Circular guide

Sharing economy

Didactic Units 5.2

The collaborative economy or sharing economy, thanks to the rapid development of the internet and digital platforms, represents a phenomenon that is attracting the attention of multiple actors, institutional and non-institutional, especially by virtue of the opportunities posed by its rapid expansion. To date, finding an unambiguous definition of sharing economy is quite complex: among the most authoritative we can quote what is contained in the communication COM (2016) 356 in which the latter is defined as “[…] the set of new business models whose activities are facilitated by collaborative platforms that create an open market for the temporary use of goods or services […]”. According instead to a second definition proposed instead by Frenken et al. (2015) the same is defined as a model through which “consumers grant each other temporary access to underutilized physical goods possibly in exchange for money.” Since these definitions, the concept has been extended becoming rather general and applicable to a multiplicity of situations inherent in the activities of exchanging goods or services. However, according to what emerges especially from the first of the two proposals, sharing alone, would not be a sufficient element for the definition of sharing economy models, or at any rate the activities so defined would not be able by themselves to radically change the classical dynamics inherent in the fruition of goods or services. Therefore, in order for real examples of sharing economy to manifest themselves, a fundamental prerequisite is the use of the Internet and more specifically digital platforms, which have the task in this framework of facilitating interactions and exchanges, between private entities. 

Referring again to the European Commission’s communication, it is useful to identify who are the protagonists of this new economic model, in order to define them, however, it is necessary first to distinguish the possible interactions that can be generated, within the same. A first example can be traced to the classic business-to-consumer (B2C) model, through which a professional subject, is put in contact with a consumer interested in the fruition of a good or service. The second type of interaction, on the other hand, can be traced back to the business-to-business (B2B) model, in which both parties involved, turn out to be businesses. Finally, the last category is the “most classic” relationship of the sharing economy, namely the consumer-to-consumer (C2C) relationship where the parties involved are placed on the same level (peer) with each other. 

 As can be guessed from this brief overview of the possible interactions, it is always possible to identify three subjects operating in the sharing economy, such as the service provider, the platform and the user to which can be added one characteristic of this model namely the prosumer. In fact, the consumer no longer represents a purely passive subject, who benefits from the goods and services offered: the latter is to all intents and purposes an active subject as he or she is able in turn to produce goods, services and information that can be made available online, in turn becoming a starting point for further interactions and exchanges with new subjects.

Opportunities and critical issues of the sharing economy

The model thus outlined certainly represents a major development opportunity for the entire European economy, as it offers possibilities in terms of expanding the range of services on offer, lowering prices and promoting employment. Moreover, in light of the goals set at the EU level regarding sustainability, the sharing economy by promoting the sharing and more efficient use of resources, if properly implemented can be a valuable tool to support the reconversion in a circular economy perspective, of the entire European system. 

 According to some of the numbers available on the sector, it is clear that the sector is still modest in size despite experiencing rapid growth especially in recent years: in 2015 alone, total revenues from the shared economy amounted to more than 3.6 billion euros (equal to about 0.2 percent of European GDP), registering an annual growth rate of 25 percent that could lead the sector, to reach 83 billion in revenues as early as 2025. On the consumer side, too, some numbers stand out, testifying to the interest in the opportunities posed by the collaborative economy: in fact, according to the 2016 Eurobarometer 438 survey, 42 percent of respondents consider “shared” services to be more practical, to which is added an additional 33 percent who appreciate the greater cost-effectiveness of the same. 

 Despite the many benefits, briefly described here, associated with the development of such sharing practices, however, the latter are not without some potential barriers to development and critical issues. With regard to barriers, the main one is certainly represented by technological development and specifically accessibility to the Internet and broadband. While with regard to the former, the general situation at the EU level is particularly positive (according to Eurostat data updated in 2019, 89 percent of households in Europe are equipped with Internet access) on the broadband front, on the other hand, despite the fact that there is a general improvement in coverage here as well, many of the EU 2020 targets set on this issue are likely to be missed. Since the development of a reliable digital infrastructure is central to the development of sharing economy initiatives, the need for continued investment on this front therefore seems clear. 

 In order to have a full understanding of the sharing economy phenomenon, the possible risks that the new business models, as a result of rapid growth and lack of regulation, could have on the more traditional systems of production and consumption as well as on the business realities associated with them must also be considered. First, some relevant issues emerge on the front of consumer rights, transparency of information provided, and privacy of personal data. Then there are risks associated with the reduction of minimum standards, compared to those in place for similar services offered by professionals. On the subject of minimum standards, it must also be remembered that, the new collaborative models, are generating a strong impact on the labor market and the labor relations that are being created between digital platforms and wage earners, with the risk often and willingly of undermining the fairness of the latter’s working conditions. The development of sharing economy services has also been accompanied in some areas by the development of unfair competition phenomena and creation of new monopolies, which pose a clear risk to the proper functioning of the European common market. Lastly, the lack of regulation that accompanies the sector has led to the emergence of certain threats related to the difficulty in meeting tax obligations, despite the increased traceability of economic transactions recorded on collaborative platforms.

Attempts at regulatory interventions in Italy 

To date, the EU regulatory framework shows the absence of a real discipline on the subject. Similarly, even in our legal system, regulatory gaps are evident, on which attempts have been made to intervene through some proposals (which, however, have never seen the light of day) aimed at regulating a sector whose boundaries are still unclear. 

 An example in this regard, we owe it to Bill No. 3546 of January 27, 2016 on “Regulation of digital platforms for the sharing of goods and services and provisions for the promotion of the sharing economy.” In it, in addition to containing its own definition of sharing economy, which does not differ much from those mentioned above, it provides for the regulation of digital platforms, through the introduction of an authorization regime, subject to the preparation of a business policy document to regulate the relationship between operators and users of them. It is also envisaged that, the aforementioned document, will subsequently be submitted to the Antitrust Authority (AGCM), which will have the task of enrolling those deemed eligible in a special electronic register and the control of any inconsistencies and regulatory violations.

Another aspect touched upon by the aforementioned proposal concerns a particularly thorny issue when it comes to the sharing economy, namely taxation. More precisely, the proposal identifies a threshold of 10,000 euros below which the tax on income generated by platforms will be set at 10 percent, while above this threshold, the income will be cumulated with income from employment or self-employment with application of the corresponding rate. Lastly, in order to encourage the development and spread of the sharing economy, the text also provides for the adoption of specific annual measures to incentivize sharing practices: in particular, the financial resources necessary for such initiatives, will be found through the proceeds of the implementation of the bill and will be allocated to training courses, refresher courses, conferences, congresses or the financing of technological innovation policies. 

Despite the fact that, as previously mentioned, no real regulatory interventions on the sector are observed at the EU level, it may be interesting, however, to assess whether and how the contents of the Italian bill, meet the requirements that, according to European Communication COM (2016) 356, should be considered in the development of future national regulations on the sharing economy. A first aspect touched upon by the latter, concerns the requirements for access to the European market, by new entities operating in the collaborative economy: the issuance of special authorizations should be provided only in strictly necessary cases such as the protection of the public interest and therefore, entities such as platforms, should be subject to them only in case they play an active role and not only as an intermediary between different entities. On this front, the proposed Italian law turns out to be aligned, in that in the case of conversion of the law, the establishment of a special authorization process to exercise their sharing activity is foreseen. 

 As seen, the issue of taxation represents a topic of particular concern, and it will necessarily have to be addressed in order to ensure the proper regulation of collaborative activities: service providers operating on digital platforms will be progressively obliged to be more transparent to users; they will be required to pay taxes as defined by their respective national laws and will also have to cooperate with national authorities to facilitate their collection. On this front as well, the proposal drafted at the national level, would seem to follow what is recommended at the EU level, with the need, however, for further study regarding compliance with the principles of proportionality of taxation provided for in our legal system. To conclude, the document drafted by the Chamber is not, however, without some shortcomings, which would specifically concern the assessment of the adequacy of national labor regulations in light of the new business models proposed by the sharing economy.

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