February 2016

The sharing economy is based on reductions in transaction costs which enable exchanges that were previously not possible. Sharing economy firms facilitate a more efficient use of assets, to the benefit of both asset owners and prospective users. Its potential positive impact on welfare has been estimated at over €1,000 per EU citizen. There is reason to doubt that a special regulatory regime is needed for sharing economy businesses. However, the rise of new business models does underline the need to adapt employment and tax rules to the new circumstances.