This week, I'm thinking about ownership.

It's a topic that's top of mind, in part, because of the news of Moove's $23 million Series A.

The company offers revenue-based vehicle financing to "mobility entrepreneurs". It is a car financing and vehicle supply partner of Uber's on the continent. Similar companies include FlexClub in South Africa and Tugende in Kenya.

Thinking about the gig economy, ride-hailing platforms and ownership, I am reminded of a fantastic essay I read last year by Kevin Kwok, entitled "Underutilized Fixed Assets".

The author discusses underutilized fixed assets (UFA) in the context of successful marketplaces. UFAs are "things with fixed costs that are not being used as much as they could be. They are important because they *can* be used more, and from their owner’s perspective all additional usage is free."

They are important, too, because the prevalence of underutilized fixed assets can also help in building the supply side of a marketplace and expedite a platform's growth.

In the early days of ride-hailing in the US, Lyft opened up its driver service to anyone with a car. It became a way for anyone with a car (which is a UFA) to earn extra income. Ditto for Airbnb and empty rooms or homes.

As supply increases, however, these marketplaces see an increase in professionalization. Full-time Uber and Lyft drivers. Houses that are exclusively Airbnb rentals.

It's this part that stuck with me.

Moove's fundraising announcement cited a pretty staggering stat: "In 2019, Africa had fewer than 900,000 new vehicle sales. The U.S. sold more than 17 million new cars that same year."

With a scarcity of underutilized fixed assets, ride-hailing was professionalized from the get-go in African markets. Mobility entrepreneurs became the employees of supply-side "arbitragers" who own the assets.

In this context, lending platforms that turn employees into owners are important. (Indeed, I suspect the reason why ride-hailing platforms, for example, skipped straight to the professionalization stage of marketplace supply is precisely because of the lack of systems of credit that enable ownership).

However, as the landscape and discourse in the global tech environment evolves, so too should the discourse in the African tech environment.

An Evolving Discourse

A prevalent discussion in Big Tech™️ today is on the outsize role platforms play in the lives of its users. These platforms have a lot of (centralized) power.

In the context of speech, Twitter and Facebook ban users who violate the terms of service. In the context of app stores, there is an increasing opposition to 30% cuts of revenue. In the creator economy too, the conversation is shifting to discuss the degree to which platform revenue share is unfair to creators. That, in addition to the fact that algorithm changes or product re-prioritization can have a direct and negative effect on the livelihood of creators.

In the gig economy, there's been a persistent discussion around the extent to which platforms are bad for gig workers, whose effective earnings are, in some cases, below minimum wage. Yes, these platforms create jobs, but they're not dignified jobs. And these workers are at the complete mercy of the platforms.

So while revenue-based vehicle financing does enable mobility entrepreneurs to become owners - which is undeniably better than the alternative - these owners are still subject to the same punitive take rates of the platforms on which they operate.

Meanwhile, much of today's tech zeitgeist is around ownership and incentive alignment.

Whereas social media platforms, for example, monetize attention and have a < 50% revenue share with their creators, in the future the platform itself will be owned by the users (largely enabled and powered by blockchain and crypto technology, and the so-called Decentralized Autonomous Organizations (DAOs)).

While that reality is esoteric and seemingly far in the future, we are experiencing, and will increasingly experience, a fundamental shift in the relationship between platform and participant.

The future opportunities are not entirely limited to crypto, however. As investor Jesse Walden writes,

The ownership economy doesn’t always mean a literal distribution of tokens, stock options, or equity. It also doesn’t necessarily mean that an application or service is entirely built on a blockchain. Rather, it means that ownership — which may manifest in the form of novel economic rewards, platform governance, or new forms of social capital — can be a new keystone of user experiences, with plenty of design space to explore.

In the African context, Victor Asemota has explored this topic from the perspective of the principal-agent problem: "The principal-agent problem is a conflict in priorities between a person or group and the representative authorized to act on their behalf. An agent may act in a way that is contrary to the best interests of the principal."

The problem in the western context may be more acute, while on the continent there is considerably wider opportunity considering income inequality, as well.

The future is and will be about incentive alignment, made possible by shared ownership. Indeed, this should be a concept that resonates in African markets, where, for example, community savings groups and cooperatives proliferate.

So as we're thinking about creating ownership on the African continent, now is an opportunity to look at the limitations of today's status quo, globally, and build towards the more democratic future that we wish to see.

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✌️ Justin

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