Brussels to issue sharing economy ‘guidelines’ in March

Numerous protests against Uber have taken place across the EU since the ride hailing app became popular among users in Europe. [David Holt/Flickr]

The European Commission will issue guidelines to member states in early March on how to regulate emerging companies like Uber and Airbnb, which have shaken up the taxi and hotel sector.

“Uncertainty over the rights and obligations of users and providers are a key obstacle hampering the sharing economy,” the Commission said on Wednesday (27 January) in a report outlining the early results from a public consultation launched in September.

“Traditional” service provides, such as taxi drivers and hotels, support strict new rules to regulate the sector.

In the opposite camp are emerging companies, digital platforms and public authorities, who tend to favour a lighter regulatory approach. They call for “more guidance and better information on the application of existing rules as a policy response,” the Commission said in its report.

According to the EU executive, a majority of consumers who responded to the consultation backed Uber-type companies, saying they provide sufficient information on services and consumer rights.

New legislation excluded

Before the results of the consultation were unveiled, the Commission clearly ruled out specific legislation to regulate companies like Uber and Airbnb.

Instead, the EU executive announced last November that it would publish a set of guidelines on how to apply existing laws across the EU in a more homogeneous way, taking into account the various regulatory responses that emerged at national level.

The Commission will present this long-awaited document in early March, Commissioner for Industry El?bieta Bie?kowska announced on Tuesday (26 January).

The Polish Commissioner again made the case for a light regulatory approach, arguing in favour of “clear guidelines related to existing regulations”.

Uber has been not only the most popular, but also the most controversial of these new firms. The irruption of the US-based company in Europe is regarded as “unfair competition” by taxi drivers.

Some member states like Spain reacted by banning the ride-hailing service, while various national authorities restricted the service?including France, Belgium, Germany, The Netherlands and Italy.

Critics point out flaws in the tax compliance of Uber drivers, and to a risk of eroding social protection schemes across Europe.

>>Read: ‘Uberisation’ of economies pinching state tax revenues

Even though new legislation is ruled out for the time being, the issue is far from being settled inside the College of Commissioners, where each EU member state has a seat.

Some Commissioners would like to see a more thorough impact assessment before ruling out new legislation.

Marianne Thyssen, the Employment and Social Affairs Commissioner, said on Wednesday (27 January) that the EU executive “will have to reflect” on the new types of work emerging from new business models and whether existing legislation is “fit for purpose”.

>>Read: Taxi drivers look for allies in the Commission against Uber

Meanwhile, other Commissioners are staunch backers of the new companies brought by the sharing economy.

“In the college of commissioners, my role is to be on the positive side of innovation,” the Commissioner for Innovation, Carlos Moedas, told EURACTIV at the World Economic Forum in Davos.

He admitted that “of course” there are “negative angles” to look at, including taxation and social protection. However, he argued that the EU “should embrace” the sharing economy, as it represents an “important element for the future of the economy”, because it creates new markets and provides additional sources of revenue for the people who need it.

Moedas confessed that he was “very impressed” by the comments made by the CEO of Uber, Travis Kalanick, during the World Economic Forum. “We all have to respect the rules of the game, but the concept of being the master of your own time is a very interesting way of looking at things,” he said.

In the European Parliament, lawmakers appear broadly in favour of Uber-type companies, and called on regulators to encourage their development in Europe.

>> Read: MEPs unite behind ‘pro-Uber’ report

The controversy around the sharing economy has triggered numerous legal disputes in member states.

In Spain, the National Markets and Competition Commission, has challenged the regulations of the local authorities in Malaga and Cordoba seen as “limitation to effective competition” without economic justification.

>>Read: Spanish competition regulator pushes for sharing economy - despite court cases

Spain emerged as a test case in the debate over the collaborative economy, experts and EU officials say. The country has not only caught media attention by banning Uber and severely limiting Airbnb?it is also the only country in Europe where other popular services like Blablacar are being examined by judges.

In stark contrast with the decisions taken by local authorities and national judges, the CNMC officials consider that some of the restrictive measures taken against innovative service providers are “unnecessary”. The Spanish body is currently concluding the first comprehensive study to be published by a national authority on the sharing economy.

At EU level, the European Commission is seeking clarity as to which rules should apply, saying uncertainty may constitute a barrier for both business and consumers. Users for instance face issues related to trust, safety, data privacy and insurance against certain risks. For example, will they receive insurance coverage in case of an accident?

When looking at possible regulatory issues, the EU executive said it wants to find the right balance between:

  • Facilitating innovative services;
  • Protecting consumers; and
  • Ensuring a level playing field between different business models.
  • 27-28 January: EU ministers discuss the sharing economy in the informal Competitiveness Council in Amsterdam.
  • Early March: European Commission announces its guidelines on how to apply existing regulation on sharing economy.
  • End March/early April: Full reports to be published on online platforms and collaborative economy.

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