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The Case for Portable Reputation

Mar 7, 2022 | Unpacking the Box

We’ve previously sought to understand what the infrastructure for jobtech in Africa looks like (see here). This article dives into a critical part of the jobtech stack – portable reputation. 

The emergence of gig platforms has reshaped how millions of people across the globe find work and earn a living. British economist Guy Standing estimates that by 2025, one third of all work will be mediated by digital platforms.

One of the defining features of gig platforms is their reputation systems. At the heart of any reputation system is a mechanism that allows users to rate their interactions with other users on the platform. This feedback is then aggregated and crystallized into a rating that informs users about the trustworthiness of a particular individual. On a ride-hailing app for instance, this could be a driver’s average star rating or the total number of rides completed. Similarly, on a freelance marketplace, it could be the number of jobs completed or the freelancer’s project completion rate.

For many independent workers, their online reputation is tantamount to their resume yet many gig platforms have been designed to keep accumulated reputation ‘points’ local to the platform on which they are earned. For instance, an Uber driver cannot export his ratings and driving history from Uber to Lyft. Similarly, a seller cannot display ratings and reviews earned on eBay on Amazon.

Moreover, the inner workings of some reputation systems are opaque and may disadvantage some platform users over others. To give an example, Upwork’s JSS (Job Success Score) penalizes freelancers who take long absences from the platform, regardless of their past performance.

Reputation is currency

Just like one’s credit score can make or break one’s ability to get a loan, online reputation systems could make or break one’s ability to access work opportunities.

Many platform workers in Africa — particularly tradespeople on platforms like Kandua or Lynk, or microenterprises on platforms like Skygarden — have no CVs, few academic qualifications, and lack the traditional datapoints of professional credibility that are often used to get more work. This can be particularly challenging for those who lack social networks. Platform data therefore offers a unique opportunity to build up a professional reputation.

What’s more, multiple studies have shown that the reputation of sellers on online marketplaces significantly influences prospective buyers’ willingness to pay. One study conducted on eBay found that sellers with better reputation consistently receive higher bid prices for auctioned goods.

It follows then that one’s online reputation is inextricably linked to one’s earning potential. This reality is even more pronounced in African markets, where experts hypothesize that jobtech’s evolution will take a different path than the North American and European winner-takes-all business models (with huge scale and very small margins) and instead converge at many smaller platforms, with multihoming users . Given this state of play, the capacity to port reputation is all-important.

Portable reputation can benefit platforms as well, not just workers

One reason platforms do not allow their users to export their reputation is because it creates platform lock-in and increases barriers to entry for competitors. In some markets, however, there are dynamics that create strong incentives for platforms to share their data with competing platforms. 

In Africa, for instance, job-matching platforms for highly skilled labour have very high costs of KYC and onboarding because vetting workers’ qualifications is time consuming and involves many manual processes. Therefore, enabling the portability of verified reputation data could reduce platform onboarding costs as vetting/KYC data is exchanged across platforms. Moreover, for the platforms heavily invested in setting up training academies, reputation porting could become an avenue for monetization. For instance, SafeBoda could create a pay-per-use API that allows its competitors or any other third-party to validate whether a rider completed training at their academy. This could allow SafeBoda to turn a cost center into a revenue source while helping its competitors save on their onboarding costs.

What’s more, unlocking reputation data such as ratings and reviews could increase the discoverability of platform workers on search engines and other discovery channels. For instance, if freelance platforms such as Upwork or KuHustle allow Google to index their ratings and reviews, people searching for “the best mobile developers Nairobi” or “the 2 top web designers in Eldoret” will get richer and more accurate results, resulting in more traffic to the gig platforms.

Interoperability unlocks new possibilities

Reputation data has utility beyond enabling workers to secure more work. One conceivable use case for reputation data is in digital lending. In emerging markets, where the use of alternative data for credit scoring is on the rise, gig worker’s online reputation and earning history provides a good indicator of a borrower’s capacity to pay back.

By limiting the portability of reputation data, gig platforms inadvertently hurt their users’ ability to access the services of other applications that rely on this data to function. Moreover, the rise of open-banking APIs in the UK and Europe has shown that unlocking transaction data and sharing it with third parties can result in novel use cases and applications that were previously infeasible.

For instance, Belvo, a Latam-based open-finance platform, is building APIs to unlock data of gig economy workers. The early use cases of Belvo’s APIs provide a glimpse of what is possible when gig platforms share data with third parties. Heru, one of the first apps built atop Belvo’s APIs automates tax filing for gig economy workers. Before Belvo launched its APIs, it was practically impossible or needlessly complicated to build applications such as Heru.

Therefore, removing artificial barriers around the sharing of platform reputation is likely to lead to new innovative applications that benefit both gig workers and the gig platforms.

Regulators have been slow to step up

Though gig platforms have permeated so many spheres of our lives, there appears to be no regulatory stance on reputation portability.

In 2018, GDPR reformed the European data privacy landscape by giving individuals rights over their personal data, and protections against the misuse of their data. The ‘right to data portability’ is one of the eight rights enforced by GDPR. It allows data subjects to obtain data that a data controller holds on them and to reuse it for their own purposes

While one might assume that the ‘right to data portability’ implies the ‘right to reputation portability’, GDPR does not expressly state this. As Helena Ersic explains, reputation scores do not fit GDPR’s strict definition of data that falls under the right of portability because they are not “provided” by the worker and usually concern more than one “data subject”.

At its core, GDPR is about giving our “internet identities” the same rights that our “physical identities” have always enjoyed. Likewise, reputation portability is about giving platform workers the same “right to self-determination” that traditional professionals such as engineers, teachers, lawyers and others have always enjoyed. If engineers can move from one company to another and still maintain their historical credibility, platform workers should be able to do the same.

It follows then that regulation should err on the side of increased portability. Moreover, reputation portability shares the same ethos as the open banking movement, which was catalyzed by the European Parliament’s PSD2 directive in 2015. By requiring banks to open their payment and data interfaces to third parties, PSD2 unleashed a new wave of innovation and competition in the European fintech ecosystem.

As the gig economy matures, regulators across the globe need to step up and ensure that platform workers are able to exercise their right to self-determination and that innovation is not stifled.

Reputation portability is coming

If there’s anything we can learn from the history of the internet, it is that user-friendliness always wins. As Ben Thompson put it: “in consumer technology — and increasingly enterprise — the best user experience wins, and it is the best hedge against disruption”. Since reputation portability is more user friendly than the opposite, history predicts that the industry will gradually move in the direction of increased portability.

Over the past few years, there have been several developments that should make portability enthusiasts optimistic. In 2016, Uber launched a Driver API that allows third-party developers to access detailed ratings, trip count and more details for drivers who grant them permission, although access to the API is still limited to only approved partners. In order for such initiatives to succeed, there needs to be reciprocity amongst the gig platforms. In other words, it is only beneficial for platforms to share their data if it grants them access to the data of other platforms. This is a gap that startups such as Belvo could fill by coordinating the exchange of data across gig platforms, akin to the role Plaid plays in the open-banking space.

Another noteworthy development is the creation of the Verifiable Credentials standard by the World Wide Web Consortium (W3C), the body responsible for the governance of web standards. Verifiable credentials promise to make reputation and identity native to the internet by allowing web users to easily prove claims about their identity and reputation to anyone on the internet, through the use of decentralized identifiers (DIDs). Yoma is one of the early pioneers attempting to put these new capabilities in the hands of African workers. If adopted, verifiable credentials and decentralized identifiers have the potential to do for jobtech what SSL did for ecommerce. (We’ll explore this more in a subsequent post.)

Relatedly, the rise of web3 is in some ways a reaction to the extractive nature of many of today’s dominant online platforms. Web3 platforms such as Braintrust attempt to fix the economic misalignment between platforms and their users by decentralizing control of the platform and allowing users to co-govern the platform. Moreover, web3 platforms are inherently interoperable and composable —allowing users to carry their data across platforms.

It is not clear how soon reputation portability will become a reality for the millions of platform workers across the globe but the arc of the history of the internet is bending towards increased portability.

The author is the co-founder and CTO of Ugandan jobtech start-up Sellio.


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