From Uber to local commuting platform: digital platforms at the center of a “theoretical representation crisis", case study of the mobility sector in France

Type de publication:

Conference Paper

Source:

Gerpisa colloquium, Paris (2019)

Mots-clés:

Platform; Digital economy; Mobility; Platform Capitalism; Platform Governance; Business model; Price fixing;

Résumé:

In January 2019, Amazon Inc. became the first market capitalization on the New York Stock Exchange, ahead of Microsoft Corporation. For the first time a marketplace–a digital platform–was taking the lead before traditional companies from the digital economy sector. Two weeks later, Uber reported a net loss of 865 million dollars in the fourth quarter of 2018. Digital platforms, as new intermediaries, are shaping the functioning rules of this (new) market economy (sometimes called “platform capitalism,” Srnicek, 2018) and challenge economics methods. Thus, platforms can be considered as the center of a "theoretical representations crisis"and raise the following question: Are the current tools provided by economic theory adequate enough for an accurate understanding of new governance issues, particularly those of the distribution of powers stemming from the development of the different business models of digital platforms?

 

Since Rochet and Tirole’s pioneer research in industrial economics on two-sided and multi-sided markets (2003), platforms have been the subject of much research in economics and management (Boudreau & Hagiu, 2009; Tiwana & alii, 2010; Tiwana, 2013; Choudary, 2015; Evans & Schmalensee, 2016; Benavent, 2016; Srnicek, Ibid).  Whether it is to build typologies, or to analyze the emergence of the diverse business models or the reconfiguration of value chains and their socio-economic impacts, these approaches acknowledge the existence of massive disruptive effects, related to the dissemination of digital platforms. The results are new forms of economic activity organization, far from the classical theoretical representations of the industry, particularly regarding the identities and behaviors of the economic actors involved in these activities. Often qualified as “hybrids” (meaning they are on a spectrum between hierarchy and market, Sundararajan, 2012, inspired by Williamson, 1981), digital platforms lead us to think of conceptual innovations and new approaches of enterprise governance. These are necessary to comprehend power distribution in economic and commercial relations, which are no longer “over-the-counter” but at least triangular. Indeed, platforms, as digital architecture organizations, have specific coordination abilities that create new forms of control on economic activities.

 

My monographic work on mobility platforms in France, with a focus on the price-fixing process, highlights the shortcomings of approaches that tend to conceive platforms as ecosystems, and the need to understand platforms from a complex system perspective(von Bertalanffy, 1969; Morin, 1990, 1999) that challenges the power and revenue distributions. In order to build a systemic approach, leaving the spectrum and ecosystems perspectives behind,scholars need to extend the analysis on platform to a new methodology that would aggregate tools from the socio-economics approach (thinking platforms as socio-technical devices in a microstructural analysisMirowski 2002, 2003; Muniesa, 2003), management analysis (specially the stakeholder theory, Freeman, 1984; Evan and Freeman, 1988), encompassed by philosophy principles (including Foucault and Deleuze theories of powers in discipline and control societies, Deleuze, 1988, 1990; Foucault, 1976, 1984). Brought together, these will help us understand the allocation of roles in platforms’ architectures, in other words to understand how “digital capabilities” are organized to promote new power–and value–distributions. The article statement, based on the monographic work previously mentioned, will expose how different economic theories have conceptualized the significant changes observed in the mobility sector in France, underlining the weaknesses of these approaches to understand platforms as reticular organizations of the value creation that are based on a distributed digital system. From then, I will stress the need of a power relations analysis in order to understand the particular way platforms are changing the market functioning rules, particularly through the price fixing algorithms.

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