As it has two sides of coin of innovative service and the expansion of precarious labor, Uber creates dispute and conflict with the stakeholders of existing mobility industry everywhere it is introduced. In Korea, it is no surprising to see a street demonstration every weekend, but in Québec where street demonstration is observed not that often, demonstration of taxi union clearly brought attention to the controversy.Cars with UBER mark had to become targets of eggs thrown by angry taxi drivers 1.In civil society, precarious labor and other issues including the aversion of tax and safety regulations made people concerned about giving the permission to operate.
Given all the complaints and concerns, the Québec provincial government gave UBER only temporary permission to operate which was to be renewed every year. However, with the temporary permission, the usage of UBER grew rapidly in the market. In November 2015, number of the rides already reached 300,000 times in one year 2.
Uber continuously lobbied the government using user convenience and new job creation as supporting ground for their case. On 10th October 2019, after 5 years of operation under the temporary permit, UBER finally got the proper rights to operate under the 3 ” An Act respecting remunerated passenger transportation by automobile”, so-called bill 17.
Unusually long and intense mobilization against the permission to UBER didn’t succeed to prevent it to have permanent rights to operate in Québec, but something unprecedented happened in Québec.
A birth of an organization, aspiring to become the global confederation of local mobility cooperatives, replacing UBER with a social economy alternative.
Idea of founding Eva cooperatives began in 2014 during the debate around UBER permission was on-going. Mr. Dardan Isufi, who has just finished his bachelor degree and the military service, and Mr. Raphael Gaudreault, who was working as software developer, exchanged ideas on the issue and came upon an idea of social economy alternative of UBER. After some period of preparation, EVA coop launched officially on 13th May, 2019. 4
Despite being a small venture that just started, huge attention has been brought to this small venture with amazingly innovative idea became a hot issue. Maybe, a mobility sharing platform business in a cooperative organizational form, can it be an alternative in an age of platform capitalism and the gig economy? To resolve the curiosity, I decided to meet people at EVA.
First of all, I downloaded the app and met the EVA drivers. Many drivers have used, or still using the UBER app at the same time they are using EVA app to catch the rides. I asked if they preferred EVA and why if they do. All the drivers I talked to preferred EVA.
Most frequent answer from the drivers was, because “Money stays in Quebec.” Of course, the fact that they get 15% more when they use EVA is an important reason to use EVA platform, but many drivers were aware of the problem of UBER. It wouldn’t benefit the Quebec economy in the long term.
Some were proud to be a part of the cooperative movement as a member of a cooperative. Maybe partly due to the effort of the cooperative staff in their training to raise awareness of cooperative.
And I met one of Eva’s two co-founder, Mr. Dadan Yisufi. First, I asked what the motivation was.
We thought Gig economies such as UBER AND Airbnb had three major problems: First, it accelerated the delocalization of the economy.
Profits created by each transaction happened through the platform wouldn’t stay local. It was likely the money moved across borders to find place where they could pay as less tax as possible. Secondly, personal information accumulated during the service could be used by the company.
As is in the Facebook, in the mobility platform, user information could be accumulated, and the data could be used for profit. Privacy can be breached. We thought this could be also a serious problem in the case of UBER. Lastly, the expansion of precarious labour. Gig economy such as UBER would create changes in reverse direction of the precious progress for labor rights, social rights, and human rights.
In Eva’s business model, money stays local, user information is protected as it is encrypted with the decentralized blockchain technology, and drivers would be empowered and would have more security with the cooperative owned by themselves.
The strength of the cooperative business model for the local economy has been proven by many actual cases around the world, but when it comes to the global platform business, would it be still the case? How can we apply the cooperative spirit to the global platform business? Is it possible to be at the same time local and global?
Answer by Mr. Isufi shed the highlight on the dual legal entity model of EVA. To become global at the same time going local, the ‘social franchise’ idea was there from the beginning.
For now, EVA global plays role as social franchise headquarter, which support the foundation of local mobility cooperatives around the world. (Eval global was initially founded as non-profit but not it has been changed to stock ownership company to make it easier to attract investment in the future.)
(Dardan) Yes, EVA network consist of two legal entities. EVA Global, which owns the blockchain technology of mobility platform plays role as headquarter of social franchise. It supports the local groups around the world so they can build a local mobility cooperative. In Americas, Asia, and Africa, there are groups around the world interested in founding a mobility cooperative in partnership with EVA.
As of now, the group in Calgary is the working closely with us in the process of registration and business development. Québec cooperative is of course the first one to be registered, and it is now expanding it coverage to Québec city in addition to Montréal. Eva Coop in Québec is a solidarity cooperative.
It is an equivalent term of “multi-stakeholder cooperative” in a terminology familiar to Korean readers, according to the Québec legislation on cooperatives.
There are three type of cooperative members in one cooperative: 1) driver members, 2) rider members, and 3) worker members. Obligation and rights of cooperative members are as in the cooperative act of Canada and universal cooperative principles.
Installment of qualifying share payment in 20 times, 50 cents per usage was designed so the obligation of qualifying share wouldn’t work as entry barrier, but they all have same rights to represent themselves in the general assembly of members in making important decisions for the cooperative.
Whenever there is a surplus, it can be either distributed among members or invested for the future based on the resolution of the general assembly.
Then I became curious how Quebec ‘s unique social economic ecosystem helped during the process of development. How did they mobilize the funding? Who helped for what?
(Dardan) For the capitalization of two legal entities, the one for the coop was done first. For the EVA the cooperative, the phase 1 capitalization was concluded, and it succeeded to mobilize around CAD 700,000. As per the Eva Global, the process of capitalization is still on-going.
The list of financial institutions included Investissement Quebec (IQ), Réseau d’Investissement Social du Québec (RISQ), Caisse d’économie solidaire Desjardins. These financial institutions were providing favorable conditions tailored for enterprises in the start-up phases. Som e provided interest rates much lower than the market, delayed the payment of capital and interest (Congé de Capital).
Other than financial organizations, supporting organisations such as Conseil Québécois de la coopération et de la mutualité (CQCM), Montréal small and medium business centre (PME Montréal), Coopérative de développement régional du Québec (CDRQ) have helped EVA to develop organizatoinal structure with grant, management consulting, other types of support.
Organizationa such as Chantier économie sociale and Centre international de transfert d’innovations et de connaissances en économie sociale et solidaire (CITIES) was helping EVA in their effort to influence government departments and connected it with the right people and helped in various forms during their process of development.
It seemed obvious to me that the social economy ecosystem was very helpful in the development of mobility cooperative.
Mr. Isufi also regarded the non-financial forms of support such as management consulting regarding the cooperative governance, accompanying in the lobbying efforts to change the policies as essential support, no less important than the financial support.
Although I am not an expert in information technology to go in depth, I needed to ask Mr. Isufi to explain basic elements of the blockchain technology. What is EOS? Where are such concepts as EOS, token, blockchain located in the Eva Coop?
Block chain is cryptocurrency ‘s core technology, but you shouldn’t confuse the cryptocurrency and the blockchain. Facebook is social media, but social media is not Facebook. At Eva, the importance of blockchain technology is that it guarantees the data privacy of users. As user information is accumulated, if somebody hacks UBER system, there is a risk that user’s privacy is breached.
Blockchain technology prevent this to happen from the beginning. There is zero possibility. To Dardan, most important innovation of EVA is blockchain technology-based transaction platform.
What is EOS? EOS is a large protocol developed by Block.one. It is an open source platform released in June 2018. It’s a database technology. We’re using their database protocol for our distributed blockchain system. In terms of size, we are 5th largest platform using the protocol.
While listening to Mr. Isufi, I realized that EVA’s future is dependent upon how many local cooperative members (or franchisees) around the world. Then how about Korea? What is necessary to launch EVA Korea?
(Dardan) What we have achieved so far in Motreal is easily transferrable. App has already been developed and tested. With a little translation and local adaptations, technical part can be done even in a few weeks.
I think what is more important and might take longer time is to mobilize the cooperative. If there is a strong social economy support network and make a partnership with a group of technical experts, it would make it much faster.
There are already many apps for on-line transactions, but blockchain based technology for the digital cooperative is rare. I think blockchain technology is most appropriate tool for the digital cooperative.
It’s an important infra for the digital democracy. Digital platform cooperative is the future of cooperative movement, and blockchain is a foundational tool.
EVA thinks digital platform cooperative is the future of cooperative movement, and the block chain is the core technology to materialize it ©EVA If alternative services such as Eva can not enter the market now, companies such as Uber and Lyft might dominate the market. At the beginning I have already discussed why it is a big problem.
The spread of Gig economy will pull all the progress such as labor rights, gender equality, human rights backward. Eva Coop’s business model push forward such progress.
Workers in the gig economy doesn’t have social security, no parental leave, no insurance. In the mobility sector, a way to go is the digital platform cooperative that can replace UBER.
While it can capitalize on the technology for sharing economy, it provides the business model based on democratic governance. In Montreal Eva Coop, every profit made by transactions between members stays in Montreal. If you make a Seoul Eva Coop, money stays in Seoul.
So far, I could find answers to questions I had about EVA doing this interview with EVA. EVA is young social venture with big aspirations. What was most impressive for me was their vision of global alliance among local mobility cooperative. EVA does not aspire to become big as it is. It aspires to become a platform for global network of local mobility cooperative. Is such aspiration bigger than becoming big?
Mr. Isufi emphasized that it would not be difficult to adapt the app to serve the local needs. Maybe more difficult part will be to build a cooperative with good governance and at the same time with business capacity. As we have seen the case of Seoul’s first taxi cooperative, taking the legal form of cooperative does not always guarantee the good governance ensuring cooperation.
Even if the EVA Quebec is on smooth sail, it has a long way to achieve its vision of ‘global confederation of local mobility cooperatives’. Maybe we shouldn’t expect EVA to grow as fast as UBER, because success of EVA is dependent upon the sound governance of local cooperative, which takes time. Having the supportive ecosystem such as Quebec cannot be guaranteed everywhere.
However, if EVA Quebec and early local cooperatives prove that it is viable and sustainable business model, more cooperatives will follow around the World.
As Dardan hope, if we can establish a partner cooperative of EVA, EVA Seoul or EVA Korea, the speed of the process can be a little faster. I think if there is one more place that has good environment for local mobility cooperative to succeed, it is Seoul, Korea. Local networks of social economy are emerging, the capacity to accept the new IT technology is very good, and they are able to do it very fast.
More importantly, the attention to the platform economy has been recently became very high after the controversy arisen as Seoul disapprove the new mobility ventures such as TADA, not only UBER.
As People at EVA respects the local legal institutions and open to adapt the application to conform local institutions, probable approach in places such as Seoul with very high legal entrance barrier to the mobility industry, maybe to collaborate with taxi cooperatives or the cooperative of proxy driver service.
The problem of the first taxi cooperative of Korea has been reported in the several media. It is allegedly because of it was dependent on one person-the founder who used to be a politician.
If we take lesson from the trial and error of the taxi cooperative and try a new cooperative with the support of the local social economy network, wouldn’t it be possible to develop a new alternative to the mobility problem? I am looking forward to seeing new opportunities of collaborations between EVA and Seoul’s social economy network.
(Published on 2nd April 2020)