This article examines the main public interests at stake with the rise of online platforms in the sharing economy and the gig economy. We do so by analyzing platforms in five sectors in the Netherlands: domestic cleaning (Helpling), taxi rides (UberPop), home restaurants (AirDnD), home sharing (Airbnb), and car sharing (SnappCar). The most salient public interests are a level playing field between platforms and industry incumbents, tax compliance, consumer protection, labor protection, and privacy protection. We develop four policy options (enforce, new regulation, deregulation, and toleration), and discuss the rationales for each option in safeguarding each public interest. We further stress that arguments supporting a particular policy option should take into account the sectoral context. We finally highlight the tension between the subsidiarity principle, which would call for local regulations as platforms mostly concern local transactions and innovation policies that aim to support innovation and a single digital market.
Frenken, K., van Waes, A., Pelzer, P., Smink, M., & van Est, R. (2019). Safeguarding Public Interests in the Platform Economy. Policy & Internet
Copernicus Institute of Sustainable Development
Utrecht University, Netherlands
The interview transcript
Koen, thank you very much for accepting this invitation to a coffee break, how are you doing?
I would like to talk with you today about the paper you wrote, in which you are examining public interests with regards to online platforms in sharing economies, platform economies actually. Could you please tell me what the paper was about?
Well the paper examines the pros and cons of online platforms that people use to sell their goods, rent out their houses, but also offer services like cleaning, taxi, tutoring what have you, and there’s a lot of political debate about how we have to manage and regulate those platforms, and this paper looks at all the positive and all the negatives of such platforms for society.
So since this notion of platform economies is so important for your paper, is important for your paper, could you please define it?
Well a platform brings together supply and demand through a website, but it also does much more because it regulates the way we trade, it monitors what we do and it can also ban users in case they feel that users do not comply to their rules, so they act what people say as a private regulator in organizing markets way before the government would regulate those markets and this brings positive aspects for the government because the government has to do less and platforms are very good in regulating those markets, but it also raises new questions about the responsibility of those platforms, the privacy of the users, whether the taxes are being paid and so forth so, that’s why I say it’s a very timely topic for governments, how they have to regulate those platforms.
I can imagine, that’s very interesting and which ones were your main findings.
Well we looked at car sharing, we looked at home sharing, we looked at Uber taxis and cleaning platforms and the first finding is that it really depends on the sector and the platform you look at what are the positives and what are negatives, and the second finding is that the main political issue now emerging is the labor issue, the question whether the people who now freelance through those platforms should not be actually considered as employees of those platforms because the platform’s yeah exert so much power over them, that’s from a legal point of view, it looks very much like an employer-employee relationship ,so that were the main the main findings.
Thank you for that, it is very interesting and I want to know what was your personal motivation? Are you an Uber user?
Not an Uber user but a car sharing person, so I started renting a car from a car sharing organization back in 2013, and that was at a time in the Netherlands that uber and airbnb were about to start and then I got interested in the whole phenomenon and started reading about it and starting researching it and my personal interest is that is this is typical and disruptive innovation, a big innovation where it is not very clear in the beginning what are all the effects, but also not clear how you want to regulate it because without regulation I think this will create too much problems, but you also don’t want to forbid it but you want to find new regulations that maximize the benefits, but also mitigate the problems that we see.
This can be said is like a hot topic now so, which ones would you say are their key implications for policy making?
Well what we do in the paper is that we give the policymaker four options, two extreme options are let it go and in the beginning that’s what you basically do because you have to learn about it and many platforms never grow big anyway so you don’t need to regulate it. The other extreme option is to forbid it and in many cases you can forbid it because the existing laws do not allow people for example just to rent out their home but forbidding and so enforcing the law is very hard because there are now millions of people doing this and you can’t trace the actions of million people so you have to go in between, let it go and forbidding and which can be to deregulate, so remove some of the regulations that are existing and give people more freedom to run their own lives and to run their own businesses, this has a disadvantage that some protections are lifted, but it has the advantage that as a government you can better enforce the few regulations that remain or you can think of new regulations and that’s then the hard part, what are the smart regulations to introduce and how do you enforce them, so one example famous examples, AirB&B where most cities say it’s allowed but only up till 30 days per year or 60 days per year and then you kind of balance the benefits for local residents to rent out their home when there are away, but also don’t t let it go and have people rent out their home for a whole year and running basically a hotel so you have to find a balanced approach to regulation.
That’s a fascinating topic, thank you very much again finding the right balance regulation is very important, so thank you for your insights and I wish you all the best for your future research and hope to see you again in a coffee break.
Thank you for watching, if you’re interested in more details about this academic publication please find here the link below and see you next time bye byeTags: Airbnb, gig economy, Regulation, sharing economy, Uber