Are we ready for the Collaborative Economy?  

Collaborative economy cover

Digital Revolution comes with big changes in the future of European Community. Accelerate innovation opened the needs for a Digital Single Market. Digital Europe needs new business models to better fit the regional development and the new competitiveness requests.

Collaborative economy is one of the new and big challenges in the new geopolitical landscape. The development of existing collaborative platforms is a real problem for existing market players and practices, but offers extraordinary opportunities to individual citizens to offer new services, in flexible working arrangements and new sources of income.

Named also “sharing economy”, the collaborative economy covers a variety of sectors and is rapidly emerging across Europe. But Europe should be ready to proactively support the innovation, competitiveness and growth opportunities offered by modernization of the economy. Looking to encourage the development of new collaborative economy model, European Commission very recently announced a set of “Guidance and policy recommendations for the collaborative economy”, activity included in the “European agenda for the collaborative economy”.

 

Digital EuropeThe Guidance offers essential information about the single digital market evolution and shows the European Commission’s support for consumers, businesses and public authorities to engage confidently in the collaborative economy. The Commission will review collaborative economy developments, collect statistical data and evidence and work with Member States to exchange best practices.

The collaborative economy is growing rapidly, with important market shares increases in some sectors. Gross revenue in the EU from collaborative platforms and providers is estimated at EUR 28 billion in 2015. This was a two time growing comparing last year. Collaborative economy could add EUR 160-572 billion to the EU economy, according experts estimations.

What is Collaborative Economy?

In a short definition „collaborative economy” refers to business models where activities are facilitated by collaborative platforms that create an open marketplace for the temporary usage of goods or services often provided by private individuals. Collaborative economy transactions generally do not involve a change of ownership and can be carried out for profit or not-for-profit.

According EU Commission, the collaborative economy involves three categories of actors:

  • service providers who share assets, resources, time and/or skills — these can be private individuals offering services on an occasional basis (‘peers’) or service providers acting in their professional capacity (“professional services providers”);
  • users of these
  • Intermediaries that connect — via an online platform — providers with users and that facilitate transactions between them (‘collaborative platforms’).

5 Key issues in collaborative economy development

collaborative systemMarket access requirements – creating new markets and expanding existing ones collaborative economy businesses affect markets traditionally served by classic service providers. According existing EU law, collaborative platforms and new collaborative service providers can be subject to market access requirements (business authorizations, licensing and quality standard requirements);

Liability regimes – according EU law online platforms – as providers of digital intermediary services, are under certain conditions exempted from liability for the information they store. This exemption from liability applicability will depend on the legal and factual elements relating to the activity performed by the collaborative platform.

Users’ protection – collaborative economy blurs the lines between traditional consumers and business classification, due to multi-sided relationship that may involve business-to-business, business-to-consumer, consumer-to-business, and consumer-to-consumer transactions. In these relationships, it is not always clear who the weaker party requiring protection may be.

Self-employed and workers – traditional employment models are disrupted. New digital citizens of Europe can work in flexible arrangements, having individual tasks performed on an ad hoc basis rather than regularly performed tasks.

New taxation models – collaborative economy should adopt the same taxation rules (personal income, corporate income and value added tax). EU community still need to solve key issues associated to taxpayers and taxable income regulations, weak information exchange and differences in tax practices across the EU.

European Commission will establish a monitoring framework covering both the evolving regulatory environment and economic and business developments. The monitoring will aim to follow trends on prices and quality of services, and identify possible obstacles and problems encountered, generated by divergent national regulations or regulatory gaps.

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About Radu Crahmaliuc
Independent IT&C analyst, digital transformation & Cloud computing evangelist, start-ups developer, freelancer, storyteller, events moderator & keynote speaker

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