fbpx

Author: Anna Arunashvili

Sharing Economy Index and its results – SHARING ECONOMY SERIES, PART 4

Welcome to the CCC’s sharing economy series. In this series of short blog posts, I elaborate on what the sharing economy is, present the main findings of the Sharing Economy Index, and look at potential future regulations surrounding these services. 

The Consumer Choice Center recently published the Global Sharing Economy Index 2021, which evaluates 50 cities around the world based on the availability and accessibility of sharing economy services. The index is a one-of-its-kind compilation of applications you can use to improve your city experience and analyses how regulated these services are in each city (whether you need a special permit to operate an Airbnb business or if there are additional taxes levied on the guests).

In the early years of Uber, to become a driver you only needed a car, driving license, and simple registration on their website. As driving Uber did not require special permits or taxi licensing, which can be quite expensive to acquire in certain countries, it allowed Uber to offer the same services at a much lower cost. 

However, according to the index results, as of today, out of 50 cities, there are only a few ones left that don’t require a special permit. In France for example, in order to operate Uber, you have to get a VTC card first (VTC is a French acronym for private chauffeur services that are different from taxis), and registration for the exam will cost you around 200 euros. Becoming an Uber driver might be more complicated now, but it remains a lucrative business and a big competition to traditional taxi services. Which, as we already saw in the previous blog post, isn’t something that taxi drivers are very happy about.

Another shared service discussed in the index, e-scooter, is an affordable and quite fun means of transportation, available in 43 out of 50 cities. Recently, most cities have been trying to regulate e-scooters by banning them from sidewalks, setting speed limits, or introducing a fine system for parking at the wrong locations, as in the case of Norway. Some cities, like Athens, went as far as permanently banning e-scooters altogether, only allowing private ownership of electric scooters.

Interestingly enough, Eastern European countries enjoy more freedom when it comes to sharing economy services. First place in the ranking was shared by post-soviet cities Tallinn and Tbilisi, where not only all the discussed services are available, but they are also less regulated. On the other hand, Western and Central European countries seem to have taken more restrictive approaches, therefore limiting consumer choice. For example, as if covid wasn’t already destructive enough to sharing economy services, Amsterdam decided to ban Airbnb in its historical centre, a decision that was fortunately overturned by the court.

Even in the light of current efforts from governments to regulate this sector, we can say that the sharing economy is here to stay. People have come to appreciate and get used to the comfort and convenience these services bring to our everyday lives. So no matter what new restrictions the governments around the world come up with, we can leave it to the creativity and entrepreneurial spirit of this industry to fight back and readjust.

The EU mandated harmonisation of charging ports will negatively impact innovation

Last month, the European Commission unveiled its plan to harmonise charging ports for electronic devices. With the new legislation, USB-C will be the required standard port for all smartphones, cameras, tablets, headphones, portable speakers, and video consoles. When the EU first proposed a common charger in 2009, they believed it would be the micro-USB standard.

The EU claims that this approach is needed to solve ‘consumer inconvenience’ and tackle the e-waste problem, but that logic falls short of making sense. This regulation will have a negative impact on innovation, do nothing to help the environment, and consumers will end up being the ones who have to foot the bill. The best thing the EU can do to help consumers and not impede innovation is to stay technology neutral.

Even though USB-C seems like the most efficient charger at the moment, we can’t predict how this technology will develop in the future. For example, in 2009, when the European Union first proposed a common charger, micro-USB was considered the standard Had this common charger been passed then, would European consumers have lost out on the now more-popular USB-C devices that are the new standard? Time has shown us that there are always better and more efficient technologies waiting in the wings. By legislating one common charger, the EU will be responsible for delaying innovation that will deprive consumers of choice not only now, but in the future. Adopting this proposal by the European Parliament and the Council could take many more months, by which time many companies may even find better solutions than what is currently proposed.

With fast-developing technology, there’s no guarantee that USB-C will still be considered the most efficient charging technology even months from now. Plus, as more and more companies are experimenting with wireless chargers it is very likely that charging cables will become obsolete. If this proposal is accepted, companies will be forced to provide the plug anyway. 

When Apple decided to drop the headphone port for iPhones in 2016, many were skeptical about the move. But consumers eventually came to appreciate wireless technology and not having to deal with wires that always mystically entangle the moment you put it in the pocket. Had the EU or any other government body tried to intervene and fix the “inconvenience”, we probably wouldn’t have been able to enjoy the benefits of them.

More disturbingly, this decision specifically targets Apple, the only company that uses a unique lightning cable for its products. Considering how many iPhone users exist in Europe, this proposal would have an immediate impact, forcing users to trash their existing wires and have to purchase new ones. It is hard not to be skeptical about this move. Innovators will keep innovating and we have new and improved versions of the products that pop up in the market almost daily. What we need is more competition, which is the main driving force behind innovation. Common charger mandates will do nothing but infringe on this entrepreneurial spirit, and mandate technology that will likely soon be obsolete. 

With this proposal, the EU is choosing favourites and endorsing a specific technology, when in reality it should be practicing technology neutrality. Rather than force companies to adopt a commission-favoured solution, the EU should simply issue general recommendations, leaving it up to the companies and consumers to make the ultimate choice of which charging wire they want to use.

Sharing economy under threat – Sharing Economy Series, part 3

Welcome to the CCC’s sharing economy series. In this series of short blog posts, I elaborate on what the sharing economy is, present the main findings of the Sharing Economy Index, and look at potential future regulations surrounding these services. 

The pandemic isn’t the only obstacle sharing economy platforms have had to face for the past several months. Governments around the world have introduced new regulations that have been detrimental to consumer choice. Compared to the time when the platform economy was only starting its way into our daily lives, ride-hailing apps today are subject to many more restrictions. Some of these new interventions include employee classifications, social security, parking requirements, or outright bans. 

One of the main aspects of ride-sharing that governments are trying to redefine and regulate is the relationship between service providers and drivers. Uber and other platforms treat drivers as contractors, rather than employees, but to some such an approach is unfair.

Drivers’ inability to set fares, penalties for cancelling rides, and customer engagement restrictions are among the main reasons why drivers can be seen as less independent than believed. However, on the other hand, contractor status gives drivers more flexibility and the chance to choose their own working hours. They can work for different ride-hailing apps at the same time, which would become impossible should full employee status be given to drivers.

Uber has been involved in many legal battles to protect drivers’ independence. Recently, the supreme court of the UK ruled that Uber drivers should be granted employee status and benefits that the status entails, like paying minimum wage and paid annual leave. This will likely increase the ride fare around the country.

This is not the first attempt at restricting Uber though. After protests of London black cab drivers, the transport regulation body TfL was pressured to introduce new restrictions on Uber. Some of these restrictions included a 5-minute wait between rides, which would have affected the delivery of service and, as Uber claimed, taken money out of drivers’ pockets. A petition against this restriction was signed by over 130,000 people and, fortunately, TfL decided to drop it. 

Brussels took a different yet equally restrictive path. The Belgian capital recently has even gone as far as banning app-based taxi systems, the essence of ride-hailing itself. This comes after pressure from the traditional taxi drivers, who were urging the government to regulate app-based ride-hailing that was becoming harder and harder for them to compete with.

Drivers who continue to accept trips via their smartphone face a risk of getting fined or having their license revoked. While Uber hasn’t been explicitly banned, countries like Denmark and Hungary have made it impossible for Uber to operate there and have practically forced the company out of the market. 

Across the ocean, the state of California has also been debating over the drivers’ status. Passed in 2020, Assembly Bill 5 (AB5) was meant to reclassify independent contractors as employees. According to the bill, ride-hailing and delivery services platforms would be required to offer multiple benefits to their drivers. This would have cost Uber and Lyft billions of dollars and increased the cost of ride-sharing services, making it increasingly unaffordable compared to traditional taxis.

Ride-hailing and delivery services platforms wanted to be exempt from granting worker-level benefits to their workers and threatened to suspend their services in the state of California. For example, it costs almost 2x more to catch a traditional taxi from LAX to Hollywood and with no more ride-hailing available, consumers would be left with fewer and more expensive options.

Proposition 22 was included in the November 2020 election ballot and passed with around 57% of California voters. This proposition allowed drivers on these apps to maintain their independent status with certain qualified benefits. But the California court recently ruled Proposition 22 unconstitutional, so it seems like the legal battle is far from being over. It is very likely that other states will follow the example of California which will put the fate of the ride-hailing in jeopardy.

Overall, even though ride-hailing services have made life easier and cheaper for consumers around the world, governments keep yielding to pressures mainly from traditional taxi industries and introducing regulations and restrictions that could potentially lead to the suspension of ride-hailing services.

The cases of the UK, Brussels and California discussed in this blogpost demonstrate a dangerous precedent for countries and cities around the world. If this trend continues, soon ride-hailing will no longer be any different from traditional services and the essence of the sharing economy will be lost. And, of course, consumers are the ones who will have to bear the burden of restricted choice.

Sharing economy in COVID-times – Sharing economy series, part 2

Welcome to the CCC’s sharing economy series. In this series of short blog posts, I elaborate on what the sharing economy is, present the main findings of the Sharing Economy Index, and look at potential future regulations surrounding these services. 

The current pandemic has had a huge impact on the delivery of sharing economy services. As was discussed in the previous blogpost, online platforms have demonstrated exceptional adaptability and have gone above and beyond to make sure consumers continue to see value in using them. 

While some sectors of the sharing economy, like ride-sharing and home-sharing, have suffered immense losses due to strict lockdowns around the world, others have increased their profits and proved to be invaluable. For example, delivery apps became an essential part of our everyday lives. With restaurants being closed, the fear of virus transmission, and difficulty of travelling due to transport restrictions, we found ourselves relying on delivery services. 

To avoid human interaction at the delivery point, Doordash, an online food delivery platform, like many others, introduced a contactless delivery option that can be requested both by the customer and the deliverer. According to Statista, in the second quarter in France, restaurant delivery users increased by 24% compared to pre-pandemic numbers. In the US, delivery companies also reported growth in their revenues. Combined revenues from the four major delivery companies, Uber Eats, Doordash, Postmates, and Grubhub, from April-September 2020 was double the amount during April-September 2019.

Professional car-sharing services experienced a huge drop in demand during lockdowns, but once people started to get back on the move rather than opt for public transportation they placed more trust in car-sharing services as it entails low risks of virus transmission. Share Now increased their hygiene measures, and they have been cleaning and disinfecting their cars four times more than usual. Peer-to-peer car-sharing platforms, like Turo and Getaround, have also bounced back from pandemic-related setbacks. To reassure people into using their services again they eased cancellation policies and introduced additional cleaning measures.

As demand for services dropped drastically, many companies had to cut losses. Uber, for example, had to lay off thousands of employees to reduce operating expenses, most of those employees being customer service agents, and had to close 45 offices globally. Lyft, another ride-sharing company and Uber’s biggest rival, had to let go of 17% of its workforce.

To comply with new covid restrictions introduced by the local governments, Uber and Airbnb changed and adapted their processes. Uber made it obligatory to wear masks while riding, and before ordering a ride, you have to confirm you will be wearing a mask during the ride. Airbnb introduced additional safety measures and made it a requirement for hosts to carry out a 5 step cleaning process between the guest stays. 

Overall, despite the doom and gloom of the pandemic, the sharing economy managed to survive and continue to innovate. These unprecedented times were more challenging for some than for others. While some services, like ride-sharing and home-sharing, had to lay off a significant amount of their workforce, delivery platforms saw record-breaking demand for their services. 

The next blogpost in our series will discuss some of the controversies surrounding sharing economy platforms and how governments are trying to regulate this innovative sector.

The essence of the sharing economy – Sharing economy series, part 1

The current pandemic has taken a toll on most areas of economic activity, including the sharing economy. Cancelled holidays, stay-at-home orders, mobility restrictions due to quarantines, and lockdowns resulted in a sharp drop in demand for sharing economy services.

The Sharing Economy Index 2021, recently published by the Consumer Choice Center, examines the impact said restrictions have had on the sharing economy as well as provides an extensive overview of the availability of ride-sharing, flat sharing, and other types of peer-to-peer exchange. 

In this series of short blog posts, I will elaborate on what the sharing economy is, present the main findings of the Sharing Economy Index, and look at potential future regulations surrounding these services. 

The sharing (collaborative) economy has transformed human interactions around the globe. As a relatively new economic model, the sharing economy is a platform based type of exchange that allows individuals and groups to share their services on a peer-to-peer basis. 

One of the most distinctive features of the sharing economy is that it eliminates the need to own assets and allows people to use various items — cars, e-scooters, gyms — for a short time without buying them. For example, the flat-sharing platform Airbnb that has been around since 2008, allows you to rent a room or a whole place to yourself in exchange for a certain fee. Simple registration on their website or mobile app opens access to thousands of places around the world and is a great alternative to conventional hotels.

Another tech giant and San-Francisco native, Uber, offers services such as ride-hailing, food and package delivery and also requires just a simple registration process. Uber has been known to be a cheaper alternative to traditional taxi services and is currently available in 70 countries.

Technology has been the driving force behind these companies. However, platforms only act as intermediaries and facilitators: they instantly connect the supply with demand. All forms of collaborative consumption require the internet to connect providers with potential customers. Platforms offer a safe and easy-to-use platform to link people in need of certain services, assets to those who can provide them. 

The trust among users is built through the rating systems. Most platforms encourage review exchange to achieve the best user experience and guarantee safety. For example, for Airbnb, some hosts go the extra mile to make sure their guests enjoy their stay by offering free cleaning services or early check-in. Uber recently released Uber Lite to accommodate those people in developing countries who don’t own the latest smartphones and have an unstable internet connection. Mexico is one of those countries. To adjust to the needs of Mexican people even better, Uber also fought hard to enable cash payments in Mexico city, expanding their service to around 10 million people in the metropolitan area. 

Sharing economy provides services that are more affordable and accessible than their traditional counterparts. The main reason for this is the fewer entry barriers. In order to start driving Uber or rent out your flat through Airbnb, you use idle assets already in your possession. In many countries, platform businesses face fewer market entry barriers compared to traditional businesses, too. Often, it only takes a quick sign-up to join a sharing economy platform. 

A variety of services — from home-sharing to co-working spaces — has made our lives much easier. Even though the recent pandemic has been quite challenging, we’re optimistic that the sharing economy will continue to expand and provide even bigger benefits for people around the world. In the next blog post, we’ll go into details on what effects COVID-19 has had on the sharing economy platforms and how they responded.

The ConsEUmer Podcast nominated as a top European Union podcast by Welp Magazine

We’re excited to announce that the ConsEUmer Podcast, produced by Consumer Choice Center, was named as one of the best European Union Podcasts of 2021. The list was recently published by Welp Magazine and is intended for everyone wanting to boost their knowledge of everything related to the European Union. 

Various factors played a part in selecting these podcasts and it is worth noting that podcast hosts and guests come from across the political spectrum, so listeners have a chance to hear different points of views about the European Union. The ranking was created using the data provided by ListenNotes, Crunchbase, SemRush and Ahrefs.  

ConsEUmer Podcast is hosted by Bill Wirtz, a senior policy analyst at the Consumer Choice Center. Besides his active role at the organisation, Bill is a pro-liberty freelance journalist who publishes in 4 languages, he has been featured in multiple news outlets around the world. His podcast focuses on consumer issues, such as free trade, science-based policy making, privacy, digital single market, and more. The podcast also offers insightful commentary on the hottest EU related topics. Bill critically examines and evaluates strategies and policies of the EU and its member states. Each episode lasts around 20-40 minutes and features experts and policy makers from various fields. Some of the topics that have been discussed on the podcast include the Polish sugar tax, EU Beating Cancer plan and its effect on vaping, Farm to Fork strategy, the e-scooter revolution, nanny state index, and more. As you can see, the podcast is very diverse in topics and there’s definitely something for every taste. Stay tuned for podcast updates and in the meantime catch up with the past episodes below.

P.S. If you want to find out more about the work we do around Europe, we recommend checking out our European Railway Station Index 2021 as well as the list of Europe’s Most Passenger-Friendly Airports 2020

EP45: Belgium taxes short-haul flights, France's nuclear comeback, and Crypto geo-fencing (w/ Aleksandar Kokotović) The ConsEUmer Podcast

It's episode 45 of ConsEUmer! This week: 🇧🇪 Belgium imposes a new tax on short-haul flights 🇫🇷 France invests into small nuclear plants ₿ Geo-fencing is an issue in the crypto space (w/ Aleksandar Kokotović) You can follow Aleksandar Kokotović on Twitter at @kokota. October 14, 2021 Follow ConsEUmer wherever you get your podcasts: Apple: https://apple.co/2HR4TLT Spotify: https://spoti.fi/3l3GZdx Google podcasts: https://bit.ly/3fyyzto Donate: http://consumerchoicecenter.org/donate See omnystudio.com/listener for privacy information.
  1. EP45: Belgium taxes short-haul flights, France's nuclear comeback, and Crypto geo-fencing (w/ Aleksandar Kokotović)
  2. EP44: Charger wars, Uber v Brussels, and Inflation on the rise (co-host: Fabio Fernandes)
  3. EP43: Crypto rules, Gene-edited tomatoes, and Brexit divergence (w/ Tom Spencer)
  4. EP42: Green fuels under fire, Autobahn limits, and UK tax hikes (w/ Alys Watson Brown)
  5. EP41: State of the Union, Forced labour ban, and Sustainable Beer (w/ Sébastien Morvan)
Scroll to top