Urban platforms, rent, and the digital built environment

Bird scooter rider in East Austin, April 19, 2018. Photo by author.
[Ed. note: this post is part of a Roundtable discussion on “Platform Urbanism.” For more background on the discussion and to view other posts in the series, see here.]

The city is the theater of platform capitalism. Cities increasingly concentrate the young, highly educated, mobile, and technologically savvy producers and consumers of digitally-mediated products and services, the firms that employ them, and the capitalists who invest in these firms – as well as the precarious workers and basic infrastructures on which these entire agglomerations depend. As platforms generate an ever-greater wealth of data, cities have also responded by reshaping systems of legibility, governance, participation, and – slowly – physical infrastructure.

However, the relationship between the urban and the platform goes beyond just empirical overlap. Instead, the two share a logic: they are both fundamentally about rent.1Langley, Paul, and Andrew Leyshon. “Platform capitalism: The intermediation and capitalization of digital economic circulation.” Finance and Society 3, no. 1 (2017): 11–31. More specifically, both are built environments whose mutual entwining creates landscapes of locational advantage that bridge the physical and the digital. In this respect, they can be considered part of the secondary circuit of capital.2Harvey, David. The limits to capital. Verso, 2007 [1982]. At the same time, we live our lives in them. The contradiction between the extraction of value and the flourishing of meaningful social life characterizes the platform no less than the city.3Logan, John R., and Harvey L. Molotch. Urban fortunes: The political economy of place. University of California Press, 2007 [1987].

For Nick Srnicek, platforms have four essential features: 1) they facilitate group interaction; 2) they generate value through network effects; 3) they cross-subsidize some services with rates on others; and 4) their core architecture governs possibilities for interaction.4Srnicek, Nick. Platform capitalism. Polity, 2017: Ch. 2 These features are also fundamental elements of the urban under capitalism. Urban space is constituted by interaction, network effects increase the desirability of specific sites within the city, “free” public space is effectively cross-subsidized by private accumulation, and both public and private infrastructures create the terrain of the possible. In particular, like cities, the network effects of platforms drive increasing returns to scale—their advantages are often not competed away by development, but enhanced.5Krugman, Paul. “Increasing returns and economic geography.” Journal of Political Economy 99, no. 3 (1991): 483–99. As such, every platform aspires to become the equivalent of a “central place” in digital space.

Platforms link physical and digital space in a number of ways. But critically, urban platforms act as infrastructures for the extraction of place-based value accessible only through that platform. More specifically, they create a shadow rent gradient – a contour of locational advantage – realized within physical urban space.6In Marxist terms, this is differential rent, rather than monopoly rent. See: Haila, Anne. “The theory of land rent at the crossroads.” Environment and Planning D: Society and Space 8, no. 3 (1990): 275–96. Effectively, they deterritorialize the existing built environment, reterritorializing it in a new physical-digital composition, with the app as a portal to this ensemble.

One example of this shadow rent gradient is the short-term rental (STR) platform Airbnb. In effect, Airbnb is the infrastructural link to a largely invisible, spatially disaggregated hotel, with rooms distributed throughout the existing urban fabric, which appropriates ground rents that would otherwise be captured at a single site through the construction of a physical hotel.7Some platforms have also emerged that facilitate home sharing for co-working. Therefore, unlike in conventional gentrification, the “rent gap” that Airbnb exploits is between residential and hotel uses, with dramatic effects for local property markets.8Wachsmuth, David, and Alexander Weisler. “Airbnb and the rent gap: Gentrification through the sharing economy.” Environment and Planning A 50 (2018): 1147–70.

Transportation network companies (TNCs) like Uber operate somewhat differently. Like Airbnb, the platform functions as choke point for accessing on-demand drivers and rated customers. But rather than concentrating locational advantage, these platforms concentrate accessibility, the other determining component of ground rent. Prior to the growth of these services, the need for taxis to cluster in central locations created concentrated zones of accessibility and limited service outside these zones. In effect, through ride-hailing platforms, dispersed points in space function as more central, expanding the rent envelope around downtowns and transit hubs through digital rather than physical infrastructure.9This replaces the broad “redlining” endemic in the taxi industry with more finely grained — and often no less racist — algorithmic selection.

In some cases, this algorithmic accessibility becomes a direct input to the property market. In Los Angeles, some developers have offered Uber ride credit in lieu of parking spaces. In Oakland, California, GreenTRIP, a prospective sustainability certification program, offers a scoring system that rewards residential developers for replacing parking with bike and car sharing, an area into which Uber and Lyft have both been expanding. This potential rent is not necessarily appropriated in the present. Akin to the early 20th century streetcar companies owned by real estate syndicates, TNCs rely on a stream of venture capital that effectively subsidizes rapid expansion by trading present losses for the speculative value of a future monopoly.

One picture of what this monopoly might look like can be found in the Indonesian platform GO-JEK. GO-JEK began in 2010 as a ride-hailing service for ojeks (motorcycle taxis). By 2018, platform users could order food, book an in-house beautician, and even pay their electricity bill. In effect, GO-JEK is a virtual central place that extracts a rent from the various services it hosts. If GO-JEK is a full expression of platform logic, it also approaches the urban ideal: a tight agglomeration of producers and consumers, generating handsome rewards for the landowner.

The outlines of platform capitalism now taking shape are strikingly reminiscent of Henri Lefebvre’s idea of the “urban revolution.” For Lefebvre, through urbanization, capitalism was evolving, superseding industrial society, and in the process the figure of the “user,” rather than the producer or worker, was becoming central.10Henri Lefebvre, The urban revolution. University of Minnesota Press, 2003 [1968]: 181-88 Thinking platform capitalism in this way offers a different route into questions of the “urban revolution” and ensuing debates surrounding “planetary urbanization.”11Brenner, Neil, and Christian Schmid. “Towards a new epistemology of the urban?” City 19, no. 2–3 (2015): 151–82; Roy, Ananya. “What Is urban about critical urban theory?” Urban Geography 37, no. 6 (2016): 810–23. I want to suggest that the urban and platform “revolutions” are occurring in tandem, and with similar tendencies, precisely because they embody the rentier logic endemic to the “long downturn” of postwar capitalism.12Brenner, Robert. The economics of global turbulence: The advanced capitalist economies from long boom to long downturn, 1945-2005. Verso, 2006.

Karl Polanyi saw wage labor as a “fictitious commodity”: human activity abstracted from various social bonds and set “free” in the marketplace as an input to industry.13Polanyi, Karl. The great transformation. Beacon Press, 1957 [1944]. In Polanyi’s terms, the great class struggles of the 19th and 20th centuries were “protective counter-movements” that limited the exploitation of this commodity and expanded the realm of leisure time (at least for stably-waged men). Platform capitalism thrives on the roll-back of these gains since the 1970s, algorithmically allocating labor tasks across a global pool of insecure workers.14Standing, Guy. The precariat: The new dangerous class. Bloomsbury Academic, 2014. But it also expands the field of appropriation, taking hold of reproductive activities conducted “outside” of the formal limits of the working day — communication, consumption, habitation, leisure, reproductive labor, mobility, and politics — as valuable data sources. These practices are fundamentally the stuff of urban life, but through their objectification in platforms we encounter them as alien objects. If platforms themselves have become central to the production of urban space, then the right to the city must necessarily include the right to the platform.15Shaw, Joe, and Mark Graham. “An informational right to the city? Code, content, control, and the urbanization of information.” Antipode 49, no. 4 (2017): 907–27. Contra localist visions of “unplugging” from digitally mediated life, the task for today’s protective counter-movements is to reappropriate the platform city in order to expand collective human potential.

Notes   [ + ]

1. Langley, Paul, and Andrew Leyshon. “Platform capitalism: The intermediation and capitalization of digital economic circulation.” Finance and Society 3, no. 1 (2017): 11–31.
2. Harvey, David. The limits to capital. Verso, 2007 [1982].
3. Logan, John R., and Harvey L. Molotch. Urban fortunes: The political economy of place. University of California Press, 2007 [1987].
4. Srnicek, Nick. Platform capitalism. Polity, 2017: Ch. 2
5. Krugman, Paul. “Increasing returns and economic geography.” Journal of Political Economy 99, no. 3 (1991): 483–99.
6. In Marxist terms, this is differential rent, rather than monopoly rent. See: Haila, Anne. “The theory of land rent at the crossroads.” Environment and Planning D: Society and Space 8, no. 3 (1990): 275–96.
7. Some platforms have also emerged that facilitate home sharing for co-working.
8. Wachsmuth, David, and Alexander Weisler. “Airbnb and the rent gap: Gentrification through the sharing economy.” Environment and Planning A 50 (2018): 1147–70.
9. This replaces the broad “redlining” endemic in the taxi industry with more finely grained — and often no less racist — algorithmic selection.
10. Henri Lefebvre, The urban revolution. University of Minnesota Press, 2003 [1968]: 181-88
11. Brenner, Neil, and Christian Schmid. “Towards a new epistemology of the urban?” City 19, no. 2–3 (2015): 151–82; Roy, Ananya. “What Is urban about critical urban theory?” Urban Geography 37, no. 6 (2016): 810–23.
12. Brenner, Robert. The economics of global turbulence: The advanced capitalist economies from long boom to long downturn, 1945-2005. Verso, 2006.
13. Polanyi, Karl. The great transformation. Beacon Press, 1957 [1944].
14. Standing, Guy. The precariat: The new dangerous class. Bloomsbury Academic, 2014.
15. Shaw, Joe, and Mark Graham. “An informational right to the city? Code, content, control, and the urbanization of information.” Antipode 49, no. 4 (2017): 907–27.

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