Last week, a European agenda for the collaborative economy was issued by the European Commission, aiming at supporting consumers, businesses and public authorities in engaging in this new business system with confidence.

Collaborative economy is a new business trend which provides access to products, services and know-how beyond one-to-one or singular ownership. It includes a wide range of activities and encompasses various economic sectors, from domestic services to car journeys and sharing houses. Brands like Trip advisor, Airbnb and Uber are now part of our daily life.

if encouraged and developed in a responsible manner, these new business models can be an important contribution to jobs and growth in the European Union.

“The collaborative economy is an opportunity for consumers, entrepreneurs and businesses – provided we get it right,” said Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and SMEs.

A fragmented approach to tackle Collaborative economy.

Indeed, it is currently a source of troubles for both public authorities and market operators.

During the last year, the online ride-sharing company Uber – which employs drivers without the special licenses normally required to drive a taxi – has sparked protests among taxi drivers all over Europe. As a result, national and local authorities have been responded with various regulatory actions.

Nonetheless, the European Commission is convinced that such fragmented approach risks hampering growth, innovation and job creation, as well as creating uncertainty for both new services providers and consumers and traditional operators.

“If we allow our Single Market to be fragmented along national or even local lines, Europe as a whole risks losing out,” she added.

Therefore,  guidance on the way to apply existing EU law to this vibrant and mutable sector.

“Today we are providing legal guidance for public authorities and market operators for the balanced and sustainable development of these new business models. We invite Member States to review their regulation in the light of this guidance and stand ready to support them in this process,” the Eu Commissioner concluded.

 What is inside the EU agenda?

As for business authorisations or licences, service providers should not be required to get one, especially where they only act as intermediaries between those offering the actual service (e.g. transport or accommodation service) and consumers. The only exceptions are cases where it is strictly necessary to meet relevant public interest objectives. In the Commission’s view, Member States should refrain from issuing absolute bans of an activity, unless it is a final resort.

A distinction should also be made by Member States between individual citizens providing services on an occasional basis and those who are acting in a professional capacity –by establishing thresholds based on the level of activity, for example.

Although collaborative platforms can be exempted from liability for information they store on behalf of service providers, they should not be held liable for any services they themselves offer, such as payment services. Nonetheless, collaborative platforms are encouraged to continue taking voluntary action to fight illegal content online and to increase trust.

Even though the Commission called for an elevated protection of consumers from unfair commercial practices,  it also invited Member States not to inflict disproportionate obligations on private individuals who only provide services on an occasional basis.

As labour law mostly falls under national competence, the Commission invited Member States to consider the nature of the work, the remuneration and the relation of subordination to the platform, when they wish to decide whether someone can be considered as an employee of a platform.

Like any other participants in the economy, said the Commission, service providers and platforms in the collaborative economy also have to pay taxes, such as tax on corporate income, personal income and Value Added Tax.

Finally, the Commission encouraged Member States to continue simplifying and clarifying the application of tax rules to the collaborative economy, while inviting collaborative economy platforms to fully cooperate with national authorities to record economic activity and facilitate tax collection.