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European Commission publishes guidance for on-demand startups

european commission

The European Commission (EC) has today published a new set of guidelines to harmonise the regulation agenda for on-demand companies such as Love Home Swap and Vrumi.

According to the guidelines, the EC is in favour of light-touch regulation, noting that on-demand startups and companies should not require operational licenses and that decisions on whether workers should be classed as employees fall under the remit of individual member states.

As part of its guidance, the EC praised the collaborative economy for its creation of new opportunities for consumers and entrepreneurs.

“The Commission considers that it can therefore make an important contribution to jobs and growth in the European Union, if encouraged and developed in a responsible manner. Driven by innovation, new business models have a significant potential to contribute to competitiveness and growth,” said the guidelines.

Russ Shaw, founder of Tech London Advocates, commented on the news:

“Companies like Uber and Airbnb are reinventing markets and providing a fantastic product. These companies disrupt industries at a large scale, and it is right for regulators to ensure that they deliver access, quality and safety to the end user.”

“While I feel it is also important to listen to the concerns of those whose jobs are affected, regulation should ease this technological progress without standing in its way,” he said.

‘A step in the right direction’

Debbie Wosskow, founding chair of Sharing Economy UK (SEUK) and founder of Love Home Swap, welcomed the EC’s guidance:

“Over the past couple of years we’ve seen very different treatment of sharing economy companies, and people who use sharing economy companies, across Europe,” said Wosskow, adding: “The UK has been largely progressive in its thinking whilst other countries have taken more of an oppressive approach and in some cases governments have threatened consumers with hefty fines if they use certain platforms.”

This harmonisation, she added, is a huge step in the right direction for both consumers and the industry.

“It will provide consistency for consumers using sharing economy businesses across the member states, which will build trust, drive uptake and help these sharing economy businesses to meet their full potential, “ concluded the entrepreneur.

‘A welcomed change’

Rich Preece, Europe VP and MD of Intuit QuickBooks, an accounting software provider for small businesses, spoke about the EC’s guidance.

“The bid to introduce coherent regulation for sharing economy players across Europe is warmly welcomed,” he said.

In the UK and other European countries, he added, a growing number of individuals rely on platforms such as Airbnb, Uber and TaskRabbit, either as a main source of income or as way to carve out a more flexible lifestyle.

“These entrepreneurs are in need of even more tailored support, particularly as policies around tax, retirement and parental leave can be a minefield for anyone new to self-employment. As with any significant shift in the way people work, we must continually review regulation and ensure that our entrepreneurial workers have processes in place to help ease the administrative side of the business,” he added.