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.
