan (PwC) and Juan Manuel Vázquez (UvA). We also thank Merel Hillen of The Hague University for coordination and organisation.

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Super-apps and green jackets: lessons on the gig economy from Indonesia

Super-apps like Grab and Gojek are centralising and formalising Indonesia’s informal labour market. What problems are associated with this? And what does this teach us about the gig economy worldwide? Martijn Arets explores in The Gig Work Podcast.

Working via online platforms is on the rise all over the world, but the debate on the gig economy is mostly focused on the western world. To get a more complete picture, it is good to take a look at countries with a different institutional landscape. For example, Indonesia.

This summer, I travelled through this particular island state for six weeks and ordered taxis dozens of times via Asian platforms Gojek and Grab. These ‘super-apps’ offer numerous services on a single platform: from taxi rides to meal and grocery delivery, from cleaning to financial services. They are wildly popular and you can see this on the streets. In big cities like Jakarta, Surabaya and Yogyakarta, a sea of men in green jackets on motorbikes.

What does the gig economy mean for Indonesian (platform) workers? To find out, I spoke to Suci Lestari Yuana, PhD researcher at Utrecht University and working in the Department of International Relations at the Faculty of Social and Political Science at Gadjah Mada University in Yogyakarta, Indonesia.

Informal labour as the backbone of society

Yuana has had a fascination with the platform economy and its impact on the labour market since 2015. She researched developments in both the Netherlands and Indonesia. “European colleagues see informal labour and undeclared work as inferior,” she says. “They immediately look for ways to formalise work. In Indonesia, we think very differently about the informal economy: it is not inferior, it is the backbone of society.”

In Indonesia, there are far more people in informal than formal jobs: some 65% of the population works without formal regulation, legal protection or official registration (2023). “The government is unable to create sufficient employment in the formal economy,” the researcher says. “Daily life depends on informal employment. This is true for more countries in the global south.”

From formal job to gig worker

Platforms are digitising this informal economy. Platforms like Gojek and Grab promise higher pay and more work. So the fact that the platform economy is flourishing in Indonesia is actually not that surprising. Since the rise of online work platforms, informal work has become more visible and valued.

That the informal economy is getting more structure and status is positive, but there is also a downside. “The beautiful promises of the platforms lead people with formal jobs or higher education degree to work as gig workers,” Yuana explains. “This is at the expense of the original taxi drivers and meal delivery workers, who often do not have an entry-level qualification. In short, they make the informal economy become even more competitive for the informal workers.”

Moreover, the platforms often fail to deliver on their fine promises, she says. “For example, they advertise salaries of 700 euros a month, four times the minimum in Jakarta. In practice, this is often disappointing, because this income tied to performance based bonuses, making it an unpredictable rollercoaster ride for the drivers.”

Lack of long-term vision

Yuana researches debates and conflicts related to the gig economy in Indonesia. “Discussions and protests tend to focus on short-term gains,” she says. “This is so in more other poorer countries in the southern hemisphere. Workers’ organisations in Indonesia, for example, mainly make the case for higher tariffs, but not for better working conditions.”

According to Yuana, the government does not think enough about the long term. This is not a new problem, she explains. “For example, transport via motorbike taxis is not legal, but it has been tolerated since the 1970s. There are no laws and regulations because the government actually considers this kind of taxi transport is unsafe. But enforcers do not act against it either, because there is no decent alternative public transport yet. As they said, motorbike taxi is a mode of transport in transition. But the question is, until when?”

Platform workers at the table

Changing government policy is difficult, but she and her fellow researchers are doing their best. For instance, they organise meetings and seminars on the platform economy, where they are not afraid to voice criticism. They advocate for more regulation of the platform economy to improve working conditions and give more people a fair chance to work.

According to Yuana, it is important to take into account the dramaturgy elements into the consideration of decision-making process. For example, in enacting regulation for gig economy, platform workers have to get seats  during discussions that concern them. “To achieve workable laws and regulations, all voices need to be heard. The worker is still too often overlooked. Of course, we scientists know a lot about platform workers, but I don’t feel I could speak on their behalf.”

That seat at the table is increasingly available. At a Transport Ministry meeting on possible regulation of motorbike taxis, for instance, platform workers were also present.

Wishes of workers

What do platform workers want in Indonesia? Yuana researched the needs of taxi drivers and other stakeholders working through the digital apps. She discovered 19 criteria, which she will soon publish in her research paper. Only four of these are purely technical. “Most of the criteria are about positioning taxi platforms within current and future social, economic and legal conditions,” she says. “How can we ensure that customers are better protected? In what ways can we ensure that drivers have better incomes and fairer working conditions?”

Yuana sees a joint task for government, science, platform workers and platform companies to make this happen. Are you starting a platform that brings together part of the informal labour market? Then first involve the people who were already working in it,” she says. “It is not fair to lure away people who already had formal jobs with the often empty promise of a nice salary.”

More equal discussion

Yuana is also exploring how platform workers can have more influence during a discussion with the government. “First, group size matters. The better platform workers unite, the better they are heard,” she says.

Furthermore, from dramaturgy point of view, it matters which place in the room someone sits. Yuana: “If there are two rows of chairs, the people in the front row often have the most to say. These kinds of insights are valuable both for the platform workers themselves and the organisations that organise these kinds of meetings. With this, we can ensure a more equal discussion.”

Lessons from Indonesia

I learnt a lot from Yuana and my six-week trip through Indonesia. As in other countries, job platforms in Indonesia present themselves as new and different, while merely facilitating existing work through a digital platform. The name ‘Gojek’ is even derived from the existing word ‘Ojek’, meaning ‘motorbike taxi’. It is remarkable that policymakers fall for this so easily.

That job platforms are popular in countries like Indonesia is quite logical. After all, personal services such as motorbike taxis are already commonplace there. In addition, there is high unemployment, so more and more skilled people are also offering their services via the platforms. In short, there is talk of perspective. This is a topic that, in my opinion, is too often missing in discussions about the gig economy.

Strong together

Thanks to the conversation with Yuana, I look at developments in the platform economy with new eyes. The way southern countries view the informal economy is particularly interesting. In a large informal market, workers may be more resilient to the gig economy because they are already used to organising informally. This is confirmed by members of the WageIndicator team in Jakarta. They told me that meal delivery workers keep in close touch via WhatsApp groups. If something is wrong with someone, there is a swarm of green jackets around them in no time.

While I feel delivery drivers are stronger because of their solidarity, it is difficult to stand up to platforms. Apps in Indonesia are increasingly becoming ‘super-apps’ with different services. For instance, you can not only order a taxi, but also have groceries delivered, see a doctor, send packages or hire a handyman. Easy for customers, but it also means that workers are becoming increasingly dependent on the apps. Indeed, it becomes harder to build your own customer base apart from the app. That is another argument for more government regulation. In this respect, Indonesia still has quite a few steps to take.

Algorithmic gamblification of work | The workers behind the ‘AI magic’ | New Airbnb regulation

Good day! One minute you get a newsletter in your mailbox every week and the next you have to wait 3 weeks for it. As someone who loves surprises, I go for option 2 😉

Last weeks, I again participated in many events related to platforms in different roles, had the opportunity to contribute to great projects and work with professionals on almost all continents on this globe. How cool are the opportunities to work location-independent with tools to operate in international teams in an accessible way. Although, of course, it’s not about the tools, but how you collaborate and use the tools. Just as with platforms, (online) tools are facilitating and not leading. Should you think: with me it is the other way round, I would have a good discussion with yourself.

And although a lot is possible online and remote, it is also important to continue travelling (as responsibly as possible) and to speak to each other live. So that is the reason I ‘briefly’ took the train up and down to Munich in Germany this week for an interview with the person in charge of the Crowdsourcing Code: a code of conduct between 8 ‘crowdwork’ platforms in Germany. I did this for the WageIndicator’s new podcast: a podcast (and blog) on ‘global gig economy issues’. The first edition of this monthly podcast will go live in mid-April.

Enough introduction: for this edition I have again collected a number of relevant pieces for you and provided them with my interpretation and commentary. Enjoy the read and have a nice day!

The house always wins: the algorithmic gamblification of work | Veena Dubal

The impact of algorithms and technology on the worker: the subject of part two of the European Platform Work Directive. For platforms offering ‘on demand’ jobs (taxi and delivery), the impact of the algorithm on finding, hiring and performing work is great and the worker is paid per job. Where it is often unclear exactly what the returns are.

In the early days of Uber, everyone was excited about the ‘surge pricing’ the company uses. If there is more demand than supply somewhere at a given time, prices rise. With this, demand goes down and supply goes up. At the time, many saw this as a perfect economic model of flexible pricing. The example of the hairdresser was often brought to mind: why do you pay the same for a haircut on Tuesday afternoon as on Friday evening, when demand is many times higher? Now it appears (and this is not overnight) that these ‘smart’ (or: ‘savvy’) technologies are able to root for and entice working people to do more than initially envisaged.

In the article “The house always wins: the algorithmic gamblification of work“, scientist Veena Dubal gives an interesting (and shocking) insight into the algorithms used by Uber to direct workers to be available as much as possible at the platform’s convenience. This is also because the risk of not working is at the worker’s expense: something that, in my opinion, is a very bad idea anyway.

In this article:

“In a new article, I draw on a multi-year, first-of-its-kind ethnographic study of organizing on-demand workers to examine these dramatic changes in wage calculation, coordination, and distribution: the use of granular data to produce unpredictable, variable, and personalized pay. Rooted in worker on-the-job experiences, I construct a novel framework to understand the ascent of digitalized variable pay practices, or the transferal of price discrimination from the consumer to the labor context, what I identify as algorithmic wage discrimination. As a wage-setting technique, algorithmic wage discrimination encompasses not only digitalized payment for work completed, but critically, digitalized decisions to allocate work and judge worker behavior, which are significant determinants of firm control.

Though firms have relied upon performance-based variable pay for some time, my research in the on-demand ride hail industry suggests that algorithmic wage discrimination raises a new and distinctive set of concerns. In contrast to more traditional forms of variable pay like commissions, algorithmic wage discrimination arises from (and functions akin to) to the practice of consumer price discrimination, in which individual consumers are charged as much as a firm determines they are willing to pay.

As a labor management practice, algorithmic wage discrimination allows firms to personalize and differentiate wages for workers in ways unknown to them, paying them to behave in ways that the firm desires, perhaps for as little as the system determines that they may be willing to accept. Given the information asymmetry between workers and the firm, companies can calculate the exact wage rates necessary to incentivize desired behaviors, while workers can only guess as to why they make what they do.”

You don’t have to be an activist to understand that such techniques are far from desirable. This piece includes the experiences of some drivers:

“Domingo, the longtime driver whose experience began this post, felt like over time, he was being tricked into working longer and longer, for less and less. As he saw it, Uber was not keeping its side of the bargain. He had worked hard to reach his quest and attain his $100 bonus, but he found that the algorithm was using that fact against him.”

I think it is important to let platforms take more responsibility in explaining their processes and having this validated by a trusted third party. The fact that platforms like Uber frame complexity as an added value for the worker is evident from this quote:

“If you joined Uber years ago, you will have joined when prices were quite simple. We set prices based on time and distance and then surge helped increase the price when demand was highest. Uber has come a long way since then, and we now have advanced technology that uses years of data and learning to find a competitive price for the time of day, location and distance of the trip.”

When someone takes pride in adding complexity, it should lead to suspicion by default. Because complexity can also be used to hide things. I wonder if upcoming European regulations will lead to less complexity and unclear processes for the worker. It should be a key issue for policymakers anyway.

Video course: Build a successful marketplace | Sharetribe

Starting your own platform: where do you start and what is the route to take? That’s a question you can safely leave to the team at Sharetribe. Sharetribe offers a simple and straightforward tool for putting together your own ‘marketplace’ without any expertise in programming. I have known the company myself for about ten years, and even with the ‘build your own platform’ programme at the The Hague University of Applied Sciences, students with no prior knowledge easily built their own platform via Sharetribe.

Sharetribe invests a lot in content to help their clients successfully launch their own platform. They also have a stake in this: they only make money when their customers are successful. This has resulted in an impressive collection of valuable content. Last week, they added something new to this: an online video course:

This ten-step video course takes you through your marketplace journey all the way from idea to scaling your business. Each step is packed with the latest marketplace facts, actionable advice, and relevant case studies.

In an hour and a half, you will learn a nice foundation of the steps you need to go through to launch a successful platform.

Exclusive: OpenAI Used Kenyan Workers on Less Than $2 Per Hour to Make ChatGPT Less Toxic | Time

It is almost inevitable that you have seen OpenAI’s insane tool ChatGPT pass by or possibly tried it yourself. An impressive chatbot that you can ask any question, only to get a comprehensive and detailed answer. Many sectors, including education, are anxiously considering what to do with such a tool. I have tried the tool myself and it is really impressive. For instance, before the workshop on platform economy and education, I asked what are important topics for education and platform economy. A rather general and vague question. You can see the result in the image at the bottom of this piece.

ChatGPT is yet another development that, as with AI and algorithms, seems like a kind of magic black box. It almost seems like magic: everything happens by itself. But…. is that really the case? Certainly not. Both in training and execution, there are always loose ends. For instance, many tech companies use platforms like Amazon Mechanical Turk: a platform where people all over the world (and especially pieces of the world where you can get by on very little income and where people have little alternative) perform mini jobs of a few seconds via a platform: so-called ‘clickwork’. This involves recognising images, but also resolving loose ends of seemingly automatic systems. Content moderation of platforms like Facebook is also designed according to these principles. Not always pure platform, but similar principles.

Mary Gray wrote a fascinating book on so-called clickwork: “Ghost Work – How to stop Silocon Valley from building a new global underclass“. Timm O’Reily wrote the following about this book: “The Wachowskis got it wrong. Humans aren’t batteries for The Matrix, we are computer chips. In this fascinating book, Gray and Suri show us just how integral human online task workers are to the development of AI and the seamless operation of all the great internet services. Essential reading for anyone who wants to understand our technology-infused future.” Highly recommended.

A long run-up to the piece I want to discuss today: “OpenAI Used Kenyan Workers on Less Than $2 Per Hour to Make ChatGPT Less Toxic.” It describes how OpenAI managed to ‘magically’ make ChatGPT better and safer:

“To build that safety system, OpenAI took a leaf out of the playbook of social media companies like Facebook, who had already shown it was possible to build AIs that could detect toxic language like hate speech to help remove it from their platforms. The premise was simple: feed an AI with labeled examples of violence, hate speech, and sexual abuse, and that tool could learn to detect those forms of toxicity in the wild. That detector would be built into ChatGPT to check whether it was echoing the toxicity of its training data, and filter it out before it ever reached the user. It could also help scrub toxic text from the training datasets of future AI models.

To get those labels, OpenAI sent tens of thousands of snippets of text to an outsourcing firm in Kenya, beginning in November 2021. Much of that text appeared to have been pulled from the darkest recesses of the internet. Some of it described situations in graphic detail like child sexual abuse, bestiality, murder, suicide, torture, self harm, and incest.”

OpenAI considers this work very important: “Classifying and filtering harmful [text and images] is a necessary step in minimising the amount of violent and sexual content included in training data and creating tools that can detect harmful content.” The article’s authors are rightly critical after their research: “But the working conditions of data labelers reveal a darker part of that picture: that for all its glamour, AI often relies on hidden human labor in the Global South that can often be damaging and exploitative. These invisible workers remain on the margins even as their work contributes to billion-dollar industries.”

ChatGPT remains an impressive tool, but surely the magic is a lot less (clean) than the tech optimists try to make us believe. Andrew Strait describes it powerfully in the piece: “They’re impressive, but ChatGPT and other generative models are not magic – they rely on massive supply chains of human labour and scraped data, much of which is unattributed and used without consent”

What can we learn from this?

While the insights from this story alone are interesting on their own, I think it’s important to look further. What can we learn from this case study.

For one thing, it shows that these kinds of tools feast on the work of others: scrapping content created by others and low-paid moderators and workers. It is the bright minds who devise and build systems to do this and get away with the credit and money, but I think it is important to (re)recognise more that this content does not fall from the sky and there may be a necessary discussion about how fair and desirable this is.

I would also like to broaden that discussion a bit. I regularly speak to very committed scientists with a clear opinion about what is ‘fair’ who meanwhile use Amazon Mechanical Turk for their research. I understand that this is incredibly convenient, but then of course you also have butter on your head. A good conversation about fair treatment and remuneration of everyone in the chain is something that is missing from many innovations. A conversation that, as far as I am concerned, could be had more often. People who perform clickwork are a kind of ‘disposable labour’. The moment they are no longer needed, no one will care. And because of this, it is only right that the authors of Ghostwork and of this article point out the facts to us.

NEW AIRBNB LEGISLATION MAKES ENFORCEMENT RULES MUCH EASIER

Airbnb and regulation: it is an issue that has been around for quite a few years. Earlier, national regulations were introduced in the Netherlands and now this is being extended to European regulations. I think a good step for everyone.

The regulations will also be accompanied by a European tool: “The Commission is coming up with a single European data tool for exchanging information on holiday rentals between platforms and local authorities. Platforms will now have to share, in places where rules apply, data every month on how ma
ny nights a house or flat has been rented out and to how many people.”

Ultimately, each city will continue to set its own holiday rental rules. That too is a good step, although Amsterdam’s case study teaches us that it is not as simple as it seems.

It would also be good to secure the knowledge and research in a central location alongside this tool, so that not every city has to reinvent the wheel itself. Furthermore, I am (very) curious about the implementation of this. Connecting the platform and the central European tool: that’s probably fine. But what about the translation to the individual systems of the municipalities (a link with the land registry in the Netherlands, for instance, seems light years away, and we are a country in the digital vanguard…) and what are the privacy risks involved? I will keep following this.

About and contact

What impact does the platform economy have on people, organisations and society? My fascination with this phenomenon started in 2012. Since then, I have been seeking answers by engaging in conversation with all stakeholders involved, conducting research and participating in the public debate. I always do so out of wonder, curiosity and my independent role as a professional outsider.

I share my insights through my Dutch and English newsletters, presentations and contributions in (international) media and academic literature. I also wrote several books on the topic and am founder of GigCV, a new standard to give platform workers access to their own data. Besides all my own projects and explorations, I am also a member of the ‘gig team’ of the WageIndicator Foundation and am part of the knowledge group of the Platform Economy research group at The Hague University of Applied Science.

Need inspiration and advice or research on issues surrounding the platform economy? Or looking for a speaker on the platform economy for an online or offline event? Feel free to contact me via a reply to this newsletter, via email ([email protected]) or phone (0031650244596).
Also visit my YouTube channel with over 300 interviews about the platform economy and my personal website where I regularly share blogs about the platform economy. Interested in my photos? Then check out my photo page.

11,000 GigCV downloads! | Will the platform directive make a difference? | NYC Platform Cooperative | How India tries to ‘democratize’ shopping

Good day! Last week, I posted my newsletter about the platform economy for the first time in a long time and I received a lots of nice reactions. Although I have not yet decided what the frequency of this newsletter will be, you will receive this next one a week later. In this edition, I have again compiled a number of articles that have appeared in the media in recent weeks and provided them with my interpretation and comments. And I take a closer look at the 1st anniversary of GigCV: a data-sharing agreement with platforms in the Netherlands enabling more than 50,000 workers to access their data on reputation and transactions that has already been used more than 11,000 times in its first year! Have a great day and enjoy reading.

GigCV 1 year anniversary!

Exactly one year ago, GigCV went live. GigCV is a project I set up after spending a year researching the issue of ‘reputation and transaction data portability for platform workers’. Going live, 4 platforms participated: Charly Cares, Helpling, Roamler and YoungOnes. They integrated the GigCV data sharing agreement system (and its API and legal documentation) into their platform, giving workers completing jobs through their platform access to their free PDF digital resume. They also agreed to participate in independent scientific research around data sharing with platform workers.

Now it was already quite a step that it had succeeded in putting data portability into practice: from the start, more than 50,000 workers had access to their data. This is because this topic usually remains stuck in a conceptual vacuum. That’s different with GigCV. Through an extreme focus on simplicity and avoiding complexity, we managed to get this project off the ground in a short time, without a business model. And then it’s especially nice when it’s used! Two weeks ago I announced that 11,000 resumes were downloaded in the first year! That’s a number I never would have dared mention at the start.

There is still plenty around GigCV in store for 2023:

  • connecting new platforms;
  • extending the standard;
  • research into the impact of the inclusion of data on the position of the worker;
  • research into the value of this data outside the platform market;
  • securing the long-term continuity of GigCV.

Upon reading the list of participating platforms, you will also see the name of Helpling. This platform, depending on how the bankruptcy ends, will disappear from the Netherlands. An incredibly shame (and pointless), but what is nice to see is that after the bad news was announced, the number of downloads of resumes from Helpling cleaners skyrocketed. This indicates that workers are eager to secure their data now that their profiles will most likely be taken offline soon. Which provides me with another interesting insight for a piece of “exit by design” I am currently working on.

P.s. GigCV is currently only running on Dutch platforms. Some of these platforms also are active outside the Netherlands. This makes GigCV also available to those working in England, Germany, Belgium and France via affiliated platforms.

Improving conditions for gig workers splits MEPs | EU Observer

The ‘Platformwork Directive’: a European law specifically for platform workers, has been under discussion in Brussels for some time. This directive proposes reversing the legal presumption (employee, unless) and imposing certain transparency obligations on the automatic decision-making processes used on platforms.

It is an exhaustive process and at every (mainly online) meeting I attended on the subject, I did not get the feeling that people actually believed themselves that this was ever going to make a difference. Recently it became clear once again how laborious the process is:

“In December 2022, the council failed to reach an agreement on its position, so it remains divided between those who advocate a pro-worker directive, and those who do not. And the European Parliament, the third axis in this relationship, was supposed to vote this Thursday (19 January) whether the report of the employment committee voted upon last month will be the institution’s position in the trilogue negotiation. However, MEPs are divided, and the text could be rejected in a plenary vote that has now been postponed for two weeks (until 2 February), after 71 MEPs who disagreed with the committee report wanted more time to insert amendments before the trilogues started.”

Still, there is some progress. Today there was an agreement in the European Parliament. “The European Parliament votes to adopt the text on the Platform Work Directive. 376 in favour, 212 against, 15 abstentions”. A good step, but there is still a long way to go. Also read the very good read on this by Brave New Europe: “Gig Economy Project – Defeat for the platform lobby: European Parliament backs stronger Platform Work Directive.”

During the kick-off of the Dutch NWO NWA PlatWork-R research, led by Utrecht University, a presentation by Hanneke Bennaars further highlighted the complexity of the issue. She explained that IF a final agreement comes out of the EU, each country is then responsible for the implementation itself. After all, labour laws are national, not European. And, if I understood correctly, when a country itself has a ‘better’ alternative, this is always leading. It is not for nothing that platform work (the ‘gig economy’) is also called ‘lawyers paradise’.

Meanwhile, lawsuits against platforms also continue in several countries in Europe. For example, the court in France recently fined Uber 17 million euros “in damages and lost salaries to a group of drivers who argued they should have been treated like employees rather than self-employed.” Uber has indicated it will appeal. You wouldn’t expect it. Cases against Uber Taxi and Deliveroo are also in their final stages in the Netherlands. You could say that legislation (which I have a hard head in believing is ever going to happen) is lagging behind the lawsuits. And I keep repeating: where is the voice of the worker in this debate and who is the first to acknowledge that the gig economy is not a loose planet or silo and that we need a proper debate on the value and valuation of work in general anyway.

The kick-off discussed earlier also raised the question: shouldplatforms, like employment agencies in the Netherlands, become a separate category? While I want to delve again into why in the case of employment agencies this has been done (tips and links are welcome), I think this is not a good idea in the case of platform work. This is because I expect the grey area will only grow in the coming years and we really need to start seeing platforms as an organisational mechanism rather than silo organisations. Then you also get to the most interesting and relevant questions about really new issues. And then it would be nice if, in the meantime, the real reform of the labour market will also take place one day, so that there is no (or less) competition on employment conditions between the different contract forms. Because everyone (except the lawyers, that is ;-)) is done with that now too.

New York cleaners create new path to entrepreneurship – BBC News

It has come up many times in my publications: the platform cooperative Up&Go. Here is a nice piece on BBC News about this concept, in which cleaners, who are only members of local worker cooperatives, together form the board and ownership of the app they depend on.

It remains a great example, but the question is whether this is a ‘platform first’ initiative, or a way for existing worker cooperatives to better organise and market their existing work. I go for option two. A lot less exciting and spectacular perhaps, but ultimately it’s about the impact on workers and how they have been helped.

India aims to ‘democratise’ online shopping with ecommerce network – Financial Times

It is a question that keeps coming up: how to ensure that the power of platforms is more equitably distributed. And what is the government’s role in this? In this article, an interesting angle from India.

“India is preparing to launch a government-backed ecommerce initiative to “democratise” online shopping, in an ambitious attempt to challenge the dominance of companies such as Amazon and Walmart-owned Flipkart in one of the world’s fastest-growing markets. Open Network for Digital Commerce, a non-profit company set up by India’s commerce ministry last year, is holding trials in more than 85 cities including the tech hub of Bangalore, ahead of a nationwide launch next year. While companies such as Amazon run proprietary services controlling everything from vendor registration and delivery to customer experience, ONDC is an “interoperable” network, where buyers and sellers can transact regardless of the apps or services they are using. The open-source network would allow a customer using one app, such as fintech services provider Paytm, to find and order groceries from a vendor registered to another platform, such as small business hub eSamudaay. This can then be shipped by whichever alternative platform, such as delivery service Dunzo, that is able to do it at the fastest and lowest rate.”

Interesting about this initiative:

  • Open source;
  • Scale through interoperability (interchangeability);
  • From the government;
  • A way to get existing retailers online.

Will this work? No idea: in the end, “the proof of the pudding is in the eating”. The question is whether a purely technical infrastructure is enough to generate enough reach and whether the platform as a ‘private regulator’ can ensure that all suppliers can keep their promises to consumers. Because ultimately, this is the group that will determine whether this initiative will be a success. That “only 0.1 per cent of the country’s 12mn retail outlets are digitally enabled” gives little hope. And besides, the government is a co-investor, but it is not clear exactly what that means. But who knows, it might still succeed. Or at least deliver some interesting lessons and insights that others can take forward.

About and contact

What impact does the platform economy have on people, organisations and society? My fascination with this phenomenon started in 2012. Since then, I have been seeking answers by engaging in conversation with all stakeholders involved, conducting research and participating in the public debate. I always do so out of wonder, curiosity and my independent role as a professional outsider.

I share my insights through my Dutch and English newsletters, presentations and contributions in (international) media and academic literature. I also wrote several books on the topic and am founder of GigCV, a new standard to give platform workers access to their own data. Besides all my own projects and explorations, I am also a member of the ‘gig team’ of the WageIndicator Foundation and am part of the knowledge group of the Platform Economy research group at The Hague University of Applied Science.

Need inspiration and advice or research on issues surrounding the platform economy? Or looking for a speaker on the platform economy for an online or offline event? Feel free to contact me via a reply to this newsletter, via email ([email protected]) or phone (0031650244596).
Also visit my YouTube channel with over 300 interviews about the platform economy and my personal website where I regularly share blogs about the platform economy. Interested in my photos? Then check out my photo page.

How Helpling’s bankruptcy exposes the flaws of the debate on the gig economy.

Good day! It has been silent for a while around the English version my newsletter on the platform economy. Whereas the Dutch edition appeared weekly and is now on its 320th edition, it was difficult to publish an English version in parallel. Meanwhile, I have the processes more in order and I am making a new attempt to get more continuity in the English version.

You will no longer receive this newsletter from Revue: the platform I used to send my newsletters. Less than eight months after Twitter bought Revue, the company closed its doors. After a long search I ended up at Ghost: an open source initiative organized by a foundation. I had no desire to become another puppet of Venture Capitalists.

In this newsletter, as before, I will discuss various publications in the platform economy and will regularly share long blogs of my own. In this first edition via Ghost, I am sharing a piece I wrote about the level of debate around the gig economy based on the bankruptcy of the Dutch arm of the platform for domestic cleaners Helpling.

Enjoy the read and have a nice day,
Martijn

How Helpling’s bankruptcy exposes the flaws of the debate on the gig economy.

After a long legal battle, platform for domestic cleaners Helpling in the Netherlands filed for bankruptcy. The bankruptcy marks the end of a not uncontested battle with Dutch trade union FNV, which claimed the bankruptcy as a “belated victory” in the Dutch media.

The big question that remains is: a victory for whom? In a blog in 2018, I predicted that a ruling in FNV’s ‘favour’ would result in the company going bankrupt. And I already put quite a few question marks and exclamation marks on this case. In this blog, I outline the context of the case and Helpling’s activities, discuss what is (not) new about a domestic cleaning platform and give an overview of what changes the platform has made over the years. To conclude with a proposal for a debate that honours both workers and society.

The rise of Helpling

Helpling, a startup from Germany’s Rocket Internet, entered the Dutch market in June 2014. The platform where individuals can book a cleaner for their home is ambitious and is quickly seen as one of the big promises in the rise of the gig economy, a.k.a. ‘gig economy’, in the Netherlands. That the platform will not just stick to cleaning becomes clear to me when I interview then-Director of the Netherlands Floyd Sijmons at their Amsterdam office in 2015. When I ask him if it will stick to cleaning, he replies, “if we were to stick to cleaning only, we would have called our platform Cleanling”. Crystal clear.

Yet the platform fails to expand its services. It is looking at window cleaners, but that ultimately does not get off the ground. The added value of the platform also turns out to be a lot less than with, say, Uber. It involves a pre-scheduled transaction (nobody wants a cleaner ‘on demand’) and the worker and client stay connected after an initial successful gig and can easily work around the platform. Due to the nature of the transaction, no high-level algorithm is needed and the benefits of data mining are limited. Therefore, there is no strong ‘lock in’ as with Uber and the platform has to work hard to offer an appropriate service to worker and client to bind them to the platform.

Retaining clients within national markets was more difficult than potentially expected at the outset. Where it was first thought that one strategy would suffice, it soon became clear that each country needed its own strategy. This is reflected in the recently published paper “Platform adaptation to regulation: the case of domestic cleaning in Europe“, written by Koutsimpogiorgos, Frenken and Herrmann. For this paper, the authors compare Helpling’s general terms and conditions in France, Germany, Ireland, the Netherlands and the UK and analysed the changes over the years. Their conclusion is that although Helpling starts with a general strategy, it soon has to adapt to the institutional conditions per country. Over the years, Helpling regularly adjusts its model in the Netherlands. For instance, the platform changes its commission structure and introduces a model where cleaners are allowed to set the price for a cleaning job themselves. A minimal fee should ensure that there is no ‘race to the bottom’.

Home services arrangement

Helpling has never worked with freelancers. The platform, like other platforms where consumers hire services in and around the house, makes use of the ‘regeling dienstverlening aan huis’ (‘service at home scheme’). This is a national regulation in the Netherlands that exempts private employers, which is what you are when you get a cleaner to come for your home, from a large set of employer obligations. However, a private employer must pay the minimum wage and 8 per cent holiday pay, continue to pay the cleaner in case of illness and provide a safe and healthy workplace.

In practice, little comes of this regulation in the private cleaning market in the Netherlands due to lack of enforcement. Or, as I wrote in an earlier blog: “So it looks like we have it well regulated for our domestic workers, but it is not. They fall into an ‘excuse category’, so to speak.” Helpling, by using this arrangement, joins the standard in the Netherlands.”

The end of Helpling

The fact that the private employer finds, books and pays a cleaner through a platform is reason for FNV to take the platform to court in 2018. FNV believes that the platform is an employer and must employ the cleaners. In the first instance, the subdistrict court ruled in 2019 that Helpling is not an employer but an intermediary. Two years later, however, the Amsterdam court of appeal sees things differently and rules that Helpling must treat the cleaners as temporary workers, with corresponding rights and obligations.

Helpling is aware that a temp model will not work for the platform: consumers will never want to pay these rates. The platform flips the model for the last time, rigorously discontinuing its original model where it deducts a commission on the hours paid out and introduces Helpling Select (where you pay a one-off fee to find a cleaner and then take care of everything yourself) and Helpling Premium (where a professional cleaner comes to be employed by a cleaning company).

In the end, the platform did not live up to expectations: the receiver’s response stated that 10 employees were working for the platform on the day of the bankruptcy.

Looking back: what was new about Helpling?

In the aforementioned blog from 2018, I asked the question: what’s new about Helpling? I wrote:

“Platform Helpling enables households to find a domestic cleaner through an online marketplace. In addition, the platform supports with quality control (by phone intake, ID check and reputation system), back office (complaints, queries, replacement help in case of holidays) and payment module. The company makes money by skimming a margin from each transaction. A common used model.

Helpling is certainly not unique; this kind of service has been around for years. Take the company HomeWorks. A company that has been doing exactly the same thing as Helping for 25 years. The only difference is that this is not an online marketplace, but the company manually matches supply and demand. It also has service coordinators who oversee quality and even go with the initial cleaning. All this makes it an expensive model: the commission the company charges is therefore around 39% (compared to 23% at Helpling).”

The platform competes with intermediaries with a similar model and strategy that have been operating in the market for many years. It is therefore questionable why the platform was then suddenly seen as an undesirable player.

Where was the informal market in the debate?

In the lawsuit against Helpling, FNV pretends that the platform competes with cleaning companies. That, of course, is nonsense. The only thing Helpling was competing with is the informal market. My prediction in my earlier blog: “if FNV wins and Helpling has to employ domestic workers, the price of help for the customer will go up to a minimum of 25 euros. Practically no individual is willing to pay this amount per hour. No one will book through the platform anymore and Helpling will be bankrupt in no time. Does that solve the problem? No. That cleaning will continue to be done afterwards. But then through the informal market.” And that is exactly what will happen now.

And that is a shame. The case concerning Helpling could have sparked a debate on how we as a society value work in and around the house. That is a discussion we should have in society that should culminate in a political choice. Because that’s what it is: a choice. That politics can indeed do something to improve the situation is proven by the countries around us: Belgium, France, Scandinavia. There, the government subsidises this kind of work, in Belgium, for example, through service vouchers. I talk to many people who recognise that the current Dutch rule is worthless and we should introduce a system like in Belgium. But they fail to get the issue on the agenda. Apparently, a structural debate is less interesting than a random court case.

Towards a broader view of ‘mediation’ for home cleaning

With today’s knowledge, I want to dig a little deeper into what was new about Helpling. The fact that it is a platform made Helping distinctive from other ways for private employers to find domestic cleaners, but the question is what impact this has on workers’ autonomy, satisfaction and income. The moment something is new, my first question is always: how was it done before? And in what areas does the ‘new’ make things better, worse or stay the same. In the case of Helpling: what are the conditions of domestic cleaners who find their private employers through other channels? There are always different ways to find a domestic cleaner: via via via, a note in the supermarket, via social media, mediation websites and through platforms.

Quite coincidentally, on the day of Helpling’s bankruptcy, I attended an academic workshop on ‘platform work‘ organised by Koen Frenken of Utrecht University. One of the speakers was Juliet Schor, economist and Sociology Professor at Boston College. Schor has some very interesting research in the sharing and clustering economy to her name and presented a study in Utrecht where she interviewed workers in private home care who find their clients via a Facebook group or via a platform. She was curious whether these workers would experience their work and conditions differently.

She found that the outcomes between the two ways of finding work were very similar. The only differences she discovered were traceable to differences in the workers’ circumstances, not the way they had found work. Workers’ income was higher through the platform than through a Facebook group and “our interviews found reveal high levels of work and platform satisfaction among these workers”. To which Schor did add the note that the ‘market conditions’ for this target group are predominantly positive.

Her conclusion: “We conclude that factors external to the technical functioning of platforms, such as market and regulatory conditions, workforce composition and the nature of the work, should be more systematically examined to understand what forms of control platforms themselves can be subjected to.”

Conclusion and proposal debate

As predicted in 2018, Helpling is now out of business and cleaners have to find their way back into the informal market. The fact that there has never been a serious attempt to explore how a central platform can improve the situation of a vulnerable group of workers without becoming an equal employer is a missed opportunity (and responsibility). Not only of FNV, but also of all the institutions that are responsible about this agenda and have not spoken out. That FNV is claiming a belated victory is sour, because you have to wonder who won. Certainly not the cleaners and certainly not the debate.

I hope that this case (and this blog) will encourage policymakers, but also trade unionists, to still take up the important questions surrounding this group of workers. That research is now done into the differences that the different ways of ‘matching’ entail and to see how to really do something for this group of workers. This starts with (re)recognising the context, to make (political) choices along these lines. Perhaps the closing of Helpling’s chapter will now free up space for this. Let’s hope so.

Contact

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