Delany & Co EUCoLab Round Table 3_v2

European Collaborative Economy Forum
Shared thinking for a collaborative Europe
Roundtable Three:
The Platform
27th January 2016,
Brussels
www.eucolab.org
contact@eucolab.org

EUCoLab Roundtable Three: The Platform | 2
The European Collaborative Economy Forum: Our Aim
The European Collaborative Economy Forum provides a neutral place for industry and policy
makers to come together to explore the current and future policy and regulatory landscape
of the collaborative economy.
The Forum’s aim is to help create a strong and competitive industry for the benefit of platforms,
users and European consumers. The Forum is funded by a collection of like-
minded companies, who believe that co-operation and exchange of ideas are paramount to
furthering the collaborative economy in Europe.
As part of this, EUCoLab is holding a series of roundtables between policymakers and
industry, focusing on the constituent parts of the collaborative economy - the consumer,
the participant and the platform. The roundtables are a first step in establishing dialogue.
This report outlines the discussions held on 27th January 2016 during Roundtable Three:
The Platform. This third roundtable follows Roundtable One “The Consumer in a Trust Based
Collaborative Economy”1
and Roundtable Two “Supporting Participants in the Network”2
.
Who is the European Collaborative Economy Forum?
EUCoLab members are collaborative economy service providers, working across different
verticals and along the entire value chain of the collaborative economy.
Current members include:
For further information on the work of the Forum, please visit our mini-site:
www.eucolab.org or email: contact@eucolab.org

EUCoLab Roundtable Three:
The Platform
27th January 2016, Brussels

EUCoLab Roundtable Three
An Introduction to the Collaborative Economy
Based on an introductory presentation by Luc Delany, EUCoLab Roundtable Chair
What is the collaborative economy?
By leveraging internet based technologies to empower individuals, corporations, non-profits
and government with information, these platforms enable distribution, sharing and reuse
of excess capacity in goods and services on a scale that did not exist before. By enabling
consumers to connect directly with participants, platforms create value by unlocking
unused or underutilised assets, streamlining business whilst opening up access to markets
and employment. The effect of such peer-to-peer transaction models is to enable people to
effectively unlock and redistribute the untapped value of underutilised assets, “capitalising
on our newly found ability to use the Internet to match millions of haves with millions of
wants, instantly and efficiently”: April Rinne, World Economy Forum3
.
The collaborative economy can be defined as a
social and economic system which allows people
to share access to their assets, resources, time
and skills through network technologies and peer
communities in ways and on a scale that did not
exist before.
The effect of such peer-to-peer transaction models is to
enable people to effectively unlock and redistribute the
untapped value of underutilised assets, “capitalising on our
newly found ability to use the Internet to match millions of
haves with millions of wants, instantly and efficiently”
April Rinne, World Economy Forum

The Opportunity for Europe
• To date, the collaborative economy has produced 17 billion dollar start-up companies
(and 10 so called ‘unicorns’).4
• Collectively collaborative economy start-ups have already received $15 billion in funding
– surpassing the social media space which spurred giants like Facebook, Twitter and
LinkedIn.5
• PriceWaterhouseCoopers estimates that the five main collaborative economy sectors
alone (peer to peer finance, online staffing, peer-to-peer accommodation, car sharing and
music and video streaming) generated €14.1bn in global revenues in 2014 (making up
just 5% of total revenue generated by the sectors examined), and would generate up to
€315.6 billion by 2025.6
• Participation in the collaborative economy is predicted to rise by a third in the next 12
months in Europe - more than 150 million Europeans are expected to engage in sharing
over the next year.7
• Nearly 5% of Europeans are participating in the collaborative economy and considerable
growth is expected in the next year. Certain European countries are leading the way in the
collaborative economy, with participation highest in Turkey (9%), Spain (6%) and the UK
(5%), but this suggests that there is considerable scope for growth across the continent as
familiarity spreads and more people turn their knowledge into action.8
Collectively collaborative economy start-ups have already
received $15 billion in funding – surpassing the social
media space which spurred giants like Facebook, Twitter
and LinkedIn.

Issue One: Ensuring European platforms are
success stories
I: How are platforms meeting consumer demand of tomorrow?
Cities are facing many challenges including rapid urbanisation, increased population, aging
populations and a continued strain on resources. The intersection of a city’s highly networked
physical space with new digital technologies and new mediated forms of sharing, offers cities
the opportunity to connect smart technology to community sustainability. The collaborative
economy offers a route to increased resilience, optimisation of the transport of goods and
increased efficiency of resource consumption.
European cities are embracing the collaborative economy as an opportunity to embrace
collaboration and as a way of dealing with transport pollution and congestion; encouraging
local investment; increasing efficiency; cutting waste and addressing inequalities in access to
services.
Case Study: Amsterdam
Amsterdam Sharing City is a joint initiative in which ‘ambassadors’ from all corners
of the city work together: from startups to corporates, from community centres to
public libraries, and from universities to local municipalities. Amsterdam residents
are closely involved: research shows that 84% of ‘Amsterdammers’ are willing to
participate in the sharing economy9
.
The purpose is, firstly, to utilise the chances the collaborative economy offers in
the areas of sustainability, social cohesion and economy as a city. And secondly,
to formulate answers to the challenges that this rapidly growing phenomenon
entails. The city has demonstrated leading practice in the area already, for
example: It was the first municipality in the world to develop regulations around
Airbnb. The city allows residents to rent out their homes as ‘private rentals’ for
a maximum period of two months a year. Airbnb will support participants by
making paying taxes on the income and tourist tax easier.

II: Unleashing economic assets and increasing resource efficiency
Reselling, giving, swapping, short-term renting and lending—with or without monetary
exchange and whether practiced between individuals or through companies or associations—
are all models that can help to increase the usage duration of resource-consuming goods.
The collaborative economy has created markets out of things that wouldn’t have been
considered monetisable assets before.
Example one: A better transport solution
• The average car is parked at home for 80% of the time, parked elsewhere for
16% of the time and is only on the move for 4% of the time.10
• There are 1 billion cars globally, of which 96% are underutilised.11
• The average occupancy is 1.3 passengers per vehicle and is falling in most EU
countries.12
Example Two: Increasing the efficiency of household goods
• Shareable goods account for a quarter of household expenditure and a third of
household waste.13
• 80% of household goods are used less than once a month. If sharing models
could be operated under the most favourable conditions, savings of up to 7%
in the household budget and 20% in terms of waste could be achieved.14
• There are 80 million power drills in the US that are used an average of 13
minutes. But an average power drill has a lifespan of about 160 operational
hours. So the average drill gets used a mere 0.001% of its potential lifespan.15
The collaborative economy has created markets out of
things that wouldn’t have been considered monetisable
assets before.

III: How might we ensure collaborative economy platforms are
able to succeed?
i) Supporting participants
Supporting participants to provide services through platforms will help platforms grow:
• Self-employment is a growth area in many EU member states. Platforms offer flexible
opportunities for those looking to top up income or make use of their existing assets.
Making compliance (eg tax and reporting requirements) easy for participants is
essential to supporting activity in the sector and encouraging citizens to offer their
goods and services in the sector. Participants need amongst other things, an easy tax
reporting scheme, especially when they only use the collaborative economy to earn a
complementary income. Electronic transactions which are facilitated by collaborative
economy platforms can transform transparency and traceability for authorities and
individuals in what have historically been cash-in-hand industries.
• The role of platforms in making it easier for participants to submit their tax information
should be considered by policymakers and examples of best practice should be
monitored. The Estonian Tax and Customs Board (ETCB) and Uber, for example, are
setting up a working group to analyse collaboration points between Uber’s global cash-
free service and the ETCB’s contactless reporting scheme in order to offer new ways of
paying tax liabilities. As a result of the joint pilot project of Uber and the ECTB, a new
tax declaration platform will be developed, which is meant to simplify tax declaration
process for Uber’s partner drivers. First results are expected in 2016.
• There is a need for policymakers to consider the creation of legal statuses for those
working in the collaborative economy. For example, specific legal statuses have been
created in some Member States to support the development of participation on
platforms. For example, as from the 1st of January 2009, France has created the status
of “auto- entrepreneur” that offers simplified conditions to set up a business, as well as a
simplified system to calculate taxes and social charges.
ii) Barriers to cross border trade
• Technical and regulatory fragmentation across borders deters platforms from setting up
and operating across borders - currently only 7% of EU SMEs operate across borders.16
• Participants wanting to trade online face extra costs of €9,000 to adapt to national
laws17
. For participants wanting to increase their cross border activity; different sets
of rules on copyright, consumer protection, company law, data protection pose a
significant barrier.

iii) A clear and measured approach regulation
• Platforms segment their markets by location, with different regulations applying to
businesses (e.g. consumer safety and commercial zoning) and consumers (e.g. local taxes).
In order to support platforms, policymakers should avoid fragmentation of regulations;
and consider whether regulations applying to traditional industry are appropriate for
microentrepreneurs (eg licensing requirements). The policy focus should be on how to best
apply and unify existing EU regulations instead of creating additional regulation.
• There is a need to effectively enforce existing EU laws, and notably the E-Commerce and
Services directive to lift national restrictions to innovative services. According to these
Directives, any regulation restricting freedom to provide service needs to be justified
and proportionate with regards to the public interest objective it pursued. Applying
this proportionality test to online services of the collaborative economy, any restriction
to such services that is not meant to strictly support public interest, users’ choice,
innovation and competition should be systematically called into question and - when
needed - reviewed. This proportionality test should be systematically applied, and EU law
strictly enforced by the Commission.
iv) Understanding the rules
• Industry is doing much to inform and educate participants on their responsibilities
and how to adhere to rules across Member States. There is a need for policymakers
to support platforms in simply and clearly setting out guidance on rules designed to
protect consumers and employees.
• Creating a Digital Single Gateway in each Member State, for example, would allow
collaborative economy platforms to ensure that participants can easily and quickly
access the information and procedures they need – this should incorporate a single
digital process for businesses to set up across Europe.
v) Insurance
• Insurance is crucial to making the collaborative economy work for everyone. Member
States and the Commission should investigate EU-wide cooperation with the insurance
industry to ensure collaborative economy participants have access to insurance and
increased clarity on questions of liability.

vi) Accessing finance
• Entrepreneurs need funding in order to found and grow startups. While the costs of
launching a startup have fallen significantly, access to finance is still a major issue for
startups and is often ranked as the top issue they face18
.
• Equity financing is normal for startups, with loans often unsuitable or inaccessible for
most. Although funding at the seed level has become slightly easier to access in recent
years (supported by tax reliefs in some member states); it remains hard for startups to
raise subsequent rounds of funding.
vii) Access to talent
• For platforms to thrive, Europe needs talented entrepreneurs to found companies, and
startups need to be able to hire skilled developers, engineers and designers. This is a
constant challenge. A survey of Coadec supporters showed it was the 2nd ranked issue,
after access to finance19
. This reiterates findings of other reports, for example, research
last year found that 77% of Tech City businesses could grow faster if there were more
skilled people available20
.
viii) Member States unlocking innovation
• There is a clear role for Member States to support platforms – both in working with
platforms to deliver services and also opening up government data to unlock innovation.
For example, successful UK platforms such as Zoopla have been built on top of public
sector data.
• Member States should be encouraged to release more data and open up transactions
using APIs to allow others to build upon them. This will create massive new opportunities
for innovation by platforms.
While the costs of launching a startup have fallen
significantly, access to finance is still a major issue for
startups and is often ranked as the top issue they face.

ix) Supporting peer reviews/ reputational mechanisms
• The existing legal basis for consumer protection under European Law applies to
collaborative economy service providers, consumers and participants; as it does any
other part of the economy. However, there is a clear demand from consumers to be
able to identify themselves online in a way which shifts away from traditional methods.
Regulations need to be able to support demand for peer verification and reputational
mechanisms. These tools empower the consumer, rather than disadvantage them, and
are driving better trust, quality and consumer responses.
• The majority of laws relating to consumer protection were created during the analogue
age. The kinds of services which were intended to be regulated, no longer provide the
kind of quality service consumers are demanding now.
• A shift in thinking is required, to ensure regulatory and legislative rules are reviewed with
a presumption that regulations should be removed where new technological solutions
allow and promise to ensure better services for consumers.
x) Embracing permissionless innovation
• Policymakers should strive to create conditions for permissionless innovation where
possible. Policymakers should not jump to regulate a new technology, and should try
to create the space for innovation rather than taking a precautionary approach in all
instances.
• A new approach by policy makers is needed: where disruptive innovation is supported
and an environment where people and businesses can adapt prioritised.
• The guiding principle should be for similar services to meet the same underlying
regulatory objectives, with a view to ensuring consumer safety while avoiding
fragmentation that would hamper the development of new business models.
The majority of laws relating to consumer protection were
created during the analogue age. The kinds of services
which were intended to be regulated, no longer provide the
kind of quality service consumers are demanding now.

CASE STUDY ONE
Peerby, Daan Weddepohl
What is Peerby?
Peerby is a website and app which enables people to borrow and rent what they
need from others in the neighbourhood. Peerby operates in cities across Europe
as well as 10 cities in the US and has offered close to €1 billion in product value.
What impact does Peerby have?
The platform enables participants to earn additional income or save money by
renting or borrowing items. On average, participants save €100 per transaction;
whilst suppliers make up to €300 per month by using the assets they already own.
Peerby connects communities and has already managed to connect 200,000
neighbours. This allows participants to generate social capital through connecting
people. Research by True Price suggests that the average value of such
transactions is €30 (i.e. the social capital value). In 2014, the platform generated
€2 million of social capital.
Sharing items is a more sustainable method of consumption and has a massive
impact in reducing waste. Peerby offers a more efficient way of consumption by
enabling individuals to have access to goods which they are not able or choose
not to own.
What are the key things which policymakers can do to
support the platform?
An alternative approach to taxation
The current system of taxation focuses on the point of labour rather than the
resources consumed. This creates an incentive to move jobs and waste resources
because there is no cost attached. Proposals such as the Ex’tax, for example,
enable a more sustainable kind of prosperity, based on sensible use of resources.
The Ex’tax brings tax on resources up and tax on labour down, creating a proper
incentive to use abundant and recycled materials instead of scarce ones. Lower
taxes on labour would make it more affordable to benefit from the abundance of
capacities of people, boosting manpower, craftsmanship and creativity.

Partnerships
Engagement and support from Member States and local governments to
work with collaborative economy platforms to tackle social challenges (carbon
emissions, congestion, waste and service inefficiency) would provide a powerful
signal to the public and investors. There is also a role for joint research and
partnerships to properly understand and assess the impacts of platforms in
addressing these challenges.
Embracing platforms which encourage sustainable approaches
70% of people will be living in cities in Europe by 2020, and solutions which deal
with the resource challenge that this presents are urgently needed. Collaborative
economy platforms present significant opportunities to address through
embracing a Circular Economy; thereby reducing waste and creating social capital.
For example, support from policymakers in facilitating cooperation with the
manufacturers who design goods and products for sharing over individual use
would be beneficial. Research by the Ellen MacArthur Foundation suggests that
lease models are both more profitable for manufacturers and more cost efficiency
for the user.

CASE STUDY TWO
LocoSoco, James Perry
What is LocoSoco?
LocoSoco is a UK based early stage start up which matches what participants
have with what others need. The platform was founded as a result of the closure
of a local village shop. The shop was the lifeline of the village and so when it
was threatened with closure the community decided to pool time and money
to purchase the shop. Volunteers now run the shop and the savings are passed
back onto consumers. Founder, James Perry, was inspired by the idea of what
communities can achieve when they work together; and so LocoSoco was
founded.
What impact does LocoSoco have?
The platform enables participants to earn additional income, save money
and reduce waste by renting or borrowing what is need from the community.
LocoSoco therefore empowers communities and consumers. By connecting
people, the platforms allows for joint purchases through group buying power,
thereby harnessing strength in numbers and facilitating the pooling of resources.
This allows for better value for money for consumers, access to goods which
individuals would not otherwise be able to enjoy, whilst also reducing waste and
negative environmental impacts. Money which is saved or generated can be
re-invested into local communities, supporting community local regeneration.
Partnerships with government
The public sector is a major consumer of digital services. Member State
partnerships with collaborative economy companies would go a long way to
unlocking innovation and growth in the sector. Europe has a burgeoning digital
technology sector with a wide range of highly skilled and innovative companies
and yet collaborative economy companies are often unable to access the
government procurement market due to high barriers to entry and complex,
expensive and often frustrating processes.

Making it easier to set up and trade across borders
Only 7% of SMEs sell cross-border. Small businesses and new platforms wanting
to trade online face extra costs of €9,000 to adapt to national laws. For startups
who want to scale up quickly, the challenge of 28 different sets of rules on things
like terms and conditions in contracts, copyright, consumer protection, company
law, data protection pose a significant barrier. This is especially the case when
contrasted with the option of heading to the United States as startups scale,
where often there is a more unified regulatory regime.
Reconsidering regulation
Technology has changed the level of regulation that is needed. For example, laws
and regulations from a pre-digital age do not take into account the value of user
ratings and social trust, GPS tracking, or verified online IDs. Regulations should be
removed where technological solutions allow and pan European standardisation
achieved as quickly as possible to assist platforms wishing to set up and trade
across borders.

CASE STUDY THREE
YourParkingSpace, Harrison Woods
What is YourParkingSpace?
YourParkingSpace is an online marketplace designed to make it simple for consumers
to park their cars. With 30,000 registered users, the platform enables participants to
find parking and book online instantly - with hourly, daily and monthly parking spaces
for rent. Whether it’s a parking space in a town centre for a few hours, or a secure
lock-up garage, the platform has over 250,000 spaces across the UK, ranging from
residential driveways to secure garages and commercial car parks. The platforms
allows consumers to “Search, Book and Park” in three simple steps. The platform
aims to be in 15 major cities by 2018 and has partnerships across Europe and
Australia with other online marketplace platforms.
What impact does YourParkingSpace have?
The platform has direct benefits for consumer and participants. By opening up
competition and increasing choice, the platform offers consumers cost savings in
comparison to traditional parking providers, as well as a reduction in time to find
parking. The platform enables participants to offset the cost of mobility. Parking
in cities such as Manchester are as much as £1000 - £2000 per annum and rise to
£3000 - £4000 per annum in London areas.
The platform enable participants to compete with public service providers (at
a more competitive rate than incumbents); which thereby also benefits the
customers who rent the spot. The effect is net wealth creation – which when
scaled across populations, could be considerable. The impact of improved
mobility and access also has positive social and economic impacts.
The platform also has a strong role to play in reducing the environmental impact
of transportation. Cars spend 30% of their lives looking for parking spots - in
some cities, this is greater. Statistically, it is possible to infer that 30% of accidents,
pollution and road erosion may derive from this sole inefficiency. By introducing
parking spots, YourParkingSpace aims to eliminate this.

Access to Finance
Entrepreneurs need funding in order to found and grow startups. It is a common
misconception the online businesses are low cost to start: platforms require a
huge amount of forward investment to grow. Although the costs of launching a
startup has fallen significantly, access to finance is still a major issue. There is,
however, a significant role for European policymakers to encourage mechanisms
such as tax relief for early stage companies and promoting equity financing for
startups to raise initial and subsequent rounds of funding.
Supporting partnerships - public and private
There is a role for policymakers in facilitating partnerships - city level authorities
have significant parking inventory and a public infrastructure; and could benefit
from collaboration with such platforms. Councils and other operators also have
the wealth to invest in these products; and policymakers could usefully encourage
mutually beneficial partnerships and schemes to work together.
Putting the participant at the centre of policymaking
Some Member States, such as the UK have developed tax free thresholds for
income generated from specific sharing economy practices (ie accommodation).
The whole sector would benefit if these exemptions were applicable to revenue
generated from across all sharing economy sectors.
In addition to financial incentives, there is a role for policymakers to examine and
amend where thresholds for entry and compliance disincentivises participation
on platforms. For example, some thresholds (e.g. civil liability insurance) may
make it unfeasible for those who wish to offer their parking spaces. There is,
therefore, a need to review regulation in order to keep things simple and ensure
that participants do not fall into heavy regulation designed with large incumbent
businesses in mind. The focus should be on embracing and delivering the societal
benefits which the service provides; rather than attempting to fit the service into
categories designed for traditional industry.

Summary of discussion
The collaborative economy is creating new opportunities for entrepreneurs as well as for
individuals to offer their services on platforms. It was agreed that the collaborative economy
expands opportunities for entrepreneurialism and self-employment, and there is a clear role
for policymakers in supporting this. It was also noted that traditional services providers which
do not currently offer services through platforms are also experimenting with and moving
towards a more collaborative model.
A broad discussion on how industry and policymakers could work together to ensure the
successful development and retention of European collaborative economy platforms
followed. It was widely agreed amongst industry that one of the most important ways to help
platforms would be through supporting participants operating on the platform. The example
of UberPOP in Paris was provided: 85% of drivers made under €8000 a year. Given that
the cost of ownership (parking, insurance etc.) is approximately €7000 a year; most drivers
were simply recovering the cost of mobility. The question of when an individual operating in
the sharing economy becomes a business is a key challenge to be addressed. The concept
of an EU wide threshold to determine when participants should be categorised as private
individuals supplementing their income and when they should be considered professional
business enterprises (which should be regulated more) was discussed; and consultation with
industry should be undertaken when determining how this would work in practice.
To date, only some Member States have actually created a legal status which helps individuals
to become active in the collaborative economy; and more work needs to be done. Support
for the creation of bespoke insurance options and enabling insurance companies to better
understand the risks was also identified as an area where industry and policymakers could
work together. Tax allowances for income generated from the sharing economy to encourage
participation and legitimise the sector was also discussed. Industry agreed to highlight
particular examples of best practice amongst Member States across these areas.
It was agreed by industry and policymakers that platforms are creating opportunities for
flexible employment and offer a real opportunity to tackle under and unemployment. In light
of this, it is crucial that policymakers help to ensure that participants are able to comply with
their obligations. This involves exploring simpler tax reporting and working with platforms
encourage them to build-in the ability for participants to report into their systems. Another
key issue identified by participants was VAT and the lack of clarity over rules. Policymakers
confirmed that this was an area which they were working on as a priority area.

Uncertainty over rights and obligations of users and providers are a key obstacle to the
development of the sector. The existing market fragmentation was also identified as a key
barrier to platform growth by industry participants. Many industry participants considered
expanding in the US rather than across Europe to avoid challenges presented by regulatory
fragmentation and the associated administrative costs. The specific example of different
sets of terms and conditions in contracts when setting up across various Member States
exemplified the significant time and cost burdens presented by scaling across Member States.
A standardised approach to border control was also identified as a common barrier. There
was broad agreement on the need to identify where fragmentation occurs and consider
standardisation and transferability across borders. Fragmentation between regulation at local
level - for both the platform and participant operating on the platform - was also identified as
an additional barrier. Industry participants were in agreement that more guidance and better
information on the application of existing rules would be more beneficial than the creation
of additional rules.
Better access to early stage finance and venture capital was also identified as a major
barrier to European expansion. Participants underlined the importance of supporting and
creating access to venture capital for early stage start ups. The importance of policy makers
facilitating access talent was also highlighted - both by reducing administrative costs as well
as encouraging entry into the industry. The role of policy in providing investor confidence and
legitimacy for the sector through tangible steps such as specific tax breaks for investment, as
well as shaping public discourse about the sector positively was also discussed.

References
1. EUCoLab (European Collaborative Economy Forum), Roundtable One: The Consumer in a Trust Based Collaborative Economy,
October 2015, https://www.dropbox.com/s/cs41nxnexyo19x6/EUCoLab%20Round%20Table_1%262%20Reports.pdf?dl=0
2. EUCoLab (European Collaborative Economy Forum), Roundtable One: The Consumer in a Trust Based Collaborative Economy,
October 2015, https://www.dropbox.com/s/cs41nxnexyo19x6/EUCoLab%20Round%20Table_1%262%20Reports.pdf?dl=0
3. Position Paper: Young Global Leaders Sharing Economy Working Group. World Economic Forum Young Global Leaders Taskforce:
Circular Economy Innovation & New Business Models Initiative, 2013, April Rinne et al,
www.slideshare.net/CollabLab/ygl-sharing-economy-position-paper-final-june-2013/
4. The New Rules of the Collaborative Economy, 2015 Data on the Rise of Sharing, October 2015, Jeremiah Owyang
http://www.web-strategist.com/blog/category/collaborative-economy/
5. The New Rules of the Collaborative Economy, 2015 Data on the Rise of Sharing, October 2015, Jeremiah Owyang
http://www.web-strategist.com/blog/category/collaborative-economy/
6. Five key sharing economy sectors could generate £9 billion of UK revenues by 2025, 15th August 2014, PWC
http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/the-sharing-economy-sizing-the-revenue-opportunity.html
7. European sharing economy to grow by a third in the next 12 months, 1st July 2015, ING
http://www.ing.com/Newsroom/All-news/European-sharing-economy-to-grow-by-a-third-in-the-next-12-months.html
8. European sharing economy to grow by a third in the next 12 months, 1st July 2015, Tech City News, Ryan Fowler
http://techcitynews.com/2015/07/01/european-sharing-economy-to-grow-by-a-third-in-the-next-12-months/
9. Collaborative Consumption, February 2015, Amsterdam: Europe’s first sharing city:
http://www.collaborativeconsumption.com/2015/02/04/amsterdam-europes-first-sharing-city/
10. RAC Foundation, Spaced out: perspectives on parking policy, July 2012,
http://www.racfoundation.org/research/mobility/spaced-out-perspectives-on-parking
11. Inspire Consulting, Uber disrupted an industry: you should too, July 2015,
https://www.linkedin.com/pulse/uber-disrupted-industry-you-should-too-joshua-hamlet?trkSplashRedir=true&forceNoSplash=true
12. European Environment Agency, Occupancy rates of passenger vehicles, http://www.eea.europa.eu/data-and-maps/indicators/
occupancy-rates-of-passenger-vehicles-2/eu-occupancy-rates-of-passenger-vehicles
13. Peer2Peer Foundation, Making the Sharing Economy Sustainable, 2014,
http://p2pfoundation.net/Making_the_Sharing_Economy_Sustainable
14. IDDRI, The sharing economy: making it sustainable, Damien DeMailly, Anne-Sophie Novel, 2014,
http://www.iddri.org/Publications/Economie-du-partage-enjeux-et-opportunites-pour-la-transition-ecologique
15. Welcome to the ‘Sharing Economy’, July 2013, The New York Times, Thomas L. Friedman
http://www.nytimes.com/2013/07/21/opinion/sunday/friedman-welcome-to-the-sharing-economy.html?_r=2
16. European Commission, Questions and Answers: Digital Single Market Strategy, May 2015,
http://europa.eu/rapid/press-release_MEMO-15-4920_en.htm
17. COADEC (Coalition for a Digital Economy), Digital Single Market Package Unveiled, May 2015,
http://www.coadec.com/digital-single-market-package-unveiled/
18. COADEC (Coalition for a Digital Economy), Digital Single Market Package Unveiled, May 2015,
http://www.coadec.com/digital-single-market-package-unveiled/
19. COADEC (Coalition for a Digital Economy), Start Up Manifesto, September 2014,
http://www.coadec.com/wp-content/uploads/2014/09/Startup-Manifesto.pdf
20. Grant Thornton, GfK TechCity Insider: TechCityFutures Report, May 2013,
http://www.grant-thornton.co.uk/Global/Publication_pdf/Tech-City-Futures-Report-FINAL%5B1%5D.pdf

Issue Two: Disruption or evolution - Platforms
and traditional industry
The pace of technological change is accelerating, and public policy is struggling to keep
up. 94% of modern (post 1950) UK laws were passed before the invention of the iPhone in
200722
. This is a reminder that the bulk of the legislative corpus is from a pre-digital age - it
is clear that laws and regulations are far slower to change.
Almost every sector of the economy is being ‘disrupted’ by innovative technologies and
business models. This is a good thing as it leads to more consumer choice, and to cheaper,
better services and products. It’s how progress happens. But it creates problems when new
technologies or ways of doing business run up against outdated regulations. The challenge
is to understand how best to apply existing EU regulations instead of creating new ones.
“It took 38 years for the radio to reach 50 million
users, it took 13 years for television, it took four years
for the web and it took 10 months for Facebook” 21
Baroness Lane-Fox
“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” 23
Commissioner Bienkowska
The Opportunity for Europe

Embracing the collaborative economy presents Europe with a clear market opportunity. The
collaborative economy goes beyond online platforms and has a direct impact on the real
economy. According to research from the Boston Consulting Group, the Internet Economy
in the developed markets of the G-20 is forecast to grow at an annual rate of 8% over the
next five years24
. These rates far outpace traditional economic sectors. According to Nielsen,
there’s high demand for the collaborative economy – especially in emerging markets,
where it’s tipped to accelerate growth by giving consumers access to services they couldn’t
traditionally afford25
. 28% of the global population are participating in the collaborative
economy and this number will only increase26
.
Collaborative economy platforms are resulting in the re-imagination of every single
industry, holding the promise of creating new jobs and new wealth. These companies
are overhauling the traditional relationship between business and consumer by enabling
anyone to offer up their skills or assets.
The biggest change from traditional structures is the breakdown in the distinction between
companies and customers, with peer-to-peer models giving citizens the opportunity to
become business people on a part-time, temporary and flexible level.
Collaborative economy platforms offer Europe an opportunity to secure its prospects
for the future, helping it emerge stronger, sustainable, more agile and prosperous -
improving the lives of millions of people providing them with new jobs and new skills for
a better future. As Commissioner Bienkowska comments: “Some of the 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.”
The Digital Single Market and Internal Market Strategy provide an opportunity to strike the
right balance between stimulating innovation, protecting consumers and ensuring a level
playing field. The emergence of these new business models gives rise to an urgent need to
assess whether the current regulatory framework for established operators is still fit-for-
purpose.
When looking at possible regulatory issues, policy makers need to find the right balance
between protecting consumers (see EUCoLab Roundtable One: “The Consumer in a Trust
Based Collaborative Economy” ), supporting innovative services and ensuring a level playing
field between business models.

Supporting innovative services
Collaborative economy businesses exploit new technologies, and sometimes are
constrained by – or confront – regulations designed without internet enabled commerce in
mind. Policy makers should therefore look to:
• Reduce market unfairness by closing the ‘regulatory gap’ between new and
traditional service providers by ensuring that regulation fits the digital age, is flexible, not
burdensome and minimises barriers to entry.
• Avoid reactive bans or regulations designed to protect the status quo without
properly understanding the operations of the sector and the new challenges they pose.
This means avoiding reactive bans or regulation designed to halt technological progress
and protect incumbents. EU case law clearly states that banning a new service has never
passed the proportionality test of the CJEU.
• Any intervention should promote competition which allows this sector to flourish.
With this is mind, intervention should focus on removing barriers to innovation and
new market entrants, streamlining regulations to reduce burdens on platforms and
participants.
Ensuring a level playing field
When considering the impact of the collaborative economy on traditional services, policy
makers should consider the following:
• 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 and any amendments need to be
appropriate for all players.
• The Commission must enforce existing EU legislation and infract Member States
who are disproportionately imposing barriers to the free movement of services. Full
implementation of the Services Directive is one of the most important ways in which to
close the ‘regulatory gap’ and ensure a level playing field.
• The Commission should use the Digital Single Market and Internal Market
Strategy as an opportunity to design measures focused on removing barriers to
the free movement of services and ensure that markets are open to innovative new
approaches, generating benefits for participants and consumers.

CASE STUDY ONE
Seats2Meet, Ronald van den Hoff
What is Seats2Meet?
Seats2Meet is a platform which facilitates physical and virtual environments to connect
and match people using the innovative technology. The platform has created an
ecosystem, where people share knowledge, educate and empower themselves and
their stakeholders. When people - who do not know each other but are relevant to each
other - are brought together, they connect, start collaborations and grow stronger. A
self learning intelligence system tags and matches people who are in need and able to
share. This has resulted in a value driven network with hundreds of locations powered
by Seats2Meet in countries across Europe. The platform is active in 15 countries in 150
locations, with 1.2 million seats filled since 2013.
What impact does Seats2Meet have?
Seats2Meet believes in supporting people to achieve success and make the
world a smarter, better and more sustainable place through knowledge sharing,
connecting and empowering people to excel. As a networking platform where
people can represent themselves and their businesses, and find support from
peers, Seats2Meet generates social capital as new activities are generated.
Reciprocity is high and participants “pay” by telling the network what they are
doing and what knowledge they have to share. Recruiters, for example, have
begun to use the platform as a recruitment tool. Public spaces - for example
libraries, theatres, hospitals and schools - are better utilised and empty space
is being put to use. The platform also enables local communities to connect -
Seats2Meet for locals enables private individuals and small businesses to offer
their room or cafe space.
The platform is having positive social and economic impacts. In 2013, 60% of
participants had experienced ‘serendipity’ and started a new job/assignment or
started their own venture as the result of using the platform. By 2015, this figure
had grown to 80%.

Unifying collaborative economy systems
There is a role for policymakers to encourage innovation and joint thinking in
the sector. For example, supporting the experimentation of alternative currency
systems, sustainable networks which utilise the euros and social capital and
transferable credits between collaborative economy platforms.
Simplifying taxation
The current EU VAT system is cumbersome to comply with and discourages cross
border services. There is a role for policymakers to review the current system and
make it simple for participants to comply.
Access to talent
Access to talent is a constant challenge for startups. For platforms like Seats2Meet
to thrive, the sector needs to be able to hire skilled developers, engineers and
designers. Depending on the definitions used there are a wide range of estimates
of the skills gap. European Commission research suggests that the skills gap is
larger in the UK than anywhere else in the EU, with 250,000 ICT job vacancies
expected by 2020.

CASE STUDY TWO
Lignum Capital, Oksana Gerwe
What is Lignum Capital?
Lignum Capital is an equity crowdfunding platform that facilitates investment
funding in innovative and growing startup companies - connecting those looking for
funding with a network of investors. Founded in Spain, Lignum Capital specialises
in assisting sharing and collaborative economy platforms to enable the investment
needed for these companies to scale up and grow. Lignum focuses on early-stage
businesses and provides an important alternative to banks, angels or venture capital
funding, which may not otherwise be available. Startups are thoroughly vetted, with
extensive due diligence undertaken and business plan analysis before the project is
accepted on the platform.
What impact does Lignum Capital have?
The platform is bringing much-needed new competition and choice to financing.
For a typical pre-seed start-up access to finance is a significant barrier. There is
a shortage of business angels, venture capitalists and traditional banks willing to
support start ups in their early stages. Startups simply cannot find capital. The
impact for startups which the platform works with is huge. A typical campaign
is between €20,000 and €30,000 - though the amount is relatively small, the
impact is significant: enabling the development of a first prototype, hiring of a
first employee or better understanding what the market wants. The platforms
which are supported are not global high tech unicorns, but businesses which help
communities and support local enterprises and people.
Legitimacy
There is an important role for policymakers providing the sector with legitimacy.
Openly supporting crowdfunding (through positive statements and financial
investment incentives) will debunk myths and skepticism over this nascent - and
yet heavily regulated - industry. According to a Goldman Sachs survey, growth
in the crowdfunding industry is rapid. In 2013, it was estimated to be worth $0.5
billion and grew to $2.5 billion by 2015, with the potential to soon become a
$trillion industry.

Unification and transferability
Accreditation and insurance requirements are fragmented across Europe and
could usefully be unified in order to support development of the sector. Currently,
each category allowing creditors to invest is different across Europe. Platforms
like Lignum would benefit from a transferable system of approval from regulators
across Europe - policymakers are encouraged to support greater co-ordination
between European regulators.
A revised regulatory approach which favours lowering red tape
Red tape is stopping many platforms from accessing the finance they need to
grow, and stopping investors from reaching the companies they want to back.
European rules have been built up rapidly in the years following the financial
crisis; but there is a risk that some of these regulation may stifle growth. To make
Europe more competitive, it should support market-driven solutions. Regulation
should be used only where it will really make a difference. Regulation should be
reviewed to ensure that it strikes the right balance between protecting investors
and the economy whilst also making it easier to finance start-ups across Europe -
particularly in fast-growing businesses.

CASE STUDY THREE
The People Who Share, Benita Matofska
What is The People Who Share?
The People Who Share (TPWS) is a social enterprise that helps people and
companies to discover the Sharing Economy. Its mission is to mainstream the
Sharing Economy worldwide. The People Who was established in January 2011 in
Brighton, UK by global Sharing Economy expert, Benita Matofska. TPWS serves the
following customer segments and generates revenue via the following streams:
• Consumers: The Share Collection aims to offer consumers a place to discover
and book sharing experiences for their every day lives. This will operate on an
affiliate / CPA model and will incorporate both goods and services which cost
and are free. Partners with a free offer will have an in-kind / swap payment to
TPWS reflecting the different kinds of value exchange that exists in the Sharing
Economy.
• Consultancy: TPWS offers companies a way to access the Sharing Economy
with strategic support, market intelligence and delivering a range of solutions
via our TPWS partners who span technology, marketing, insurance, logistics
etc. TPWS will also offer charities and public bodies a similar service along with
some pro bono / CSR work.
• Education / Campaigning: TPWS is well established via its educational activities,
in particular, Global Sharing Week - the largest mass engagement campaign
enabling millions to discover the Sharing Economy. TPWS also offers Sharing
TV, a crowd sourced web channel with content on the Sharing Economy.
What is the impact of The People Who Share?
TPWS creates positive impact in the following ways:
• For European Consumers: TPWS enables consumers to discover the Sharing
Economy across multiple verticals; helping people to easily discover and book
sharing experiences.
• For collaborative economy platforms: TPWS provides a discovery platform
and a directory of platforms helping people to discover a multitude of
platforms across 17 verticals. TPWS also raises awareness about the sector and
platforms within it via campaigns activity.

• Social and Environmental Impact: TPWS creates impact threefold: economic
impact by enabling people from all economic backgrounds to access shared
resources, also promoting and enabling people to access free resources;
environmental impact by promoting and enabling the efficient use of
resources, matching surplus with demand, diverting goods from landfill,
lowering carbon and promoting a sustainable economy built around people
and planet; social impact by bringing people together to share resources in
their communities, get to know their neighbours (via activities such as Global
Sharing Week and Sharing Streets). 80% of people say sharing makes them
happier and there is a correlation between sharing and well being.
How Can Policymakers Support TPWS?
• Partnerships and Support for Sharing Cities: Engagement and support from
Member States, national and local governments to work with TPWS and its partner
platforms to tackle economic, social and environmental challenges. Support for
TPWS sector wide campaigns such as Global Sharing Week (GSW) and Sharing
Streets. Official endorsement and adoption of these campaigns would help
to grow the sector. GSW could become an officially diarized week. Supporting
organisations that work to enable sharing cities and building infrastructure
that enables city-wide access to shared resources will help grow the sector.
Additionally, opportunities and measures to promote procurement from sharing
economy platforms is to be encouraged.
• Support for organisations promoting the sector: Funding for social enterprises
like TPWS that work across the sector on a systemic level is important. Recognising
catalysts such as TPWS, who operate on a sustainable not-for-private profit model
and opening up funding streams specifically for organisations that work on a
sector wide basis is important.
• Incentivised taxation to embrace a sustainable approach: Introduce financial
incentives for consumers to access shared resources and reduce waste
and consumption. This would not only serve to create positive a social and
environmental impact but would also increase the participation rates in the
Sharing Economy, helping to mainstream it.

Summary of discussion
It was widely agreed that interpreting existing regulations is a key part of the solution to
ensuring a level playing field between collaborative economy platforms and traditional
players. Industry participants agreed that it was beneficial to review directives such as the
Services, E-Commerce and Distance Selling Directives to understand how existing regulations
might be interpreted and whether they might be subsequently adapted. When reviewing
the current framework in place to support services, priority should be placed on ensuring
that rules and restrictions should be justified, proportionate and serve the public interest.
Rules which restrict the market and do not serve consumers should be challenged through
the review of existing Directives. Additionally, industry participants were in agreement that
more guidance and better information on the application of existing rules would be more
beneficial than the creation of additional rules.
The importance of industry working with policymakers to provide the evidence in order to
properlyunderstandhowexistingregulatoryframeworksmightapplytocollaborativeeconomy
platforms was discussed. The need for specific regulation versus broader policy to assist start
ups more generally was considered. It was agreed by industry and policymakers that there is a
need to properly understand the sector; or otherwise risk hindering development or causing
unintentional harm. The sector is a fast emerging one and it is vital to better understand
what the impacts are - in terms of job creation, impact on traditional industry, communities
and environmental sustainability - before formulating policy. Policymakers underlined the
difficulties in gathering evidence - most collaborative economy players are currently small
and not captured by traditional statistical methods. Although there is much anecdotal
evidence, numerical evidence is not widely available and precludes policymaking tailored for
the collaborative economy. Industry participants and policymakers were in agreement on
the need to come together to supply the evidence and examples of good practice across
Member States needed by policymakers.
Discussions also touched upon the broad principles and approach favoured by industry
when reviewing legislation and regulation. This included ensuring that regulations remain
proportionate to the scale of operations and meet people’s expectations. The level of
regulation should depend on activity level. Policymakers were also encouraged to ensure
that there are fair terms of entry for new collaborative economy entrants and that regulations
apply in the same way to collaborative economy businesses and to traditional providers.

There is also a need to bear in mind the diversity of the sector - the collaborative economy
industry in Europe is a broad church of companies operating in different market sectors at
differentscales.Thedifferencebetweenplatforms-definedasonlineintermediationplatforms
supporting services - and traditional services, necessitates a differentiated approach to
regulation. Examples provided included the distinction between YouTube and TV regulation
or IPs and telephone services; distinguishing such services has supported technological
development and underlines the danger of applying old categories to new players. Allowing
self-regulation, experimentation and innovation will allow optimal policymaking. Uber, for
example, is leading partnerships with policymakers at local level by developing agreements
which allow them to operate and in return share the data, learning and the impact of operating
models with city policy makers. This has proved powerful in not only getting the service offered
right, but also allowing for the development of the most appropriate regulation. There is a
clear role for policymakers to work with industry to consider how such work might be best
developed.
References
21. House of Parliament, Lords Hansard, January 2014,
http://www.publications.parliament.uk/pa/ld201314/ldhansrd/text/140116-0002.htm
22. COADEC (Coalition for a Digital Economy), Start Up Manifesto, September 2014,
http://www.coadec.com/wp-content/uploads/2014/09/Startup-Manifesto.pdf
23. European Commission, Announcements: Opportunities for innovative business models in the EU Single Market, May 2014,
http://ec.europa.eu/commission/2014-2019/bienkowska/announcements/opportunities-innovative-business-models-eu-single-market_en
24. Boston Consulting Group, The Internet Economy in the G-20, March 2012, https://www.bcg.com/documents/file100409.pdf
25. The New Economy, Sharing Economy Shakes Up Business Models, April 2015,
http://www.theneweconomy.com/business/the-sharing-economy-shakes-up-traditional-business-models
26. European Commission, Announcements: Opportunities for innovative business models in the EU Single Market, May 2014,
http://ec.europa.eu/commission/2014-2019/bienkowska/announcements/opportunities-innovative-business-models-eu-single-market_en

For more information email: contact@eucolab.org
or visit: www.eucolab.org

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