On 7 May, at the invitation of MEP Andreas SCHWAB, Commissioner Bieńkowska attended a lunch for an exchange of views with other Members of the European Parliament and with representatives of UBER. Her speaking notes from that event are available below.
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Opportunities for innovative business models in the EU Single Market
I am very pleased to be here today.
We share an interest to respond to the challenges and opportunities presented by the sharing economy - or as I prefer to call it: the collaborative economy. Uber is one of its front runners, but there are many more realities that we have to look into. Already today, 28% of our global population are participating in the collaborative economy. This number will only increase. And we also know that it affects many players in services markets in every Member State:
- it affects traditional players – like taxis and hotels to name only two – facing new competition.
- it affects citizens and businesses who share their assets or skills through online platforms; and
- it affects consumers who obtain access to new goods and services;
As a consequence, we are faced with concrete challenges and real opportunities:
- How can we best accommodate the development of the collaborative economy – which is an important lever for growth – with the realities of the single market?
- How can we find a modus vivendi between these new players and the traditional players, the public authorities, etc?
The recent tensions emerging in a number of Member States have to be considered and answered for. We have already launched the reflexion:
- Together with other Commissioners, we are looking at the collaborative economy and its new business models.
- The Commission adopted yesterday the Digital Single Market Strategy, calling for wide consultations on online platforms.
- It will be an issue that will also be addressed under the Internal Market Strategy due to be published in the autumn.
Today I would like to focus on:
- online platforms facilitating the collaborative economy;
- benefits of the collaborative economy; and
- challenges it raises.
1. Online platforms
The success and expansion of collaborative business models would not have been possible without digital platforms. Sharing is not new, but sharing with unknown people connected through online platforms is new.
Yesterday the Commission adopted the Digital Single Market Strategy, one of the main priorities of the new Commission. The Strategy contains many important elements. Online platforms are amongst them. We all know how important online platforms have become in our daily life. We often use them as search engines. The collaborative economy goes beyond online platforms and has a direct impact on the real economy. It uses online platforms to facilitate offline services. The rise of the collaborative economy offers opportunities for increased efficiency, growth and jobs. But it also potentially raises new regulatory questions and challenges.
The Digital Single Market Strategy already announced that the Commission will launch before the end of 2015 a comprehensive assessment of the role of platforms. This assessment will include the sharing economy. We will engage extensively with stakeholders on this topic. To better understand the implications of the collaborative economy we need to hear more about experiences on the ground. That said, the up-coming Internal Market Strategy will deal more specifically with possible regulatory issues posed by the collaborative economy beyond online platforms.
2. The benefits of the collaborative economy for the internal market
I welcome new business models emerging under the collaborative economy. They bring benefits for the users and to our economy. They are a clear opportunity to create more growth, jobs and wider choice for consumers and entrepreneurs. The collaborative economy spans a wide variety of sectors and covers many different aspects of the economy. The collaborative economy can offer a more efficient use of resources, skills and assets:
- allowing for alternatives to traditional services and goods;
- increasing efficiency gains for our society: out of 1 billion cars, for example, 740 million are typically only occupied by 1 person;
- enabling citizens to become economically active;
- helping entrepreneurs find better resources and new partners.
Today, the collaborative economy's value is estimated at 10 billion euros globally. By 2025 this is expected to increase to more than 250 billion euros. Some of this growth will be at the expense of other traditional business models. But much of it will be new economic activities. We should therefore see the collaborative economy as an opportunity – not a threat.
3. The challenges raised by the collaborative economy
But regulatory issues may come up, not only for online platforms, but also for the offline providers and users of shared services. The forthcoming Internal Market Strategy will look into such issues. One important issue is the lack of clarity as to which rules should apply to providers, online platforms, and users of shared services. This lack of clarity may constitute barriers both for business and for consumers. It stems from rules that may be well-established, but may not fit the nature of services provided by the collaborative economy. Providers of collaborative services are not sure about which rules apply to them. Are they complying with all relevant licencing requirements, insurance obligations and safety conditions? Users face issues related to trust, safety, data privacy and insurance against certain risks. What happens in case of an accident? Are they insured in case of an accident?
Online platforms face regulatory fragmentation across and within Member States which complicates and sometimes even impedes market access. In some sectors, like the one Uber is active in, traditional business providers (taxis) claim that competition is distorted since new business models may operate outside the set rules giving them unjustified cost advantages.
When looking at possible regulatory issues, we need to find the right balance between:
- facilitating innovative services;
- protecting consumers; and
- ensuring a level playing field between different business models.
We need appropriate rules which are respected by all players. The emergence of new business models may give a timely trigger to assess whether the regulatory framework for established operators is still fit-for-purpose. This links well with the new Commission's better regulation and REFIT agenda. Member States need to respect the general principles of proportionality and non-discrimination. They also need to comply with EU secondary law, such as the Services Directive and e-Commerce Directive.
4. Conclusion and next steps.
A vibrant internal market requires the right balance between stimulating innovation, protecting consumers and ensuring a level playing field. This will be our objective in the Internal Market Strategy that we will publish this autumn. As you have already seen, my first instinct is not to think of new European regulations. However, our regulatory framework must be fit for purpose and the collaborative economy must be in a position to fully benefit from the single market. The economic operators are approaching us and underlining that the single market needs European solutions.
If we wish to make Europe a fertile ground for new business models and operators, we cannot have 28 different national regulations, or hundreds of different regional approaches – let alone thousands of separate local responses.
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