Fairbnb.coop is a platform co-op whose name precedes it. Everyone’s heard of the venture-capital-backed alternative that’s putting hotels and traditional B&Bs out of business, and Fairbnb.coop is the antithesis of that – a platform co-op which puts ethics back into home-sharing.
It started its journey in 2016 and in late 2018 the team in Bologna established a co-op to serve as the legal entity behind the project, an open organization where, in the near future, they plan to welcome all their stakeholders as members.
In the run up to OPEN 2020 we spoke to Damiano Avellino, who explained Fairbnb.coop’s two main aims: To provide a cooperative alternative to the traditional home-sharing model, and reducing the negative externalities of the existing model, for example the gentrification of communities.
Damiano was quick to point out that to really change things – and avoid communities being damaged by rent seeking – you would need to regulate home-sharing platforms:
“Mainly we want to demonstrate there is another way to do this. We want to scale and are inviting people and organisations to start new nodes in their communities. Local nodes are networks of hosts, neighbours and local entities that facilitate the development of Fairbnb in a particular area. They are the engines of Fairbnb.coop, tailoring the platform to the needs of local communities, deciding on the projects that will be funded by revenues, and ensuring the cooperative’s principles are upheld.”
Funding local projects is a key element of Fairbnb.coop – differentiating it from other platforms whilst demonstrating exactly how the co-op sector can create and leverage the ‘cooperative advantage’. Fairbnb.coop charges guests a 15% booking fee. No money is taken from hosts. The 15% income is split equally to fund the platform and community projects in the local area where the guests stay. It’s an excellent model. Anyone can submit a community project to receive funds. Projects vary from sustainability-focused activities to promoting fair and circular economy initiatives at a local level – and the guests decide which projects to fund. After selecting a place to stay and clicking ‘Request booking’ you’re asked to make a choice about which local project to fund – funds accumulate in the projects’ account on Fairbnb.coop and are released once a suitable payment threshold has been reached, to reduce transfer fees. It’s the perfect model to empower local communities and promote authentic, fair and conscious tourism.
“Local nodes and the Fairbnb.coop partners act as facilitators and bring in different actors and stakeholders to help reach goals in terms of the number of hosts and projects in a community. So the local node proposes a few projects which can generate a local economy, like a local co-op supermarket or a local restaurant.
Most people on the platform don’t need to know about the platform co-op element, they just want to find a place to stay. But we think it’s important to develop a framework for this – platforms are the infrastructure of our economies. The majority of platforms are owned by American companies. Europe needs to push to collectivise the economy – and own the ‘means of production’.
We really need to strengthen the different parts of our economies. There are some amazing projects going on, but we need to develop a common narrative, and explain why it’s important to take back control of the technology we use.
One idea, which could easily be replicated, comes from the Emilia-Romagna region of Italy, where all co-ops give 3% of their revenue to a mutual fund which is used to fund and develop more cooperatives. The fund is generally used to match funds and multiply investments by 3 or 4 times, but they also provide guaranteed loans. This model is not yet designed for cooperative startups, but we are working on adapting these tools to the financial needs of emerging platform cooperatives.
Fairbnb.coop took a long term loan (with ‘not so low’ interest) which Damiano sees as essential for the project:
We would rather succeed and pay it all back, or know that we tried and failed.
He explains that Italy failed to create a digital start up community but sees the mutual funds as an opportunity to aggregate and incentivise – to attract talent and support the development of lots more nodes. There are already people interested in starting nodes in the UK and Fairbnb will be hosting meet-ups soon to explain their proposition.
The main challenge we need to solve in the platform co-op community is how to reach critical mass… and how to pass users from one platform to another.
I agree and share my thoughts on how this might be done via a centralized platform, a data exchange, or an open protocol for platform co-ops – in order to help the platform co-op economy scale quickly.
Damiano explains he has been working with others to try to understand how to raise capital – by making platform co-ops attractive to investors. He envisages a system of buy-back shares which guarantee a 3% or 5% return – depending on the investors’ appetite for risk. He sees this as a potential way to create incentives for early workers and developers of platform co-ops.
“I try to find people who are intrinsically motivated – but to keep people who are really good – especially good developers – you need money. If Google offer 20k / month and we offer 2k and some coffee and smiles it’s not enough. We are starting to explore, with Eric Duran of Fair Coin, the possibility of offering co-op shares that are easier to distribute – as tokens.”
Token economics – and “the capital conundrum” – will be key themes of OPEN 2020 and we are proud that Damiano will be with us to share his thoughts. He parting words are music to my ears:
“I think we need an end to traditional conferences – we need more events where we actually get together to work on developing and implementing solutions.”
That is exactly what OPEN 2020 aims to do. If you are interested in co-creating an alternative economy which puts people and planet before profit please, join us, Damiano, and a host of other proactive cooperators on the 11th and 12th of June in London – together we can create an entirely new economy.