The European Commission’s highly anticipated views on the sharing economy are expected to pave the way towards a solution to outstanding complaints against the likes of Uber and Airbnb in a number of EU countries.
The College of Commissioners will discuss on 1 June a set of guidelines to help member states apply existing EU laws to the collaborative economy―in areas such as taxation, employment and consumer protection.
A decision is expected to be formally adopted by written procedure on the following day, EU sources told EurActiv.com.
The Commission is looking at provisions included in the Services Directive and the E-Commerce Directive to see how they can fit Uber-type companies, and will consider new legislative proposals in the event that regulatory gaps are identified.
Once the executive sets out its political stance on how to apply existing EU law, it will decide on the pending legal cases in some member states.
Uber submitted complaints against France, Germany and Spain, claiming that the restrictions imposed on its operations in these countries breach the principles of the internal market.
The European Commission is also assessing complaints filed by Airbnb against the Catalan Tourism Act, and German legislation regulating the tourism accommodation sector, where the US house-renting company is a disruptive player.
Uber meets commissioners
These legal cases were in the background when the CEO of Uber, Travis Kalanick, came to Brussels for a visit yesterday (23 May).
Kalanick met with top EU officials involved in the sharing economy dossier, including commissioners for the internal market, transport and innovation (Elżbieta Bieńkowska, Violeta Bulc and Carlos Moedas, respectively).
The CEO of Uber told commissioners about the difficulties his company faces in France, Spain, Germany and Hungary, while praising the regulatory framework in Estonia, Lithuania, Finland and Britain, Commission officials explained.
Kalanick also discussed with EU authorities what he sees as his “next frontier”.
“We can turn every car into a shared car,” he later told an event organised by the Lisbon Council think tank, saying car pooling could help cope with traffic jams, limited parking spots and pollution in European cities.
“We are making our case but also learning what it is going to take to bring our kind of innovation to many cities here in Europe,” Kalanick said. “I got my first course in speaking European this morning at the European Commission,” he confessed.
This was not the first time the US entrepreneur visited the European Commission. Last year, he came to Brussels amid numerous legal challenges brought against his car-ride service UberPop in countries including France, Spain, Germany, Belgium or the Netherlands.
The San Francisco-based firm has now re-entered some of these markets with UberX, a new service operating with licensed chauffeurs.
Commissioners and their teams met over the last few months with numerous representatives of the collaborative economy, and sectors affected by the competition it represents.
As Uber continues to expand, taxi drivers are looking for allies inside the European Commission before the executive takes its position on the legal challenges posed by the ride-hailing service, and the so-called sharing economy as a whole.
In order to assess the existing legal framework and identify potential regulatory gaps, a broad project team involving 16 Commissioners started work on 5 April to set out the political approach on which the EU guidelines will be based, according to documents seen by EurActiv.
The group of Commissioners not only explored regulatory aspects, but also the potential of the “uberisation” of areas like energy and food production.
Against this backdrop, firms including the Dutch platform Vandebron allows consumers to buy electricity straight from local farmers with excess electricity production generated from solar panels or biogas installations.
Members of the European Parliament backed Uber-type companies in the heated debate about the sharing economy, calling on regulators to encourage their development in Europe.
European Commission spokesperson Lucia Caudet explained that "we are looking at how we can encourage the balanced development of the collaborative economy, without favouring one business model over another. We have made very good progress and will shortly present guidance on how existing EU law applies to the collaborative economy."
Gareth Mead, Uber spokesperson, said: "In recent months Europe's first ride-sharing partnership began in Lithuania; Estonia became the first European country to begin the process of legislating for ride-sharing; and both Spain and Poland's competition authorities strongly criticised current regulations that restrict consumer choice. There is significant momentum which reflects the huge consumer demand everywhere."
The sharing economy allows individuals to provide on-demand services to other people, in a peer-to-peer model without intermediaries.
This business model has disrupted whole sectors like taxi services and hotels, who complain that Uber and Airbnb do not play by the same rules. The main issues raised relate to the tax compliance and social protection of self-employees, as well as insurance and consumer protection matters.
They called for a new set of rules to address the shortcomings of this new business model.
Meanwhile Uber, the world's most valuable venture-backed start-up, with a valuation of $40 billion, faces increasing challenges across Europe, where local taxi drivers have taken to the streets and courts to fight it.
Uber has been criticised worldwide over how it pays drivers, charges passengers and ensures their safety. Taxi companies argue the company competes unfairly because it does not have to pay license fees and bypasses local laws.
To date, Uber has been hit by court injunctions in Belgium, France, Germany, the Netherlands and Spain. Uber has already filed two complaints against a French law it says favors regular taxi companies at its expense. It also submitted complaints against Spanish and German bans.
Regulation of taxi services is the competence of member states, the European Commission said. But it will assess complaints in light of the principles of proportionality, non-discrimination and freedom of establishment.
Despite legal barriers, Uber has continued attracting investors, raising $1.2 billion to strengthen its position in China last year.
A report drafted by PwC for the European Commission in 2013 recommended several measures to address the challenges :
- Tailored tenders aimed at addressing the restriction those companies face and stimulating innovation within this field;
- Facilitating the creation of minimum safety and quality standards for peer-to-peer markets;
- Making it attractive for employees to receive company shares, and receive dividends for instance in the form of tax exemptions or reduced taxes on salaries.
- Early June: Commission is expected to publish its guidelines on sharing economy.
- Late 2016: European Court of Justice's ruling on Uber activities in Spain.
- European Commission: Public consultation on Online platforms and sharing economy.
- European Parliament: Report on the Digital Single Market (including the collaborative economy).
- Dutch Presidency of the EU: Harnessing the potential of the collaborative economy
- Spanish regulator (CNMC): Study on the sharing economy,