The platform economy encompasses economic and social activities facilitated by digital platforms. These platforms — such as Amazon, Airbnb, Uber, Microsoft and Google — serve as intermediaries between various groups of users, enabling interactions, transactions, collaboration, and innovation. The platform economy has experienced rapid growth, disrupting traditional business models and contributing significantly to the global economy.
Platform businesses are characterized by their reliance on network effects, where the platform's value increases as more users join. This has allowed many platform companies to scale quickly and achieve global influence. Platform economies have also introduced novel challenges, such as the rise of precarious work arrangements in the gig economy, reduced labor protections, and concerns about tax evasion by platform operators. In addition, critics argue that platforms contribute to market concentration and increase inequality.
Historically, platforms have roots in pre-digital economic systems, with examples of matchmaking and exchange-based systems dating back millennia. However, the rise of the internet in the 1990s enabled the rapid expansion of online platforms, starting with pioneers like Craigslist and eBay. Since the financial crisis of 2007–08, the platform economy has further expanded with the growth of sharing economy services like Airbnb and labor market platforms such as TaskRabbit. The increasing prominence of platforms has attracted attention from scholars, governments, and regulators, with many early assessments praising their potential to enhance productivity and create new markets.
In recent years, concerns about the social and economic impacts of the platform economy have grown. Critics have highlighted issues such as technological unemployment, the displacement of traditional jobs with precarious forms of labor, and declining tax revenues. Some scholars and policymakers have also raised alarms about the potential psychological effects of excessive platform use and its impact on social cohesion. As a result, there has been a shift towards more regulatory scrutiny of platforms, particularly in the European Union, where new regulations have been proposed to ensure fair competition and worker protections. Despite these challenges, platforms continue to be a dominant force in the global economy, with ongoing debates about how best to manage their influence.