REVIEW #5: The Sharing Economy: Economic Frame or Forerunner of Another Political Cleavage?

img_0411_web

Uber closed down its operation in Hungary on July 24, 2016 due to a new law which would impose serious penalties on its drivers, (for example resulting in taking away their licenses) making its operation impossible. This was the last act of a several months long debate in which taxi drivers (by resorting to protests and blocking the streets) forced the Hungarian government to ban Uber. With this decision Hungary became one of the few European countries where the sharing economy – as one of the most important economic developments – has recently become a very political issue. The case of Uber vs. taxi drivers was undoubtedly influenced by party politics in Hungary: the governing right-wing Fidesz-KDNP positioned themselves against Uber, while the left-liberal opposition – regardless of their political ideology – took Uber’s side. Hungarian intellectuals were more divided: the usually anti-government but new-leftist opinion leaders seriously criticized Uber for their tax and employment policies, by the same token indirectly becoming the harsh critics of the sharing economy in general.

This clearly shows the novelty of a new economic model – which is only now being shaped – on multiple levels: it can bring innovation in terms of economic, legislative and political solutions, and can open new front lines between right- and left-wing parties, or even among the left and liberals. This can have even more serious consequences in a country like Hungary, where the opposition is forced to form some kind of unity or cooperation against the government (in this case, it is mainly the new election system created by the Fidesz government). This left-liberal camp is already divided by certain issues and the sharing economy may simply become yet another reason for turning the Hungarians against each other.

SHARING AND COLLABORATIVE ECONOMY

The term itself, is another thing currently under construction. The respective EU bodies recommend the use of “collaborative economy” instead of the original, more popular term sharing economy1. The Commission’s recommendation is rather supportive towards the collaborative economy in general due to its innovativeness and potential to create jobs. A part of these suggestions is aimed at policy makers: “Absolute bans and quantitative restrictions of an activity normally constitute a measure of last resort” – but admits that the development of a collaborative economy raises some important questions regarding the legislation both nationally and on a European level – and in the latter case, it can only mean some further recommendations.

What is the collaborative economy?

The term collaborative economy refers to business models where activities are facilitated by collaborative platforms that create an open marketplace for the temporary usage of goods or services often provided by private individuals. The collaborative economy involves three categories of actors: (i) service providers who share assets, resources, time and/or skills — these can be private individuals offering services on an occasional basis (‘peers’) or service providers acting in their professional capacity (professional services providers); (ii) users of these; and (iii) intermediaries that connect — via an online platform — providers with users and that facilitate transactions between them (‘collaborative platforms’). In general, collaborative economy transactions do not involve a change of ownership and can be carried out for profit or not-for-profit.

Nevertheless, we should bear in mind that the actual name or an official term do not really matter: no matter which label is used, people will understand it anyway. And for them the operation and the impacts are what really counts.

Basically, according to the EU definition, a ‘sharing’ and ‘collaborative economy’ shall be used as synonyms and thus it means they both:

  • connect service providers and costumers

  • through an online platform

  • regardless of whether doing this individually or as a member, or an employee of an organization.

Opportunities and innovations coming from a sharing economy can be realized if they are regulated appropriately and efficiently, which requires a predictable social and political environment. Examples of the two most popular services – Airbnb (offering rooms and flats for short term rent) and Uber (for car transportation) – illustrate well what impact they can have on society – revealing and generating both positive attitudes and serious concerns.

Download Full Article:

integrity-lab_tha-sharing-economy-the-frame-or-forerunner-of-another-political-cleavage_review_5

Download Full Magazine:

web_single_page_4liberty_no_05

1 http://www.eesc.europa.eu/resources/docs/com2016-356-final.pdf

Reka Csaba
Roland Reiner
Integrity Lab
4liberty.eu