A summary of the presentation and debate on the above study is available.
EP TRAN Committee Meeting – 4 December 2017
‘Infrastructure funding challenges in the sharing economy’ – Presentation by Prof Matthias Finger, representing the European University Institute. Study requested by the TRAN Committee, commissioned and managed by the Policy Department
– View the study
Professor Matthias Finger, European University Institute presented the results of the study. Key points included:
- online platforms were an important part of the sharing economy and created multi-sided markets. For example, you could be a driver and customer of Uber (the example of Uber was used in the study);
- they had considered various business models such as car-pooling, car-sharing and car-riding and had used secondary data only;
- car-pooling was an attractive mode for long distance travel because it was cheap and efficient in terms of time (though not as efficient as trains). It catered mostly to low-income customers. It had reached a significant volume in some countries, France in particular (BlaBlaCars were cited in the study). Car-pooling was reducing revenue and passenger volume for traditional public rail and long distance bus operators;
- recommendations included:
- more information as data was very piecemeal and hard to compare;
- a level playing field. New entrants usually took the most lucrative portions of the market;
- shared mobility should be taken into consideration for the redefinition of some public service policies. Competition from shared mobility was threatening cross- subsidies in mass-transit franchises of profitable service and non-profitable services;
- shared mobility in urban transportation was a different matter and was taking passengers away from traditional taxi companies but not from public transport which was still much cheaper. Although there were other associated problems, these did not pose a threat to operators;
- recommendations included:
- provision of legal certainty and promotion of services as complimentary to mass transit;
- the overall message of the study was that shared mobility should be included in a public policy framework rather than treated separately. Transport infrastructure in the long-run could benefit from this. American data showed that people who used ride-sourcing services like Uber would have otherwise used a car. This system was therefore moving into the direction of replacing cars and removing them from the urban transport system. Promoting this system would also favour long-distance transport and infrastructure as profits made by the platforms could be reinvested into infrastructure, for example.
Questions by the Coordinators
Wim van de Camp (EPP, NL)
- commercialisation had damaged the “romantic vision” of the sharing economy. He asked for the Professor’s views on this;
- car-sharing occurred at the expense of public transport, trains in particular. He thought car/ride-sharing would reduce private car ownership;
- he questioned the use of American data in the study as American cities were different to European ones.
Ismail Ertug (S&D, DE)
- in general, he thought the sharing economy could be a chance for the future of transport “the last mile and the first mile.” He had no reason to be critical of the study.
Roberts Zīle (ECR, LV)
- he asked for further clarification on how, when planning the next MFF, politicians could finance infrastructure whilst taking into account the sharing economy. Should online platforms be taxed more to support infrastructure, for example.
Pavel Telička (ALDE, CZ)
- he asked for further clarification on how to tackle the infrastructure finance challenge. As regards the poor quality of data, he asked if this meant the issue could be better addressed on a national rather than EU level;
- he also questioned whether the sharing model could be incentivised for peak hours;
- finally, he asked for details about how to create a level playing field.
Michael Cramer (Greens/EFA, DE)
- he considered the issue of competition. Although taxi and ride-sharing services reduced the number of cars on the road, there was a question of fair competition. Uber, for example hired untrained drivers and employed cheap labour. In terms of public transport, buses could compete with rail in an unfair way and were cheaper due to taxes;
- he asked if the sharing economy and the system described would take the pressure off politicians to improve transport infrastructure.
Professor Matthias Finger gave the following response:
- the sharing economy was a business and platforms behind it made money. The most important question to ask was should the new data layer that platforms created be regulated as a business or as infrastructure;
- the first mover advantage occurred in the digital world and this required other types of regulation in terms of market power etc. Typically, American companies moved first. BlaBlaCar, a French company, was a rarity, in this case;
- he agreed that the US was not comparable to Europe which was a rail continent for example. However, data from European countries had also been used. Although the trends were the same in the US and Europe, the consequences were different;
- the study made a distinction between urban and long-distance transport. In urban areas, taxis mainly “skimmed the cream” and were attacked for this;
- for long-distance travel, the main recommendation had been to create a level playing field. Digitisation only exacerbated the lack of a level playing field between road and rail that had already existed, it was not the most fundamental problem. Policy makers were being forced to have an intermodal approach due to digitisation;
- on reinvesting taxes back into infrastructure and public transport, a tax on Uber had been reinvested into public transport in Chicago, for example. In the US, this was done on the city rather than national level;
- more data was needed before moving forward with legislation. Although there was clear data about France, this did not exist elsewhere in the EU;
- data about Uber was mainly from the US. On the one hand, data showed Uber was supporting a move away from cars but on the other hand, more sketchy data suggested it was resulting in more cars on the road. Better information was needed;
- overall, digitisation could be beneficial with a mobility as a service approach, integrating all transport modes. Here Europe was a leader, for example in Sweden and Finland, but this required a public policy approach rather than a commercial one. Commercial companies could be useful if integrated into the public policy approach and an intermodal level playing field created.
Dominique Riquet (ALDE, FR)
- he asked for more information about taxation and the funding of infrastructure;
- some sharing platforms were aimed at or integrated public transport so the two were not always completely opposed;
- platforms also provided a service that was previously unavailable and this was an added value. He asked for the speaker’s opinion in this.
- the sharing economy should not replace public transport which provided guarantees in terms of coverage for remote areas;
- she questioned the possibility of integrating public transport with the sharing economy without reducing the quality of public services and having targeted transport in more remote areas;
- data protection was a key issue that need to be considered. Here she cited the recent Uber data breach and asked how security could be strengthened for the platform in order to protect consumer rights.
Karima Delli (Greens/EFA, FR)
- she questioned the impartiality of the study given that one of the co-authors, Professor Montero had worked as a lawyer for Uber. Uber had been mentioned 131 times in the study;
- she also refuted the Professor’s claim that Uber, a taxi service, was part of the sharing economy. BlaBlaCar on the other hand was a cost-sharing service and therefore fell into this category. The study should make a distinction between the collaborative economy and platform model. Not all digital platforms existed to make a profit;
- in addition, taxes did not form part of the sharing economy.
Professor Matthias Finger
- he denied that Professor Montero’s contribution had resulted in a biased study. The study was equally critical of the two approaches;
- two models existed in the sharing economy but it was a temporary distinction. Both were profitable businesses and there was no sharing economy in the romantic sense;
- public transport should not be replaced. Rather, better integration between public and private transport was essential. Digitisation required this. In his view, platforms could have some type of public service obligation for remote areas. This would bring complementarity. The challenge would be to integrate this into mobility policy;
- data protection was not limited to transport platforms.
Source: One Policy Place