Private sector providers including Uber, AirBnB and VentureLab will today sit down with senior members of the European Commission to take the next steps in determining the competitive landscape for the so-called Collaborative Economy across the European Union.
The meeting takes place against the backdrop of Brussels ongoing efforts to formulate a consensus policy on the Collaborative - or Sharing - Economy that all member states can live with. This is going to be no easy task given the varying natures of national attitudes to free market economics - see street violence, road rage and burning taxis in Paris as a case in point.
But given the centrist nature of the Commission, it’s inconceivable that the Eurocrats in Brussells would not regard it as essential to regulate on the emergence of firms such as Uber and AirBnB in European markets, which now represent big business. Over the past 12 months alone, gross revenues from collaborative economy platforms and providers in Europe are estimated to be €28 billion, almost doubling from 2014 to 2015.
That instinctive need to legislate has in turn spawned the creation of EUCoLab, the European Collaborative Economic Forum, a group of more than 20 Collaborative Economy businesses to act as a lobby group and a united voice for the industry in its dealings with the Commission.
Current members are Andaman7, airbnb, deemly, Guardhog, Homestay, HooYu, Intuit, Lignum Capital, LocoSoco, meploy, nimber, parkfy, peerby, PlugR, seats2meet, SnappCar, Spotahome, TicketSwap, ThePeopleWhoShare, Uber, VentureLab, Veridu and YourParkingSpace. EUCoLab describes its mission statement as being to:
bring together collaborative economy businesses and European policymakers to discuss the public policy landscape of the collaborative economy. Through a continuous programme of exclusive roundtables, special projects, research and campaigns, EUCoLab creates a space for open dialogue to foster greater understanding of our platforms and their role in Europe’s digital transformation.
The Forum signals industry’s commitment to work with policymakers to ensure that Europe moves to the forefront of embracing new ways of meeting consumer demand and so that Europeans benefit from the improved competitiveness and social progress that the growing collaborative economy delivers.
In attendance at today’s meeting will be Jyrki Katainen, Commissioner for Jobs, Growth, Investment and Competitiveness:
Vice President Katainen will lead an exchange of views with industry leaders on how best to support emerging services. Vice President Katainen comments:
The collaborative economy is becoming a driving force in our endeavour to create jobs and growth in Europe. To reap the benefits of this new global trend, the close cooperation with interested parties and EU platforms, including EUCoLab, are indispensable. In this respect, EUCoLab provides a very useful forum that helps both shaping and monitoring the policy and addressing key regulatory issues.
Under discussion at the meeting will be the European Commission’s recently published European Agenda for a Collaborative Economy paper. This identified a number of key regulatory areas in which EU states have not yet fully aligned with the existing EU legal framework, including market access, liability, consumer protection, employment and taxation, and which hinder the collaborative sector’s growth.
For its part, EUCoLab followed up the publication with its own cross-industry survey to try to curate the key issues which the sector faces in Europe from a provider perspective. Respondents were from 20 collaborative platforms with a combined consumer audience of over a million users per day and with 500,000 service providers operating on their platforms.
The survey identified a number of inhibitors to platform growth in place:
- Outdated laws in the form of requirements to adhere to outdated laws conceived for similar services.
- Market Fragmentation due to fragmented regulatory and compliance requirements across Member States, leading to complex and heavy administrative burdens.
- Costs of setting up businesses across Member States.
- Lack of access to talent to develop platform infrastructure.
- Lack of political support for the collaborative economy.
- Lack of access to finance to develop platform infrastructure and role out across Member States.
- Professional vs occasional providers in the form of there being no differentiation between individual citizens providing products and services on an occasional basis and providers acting in a professional capacity.
- Lack of enforcement of existing national and EU laws which protects incumbents/traditional industry.
- A policy environment which embraces permissionless innovation. Lack of insurance options. VAT complexity and fragmented tax requirements across Member States.
- Restrictive authorisation schemes and/or licenses regimes.
- Lack of opportunity to work with regional and national governments to deliver public services using the collaborative economy platforms. A data policy environment which opens up government data to unlock innovation.
What respondents would like to see from the Commission is:
- A clampdown on members states taking action against service providers using “disproportionate and anti-competitive” laws, with absolute bans on activities only to be used as measures of last resort.
- A level playing field to ensure national authorities review existing national legislation such that market access requirements continue to be justified, necessary and proportionate. No additional European regulation is necessary, just the proper enforcement of existing EU, as opposed to national, law.
- Targeted fiscal support for small platforms looking to scale, with tax incentives and/or allocation of tax breaks, to encourage providers to stay in Europe and grow.
- A focus on measures which ease administrative requirements to help small businesses grow, including a reduction in red tape, particularly arising from issues such as data protection.
Strong liability protections for intermediaries and for policymakers to refrain from imposing new consumer protection obligations on intermediaries.
- Local and federal governments to take an active role in working with industry to promote the Collaborative Economy in Europe as an alternative to traditional services.
From the consumer perspective, the main barriers to engagment with the Collaborative Economy were identified as:
- Lack of political support for the collaborative economy. Lack of familiarity with the collaborative economy.
- Lack of insurance options and concern over damages.
- Preference to deal with traditional companies.
- Lack of confidence in platform dispute mechanisms and ability to police the community.
- Lack of confidence that the provider’s identity is verified.
- Uncertainty regarding applicable consumer rights.
- Lack of confidence in the platform to uphold data protection and privacy.
- Lack of confidence that the provider has the necessary skills to provide the service or ensure a minimum quality of goods.
- Perceived lower quality of goods or service in comparison to traditional industry provider.
To address those points, the wish list is:
- Ensure that consumers are allowed access to the full range of services provided by platforms, and not be denied access due to outdated and protectionist regulation
- No new rules, but rather a focus on enforcement of existing EU laws, namely the Services Directive, E-Commerce Directive, Freedom to provide Services and Freedom of Establishment.
- No new consumer protection obligations on intermediaries.
- Take into consideration the tools currently used to address public policy concerns, for instance, in relation to quality or verification through rating and reputational systems, which reduce the need for certain elements of regulation.
- Support and incentives for TrustTech technologies and services which enable the verification, identification, social profiling and reviewing of participants.
Well, if you don't ask, you don't get - but I find it highly unlikely that asking Brussels for less regulation in areas such as data protection is an exercise in some futility.
That said, it's good that the industry is getting involved in early debate around the Collaborative Economy. There's a lot of be decided here. It won't be sorted out today, but a journey of a thousand miles begins with a single Uber ride etc etc.