EU cautions governments against banning Uber, Airbnb

Taxis in Berlin advertised the Uber ride hailing service. [Alper Çuğun/Flickr]

Services such as ride-hailing app Uber and home-rental site Airbnb should only be banned as a last resort, the European Commission said on Thursday (2 June), as it seeks to foster development of the “sharing economy”.

In its new guidelines, the Commission said any restrictions by EU member states on these online services should be proportionate to the public interest at stake.

“Absolute bans and quantitative restrictions should only be used as a measure of last resort,” the executive said in a statement.

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The European Commission will ask member states to review and amend legislation, when necessary, to end the fragmentation faced by Uber, Airbnb and other collaborative platforms in Europe, has learned.

The guidelines are good news for the likes of Uber and Airbnb, which have faced outright bans or restrictions in some cities as established industry players complain of unfair competition.

The European Commission also said such services should not be subject to additional sector-specific rules – for example hotel and taxi regulations – unless they own assets and set the final price.

However, they should pay taxes like other service providers.

Airbnb, founded in 2008, and Uber, launched a year later, both grew up in the hot-house San Francisco internet scene. From the outset, they faced regulatory battles across the United States, and, more recently, around the world.

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Both have become favourite targets of local officials and rival trade groups in Europe, which has a tradition of strong social oversight.

Airbnb, for example, has faced criticism from city officials in Barcelona and Paris, who say it has driven up property rents.

In the sharing economy, customers use the Internet to contract services such as ride-sharing, where amateur drivers displace professional taxis, or home-sharing, which reduces hotel demand.

European Commission Vice-President Jyrki Katainen said the collaborative economy could produce Europe’s next unicorn, or start-up company valued at more than $1 billion.

“Our role is to encourage a regulatory environment that allows new business models to develop while protecting consumers and ensuring fair taxation and employment conditions,” he said.

Taxi drivers have staged high-profile protests against Uber in France, Britain, Portugal, Spain and many other European countries since 2014.

Last year, French prosecutors raided Uber’s Paris offices in a showdown over whether the company was violating a law to curtail online taxi services.

One dispute between Uber and local authorities is whether it is a digital service or a transport service that would face more onerous rules on driver qualifications, road rules and insurance. The EU’s highest court is set to rule on the issue later this year or next.

The company announced today that it secured $3.5 billion in investments from Saudi Arabia’s public investment fund.

The Commission said it would use the guidelines to ensure that any national legislation does not violate the EU treaties, a veiled threat to any government seeking to impose overly restrictive measures on the sharing economy.

Commission to publish guidelines on sharing economy next week

The European Commission’s highly anticipated views on the sharing economy are expected to pave the way towards a solution to outstanding complaints put forward against the likes of Uber and Airbnb in a number of EU countries.

Monique Goyens, director general of The European Consumer Organisation BEUC: "We agree with the Commission that the benefits of this booming sector need to be embraced. The emergence of these new players does raise important questions though. Consumers need these platforms to be transparent about their business model and adequate protection when something goes wrong."

Trade association European Collaborative Economy Industry (including Uber and Airbnb): "This approach is more needed than EU laws supporting innovative business models. With the Agenda, the European Commission has provided a strong impulse to Member States to reassess existing regulations, and refrain from passing regulations that are not strictly meant to serve the public interest. The European Commission also calls for Member States to consider differentiating between professional service providers and peers providing services on an occasional basis. We support this approach, and welcome the establishment of thresholds under which an economic activity would be considered as non­professional peer­-to­-peer activity and be subject to lighter regulatory requirements."

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