Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

What A Wonderful New World: The Sharing Economy

Wolfgang Kowalsky 13th June 2016

Wolfgang Kowalsky

Wolfgang Kowalsky

The European Commission has just issued a communication on “A European agenda for the collaborative economy” (02.06.2016). The Commission considers this term ‘collaborative economy’ as interchangeable with the term ‘sharing economy’. It will, according to them, create fantastic new opportunities and in particular new employment opportunities. This economy is growing rapidly and therefore the Commission aims to provide legal guidance and policy orientation. It puts on the glasses of the service providers and states that the key question is whether collaborative platforms and service providers can be “subject to market access requirements”. Under this logic, “absolute bans and quantitative restrictions” are not really welcomed but only as a “measure of last resort” – last resort for what is not defined.

The Commission focuses on the question of how to differentiate between professional and non-professional providers who operate on an occasional basis. The first conclusion of this description is far reaching: Member States can only impose regulatory requirements “under limited circumstances and subject to a specific procedure”. This procedure considers the level of control or influence exerted by the platform as crucial. The criteria to be taken into account are a) the price – does the platform set the price? b) terms and conditions – are the terms and conditions mandatory, c) ownership of key assets – does the platform own the assets? And, only if all three criteria are met, can the Member states intervene.

The Commission generally is encouraging the development of the collaborative economy. It warns Member states against having overly restrictive rules that may hinder their potential. The Commission uses the collaborative economy to ask them to assess the adequacy of their national employment rules taking into account the ‘innovative nature’ of collaborative economy. As regards employment status the Commission gives a poisoned ‘guidance’ to member states:  instead of ensuring that the workers, employees or self-employed are covered, the member states have to assess an employment relationship according to at least 3 criteria to determine whether there is ‘subordination’ or a condition to qualify as employment relationship. And only under this condition are national employment rules allowed to be applicable. Is that still respecting the subsidiarity principle?

At this point, one can only congratulate Uber and Airbnb for extremely efficient lobbying of the relevant Commission services: thanks to the third – totally superfluous – criterion of ownership (taxis, flats etc. owned by platform or not), the Member States are redundant and can’t intervene. So, congratulations to the platforms and those quite influential civil servants in the Commission who are eager to give a helping hand to the platforms. Information asymmetries such as the user ranking which becomes quite decisive, together with the power imbalance between the platform and the workers, is not “proof of significant influence or control”.

First we have to look at the bigger picture. The Commission should have tried to check whether there is a functioning market or market failure and whether there is a level playing field between the new service providers and the old ones. It is quite clear to everybody outside the Commission that there is no such thing as a level playing field. Are the markets failing? Yes, there is market failure which needs to be addressed. Instead of going in this direction, the Commission actively prevents Member States from correcting market failure. When a platform fixes prices, in the good old days it would have been seen as a cartel to be dismantled…

In the current situation, with the aftermath of the financial crisis, the collaborative economy is promising innovation, progress and welfare. What we can see is a lot of disruption but no growth. The collaborative economy does not deliver. Perhaps the rise of collaborative platforms coinciding with the steep decline of media and entertainment companies (music, film, TV, newspapers, book publishers and other creative branches) is a zero sum game? The digital economy may make a few digital companies prosper but not the entire economy and society. Most of the platforms constitute a monopoly, not as technology or IT companies but as digital infrastructure companies.

The real key question would be how to ensure fair play between the disrupters and the established companies before the latter go downhill and nobody is delivering service of the same quality as before. And a second key question would be the fair share – are a few platforms collecting the benefits or will they be redistributed to the whole of society? A third key question is about externalisation of the effects of platforms, such as pollution or precariousness. All these questions are questions about society’s future, much broader than the nitty gritty details of internal market features.

Wolfgang Kowalsky

Wolfgang Kowalsky is a policy adviser working in the trade union movement in Brussels.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u421983467298feb62884 0 The Weak Strongman: How Trump’s Presidency Emboldens America’s EnemiesTimothy Snyder
u4201 af20 c4807b0e1724 3 Ballots or Bans: How Should Democracies Respond to Extremists?Katharina Pistor
u421983c824 240f 477c bc69 697bf625cb93 1 Mind the Gap: Can Europe Afford Its Green and Digital Future?Viktor Skyrman
u421983467b5 5df0 44d2 96fc ba344a10b546 0 Finland’s Austerity Gamble: Tax Cuts for the Rich, Pain for the PoorJussi Systä
u421983467 3f8a 4cbb 9da1 1db7f099aad7 0 The Enduring Appeal of the Hybrid WorkplaceJorge Cabrita

Most Popular Articles

startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer
u421983467 2a24 4c75 9482 03c99ea44770 3 Trump’s Trade War Tears North America Apart – Could Canada and Mexico Turn to Europe?Malcolm Fairbrother
u4219834676e2a479 85e9 435a bf3f 59c90bfe6225 3 Why Good Business Leaders Tune Out the Trump Noise and Stay FocusedStefan Stern
u42198346 4ba7 b898 27a9d72779f7 1 Confronting the Pandemic’s Toxic Political LegacyJan-Werner Müller
u4219834676574c9 df78 4d38 939b 929d7aea0c20 2 The End of Progess? The Dire Consequences of Trump’s ReturnJoseph Stiglitz

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

S&D Group in the European Parliament advertisement

Cohesion Policy

S&D Position Paper on Cohesion Policy post-2027: a resilient future for European territorial equity”,

Cohesion Policy aims to promote harmonious development and reduce economic, social and territorial disparities between the regions of the Union, and the backwardness of the least favoured regions with a particular focus on rural areas, areas affected by industrial transition and regions suffering from severe and permanent natural or demographic handicaps, such as outermost regions, regions with very low population density, islands, cross-border and mountain regions.

READ THE FULL POSITION PAPER HERE

ETUI advertisement

HESA Magazine Cover

What kind of impact is artificial intelligence (AI) having, or likely to have, on the way we work and the conditions we work under? Discover the latest issue of HesaMag, the ETUI’s health and safety magazine, which considers this question from many angles.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
How are minimum wage levels changing in Europe?

In a new Eurofound Talks podcast episode, host Mary McCaughey speaks with Eurofound expert Carlos Vacas Soriano about recent changes to minimum wages in Europe and their implications.

Listeners can delve into the intricacies of Europe's minimum wage dynamics and the driving factors behind these shifts. The conversation also highlights the broader effects of minimum wage changes on income inequality and gender equality.

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641