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4th Apr 2020

EU should welcome Uber-type firms, commission says

  • A protest against the Uber car ride service in Brussels. (Photo: EUobserver)

The European Commission is weighing in on the side the ”sharing economy” and is urging sceptics to get used to the idea.

”Whether we like it or not, it’s here to stay,” Elzbieta Bienkowska, the commissioner for the internal market, said on Thursday (2 June), .

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”We can close our eyes and ears, but that’s losing energy on trying to prevent innovation from happening,” she added.

The commission's vice-president Jyrki Katainen, responsible for jobs, growth and investment, pointed out that the sharing economy in the EU was worth €25 billion in 2015.

”Europe's next unicorn could stem from the collaborative economy,” he said, using business jargon for a start-up that quickly makes $1 billion.

”Many of those who would like to start a business never take the first step. The sharing economy offers much lower entry threshold, it allows people to test the waters.”

He said Europe had to go with the times and open up to new business models.

”We are in a global competition with regulators from other regions,” Katainen noted. ”It’s always easy to regulate the past. But on this matter, the EU must be on the right side of history.”

Promises and protests

There is no definition of what constitutes the sharing economy. The commission describes it as new business models, primarily based on transactions between users of collaborative platforms that trade in the temporary use of products or services.

The model is best developed in the hospitality and transport sectors. Uber, the car-ride service, or Airbnb, which allows private people to rent out rooms and apartments, have quickly established themselves as household names among young Europeans.

They have also caused public and political protests. Taxi drivers fear losing clients to amateur drivers, who are not bound by expensive permits and who keep their prices lower. Mayors of Paris and Barcelona have denounced Airbnb for causing housing shortages, as property owners prefer to rent out their places to tourists instead of long-term local residents.

In retaliation, Uber has filed complaints to the commission against France, Germany and Spain.

The commission tried to soothe nerves on Thursday (2 June) by issuing guidelines for how existing EU regulations, especially in the area of services, e-commerce and consumer protection - should apply to the sharing economy.

New protectionism

”There’s a risk of a new type of protectionism, not between nations but between old business models and new ones,” Katainen said.

It would be wrong to see the sharing economy as a zero-sum game, where established jobs would be superseded by newcomers, he said.

The commission said its guidelines will help it, as well as national authorities and courts, apply EU law on consumer and employment protection, liability issues, market restrictions and taxation to the sharing economy.

Monique Goyens, director general of the European consumer organisation BEUC, said the sharing economy had many benefits that had to be embraced.

”It is shaking up the consumer experience and paves the way for new opportunities in many markets,” Goyens said.

But the emergence of these new players raised important questions, she noted.

”Consumers need these platforms to be transparent about their business model and provide adequate protection when something goes wrong.”

According to a Eurobarometer published at the same occasion as the guidelines, 17 percent of Europeans had used a collaborative platform at least once. The figure was almost twice as high - 32 percent - among younger, highly educated, urban EU citizens.

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