US startups pulled in $178 billion in venture funding in 2024, every dollar chasing the same outcome: extract maximum value from workers, deliver maximum returns to investors.The results played out predictably. Tech companies receiving that funding laid off over 238,000 employees to show leaner operations. Platform startups misclassified workers as independent contractors to dodge benefits and protections. Logistics companies deployed algorithmic surveillance to squeeze more productivity from warehouse workers while tracking their bathroom breaks. The pressure to scale fast and exit faster guarantees workers become the variable to optimize, never the beneficiaries.
A different structure has been gaining momentum over the past decade, representing a departure from the cooperative model’s historical trajectory. While worker cooperatives have existed for over a century in agriculture, manufacturing, and retail, growth has increasingly concentrated in technology and media sectors that were previously the exclusive domain of venture-backed startups, with particular acceleration in worker-owned journalism in recent years. At least six worker-owned media outlets launched in 2024 alone, part of a wave that includes worker-owned tech cooperatives and platform businesses.
These new cooperatives are entering platform markets where network effects create winner-take-all dynamics. Historically, only venture-backed companies could afford the massive upfront investment and years of losses these sectors demanded. They are positioning themselves as direct competitors to Uber and Lyft, traditional newsrooms, and corporate tech platforms rather than operating as parallel alternatives in separate markets. The shift in ownership architecture changes everything about how value flows through an enterprise. When the people doing the work also own the business, the incentive to extract value from labor collapses into irrelevance. Labor and ownership become inseparable.
As Esteban Kelly, executive director of the US Federation of Worker Cooperatives, explains: “Worker cooperatives may be the most coherent alternative to capitalism as we know it because they put capital at the service of labor rather than the other way around.” Profit stays with those who generated it rather than flowing to distant investors. Decision-making power follows contribution instead of capital.
Media and Journalism Cooperatives
When Hell Gate launched in 2022, the six-person team made a deliberate choice. They would cover New York City as worker-owners, not freelancers grinding for a masthead. Every reporter holds an equal ownership stake. Editorial decisions and business strategy get hashed out collectively. It sounds idealistic until you look at the numbers. By its third year, Hell Gate saw a 69% increase in subscribers and 66% increase in monthly subscription revenue, reaching over 9,000 paid subscribers and nearly $70,000 in monthly recurring revenue. The site is on track for over $850,000 in annual subscription revenue in 2025, up from $490,000 in 2024. The model worked because it aligned incentives. When the people creating journalism also control its future, they have every reason to make it excellent.
The worker-owned journalism wave extends well beyond Hell Gate. Defector, launched in 2020 by former Deadspin staffers who quit en masse after their new owner demanded they “stick to sports,” has become one of the most successful examples of the model. The sports and culture site reached over 40,000 paying subscribers and $3.2 million in revenue in its first year. As editor-in-chief Tom Ley told Columbia Journalism Review, the cooperative structure means “everybody just gets the same amount” in base salary, with profit-sharing on top. Five years later, Defector continues to thrive, with Ley noting that “it’s the first time in my career where it’s like five years went by and nothing got worse; things just kind of got better.”
Discourse Blog, created by former Splinter staffers after that site was shuttered in 2019, covers politics, media criticism, and culture from the left as a fully worker-owned, independent collective. Racket, founded in 2021 by four former City Pages editors, operates as a writer-owned, reader-funded publication based in Minneapolis–Saint Paul.
Aftermath, launched in 2023 by former Kotaku writers, brings worker ownership to gaming journalism. The five co-founders, Nathan Grayson, Gita Jackson, Riley MacLeod, Luke Plunkett, and Chris Person, reunited to create a site offering breaking news and hard-hitting investigations without corporate interference. As Jackson explained, “I think that this is maybe the only sustainable way to do journalism.” Flaming Hydra, a cooperative of 60 writers and artists, raised over $40,000 on Kickstarter to create a publication for people who want to read and write “like the old internet used to be.” It operates free from censorship, corporatization, and profiteering.
The worker-owned model emerged as venture capital proved incapable of building sustainable media businesses. Investor-backed outlets spent two decades chasing scale, burning through hundreds of millions in cash while laying off thousands of writers to show “path to profitability.” Worker-owned outlets inverted the logic: keep overhead low, pay writers first, and eliminate hefty executive salaries that drain revenue.
Defector’s $3.2 million in first-year revenue covered salaries and benefits for 23 full-time employees, with half the revenue going directly to workers, and the publication continues to operate five years later. BuzzFeed News, with roughly 100 employees, lost $10 million annually despite bringing in revenue, because corporate overhead, executive compensation, and investor expectations consumed resources faster than journalism could generate them, and shut down in 2023. The worker-owned co-op succeeded where venture capital failed because the people producing the journalism determine where the money goes. This eliminates the structural incentive to sacrifice quality and jobs in service of quarterly growth targets.
Platform and Technology Cooperatives
In New York, The Drivers Cooperative launched in 2021 as a worker-owned challenge to Uber and Lyft’s dominance. The drivers own the app, set the policies, and share the profits that would otherwise flow to Silicon Valley shareholders. The economics reflect the difference in structure: the cooperative takes 15% from each ride to cover overhead, roughly half what Uber and Lyft extract. Drivers earn $1.64 per mile, well above the city’s mandated minimum. Cofounder Erik Forman explained the advantage to Fast Company with deliberate understatement: “If you’re not trying to bankroll an assault on workers rights in the United States, it turns out you save a lot of money.” The cooperative now has over 10,000 drivers and $6.1 million in annual revenue. New contracts from the MTA and expansion plans to Denver signal continued growth.
Beyond ridesharing, worker-owned tech cooperatives are emerging across software development, web design, and IT consulting. TechCollective, a worker-owned IT support cooperative operating in Boston and San Francisco since 2006, provides tech support based on a “simple, powerful idea: that tech experts, rather than managers, should be the ones in charge of a tech support enterprise.”
Palante Technology Cooperative, founded in 2010 by politically aligned technologists, provides open-source web development for nonprofits and social justice organizations. As a Palante worker-owner explained, the cooperative model was especially appealing as “an Afro-Latinx and a queer and genderqueer person” in an industry notorious for discrimination: “Few other industries demonstrate the extremes of inequity and discrimination based on race, gender, and other marginalized identities that exist in tech, so it felt especially important that we counter that in our own tech business.” CoLab Cooperative, founded in Ithaca, New York in 2010, builds websites and custom applications for socially responsible organizations.
The viability of these cooperatives is demonstrated not through venture funding rounds but through sustained operations. TechCollective has operated for 18 years across Boston and San Francisco, serving hundreds of businesses and nonprofits with a 4.7-star rating from over 300 customer reviews. CoLab has grown from 2 founders to 19 member-owners distributed across 9 countries, working with clients including Cornell University and major nonprofits. Palante has maintained operations for 15 years, with some client relationships lasting over a decade.
These tech cooperatives proved the model works years before newer platforms like Drivers Cooperative launched in 2021. Yet the tech cooperative sector faces distinct challenges, most notably the fundamental incompatibility between traditional venture capital and worker ownership. Investors expect exits and returns that cooperatives cannot provide. Yet tech cooperatives have found alternative paths. Palante kept initial costs minimal by using open-source tools and existing client relationships, an approach well-suited to consulting businesses. As the cooperative movement has accelerated, financing networks like Seed Commons have emerged to fill the funding gap, making more than 100 loans totaling over $100 million since 2016. These cooperative-built financial structures let businesses share resources and grow without surrendering ownership to investors.
Food Cooperatives
While the newest wave of worker cooperatives has concentrated in media and technology, food cooperatives are experiencing their own resurgence. Business conversions and new models are addressing contemporary exploitation in the industry. This worker-owned model is centuries-old but still rare, first popularized in Europe during the industrial revolution when striking workers formed co-ops to support themselves. In the United States, the model has historically spiked during periods of economic crisis. Cooperative bargaining systems served over a million people during the Great Depression, and worker co-ops surged again following the Great Recession. In the wake of COVID-19, which exposed the brutal toll of restaurant work, the model is being revived once more.
When Proof Bakery founder Na Young Ma decided to step back after running the Los Angeles business for ten years, she chose to sell to her employees rather than an outside buyer. “I really wanted the business itself to carry on the values that I started,” Ma said. “It was so important for me also to make sure that if I left that people who had been working there would not leave and continue to have a job.” In 2021, with help from Project Equity, eleven employees became worker-owners, each investing $2,500 in the business. The conversion model is accelerating as retiring owners seek alternatives to private equity sales. Employees gain wealth-building opportunities in businesses they already know, while communities keep locally-rooted enterprises from being extracted by acquisition firms.
In Philadelphia, Masa Cooperativa is producing fresh masa and tortillas through a worker-owned model that centers undocumented immigrants. The cooperative provides not just jobs but ownership and decision-making power to people systematically excluded from both. As co-founder Ben Miller explained, “Nobody is working illegally as an employee because work is criminalized if you don’t have papers but owning a business is not.” It represents a direct challenge to exploitation embedded in food industry labor, where undocumented workers remain simultaneously essential and invisible. According to the Democracy at Work Institute, restaurants and cafes account for roughly 13 percent of all worker cooperatives currently operating across the country, while the larger food industry accounts for 22 percent, the highest concentration of any sector. The growth reflects brutal working conditions in food service and cooperatives’ ability to create stable, dignified work as a viable alternative.
Veteran cooperatives demonstrate this capacity. Other Avenues in San Francisco recently celebrated its 50th anniversary as a worker-owned grocery cooperative, the Arizmendi Association comprises six worker cooperative bakeries across the Bay Area with wages reaching $40 to $50 per hour, and Alvarado Street Bakery has operated cooperatively since 1977. Red Emma’s in Baltimore has run as a worker cooperative since 2004, growing from a basement cafe to a 13-worker-owner operation with a full restaurant, bar, and bookstore. Named for anarchist organizer Emma Goldman, the cooperative has become a hub for the city’s worker ownership movement, hosting the first-ever national convening of worker cooperative restaurants in 2024. It also helped launch Seed Commons, which has made over $100 million in loans to worker-owned businesses nationwide.
These decades-old cooperatives demonstrate worker ownership can survive in expensive markets. But the current momentum comes from conversions and new models responding to present-day crises in labor and ownership succession.
Building Differently
The cooperative model is now being tested at scale in direct competition with conventional businesses. Can 11 bakers in Los Angeles compete with corporate chains? What about a rideshare app surviving against Uber without burning investor cash? Or a network in Jackson creating stability where banks won’t lend? The infrastructure remains thin and the challenges substantial, but cooperatives keep surviving where theory said they’d fail. Teamshares has acquired over 80 businesses. Defector runs profitably five years in. Proof Bakery’s workers own what they built.
The pattern matters because it challenges assumptions about what’s required to launch and sustain a durable business. These enterprises reinvest profits rather than extract them. When downturns hit, they adjust wages instead of cutting jobs. Success gets measured in decades, not exit timelines. The ownership structure redefines the entire equation: journalists can pursue stories advertisers won’t fund, drivers can vote on fares and working conditions, immigrant workers can build wealth the traditional economy denies them access to.
Worker cooperatives remain a small fraction of American business, but their growth shows that workers can be more than a line item to optimize. Cooperatives fail for the same reasons any business fails: market pressures, poor management, or a fundamental mismatch between structure and sector. They compete against opponents who benefit from investor subsidies, wage theft, and regulatory capture. The model won’t replace venture capital or restructure the American economy overnight.
But in an economy built on extracting maximum value from labor, these enterprises prove workers can be more than a line item to optimize. They can own the outcome and build wealth instead of generating it for someone else.
Editor’s Note: This story has been updated to include Hell Gate’s third-year performance metrics from their 2025 annual report, including a 69% increase in subscribers, 66% increase in monthly subscription revenue, over 9,000 paid subscribers, nearly $70,000 in monthly recurring revenue, and projected annual subscription revenue exceeding $850,000 in 2025.
Reporting Note
This article draws on venture funding and layoff data, federal labor guidance on worker classification, and a cross-section of public reporting and primary documentation from worker-owned cooperatives in media, technology, platform services, and food. It synthesizes cooperative annual reports, subscriber and revenue disclosures, interviews and statements from cooperative leaders and worker-owners, and case studies published by journalism and industry outlets to compare worker-owned enterprise performance against venture-backed business incentives. The piece also relies on cooperative movement resources and financing-network reporting to explain how co-ops fund growth without traditional venture capital, including documented lending totals and expansion models. All figures, claims, and examples are grounded in the primary sources and further reading listed, with emphasis on verifiable metrics (revenue, subscriber counts, driver earnings/take rates, years in operation, and conversion terms) and on-the-record descriptions of governance and ownership structure.
