European Commission calls for lighter touch on 'sharing economy'

EU states told bans on services such as Uber and Airbnb should be a 'last resort'

The European Commission has told European Union governments that they should not ban ‘sharing economy’ services except as a “measure of last resort”. 

The Commission is publishing new guidelines that seek to harmonise the treatment on online marketplaces and services across the EU. The Commission said any restrictions by EU member states on new online services need be justified and proportionate to the public interest at stake.

“Total bans of an activity constitute a measure of last resort that should be applied only if and where no less restrictive requirements to attain a public interest can be used,” states the draft document.

The sharing economy has seen the rapid evolution of online services such as Uber ride-sharing, which is seeing amateur drivers displacing professional taxis, and Airbnb home-sharing, which reduces demand for traditional hotel rooms.

Services such as Uber and Airbnb currently face outright bans or restrictions in parts of the EU. Uber has been able to operate in the UK but faces partial prohibition in countries such as Belgium, the Netherlands, France and Germany.

Both products of the San Francisco internet scene, Airbnb and Uber have encountered regulatory battles across the United States, and around the world.

While Uber has been able to operate in the UK, in countries such as France, Belgium and Spain the service has encountered legal action from government.

Taxi drivers associations have been protesting against Uber in Britain, France, Britain, Portugal, Spain and other European countries.

Last year, French prosecutors raided Uber's Paris offices as part of an investigation into whether the company was violating a law to curtail online taxi services.

Uber has suspended its UberPOP service, which relies on non-professional drivers, in Brussels last October after a court ordered it shut down.

In March the company reintroduced its service in Madrid after withdrawing the market in 2014 following a court ruling against it.

The European Court of Justice is set to rule on whether or not Uber is a transport company or a digital service. Uber considers itself as a digital service connecting drivers and passengers rather than as a transport service, which would make it subject to more onerous rules on driver qualifications, road rules and insurance.

However, the commission is also to suggest that services that do not allow their operators to set their own prices, or that force operators to take customers, could be deemed to be in an “employment” relationship.

This would be a definition resisted by Uber, which has contested legal actions brought by some of its drivers in the USA. If drivers were deemed to be employees, Uber would become liable for paid holiday and have to make contributions to social security schemes.

In the case of room-renting sites like Airbnb, Berlin has recently sought to introduce fines of up to €100,000 for people who rent out their entire apartments on Airbnb. The service has also faced criticism from city officials in Barcelona and Paris over its impact on local housing markets.

The Commission said banning short-term lets of apartments “appears difficult to justify” when limits on the maximum number of days apartments can be rented out would be more appropriate.