Airbnb is facing an outright ban in Berlin.
Photograph by JOHN MACDOUGALL AFP/Getty Images
By Claire Zillman
May 31, 2016

The European Union wants its member states to make nice with the sharing economy.

A proposal that’s expected later this week would seek to harmonize how the bloc’s 28 members regulate companies like ride-hailing app Uber and home-sharing site Airbnb. Up until now, companies like these have had to wage separate battles with regulators in each nation. In some countries like the U.K. that’s been relatively easy, but in others, it’s been a daunting challenge and a huge burden to business. France, for instance, has gone as far as arresting two Uber executives for allegedly running an illegal taxi company.

The Financial Times, which reviewed the proposal, said the measure is an effort to ease the tension over technology regulation between the European Commission and the U.S. that’s due, in large part, to Europe’s efforts to thwart the market dominance of companies like Google and Apple.

While the proposal appears to be a boon to sharing economy startups, it contains finer print that could keep companies from embracing the guidelines wholeheartedly. Namely, the commission suggests that companies could be considered as having an “employment relationship” with individual operators if those workers don’t have the leeway to set their own prices or choose their own customers. That point could raise an immediate red flag at Uber, which has spent years dodging the “employer” moniker, insisting that its drivers are independent contractors. That title lets Uber cut many costly corners of labor law, like not having to pay for Social Security and unemployment insurance, or compensate drivers for overtime and breaks.

 

The proposal comes as Uber has faced regulatory hurdles in countries like Belgium, the Netherlands, France, and Germany, and as Airbnb, confronts what equates to an outright ban in Berlin. Hosts who violate the city’s new prohibition on short-term rentals to tourists are being slapped with massive fines of about $112,000.

The new proposal says that outlawing sharing economy services completely should be a “measure of last resort.” Governments should instead introduce measures that could limit the impact of such platforms, such as restricting the number of days a host can rent out an apartment through a sign like Airbnb. The guidelines are expected to be published on Thursday.

The European Commission press office did not immediately return a request for comment on the FT report.

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