A justice-based governance approach for platform-based ecosystems

Abstract

Platform-based ecosystems (PBEs) are interdependent actors interacting to create value. To attract and retain actors while fostering interaction between them, PBEs use governance elements. As more participants enter the network and interact, more value is created and shared, so the governance aims to trigger this network effect. Fair governance will attract and retain participants. Otherwise, PBE participants leave, and value is not created and shared. Notwithstanding, we do not find any governance model for PBE based on justice. The question arises: Why do we need a justice-based governance (JBG) model for platform-based ecosystems (PBEs), and how should it be? We used a qualitative approach through multiple case studies with three delivery platforms: Rappi, the largest platform in Colombia; iFood, the largest platform in Brazil; and AppJusto, a platform that has been gaining prominence for its governance model with minors fees for restaurants and higher pay for couriers. Our data indicates that AppJusto is a fair platform overall. Nevertheless, we identify that couriers like to work in delivery PBE because of the flexibility appeal and the capability to increase value earned by working more, although the flexibility is an illusion since most couriers need to work 12 up to 14 hours. For restauranteurs, the PBE is a marketing strategy to attract customers to the salon but consider the fees extremely high. In general, for couriers and restaurants, there is no chance to negotiate with the platform and no similar alternatives in the market. The network effect created a lock-in of participants in platforms such as iFood in Brazil and Rappi in Colombia. Without a similar alternative, participants feel trapped under an unfair contract. Our JBG model indicates that fairness is individuals' capability to do or be what they value, and whenever they control their environment, they are responsible for their behavior. Otherwise, we state that governance formulators become responsible for the behavior that the implemented governance systems induce. This conclusion has theoretical implications about what justice is and how policymakers could focus on individuals' capability beyond the fair distribution of resources. We inspire jurists to review the responsibility under the contract when there is no chance to change the governance system. Ecosystem competitors can rethink how a JBG can improve and trigger network effects while remaining fair. Finally, our JBG opens the discussion of whether we should still use contracts as a fair mechanism because our data support that the contractarianism perspective about justice is not fair; only because someone signed a contract does not mean it is fair. Second, because a contract does not allow freedom, it may restrict or deny liberties, so capability should be used as a principle in any contract development.