Ecologies of friction in digital platform investment

ABSTRACT

Digital platforms are underpinned by the ideal of a frictionless market, obscuring the simultaneous practices of market monopolisation and the restriction of consumer choice and movement. This concurrent removal and erection of barriers to participation triggers ecosystemic responses such as individual adaptations and establishing alternative organisations to counter the progression of these ‘walled gardens’. In this article, we contribute to theorising ecologies of friction in the platform economy, drawing on Tsing’s friction in the creation of global connections, Orbach’s friction paradox, and Bateson’s ecological epistemology. Analysing a European short-term rental platform cooperative’s difficult launch, we ask: How do frictions emerge on alternative platforms in the digital economy, and what effect do they have on prefiguring the platform business? Frictions become apparent in platform investment, a complex resource-allocating relationship binding together multiple stakeholders, laden with expectations about the future. We highlight the interconnected frictions of individual investment into platform work, collective investment into platform participation, and resource investment into the business model. These are bound with platform organising, community development, and managing scale as the cooperative tries to prefigure a future platform economy in establishing its current practice. We contribute by extending the concept of ecologies of friction in connecting individual and collective investment with ideas around platform growth. We illustrate how all platform economy actors – participants and platforms alike – are entangled in frictions. We suggest that alternative platforms’ struggles are largely caused by the impossibility of escaping the broader ecosystemic dynamics established by dominant platform imaginaries.

KEYWORDS:

• Friction
• ecologies of friction
• investment
• prefiguration
• platform economy
• platform cooperative

A frictionless platform as an ideal and an illusion

The promise of the digital economy is epitomised by its main organisational form – the platform. The platform has the ability to connect across multiple markets and generate growth beyond stagnating manufacturing and service sectors (Srnicek, 2017). Digital platforms are conceptualised as quasi-neutral mediators that enable two or more groups to interact (Rochet & Tirole, 2003). Platform design amplifies the value of the venture by capturing value from users. Platform organisations seeking returns for investors must orchestrate a critical mass of participants and multisided exchanges to intensify user lock-in and network effects and leverage scaling (Kenney et al., 2021; Tiwana, 2014). These mechanisms gave rise to the widespread notion of platform wars, a race to win to inoculate a platform from being overtaken by a competitor (Moore & Tambini, 2018).

According to this prevailing platform development playbook, the business of platforms is to reduce friction (Evans & Schmalensee, 2016). The frictionless platform framing is consistent with transaction costs economics, where friction is conceived as difficulty in asset trading or as an obstacle to market liquidity (Stoll, 2000). The imaginary of a frictionless market drives platforms to facilitate frictionless consumption and information sharing (Manzerolle & Wiseman, 2016). Individuals enrol in user-friendly platform ecosystems, intercoupled platforms (e.g., Meta and Alphabet), where they and their resources get locked in while platform proprietors extract data from all user activities within the platform ecosystem. Frictionlessness is further realised by the elimination of barriers to e-commerce transactions and the creation of infrastructures allowing instant social media updates.

However, as Tomalin (2023) emphasises in his highly relevant typology of online frictions, many forms of informational friction are desirable from the platform proprietors’ perspective. Examples include delays in access to information content caused by the need to watch in-display ads or the algorithmic and manual labour of filtering out hate speech. Similarly, data frictions (Bates, 2018) restrict the movement of user data beyond the bounds of the systems in which it is collected (Helmond, 2015). Consequently, data friction becomes a source of a venture’s value, the proof and protection of its future growth and investment potential (Birch et al., 2021).

Despite the long-standing image of being frictionless, platforms are rife with friction that binds the movement and capitalisation of user data (Zuboff, 2019). Orbach’s (2023) notion of the friction paradox offers a lens on how attempts to reduce friction led to its amplification. As platforms require a critical mass of transactions and data, they seek to computationally produce user lock-in (Seaver, 2019). They do so by simultaneously reducing the costs of extending user participation within a single platform ecosystem and raising the costs of switching to competitors, a mechanism Bratton (2016) dubbed ‘generative entrenchment’. Platforms can achieve entrenchment by offering an ever-broader range of services and enticing users to build their platform-specific reputation scores. The ostensible goal of the platform economy to remove the middleman then fosters the emergence of all-powerful intermediary platforms (Orbach, 2023).

Furthermore, the dynamics of platform competition prompt another paradoxical effect for users. Platforms tend towards a venture capitalist monoculture with a generic supermarket consumption design in an effort to become user-friendly multichoice one-stop shops (Lovink, 2019). For instance, when X (formerly Twitter) struggled, Facebook launched Threads, copying X’s key functionality. Similarly, Airbnb transitioned from a hub offering homes with a personal touch to become a large-scale property manager for holiday rentals (Bosma & van Doorn, 2024). Consumer choice is reduced to a few similar, restricted options and consequently, users seeking more options have to invest in participating in competing platforms (or multihome; Bryan & Gans, 2019), for instance to ensure full booking of their short-term rentals.

Finally, the dominant model of platform growth relying on the simultaneous removal and erection of barriers to within-platform participation and ownership triggers responses from individuals and alternative digital organisations. Specifically, the walled gardens model, which claims ownership of infrastructures and content (e.g., data), prompts some users to collectively resist data collection (e.g., in urban spaces; Charitsis & Laamanen, 2024) or plug into existing digital infrastructures without permission (Doctorow, 2019). In investment practice, walled gardens intercouple with rapid growth strategies to attain market monopolisation. Those strategies tend to rely on inflated valuations based on potential to attract investment (Muldoon, 2022; Shapiro, 2023). These platform strategy and market expectation dynamics can limit entry options for late entrants and alternative platforms.

The research opportunity around platform friction lies in the explicit conceptualisation of friction on the ecosystemic level. The objective of this article is to illustrate how all platform economy participants – individuals and organisations – are entangled in the ecologies of friction in the recursive flows of information and action. Theorising on ecologies of friction emphasises relationality, recursiveness, and resilience understood as the ability to adapt, reorganise and change (Ens and Márton, 2024). We wish to develop a theorisation of ecologies of friction that challenges the simplification of a well-oiled platform market where friction can be reduced to restraint and resistance alone (Ruckenstein, 2023).

Ecologies of friction

Platforms-based digital technologies are ecological (Hörl, 2017), as they are dissipated within and indistinguishable from their larger environment. Platforms are currently the prevalent vehicles for configuring people and things in ongoing experimentation (Mackenzie, 2018) involving engineering participants’ activity by feeding back user data to influence their behaviour (Alaimo & Kallinikos, 2017). Such experimentation spills over across major social institutions (Burrell & Fourcade, 2021), impacting economic and political participation (Jungherr et al., 2020; Ravenelle, 2019). Rather than inward-looking bounded entities, platforms dynamically orchestrate ‘the organised complexity of the environment’ (Márton, 2022, p. 250), shaped by circularities of interactions of (human and other) users as the aggregation of data traces collected with sensors, apps, and algorithms.

A conceptualisation of platform frictions in ecosystemic terms acknowledges these dynamic qualities. Therefore, we combine existing strands of ecologies of friction (Tironi & Albornoz, 2022) with Tsing’s (2005, p. 3) idea of friction as ‘encounters across difference’ and Bateson’s (1972) ecological epistemology. Tironi and Albornoz study an ecology of frictions unfolding due to the growth of a gig economy platform and its users’ resistance to the exploitation inherent within it. The study’s ecology metaphor presents the circulation of digital information as material and situated and shows the dependencies and capacities that frictions produce ‘between territory and the digital’ (Tironi & Albornoz, 2022, p. 11).

Extending this analysis, we ground our ecological approach between platforms and conceive ecosystems as actual information systems rather than metaphors (Márton, 2022). Bateson (1972), a key figure in cybernetics and ecological thinking, sees ecosystems as patterns of complex, heterogeneous connections bound together by circularities of information. Rather than a divider, information is a difference that connects and thus creates relationships in systems of patterned communication (e.g., a parent–child relationship; Márton, 2022). Bateson’s ecological epistemology allows us to appreciate the ever-shifting configurations of and reactions to environmental conditions that become frictions. Consequentially, any development, such as a novel organisational form, is a response to certain circumstances. Ecological epistemology thus emphasises the systemic connection between the part and the broader whole. This is no different than the impact of industrial waste on the natural environment, for instance. Similarly, digital organisations may produce detrimental effects on the ecosystem (Márton, 2022), which may be countered by purposive interventions. Further, digital ecology recognises a system’s capacity to adapt and co-evolve in changing circumstances. It acknowledges how flexibility bolsters the relationship between the ecosystem’s parts to ensure its survival. Flexibility becomes depleted if it is not maintained. Finally, ecological relationality and heterogeneousness emphasise thinking as a systemic process due to information binding the ecosystem together in circularities of mutual causality.

Ecological epistemology facilitates tracing how systemic effects emerge from contingent configurations in multiple developments. This, in turn, limits the possibility of conceiving platform power as a dominant top-down force (e.g., van der Vlist, 2022; Zuboff, 2019). It highlights the need to discern which rifts in the ecosystem create ripple effects, initiating or expanding runaway dynamics that escalate change (Mikołajewska-Zając et al., 2022). For instance, excessive numbers of short-term rentals in a city trigger rent rises for long-term tenants, thus excluding the city’s most vulnerable inhabitants (Wachsmuth et al., 2018). Interventions to restore balance (e.g., housing protection policies) might be introduced. They can then produce unanticipated effects, such as city budget deficits reflecting the previous dependency on platform-based accommodation, which in turn limits opportunities to support accessible housing.

The above scenario resonates with Tsing’s (2005) concept of friction as the production of global forces in the fragile relationship between local contexts and the centres of globalisation. Tsing’s friction metaphor emphasises how a globally connected world should not be epitomised as a frictionless flow of money, goods, and people. Motion cannot proceed without friction, but necessarily forms a fragile bond between freedom and coercion, resistance and confinement. Outcomes that appear universal unfold in fragments of singular encounters (Tsing, 2005).

Applying these insights on friction to the platform economy, in which leading platforms spread universal monocultures, requires acknowledging how socio-economic change in the digital economy unfolds as ‘on steroids' (Laamanen & Wahlen, 2019): platforms accelerate the recursive patterns of interaction between organisations and environments at rates that cannot be compared with analogue technology. The broader platform ecosystem is volatile and mutable as purposive solutions and unintended effects travel faster and further, resulting in a parasitic relationship between platforms and their environments. Platforms exploit consumer’ experience of a state of lack, which needs to be maintained for continued platform growth (Mikołajewska-Zając et al., 2022). Darker turns of exploitation and negative externalities (Slee, 2015) are met with alternative models that attempt to counter the values, principles, and business models of mainstream platforms.

Alternative principles of operation address the ethical, communal, and environmental shortcomings of mainstream platforms and reflect a different position on transparency, surveillance and hierarchy (Scholz, 2023; Schor, 2020). The platform cooperative has become an alternative platform business model that connects traditional cooperative principles with platform functionalities cloned from incumbent models (Scholz, 2017, 2023). Financial and resource-supplying liabilities and profit sharing (Forno, 2013) are mediated by platform technologies to suit multi-actor participation in collaborative governance. Platform cooperatives aim to nurture democratic participation and local knowledge under continuing pressure of external managerial regimes and market globalism (Cheney et al., 2014). Such cooperatives engender platform frictions to maintain localised economic and social benefits while competing with global platforms.

While aiming to do digital platform technology ethically, platform cooperatives, similarly to the dominant corporate players, employ narrowly defined, linear interventions that cut through systemic circularities and are prone to give rise to unforeseen effects (Mikołajewska-Zając et al., 2022). The likely results are both positive solutions and unanticipated negative effects, similar to those faced by incumbents. Therefore, it is necessary to examine the frictions in platform cooperatives’ broader ecosystemic effects. The question whether alternative platforms create a just platform economy or whether they intensify the runaway dynamics of existing platforms is of particular interest (see Laamanen, 2022). We extend the development of the ecologies of friction concept by studying a platform that is built to resist the dynamics of the platform economy. We ask: How do frictions emerge on alternative platforms in the digital economy, and what effect do they have on prefiguring the platform business?

Method and materials

We illustrate the entanglement of the mainstream and alternative platforms with a revelatory case study of a European short-term rental platform cooperative, Fairbnb, which aims to divert tourists from overtourism towards sustainable, community-powered alternatives. Fairbnb is registered in Italy and operates in ten European countries, listing over 2000 properties. Fairbnb redistributes half of its 15% booking commission to local social projects (https://fairbnb.coop/how-it-works/, https://fairbnb.coop/terms-of-use/). The communal idea at Fairbnb is based on a multi-stakeholder platform model giving access to decision-making. Host are property owners who must abide by Fairbnb’s strict regulations. They can be included on the platform if a local node is established – the node includes a coordinator, known as an ambassador, and one or several local social projects. That gives the platform a unique local anchoring in its international operations.

Examining Fairbnb allows for a holistic case study (Piekkari & Welch, 2018) of ecosystemic friction. We start from that dynamic empirical context to theorise how all platform economy participants are entangled in the ecologies of friction in the recursive flows of information and action. The fieldwork, conducted during the first half of 2022, takes as its epistemology the ‘situated activity that locates the observer in the world’ (Denzin & Lincoln, 2011, p. 3). We initially sampled informants with various roles who directed us towards other informants in a snowballing manner (Patton, 2002). We settled upon ten in-depth interviews with four hosts, three platform employees, and three individuals with overlapping roles (see Figure 1).

Figure 1. Informants and their platform roles.

The first author conducted the interviews and both authors analysed the interview transcripts and engaged in iterative coding that considered the context and the experience of the informants (Corbin & Strauss, 2014). The initial coding focussed on the platform’s impact on informants’ lives. Those experiences were coded topically (e.g., technology interfaces, community implications) and also compared within (platform worker/user) and across these groups. As the informants reflected on their experiences in the platform economy, we coded for experiences of multihoming and competitive platform offerings in the larger platform ecology.

Our focussed coding exposed multilevel frictions – platform entanglements – centred on investment, which we treat as a polysemic notion, a site (Patton, 2002) where platform frictions become apparent and experiences aggregate. As an inductive concept, investment appreciates both the indispensability and the fragility of attracting, enrolling and engaging participants on a not already functional alternative platform. Our analysis somewhat simplistically treats the platform cooperative as a stable whole, while the discussion of the findings acknowledges its complex, open-ended, reprogrammable qualities (Kallinikos et al., 2013).

Findings: Three investment frictions

Our findings illustrate three frictions of investment: firstly, how individual participants navigate the friction of flexible participation that becomes focussed on the alignment of multihoming hosts and platform employees overburdened with their daily work. Secondly, collectively, the friction of intermediary positions emerges between platform stakeholders, with the ambassador – the intermediary position – at its heart. Finally, the third friction – the friction of platform growth – is the forging of an alternative platform trajectory and visions with few resources enmeshed in the tendencies of scalability and centralisation of dominant platform businesses.

Friction of flexible participation

The first aspect of friction is experienced at an individual level by two key strategic stakeholders – hosts and platform employees – and we discuss these in turn. Their struggles are intertwined, straining their goodwill towards the platform. Hosts are drawn to the idea of Fairbnb but listing a property is dependent on the region being activated by the cooperatives central functions and a local project being designated as beneficiary. Fairbnb is aware of the difficulty of new platform adoption, as it is a hard sell to ask hosts ‘to sign up for a new platform and keep track of bookings [across platforms]’ (INF_4). Furthermore, without guest take-up, the hosts’ resources sit idle, so they host on different global and local platforms, constantly moving through the short-term rental platform ecosystem. This multihoming is illustrative of flexible participation, and Fairbnb, as a new entrant, assumes this to be the hosts’ reality. The hosts are willing to move to Fairbnb but soon arrive at the sober realisation that ‘we’re totally fine with the idea, but we need it to live’ (INF_5).

While hosts may dislike the mainstream commercial platforms, they benefit from their network effects, which bring a steady influx of guests. Hosts are waiting to see network effects materialise on Fairbnb; however, they are willing to counter previous lock-in by bringing guests onto Fairbnb from other platforms (INF_1) and offering discounts, thereby forfeiting part of their earnings (INF_10). Problematically, guests appear ‘spoiled with many options on the market with a very good UX [user experience], and these other options are convenient’ (INF_2), or they are simply disinterested. Being embedded in a digital ecology dominated by lavishly funded corporate platforms (Shapiro, 2023), hosts are aware of being trapped by the mainstream platforms’ scale (Seaver, 2019) – platforms such as Booking.com are ‘too big [to be ignored], you really need them’ (INF_8).

Furthermore, there are clear limits to the alternative platform. Hosts find Fairbnb difficult to navigate; even registering appears ‘ … complicated. It isn’t a platform like Booking, where you can make an account and it’s done  …  when I first entered Fairbnb, I thought, ‘Oh, this is difficult’’ (INF_7). Fairbnb does not offer the hosts protection on par with Airbnb’s famous $1 m liability insurance, which is a barrier to adoption: ‘If a problem happens, [Fairbnb doesn’t] have the money to pay  …  so, you have to trust people much more’ (INF_1). Simultaneously, staple trust-building functions, such as reputation scores and reviews, are lacking due to limited transactions. Therefore, hosts are asked to assume risks that mainstream platforms take responsibility for, intensifying investment related to accepting guests. They realise that moving over to Fairbnb means they are risking damage to their property, which is usually their primary residence. Hosts have learned to check applicants’ reputations on other platforms before confirming bookings, illustrating the continued dependence on the broader platform ecosystem. The time required to add safeguards is extended by a lack of calendar synchronisation across platforms, which makes multihoming laborious.

Overall, some informants believe that the cooperative puts more money ‘into the marketing part instead of the technology part, the efficient part’ (INF_5). Claims regarding the platform values of the positive local impact of responsible tourism may mobilise interest, but the host does not see the promise in action. They will begin to wonder if ‘Fairbnb is as the others’ (INF_5) and refrain from investing further without a secure return: ‘I didn’t put my listing yet because why would I spend a day working on that and get nothing?’ (INF_5). Hosting via Fairbnb requires significant upfront investment in crafting the listing, managing the platform’s functionalities, and absorbing operational risk. Revenues are uncertain and without observable network effects. Finally, the hosts are currently precluded from cooperative membership (including the right to governance and profit sharing); such factors make hosts hesitant about Fairbnb.

Meanwhile, hosts’ frustrations regarding limited platform design contribute to platform employees running functions from marketing to community relations feeling overburdened. Technological shortcomings mean processes are manual rather than algorithm-based (Shestakofsky, 2017). For example, due to recurring problems of disappearing listings, the employees monitor bookings manually and inform the hosts about inquiries: ‘We track the bookings, and then we try to reach out to the host  …  this isn’t scalable’ (INF_2). Internally, perceptions differ on these issues’ magnitude. For instance, ‘for the IT team, calendar synchronisation seems simple  …  but for hosts, it is really not easy’ (INF_3). Without significant improvements to the platform and strategic guidance, employees lament that ‘everything we’re doing is useless’ (INF_3).

Platform employees are also strongly influenced by the ethical claims of Fairbnb: ‘I fell in love with the idea, and it really connected with my values  …  everyone’s here because they really have the belief that tourism must change, and the way people are travelling has to change’ (INF_9). Accessing cooperative membership with the platform is a different issue. Becoming a worker – member requires a EUR 4000 investment, and Fairbnb has ‘lots of young employees who  …  simply don’t have the capital’ (INF_2). They can opt for a lower salary to buy membership over time. Combined with part-time employment with the platform, some informants claimed to ‘have this feeling that Fairbnb isn’t really a co-op  …  but more a company with [the top] people deciding for everyone else and not taking account of the reality of the daily work’ (INF_3). That reality involves investing time, labour, and salary for a limited and uncertain return while often forfeiting cooperative membership, reminiscent of what Shapiro (2023) calls ‘predatory inclusion’. The frictions experienced by hosts and the employees as central (yet non-member) platform participants are interconnected and intensified in the community setting.

Friction of intermediary positions

Short-term rental platforms depend upon cheap and plentiful aerial transportation and popular, instagrammable sights. The ensuing ecosystem promotes overtourism, which erodes the local social and environmental fabric, while the regions bear the costs of compounding negative effects, such as the displacement of residents (Celata & Romano, 2022). An increasing local negative impact triggers the pursuit of more sustainable business models. On Fairbnb, local embeddedness stands for sustainable development of an alternative ‘platform citizenship' model l(cf. van Doorn, 2020) across multiple stakeholders. In contrast with mainstream sharing economy platforms’ narrowly defined participation scripts (Alaimo & Kallinikos, 2017), the goal of engaging multiple stakeholders equitably causes friction around collective investment.

Fairbnb’s citizenship model reconceptualises guests as part of the solution through the redistribution of a portion of the booking fees to support local social projects (see https://fairbnb.coop/how-it-works/travel-with-fairbnb/). Put differently, guests can ‘actively do something good with their travel’ (INF_2). Projects are a unique selling point amongst other tourism platforms and the glue for collective participation and investment into the cooperative’s vision. With the basic assumption that a platform cooperative copies the functions of mainstream platforms but injects them with responsibility and local value (Scholz, 2017):

Fairbnb took the drawback of Airbnb and transformed it. And now it’s of value. The fact that we are really linked to our community … we’re more quality than quantity. And we are re-injecting our values in the community. This is really our main difference. (INF_3)

Ambassadors, as key platform citizens, connect stakeholders, including hosts and guests, local municipalities, and social projects. Fairbnb centralises its community model around those intermediaries. They are essential for collective investment and highlight the frictions emerging around the intermediation of community on the collective level of the platform. The ambassadors primarily engage with actors in their region. Fairbnb suggests they consider themselves entrepreneurs (INF_4) with the promise that their investment in activating a regional node will, in due course, activate commission on all bookings made in that area (50–60% of the 7.5% platform take). The slow adoption of Fairbnb nevertheless makes the ambassador role precarious:

They say you can earn some money, but it’s a volunteer job … when you start, you put in a lot of time because you also have to learn how everything works  …  everything has to come out of your own pocket, and you have no idea if you are going to earn something. (INF_7)

Ambassadors, trained in the philosophy of Fairbnb, work without a contract and sometimes invest their own money in operations without being eligible for cooperative membership. Ambassadors accept their precarious role as quasi-franchisers, but two factors combine to erode goodwill. First, Fairbnb’s one-host-one-home rule has led to significant time investments in onboarding new hosts. The outcomes of onboarding work are uncertain as hosts are hesitant to move platforms completely. Second, Fairbnb has attracted many retirees, who ‘need support to understand the platform because not all of them are tech-savvy’ (INF_3). For some ambassadors, local embeddedness also prompts a need to disconnect. They must balance their platform and non-platform work, for example, as multi-platform hosts or employees in charge of other Fairbnb functions (INF_6). Our only ambassador-platform employee informant said, ‘I’m overwhelmed  …  the feedback I have, [Fairbnb] is asking way too much of people like me’ (INF_3). Problems may be noticed but are not considered actionable due to limited central resources. As one of the headquarters employees stated:

I would like to give more communication from our side, but also [to get] the ambassadors’ input on ‘what you need, what are you missing, how can we help you?’  …  Unfortunately, I don’t have the means and the time for this. But it’s certainly how I would like to work. (INF_6)

Ambassadors ‘are locally on guard’ (INF_2) and coordinate dialogue with local authorities. They enact Fairbnb’s vision of collaborating with municipalities by seeking to embed the platform in municipal sustainability strategies with the local, collective wellbeing in mind:

We can guide tourists to areas within Paris that are less touristy, more interesting, more local  …  educating them about the issue Paris has with overtourism, together with local authorities. (INF_2)

Simultaneously, Fairbnb can avoid the scrutiny the main short-term rental platforms face. Fairbnb uses its ambassadors’ efforts to create ‘scale through institutional avenues' (Laamanen et al., 2023). Beyond negotiating the distribution of tourism, Fairbnb has the potential to mitigate data frictions by sharing transactional data with local authorities, allowing the latter to monitor and steer the dynamics of local tourism (INF_4). Moreover, Fairbnb wants to increase the attractiveness of rural destinations and boost the economic life of communities that are commercially unattractive for many larger platforms (such as the ‘dead middle of France’ as our informant put it, INF_7). However, the main obstacle to data sharing is the current low platform traffic, which in turn invites scrutiny of Fairbnb’s approach to scale (which we address in the next section).

A central tenet of Fairbnb’s platform citizenship is the notion that impactful social change is ‘only going to work if we all work together and we all make a little step towards a bigger change’ (INF_02), tapping into the image of the cooperative as an egalitarian and non-exploitative context (Scholz, 2017). For ambassadors, that may be a myth: the set-up of the platform cooperative opens possibilities for (self-)exploitation as they seek to support collective investment (see Kasmir, 1996). For the guests, beyond an aware consumer choice, the contribution to more sustainable tourism is moot. First, their engagement with the local project appears limited to choosing one while booking. Second, Fairbnb’s focus on ambassadors recruiting hosts tends to mean guests become peripheral stakeholders. The hosts must then engage guests with the social project: ‘There’s the expectation that hosts will do their part in educating the guests, providing them with local products, etc.’ (INF_5). In fact, hosts and guests may not find the projects personally relevant (INF_8), risking the perception of the projects as a marketing gimmick. This might partially explain why the multi-stakeholder model is struggling to gain momentum.

Friction in platform growth

Platform cooperatives operate in a mature digital economy with established institutional funding opportunities and structures of social expectations regarding the temporal dynamics of growth and returns (Borup et al., 2006). The frictions at the individual and collective levels relate closely with those of platform cooperative desires to prefigure a just platform economy. Platform-growth frictions arise from the combination of the platform as a business model, the investment of resources required, and envisioning growth and returns. It is very telling that one platform employee describes Fairbnb as a hybrid of a start-up and a social enterprise. The informant suggests that positioning complicates operations for the cooperative compared to start-up platforms because ‘you’re doing everything with fewer resources because you’re less attractive for investors’ (INF_4).

In an environment oriented towards ‘growth first, profit later’ (Shestakofsky, 2017), a business model emphasising social goals has access to fewer sources of funding. Crucially, aiming to be an alternative to the venture-capital-funded platform leaders in tourism, ‘you’re playing in a field that’s actually structured to favour that exact same model that you’re trying to disrupt’ (INF_4). Below, we explore the effects of this scenario, which manifest as gaps between the ideals encoded in Fairbnb’s business and organisational model and the strategy work required to develop the platform.

Fairbnb’s vision of community-powered tourism seeks to offer an alternative distribution of the benefits and costs of tourism based on ‘fair treatment of all the stakeholders’ (INF_4). Two crucial components reinforce that vision: the business model and the organisational structure of Fairbnb. The former, aiming for fairness, limits the cooperative’s profits. Where dominant platforms use a split-fee model to charge both guests and hosts, Fairbnb charges only the traveller as ‘the person making the impact’ (INF_9). Moreover, Fairbnb recruits only hosts who can demonstrate their practice is ‘in line with all [local] regulatory limitations’ (INF_10), in stark contrast to mainstream short-term rental models.

Governance in Fairbnb aims to engage broad groups of stakeholders. The cooperative emphasises, ‘it’s not our show, it’s a collective show: we are together in the business’ (INF_6), and the board of directors are ‘part of the assembly’ (INF_9). Workers/members currently hold two-thirds of voting rights in the assembly, with the remaining third divided between the owners based on investment size. This set-up aims to prevent investors ‘gaining the upper hand, as is often the case in venture capital-funded companies’ (INF_4). Nevertheless, this composition further reflects the limited governance impact of ambassadors or hosts, which remains controversial for our informants. One employee stated, ‘Everyone should be a member. Obviously, workers. Then ambassadors, for sure. It’s a very touchy point because ambassadors are outside of Fairbnb. They should be members of the cooperative’ (INF_9).

Fairbnb currently does not extend the formal membership to other strategically important stakeholders, such as local communities, municipalities, or guests. The result is an unresolved struggle ‘between inclusivity and operability’ (INF_4). Accordingly, the centralisation of decision-making is a ‘blended social order' (Laamanen et al., 2020): an inclusive governance narrative that, over time, effectively limits inclusion to formal members and investors. Those denied representation will become disenchanted with Fairbnb’s ideals. The central functions performed at the Italian headquarters illustrate that one ‘could draw a hierarchy, but  …  we try to be a bit more horizontal’ (INF_4). The ensuing frictions between the local communities and managerial centre have prompted calls for a ‘manual for the future’ (INF_4), where the Italian operation ‘should be a cooperative of cooperatives  …  a very slim central cooperative, only there to support the local cooperatives’ (INF_6). This vision remains in stark contrast with the lived experience of ambassadors and non-headquarter employees, who tend to see the governance as ‘corporate’ and ‘just too arrogant’ (INF_7).

The vision of the future which Fairbnb promotes leaves room for interpretation. The notion of (exponential) growth creates large uncertainty: the employees seem torn between seeing their offering as targeting a niche customer interested in sustainable tourism and ‘running for the same cake’ (INF_9) as the dominant platforms. Fairbnb embraces platform growth ‘to expand the good as soon as possible’ (INF_9), expressed as its ambition ‘to jump instead of walk’ (INF_9) from the outset to leverage stakeholder desires for a just and complete platform. Consequently, the cooperative has targeted delivering its entire complex offering from day one, ‘without the basics developed properly’ (INF_9), in the form of a digital platform structured to correspond with the vision. That would require scalable technological solutions replacing the current manual work to maintain trading relationships with the hosts or transfer tax to local authorities. Employees envision a system of customisable ‘switches that you can turn on and off, depending on the territory’ (INF_4) as less a technical challenge than a social one. Meeting such challenges requires a central platform that can ‘sustain itself economically and represent the plurality of voices’ (INF_4) thereby recreating an alternative version of a frictionless platform economy.

Some three years after its launch, Fairbnb’s strategy appears premised on building scale by replicating the node-based model regionally while maintaining centralised governance. Ultimately, this causes friction between local idiosyncrasies, the more global ambitions, and lean teams and limited financial resources. Some platform employees have accepted the current approach as ‘an interim business model until we have the power to really continue as we did so far’ (INF_2), while others suggest starting from scratch, both in terms of platform design and the team of decision-makers:

There has to be a clean slate, and power has to be reconsidered and reassigned  …  people with fresher minds are able to make decisions with no emotional connections and no residues and then focus step by step  …  Italy is where we started. Let’s make it the number one platform in Italy  …  let’s be the best version of Fairbnb we can (INF_9)

Yet, a restart option does not address existing dependencies, such as Fairbnb’s accountability to its institutional investors (https://fairbnb.coop/blog/social-innovation-e1-million-investments-for-fairbnb-coop/). If Fairbnb admits its strategy to date has failed, it would likely struggle to raise new rounds of investment. Fairbnb has trialled a different approach towards scaling participation that relies on pre-existing institutional structures, such as registers of holiday apartments, in collaboration with regional governments. The strategy appears to work at a scale while remaining faithful to the ideals of Fairbnb and allowing the cooperative to do ‘more with less’ (INF_9). Nonetheless, this strategy shift leaves behind groups of willing hosts and disenchanted ambassadors and thus has the potential to exacerbate current frictions, illustrating how they are interconnected and how fragile the success of any digital organisation with an ambition to introduce social change at scale can be.

Discussion

New platforms attempt to carve out spaces in the platform economy, often responding to the values of potential participants on a smaller, localised, or alternative scale (Laamanen et al., 2023; see also Arcidiacono & Pais, 2020). Nevertheless, the pressure to attract monetary investment and monopolise a competitive international market heightens the challenge of launching and maintaining them. Put differently, frictions around establishing an alternative platform show how the race to become the winning platform has blighted the digital economy for everyone (Mikołajewska-Zając & Márton, 2022).

The dominant platforms’ frictionlessness is underpinned by encoding the stakeholders’ roles as atomised, entrapped, and disempowered (Laamanen et al., 2018).. The trap of frictionlessness prompts our theorising on the existence of similar frictions in alternative platforms. We suggest the notion of platform investment friction illuminates how alternative concepts perform with regard to competitive offerings and established expectations in the digital economy. We find that the investments platform cooperative stakeholders make are tied to the dynamics of the platform economy. Investing money or time and effort in complex resource-allocating relationships in the hope of a worthwhile result is inherently relational. It binds actors together and is saturated with expectations about desired futures (Borup et al., 2006).

The uncertainty of the investment stems from the dependency on participants’ engagement and uncontrollable developments in the broader environment. We suggest securing investment is a puzzle to the cooperative leaders, who largely seem to follow the mainstream platform development playbook (while claiming to disrupt it). Users, employees and institutional investors are often enchanted by the cooperative’s ideals, but bring conflicting expectations related to the investment of resources such as time, money and labour, which causes investment friction. The examination of the three platform frictions permits an ecological theorisation on the spaces between the frictions (Figure 2), which embodies the intertwinement of friction. Conceptually, the connections between the sources and the impacts of the frictions are illustrative of the recursiveness in the ecology of friction, which we consider in terms of the relations and exchanges enmeshed in complex patterns of the broader environment. We propose ways of addressing a platform as the encoded social structure (Lovink, 2019) with modes of prefiguring the digital everyday (Laamanen, 2022; Yates, 2022).

Figure 2. Spaces between platform frictions.

Linking the friction of flexible participation and that in platform growth reveals a prefiguring organisation space. If only the technical aspects and brand strategy were organised centrally, regional governance would lie with local organisers (ambassadors, hosts and, potentially, the local projects). Fairbnb employees envision the central cooperative as a minimal organisational core connecting the local cooperatives, thus empowering the participating regions. There is an outward communication of transparency, inclusiveness and fairness, yet the present centralisation practices and membership limitations contrast with those ideals. Local stakeholders are currently disenfranchised from the ideal due to limited access to decision-making, which stifles platform participation at the individual level. In the cooperative’s current prefigurative platform politics, centralisation is a transitional solution oriented at bracketing potential runaway dynamics or unintended consequences.

Suspended between the friction of participation and that of intermediary position is the space of the prefiguring community. While alternatives to platform capitalism (Srnicek, 2017) attempt to mitigate (self)-exploitation and extraction of communal value (Scholz, 2017), we found stakeholders were overburdened in their fight against overtourism. The expectations of the central functions demand onerous investments of labour and other resources. However, the platform’s underwhelming algorithmic system can make the intermediary role even more complex. Stakeholder frustrations are amplified by the feeling that cooperative leaders do not hear them and by the structural barriers to becoming cooperative members. The development undermines collective platform investment and can lead to stakeholders feeling they are being exploited. The scenario clashes with the cooperative’s vision of its commission-sharing model that mobilises resources in less-visited regions, thus benefiting local initiatives and civil society organisations.

Finally, the friction of intermediary positions and the friction in managing growth unveil the prefiguring growth space. Our case study suggests that platform cooperativism does not challenge the notion of platform scalability. There is a paradoxical connection between seeing digital technology as an easily scalable and reprogrammable tool to mobilise broad masses of stakeholders and idle resources. That is evident when attempts to trigger network effects by coordinating activation among hosts or regions, even beyond the capacity of the platform, lead to the neglect of other elements of the platform, such as guests. The result is frustration coursing through the broader ecology of stakeholders whose efforts to set up the local nodes matching projects and mobilising relations locally are thwarted. Ultimately, stakeholder goodwill that is so crucial for setting the alternative platform in motion is being eroded (Mikołajewska-Zając et al., 2022). In addition, wasted resources and investment mean it is unclear whether the cooperative will be able to restore goodwill by changing its operational model or enrolling broader groups of allies. The platform cooperative’s resources are stretched by having to address customers’ accommodation needs, hosts’ income requirements, and the local projects’ need for support.

At the time of writing, Fairbnb remained in the start-up phase and was torn in different directions, influencing the experience of the informants. The employees’ narratives reveal a vision of digital technology enhancing human organisation (Bridle, 2022); yet they remain faithful to the paradigm of a centralised platform design, which conflicts with inviting broad stakeholder groups to participate in line with the notion of open collaboration (Kelty, 2008). The problem is unlikely to be resolved by a platform reboot because such action would incorporate previous path dependencies, such as the inherent contradiction of Fairbnb’s promise to amplify the niche of sustainable tourism, which requires it to be scaled.

Conclusion

Platform cooperatives counter the ecosystemic harm caused by the dominant platform juggernauts. Their struggles demonstrate the paradox of a frictionless platform and platform economy. Fairbnb’s difficulties establishing itself are testament to mainstream platforms’ power both in operational terms and that of the ideal. Mainstream platforms utilise relational asymmetry by inflicting excessive demands that other players undertake costly adaptations (see Bateson, 1974): they create immense barriers to the free movement of participants and stifle the growth of alternatives due to user lock-in and the socialisation of participants to narrowly scripted roles.

Scrutinising the practice of alternative platforms identified frictions refuting ‘the lie that global power operates like a well-oiled machine’ (Tsing, 2005, p. 5). We extend Tsing’s work into the digital realm: a realm marked by visions of instant global connections and a frictionless flow of ideas, transactions, and labour. Propelled by digital technology, platforms attempt to remove friction, but in doing so, they also combine the freedom of movement within their bounds with coercion, frustration, and restraint (Tsing, 2005). When a single platform attempts to be frictionless, the ecosystem in which it operates duly develops frictions. The situation reinforces and restricts configurations of people and resources orchestrated by the dominant platform incumbents. The intertwined frictions in the platform cooperative and in connection to the broader ecosystem illustrate Orbach’s (2023) friction paradox. Attempts to remove intermediaries lead to even stronger intermediaries (Mikołajewska-Zając et al., 2022; Slee, 2015). Similarly attempts to counter runaway dynamics in the platform economy result in the amplification of those very dynamics. Ecosystemic frictions become apparent in the drive to address the negative effects of the above at a scale matching their impact – by means of digital platform technology – and the simultaneous impossibility of overcoming those effects due to their systemic character.

Our contribution is the extension of the concept of ecologies of friction. We do so by connecting frictions in individual and collective investment and by imagining the future by configuring an organisational model for platforms. Subsequently, we show how the issues alternative platforms face are largely due to the impossibility of escaping the larger ecosystemic dynamics causing those frictions. Mainstream platforms legitimise the expectation that any new entrant will need to rapidly scale and rapidly produce tangible benefits. That presents a lasting predicament to prefiguring future emancipatory platform utopias (Arcidiacono & Pais, 2020). Accordingly, operating alternatives constitutes an ongoing adaptation to the relational dynamics of the platform ecosystem. Our informants see how the game is rigged; any alternative is playing in a field structured to favour that exact same model that alternatives are trying to disrupt. We develop a theorisation of ecologies of friction that shows how frictions complicate the successful articulation of alternative models. That theorisation should illuminate an interesting avenue to explore in future studies on frictionless and friction-ridden platform ecosystems.

Acknowledgements

The authors thank the research informants for their participation.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Mikko Laamanen

Mikko Laamanen is Research Professor with the Technology and Sustainability research group at Consumer Research Norway, Oslo Metropolitan University (Norway). His research draws from the sociologies of consumption, organisation, and social movements to focus on the everyday politics of technology, inclusion, and social change. His current projects investigate the organising of local production and consumption practices, the platformisation of sharing, resistance to digitalisation and digital surveillance, and sustainability in performing arts. His work on the platform economy has been published, amongst others, in Current Sociology, International Journal of Consumer Studies, Journal of Cleaner Production, Journal of Marketing Management and Social Movement Studies [email: [email protected]].

Karolina Mikołajewska-Zając

Karolina Mikołajewska-Zając is a Research Fellow at the University of Queensland Business School (Australia). Her research is at the interconnection of organisation and digital technology. Karolina’s current work explores entrepreneurship at times of societal crises and social resilience in the context of platform dominance. She draws on ecological epistemologies and qualitative methods, as well as organisation theory, economic sociology, and media studies. Her work has been published in journals including Organization Studies, European Journal of Social Theory, and Internet Histories.