What Brexit means for the Sharing Economy

Like most, the result took us by surprise. Now the dust has settled, it’s become clearer how Brexit might affect the sharing economy in general, and UnderTheDoormat specifically.

This week PwC released a report that predicts the sharing economy will continue to grow unhindered by Brexit and estimates that in 10 years’ time the industry will be 20 times its current size. We agree with their conclusion and believe the sharing economy will continue to grow at a fast rate even with Brexit.

There are three main reasons that the sharing economy will continue to thrive, although we feel there are two areas where Brexit has brought uncertainty that the new Government will need to address.

Three reasons the sharing economy will continue to thrive

  1. More people will use the sharing economy in tough times

The fundamental principle underpinning the sharing economy is making more of what you already have. People always like to make the most of their assets, but they are especially keen on it when times are tougher.

A person’s home is their most important asset but it rarely earns any money back for them (at least not unless it appreciates, but that’s a much-delayed and not guaranteed bet). If the UK economy suffers from Brexit we expect to see more homeowners looking for innovative way to earn extra income from their homes.

We’ve already seen an impact in two areas that could lead to an increase in people using businesses like ours.

– First, the fall in the pound has made a foreign holiday a lot more expensive suddenly. Letting out their home out when they’re away can help to cover the cost.

– Second, if the housing market slows as expected, homeowners may be left with properties they aren’t living in but can’t sell. Instead of leaving it empty or locking themselves into a long-term let, a more short-term let could cover the mortgage until they are able to sell the property.

  1. More tourists will visit Britain

The UK is all of a sudden much cheaper to visit, especially for people from the States (our number one market for guests). It’s likely that we’ll see a boost in the number of tourists who visit London, increasing demand for homes to stay in – and helping to support the local businesses in our local neighbourhoods.

  1. Sharing economy businesses are more flexible than traditional ones

Just like Airbnb and Uber, UnderTheDoormat doesn’t own any of the assets that we provide. As the homes and cars used in the sharing economy are all owned by the individual the sector is much better placed to meet any changes in demand. So, though we anticipate an increase in the number of people using the sharing economy, we’re protected against any potential downturn.

Two potential downsides from Brexit

  1. Businesses that serve global customers need a global workforce in one place, and Brexit could harm that

In an office 8 people we have two Americans, a Spaniard, a Russian, an Italian, a South African, and two Brits. We welcome guests from all over the world and employing a wide range of nationalities helps us to meet their needs more effectively. If Brexit makes it harder to employ the talented people from different backgrounds that we need, it will make it harder to offer the 5 star service we pride ourselves on.

  1. Brexit may make operating across Europe more expensive

Intuitively, one single market with a common approach across 28 countries is much better for a business like our that hopes to expand in the medium term. The EU recently released a report with some very good recommendations. Even if the UK and EU remain welcoming places to the sharing economy separately, operating in the UK and EU may add to our costs.

We’ve always joked that one day we’d love to move our headquarters to Barcelona, and perhaps now we will.

Though it is an uncertain time right now, it’s worth remembering that the sharing economy was born in the aftermath of the 2008 financial crisis and grew up in the teeth of the recession that followed. The sector is built in a way that will make it resilient against any Brexit-induced economy downturn but the longer-term challenge of operating across Europe and attracting the international talent we need is something that needs to be addressed very carefully by a new Government.