Opportunities and challenges in a digital era – Cities meeting with Margrethe Vestager

17 September 2020

The platform economy has delivered a range of new services for people, from easy home deliveries, to on-your-doorstep mobility options and hassle-free city trips.

For cities this brings obvious benefits, such as greater revenues from tourism. But there is another, more insidious side: the consequences of illegal rentals, for example, can include reducing the stock of houses intended for residential use, the increase of nuisances (e.g. noise disturbance) in city districts, and sometimes breaching other areas of public safety such as how many people can stay in one location.

This was one of the points on the agenda on Thursday 17 September when mayors and leaders from 12 Eurocities members held an online roundtable with European Commission Executive Vice-President Margrethe Vestager.

“Digital platforms have a huge impact on European cities, in particular in Short Term Holiday Rentals,” noted Femke Halsema, Mayor of Amsterdam. “We all know the future is digital, which brings innovation, growth and opportunities for all. But we do need another regulatory approach to these digital services to ensure both the well-being and freedom of our citizens.”

Indeed, as the mayor, and others, pointed out, in places where the current freedom for digital services is not serving the public interest, current European legislation makes it very difficult for city administrations to take effective measures against globally operating companies.

As Laia Bonet, Deputy Mayor for Barcelona, put it, “We cannot protect local retail against Amazon’s unfair competition. We cannot ensure the right to housing if Airbnb and short-term housing rental platforms do not comply with the rules that govern the real estate market. We cannot fully deploy digitalisation strategies if we do not make sure that everyone has access to internet and the skills to use it.”

Navigating choppy waters

Ahead of the European Commission’s announced Digital Services Act, the city representatives shared proposals with Executive Vice-President Vestager on topics ranging from obliging platforms to share relevant data, key to any efficient controlling and enforcement system; to holding platforms liable for the content they display; to ensuring better cooperation and compliance with local rules.

With this in mind, and as both Mayor Jacek Majchrowski, Krakow and Secretary of State, Wenke Christoph, Berlin pointed out, one of the needed elements to protect the general interest is better access to data. More precise data – on locations where, for instance, Short term holiday Rental (STHR) activity takes place, on the number of days of such activity per year, data on the number of ‘guests’ that are involved in STHR activity – would enable city administration to better serve the interests of residents, which are their primary concern.

Speaking to Eurocities ahead of the event, Anne Hidalgo, Mayor of Paris, said: “We are not against the platforms, but they must abide with local and national regulations. It is time for a new European regulatory approach that serves first and foremost the general interest, which is for us accessibility of housing and the liveability in our cities.”

Cities, as the closest level of government to citizens, are only too keenly aware that the digital transformation can create both new opportunities but also new layers of inequalities, unless the policies guiding the process are user-centric and citizens-focused.

Indeed, in their recent joint statement by 22 European cities, the city representatives pointed out that cities welcome tourism. In his intervention for example, Zdeněk Hřib, Mayor of Prague, shared that by 2025 his city is expected to have the same number of tourists as Rome – a city twice the size – and the cities see tourism as an important source of income and employment for many people, but the responsible rental of private homes can only be done if the necessary regulation is in place.

Several of the city representatives shared the sentiment that what is illegal offline should also be illegal online, with Bordeaux and Porto outlining that effectively registering which properties are registered with short term rental platforms is a crucial first step.

“They don’t play by the same rules,” commented Philippe Close, Mayor of Brussels.

Time for new regulations

In many ways city administrations are drivers of the digital transformation: cities power innovation ecosystems, invest in tech start-ups, support digital skills development, and provide public services informed by local data. Cities are natural allies to the European policy makers working towards a more digitalised society, which puts people first.

And in this endeavour, cities are ready and able to “work with the European Commission to ensure an effective EU framework that protects and empowers people and businesses, while ensuring data and new technologies are used to deliver better public policy,” said Dario Nardella, Mayor of Florence and Vice President of Eurocities.

In her response Executive Vice-President Vestager conceded that, “better cooperation between platforms and public authorities will be a prerequisite for a proper enforcement of the Digital Services Act. It will provide a modern and harmonised regulatory framework, and take account of the needs of national and local administrations and compliance with local rules, while providing a predictable environment for innovative digital services.”

Eurocities new on paper on the Digital Services Act explores how to make digital opportunities work for people and the public good. Read it here:


Alex Godson Eurocities Writer