EurWORK European Observatory of Working Life

Collaborative economy

In its June 2016 Communication A European agenda for the collaborative economy, the European Commission defines the collaborative economy – sometimes called the 'sharing economy' – as ‘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’. Many people in the EU have already availed of collaborative economy services, which range from sharing houses and car journeys to domestic services. According to the Commission definition, the collaborative economy involves three categories of actor:

  • service providers who share assets, resources, time and/or skills – these can be private individuals offering services on an occasional basis or service providers acting in their professional capacity
  • users of these services
  • intermediaries that connect providers with users through an online platform and that facilitate transactions between them

Collaborative economy transactions generally do not involve a change of ownership and can be carried out on a for-profit or not-for-profit basis.

The Commission takes the view that the collaborative economy has the potential to create new employment opportunities, boost flexible working arrangements and create new sources of income. It could also generate income beyond traditional linear employment relationships. However, because working arrangements in the context of the collaborative economy are often based on individual tasks performed on an ad hoc basis rather than in a pre-defined environment and time frame, flexible working arrangements are often less regular and stable than traditional employment relations. The Commission, therefore, cautions that this increased flexibility could create uncertainty about the rights and levels of social protection to which workers are entitled.

In terms of its working arrangements, the term ‘platform economy’ is generally used in a similar way to collaborative economy, though it refers more specifically to a business model based on digital networks (i.e. platforms) that coordinate labour service transactions in an algorithmic way. The platform economy also has mixed implications for work and employment: while it can facilitate work participation, this participation is based on a workforce whose conditions of employment, representation and social protection are unclear and/or are disadvantaged.

While the EU should proactively support the innovation, competition and growth opportunities inherent in this emerging economy, the Commission believes that it is important to ensure fair working conditions, adequate and sustainable consumer and social protection. Citizens and businesses should be aware of the rules and obligations that apply to them.

In terms of trade unions, the European Trade Union Confederation (ETUC) presented its position on the single market strategy for Europe in December 2015, challenging the assumption that the collaborative economy increases employment and benefits workers. ETUC believes that the current state of the traditional European economy, the increase of precarious and low-paid jobs and high levels of unemployment are contributory factors to the growth of the collaborative economy. The union wants employment regulation and social security cover to apply to people working in collaborative economy services and believes that particular attention must be paid to the problems of bogus self-employment and undeclared work.

On the employers’ side, BusinessEurope stated in a position paper issued in January 2016 that it firmly believes the collaborative economy ‘could offer new opportunities for innovative business models, that it can enable operators to provide services in an innovative way and can also foster entrepreneurship through the establishment of partnerships between big corporations and start-ups’.

BusinessEurope also believes that developments in the collaborative economy can lead to the adoption of flexible forms of employment for workers (especially for women, young people or people outside the standard job market) that may otherwise not be available to them. However, it warns that these new business models could undermine the level playing field between new and traditional business models providing similar services under a different regulatory framework and should therefore be carefully monitored.

See also: atypical work; entrepreneurship; platform work; self-employed person

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