The sharing economy could change the way in which we interact for the better

The sharing economy is changing the way we interact and we must adapt accordingly, argues Vicky Ford.

By Vicky Ford

22 Sep 2015

The digital revolution is transforming the economic landscape for both consumers and businesses. Innovation is revitalising areas of the economy that have been lying dormant, creating new jobs and new products. 

A major element of this revolution is the growth of the sharing economy, enabled by online platforms, whereby individuals interact with each other to exchange goods or services.

A recent study has estimated that the sharing economy could grow from €12bn last year to €315bn in 2025. Consumers have embraced online sharing opportunities, which offer them greater flexibility and choice of goods and services, as well as more control over how these are received and used. Easy access to customer reviews gives consumers the ability to be better informed about their purchase decision.


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There are also potential benefits for society and the environment. For example, car sharing brings affordable transport solutions to isolated rural communities, free-cycling reduces demand for manufactured goods, and in response to the refugee crisis, citizens across Europe have been using digital platforms to offer support and shelter. 

There are many opportunities for entrepreneurs managing sharing platforms as well as for micro businesses and peer-to-peer providers.

The route to self-employment has never been easier and many people prefer the flexibility that comes with short-term work, and the ability to combine shared economy roles with other work or family commitments. However, the traditional distinction between a consumer and a business is also becoming blurred.

Should someone who rents their spare bedroom out to a stranger be regarded as a hotel? What about someone who wants to give a stranger a lift into the local town for a few extra euros? Should they be required to go through the same tests and exams as a regulated taxi driver? Not all sharing economy roles fall outside of existing regulatory frameworks.

Different member states have different approaches to regulating services. In the UK, for example, anyone offering to drive passengers for a fare must hold the same licenses covering both the driver and the vehicle as those required for a traditional mini-cab driver.

There are many nuanced questions which the Commission will need to address in its upcoming digital single market strategy. Ensuring a competitive level playing field must remain a key tenet of Europe's single market. 

I hope European Commissioner Elzbieta Bienkowska will bear this in mind when finding a balance between those who want to see the sharing economy expand and those who are more concerned with defending existing practices.

Rushing to ban business models risks stifling innovation and growth. Furthermore, simply extending existing sectoral regulation to participants in the sharing economy risks being disproportionate. 

I hope that the Commission will look at how to make it easier for businesses to set up shop and pay taxes online, prevent unjustified price discrimination and encourage new approaches to managing or insuring against the risks associated with new business models. 

Industry solutions such as having kite-marks to indicate compliance with appropriate health, safety and work regulations could also enhance trust.

The sharing economy could fundamentally change for the better the way in which communities and individuals interact.

Entrepreneurs frequently tell me of their ambition to be able to operate across the single market without complex regulatory arrangements in each country. 

We should allow our entrepreneurs to continue innovating and ensure the regulatory framework in which they operate is proportionate and does not create additional burdens.

 

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