UK sharing economy will take a decade to hit its stride
Despite popularity of existing players such as Airbnb and Liftshare, it will take 10 years for the sharing economy to become mainstream, according to the industry's trade body
The chairman of the UK’s new sharing economy trade body has claimed it will take 10 years for the industry to go mainstream, despite recent moves by large corporations to adopt the radical model.
According to Debbie Wosskow, who created Sharing Economy UK (SEUK) three months ago to support and monitor businesses working within the nascent industry, the sharing economy will follow the same growth trajectory as the online travel boom 20 years ago.
“If you look at the early days of online travel, those operators were very separate from traditional players,” she said. “Now, big operators wouldn’t dream of not having an online presence.”
In the mid-1990s, Microsoft launched Expedia and a comprehensive list of hotels was made available online through Travelweb. A decade later, travel booking sites, airfare price comparison sites and online-only operators were the norm.
“I want to see how big business will respond to the sharing economy,” said Ms Wosskow. “How long will it take to see true integration and assimilation? About a decade.”
There are already a handful of corporate early adopters tapping into sharing economy principles. Kingfisher, the owner of DIY chain B&Q, has rolled out a pilot sharing scheme to allow customers to bring down the cost of their power tools by renting them out at a handful of stores.
Hyatt, the hotel group, invested an undisclosed sum in OneFineStay, which rents out owners’ luxury holiday homes, to gauge the appeal of the new model.
Courier firms are using the Nimber peer-to-peer delivery service to ease pressure on their networks, according to founder Ari Kestin.
BMW has rolled out car sharing scheme DriveNow in London, which gives users access to a fleet of BMWs and Minis for a registration fee, in response to the new demands of urban living.
“Millennials are buying fewer cars and homes,” said Ms Wosskow. “The sharing economy is a response to that trend.”
A new definition for the sharing economy was released by SEUK this week as the industry works towards its long-term goal to give accredited firms a kitemark, which will reassure consumers that its services are trustworthy.
The new definition reads: “The sharing economy involves using internet technologies to connect distributed groups of people and organisations to make better use of goods, skills, services, capital and spaces, sharing access and so reducing the need for ownership.”
In order to be classed as a genuine player within the UK’s sharing economy, companies must meet these criteria. Ms Wosskow, who is also the founder of home exchange platform Love Home Swap, claimed the definition would help unite the industry.
“The sharing economy is a very broad church,” she said. “It covers a vast range of businesses doing very different things, from transport to food. Blood, sweat and tears went into coming up with the definition, but it is crucial, as the sharing economy is such a hot topic.”
Andrew Saul, deputy chairman of SEUK and senior partner at Osborne Clarke, added: “A clear, agreed and consistent definition is crucial if the sharing economy is to become the defining force in technology and enterprise that we know it can be.”
SEUK, a self-appointed and member-funded trade body, has also announced new members to its ranks, which already include established players Airbnb, Zipcar and Liftshare.
Home Exchange, the international home swap platform; Vrumi, which connects spare work space in London with freelance professionals; Trusted Housesitters, which finds pet and house sitters around the world; and UnderTheDoormat, which offers users the chance to stay in luxury homes around London, have joined as members. Onfido, which provides comprehensive background checking, has joined as an associate member.
Members are admitted only every quarter and there is “quite a backlog” of applications, Ms Wosskow said.
The SEUK kitemark, which should be launched this year, will also allow the holder of the mark to access crucial services, such as insurance.
“Insurance companies are only going to write new products when there are a number of companies acting together,” said Ms Wosskow. “The sharing economy has changed the way liability is understood. If something goes wrong when a person is driving someone else’s car, who is responsible?”
Ms Wosskow, who wrote a report into the sharing economy last year for the Government, claimed that the UK is at the forefront of innovation in the sector.
“The Government and policymakers want to make the UK the home of the sharing economy,” she said, citing the creation of the “sharing cities” pilot programmes in Leeds and Manchester where initiatives such as shared city bikes and food collectives are being discussed.
Her report found that the sharing economy has the potential to turn the UK into a nation of “microentrepreneurs”, unlocking up to £9bn a year in economic benefit by 2025.
Last January, the Government made changes permitting sub-letting in London and the renting out of driveways to enable sharing economy players to operate legally.
“The Government is very keen on micro business,” said Ms Wosskow. “If you look at the average Airbnb host, they make an extra £3,000 a year. This makes a massive difference to people’s lives and the Government has tapped into that.”