Sharing economy puts public values under pressure

The sharing economy generates employment, promotes entrepreneurship and encourages innovation in existing sectors. At the same time, the rise of online sharing platforms is putting pressure on public values such as consumer protection, public order and privacy. There is a need for better protection of public interests in the sharing economy and that calls for policies that promote the positive effects and limit the negative effects, according to the report ‘A fair share’ published by the Rathenau Instituut.

The number of Dutch people that use sharing platforms (Airbnb, Airdnd, SnappCar), gig platforms (UberPop, Helpling) and second-hand platforms (Marktplaats) has grown four-fold in the last three years, to almost a quarter of the population in 2016. Sharing platforms start small but have the tendency to grow into monopolies. After all, the larger the number of people participating in them and sharing their data, the better they function. It is that rapid growth in the scale of platforms that threatens existing public values. There are insufficient guarantees of a level playing field for citizens who offer their services via platforms and regular suppliers such as hotels, restaurants, cleaning companies and taxi companies. Melanie Peters, director of the Rathenau Instituut: “In the public interest we have to give sharing platforms sufficient scope to promote innovation in existing markets, but we must regulate them before they become too dominant in their sector.”

The report makes a number of specific recommendations. First, the government should clarify the legal status of sharing and gig platforms. The government should also be able to establish a trusted third party to monitor a platform in a manner that guarantees the privacy of the participants. Finally, the government should take measures to ensure that reviews on platforms are reliable and portable. Peters: “Sharing platforms are data-driven and depend largely on the data and the reviews of their users. We propose regulating that users can carry their reputation data with them to other platforms.”

The Rathenau Instituut advances public and political debate on the social aspects of science and technology. The institute carries out research and organises debate on science, innovation and new technologies. The Rathenau Instituut carried out this study in association with Utrecht University.

Frenken, K., A. van Waes, M. Smink & R. van Est, A fair share – Safeguarding public interests in the sharing and gig economy. The Hague, Rathenau Instituut, 2017.