03 Jun 2016

The Impact of the Collaborative Economy on the Labour Market

Willem Pieter De Groen / Ilaria Maselli

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Authors: Willem Pieter De Groen and Ilaria Maselli

Series: CEPS Special Report No. 138     No. of pp: 35

The digitalisation of work is creating new ways of intermediating work, with for example platforms intermediating work between individuals online. These so-called online collaborative platforms have the potential to fundamentally change the labour market, but for the moment, with an estimated 100,000 active workers or 0.05% of total employees in the EU, they do not seem to have a large impact on the offline/traditional labour market or the create/destroy impetus.

This paper analyses the direct and indirect impact of the collaborative economy on the labour market. The findings, based on a collection of empirical studies, suggest that most workers do not earn their main income through online platforms and they obtain earnings from different types of platforms. Earnings from physical/local services are, in general, substantially higher than virtual services that can potentially be delivered globally. The paper also assesses the conditions, number of hours worked and employment status, compared to the offline labour market, and finds shows large differences across types of workers, platforms, and countries.

The emergence of online collaborative platforms poses some challenges and opportunities for policy-makers. On the one hand, they may be challenged to ensure minimum remuneration, fair evaluation, tax declaration and social protection, and reduction of the administrative burden. On the other hand, the new technologies may provide opportunities to (partially) liberate some professional services and activate specific groups at a distance away from the labour market.

This paper was  commissioned by the European Commission as input into its European Agenda for the Collaborative Economy. This Agenda will take account of the direct and indirect impact of the collaborative economy on the labour market.

Willem Pieter De Groen is a Research Fellow at CEPS in Brussels and an Associate Researcher at the International Research Centre on Cooperative Finance (IRCCF) of HEC Montréal. At the time of writing, Ilaria Maselli was a Research Fellow at CEPS.