Experience

Growth of the sharing economy

With the spectacular inter-connectivity deriving from the digitalisation of our society, the radius of people one can interact with broadens massively. This creates immediate scale at low transaction costs, freeing significant potential for social and resource efficient economic exchanges.

The resulting Sharing Economy optimises the use of idle assets which can now be shared efficiently amongst many users. The positive impacts are numerous: better use of our resources, savings and/or additional sources of revenues in-turn increasing purchasing power, value-add by offering additional solutions, new social interactions providing a human face to the digital economy. As the size of the sharing economy increases however, we observe rising concerns which need to be addressed efficiently to foster its phenomenal efficiencies and positive externalities.  All actors will benefit from a well-defined context to this fast growing trend, as long as the definition is adequate and standardized across the EU.

Sharing vs. profiting

It is important that all EU countries recognise the rights of private individuals to share an idle assets. We must distinguish between: sharing an asset in exchange for a financial contribution to its costs (no profit involved), or utilizing it in exchange for a revenue (for profit). This results in different fiscal and legal implications for asset owners.

At BlaBlaCar, a trusted community of more than 10 million members connecting drivers with empty seats to passengers looking for a ride across 14 countries, our drivers do not make a profit. They propose to share a ride they would do anyway, in exchange for sharing the costs. Fares are calculated on the basis of average cost of driving per KM, and capped by the website/mobile app.

Some other activities go beyond simple cost-sharing, allowing individuals to profit from their asset. The sharing economy therefore needs tools for private individuals to justify the total costs linked to an asset, and prove when they are sharing their costs vs. making a profit. In France for example, a fiscal scale (“barème fiscal kilométrique”) historically used for companies to reimburse their employees driving for professional purposes, allows drivers to estimate their cost/km; in the UK, HMRC provides an “Approved Mileage Payment Allowance”. Similar calculation mechanisms could be extended to other sectors.

Ideas

Our recommendation:

We believe that encouraging all European countries to 1) clarify the right of private individuals to share an idle asset and the costs associated to it and 2) have fiscal mechanisms for individuals to clearly define when they are cost-sharing vs. making a declarable profit, would be key in allowing the sharing economy to strive in a well-defined context.