Regulating Transport Platforms: The Case of Carpooling in Europe

Abstract

Online platforms are transforming transportation as they create new multi-sided markets connecting transport providers (often non-professional providers) and passengers, in a way that generates new network effects and distributes them among the participants in the ecosystem. The European carpooling experience shows the power of transport platforms to multiply the traditional sharing of resources and even to substitute collective transportation modes such as railways and buses. Transport platforms raise new regulatory challenges. New regulations must consider that the efficiency created by the platforms derives from pooling together large volumes of users. This is possible if platforms are allowed to provide their intermediation services without taking all the burden of a transport service provider. However, a balanced relationship between the platforms and the service providers on the one side, and the passengers on the other side, has to be ensured. Furthermore, a level playing field with traditional players has to be ensured. Finally, the potential market power has to be taken into consideration.