Europe should embrace sharing economy, says EU

Europe should not shut itself off to “new business models” offered by the sharing economy and companies such as Uber, the EU’s executive commission said on Wednesday as it launched plans to revamp the European Union’s single market.

The European Commission is trying to inject new impetus into the single market, which has helped the 28-nation EU to become the world's largest economy, by opening up the crucial services sector, traditionally least open to cross-border competition.

"In various member states there tends to be basic instincts to kill new business models and favour the traditional ways to do things, which is not necessarily always good," commission vice president Jyrky Katainen told a news conference.

“It would be very sad if Europe was the only continent which denied new business models and this would lead to bad situations in terms of jobs and economic growth,” Mr Katainen added.

The new ‘sharing economy’, which relies on non-professional suppliers of services, often faces resistance from established professions and companies in Europe.

For example, Uber, a popular taxi-hailing service that consumers access through their smartphones, has seen its UberPOP service, which relies on non-professional drivers, outlawed in France, Italy, Spain, Belgium and Germany.

The EU commissioner for the single market, Elzbieta Bienkowska, called for "one European approach" to companies such as Uber, though she stopped short of seeking an end to the bans.

“The situation for now is that in one member state, the UK for example, they are legal, in others they are illegal. We have to have one European approach to this kind of companies,” she told the same news conference, in reply to questions on Uber.

The commission does not plan new legislation on the sharing economy but it said in a document published on Wednesday that it would provide “guidance” on how to apply current rules to the sharing economy.

“(It) will also assess whether there are regulatory gaps and how they need to be addressed without favouring one business model over another,” the document said.

“There must be a common European approach giving a chance to new business models,” Ms Bienkowska said.

COMPETITION, LOWER PRICES

After decades of growth the ‘single market’, which has greatly facilitated trade between European countries, is showing signs of moving backwards as states become keener to protect national industries in a stagnating economy.

Bolder projects to further integrate the 19 countries that share the euro have also raised eyebrows in Britain and other EU states outside the currency union, fuelling fears that the single internal market is no longer a priority.

The Brussels-based commission has proposed the revamp to help allay such concerns.

“While services account for two-thirds of the EU economy, the cross-border provision of services is underdeveloped,” the commission said in its plan.

“Removing unjustified barriers ... would create huge opportunities for new companies to enter the market, improve competitiveness and lower prices for consumers,” it said.

The commission will make new legislative proposals next year to lower competitive barriers in the construction sector and also in business services such as engineering and accounting, which it said account for 11 per cent of the EU economy but “are characterised by low levels of competition and productivity”.

A “service passport” is to be introduced to make it easier for companies operating in these sectors to expand abroad.

The commission also plans to end diverging prices for consumers based on their country of residence, a further opening up of the retail sector, easier recognition of professional skills across the EU and cuts in red tape for small firms.

Reuters