Picture courtesy of www.girlmeetsdress.com

Share and Share Alike

16th October 2015

We’re no longer a country obsessed with ‘keeping up with the Joneses’. Conspicuous consumption is being replaced with collaborative consumption: an economic phenomenon where ownership is less important than simply having access – to all sorts of different products and services… from borrowing a pet to finding a place to sleep for the night. Jennifer Lipman explains...

Would you sleep in a stranger’s bed? Host a dinner for people you’d never met, or advertise your driveway online? Lend money to an entrepreneur on the off-chance they might make it big, or rent out your dog while you go abroad?

Well, plenty of us would. The ‘sharing economy’ – businesses that help people pool resources and skills using technology – is on the rise, valued at around £9bn by PricewaterhouseCoopers and expected to grow considerably over the next decade.

A survey by innovation charity Nesta last year, found that a quarter of Brits are using online or ‘peer-to-peer’ tools to ‘share’ something, whether it’s a spare room or some other hotly sought asset. Rather than laying out to own, or going through traditional stockists or companies, we’re renting rooms using Love Home Swap or Airbnb, finding four-legged friends on BorrowMyDoggy, or buying crafty goods from online marketplace Etsy. The sharing economy includes peer-to-peer lending services like Funding Circle, and business such as Uber, which connects potential passengers with available cabbies. Broadly speaking, the term refers to businesses that remove ‘the burden of ownership’, explains Mark Walker, general manager of Zipcar UK.

As Graeme Trudgill, executive director of the British Insurance Brokers Association, explains, the sharing economy is a ‘market disruptor’, changing the game for myriad established business models. “The Internet means people don’t have to buy a chainsaw to chop down a tree, they borrow one from a local owner,” he points out. “Established kennels could see people choosing to allow their dog to stay in a local pet lover’s home.”

Having blossomed amongst trendy techie types, sharing is no longer for “those in the know”, says Olivia Sibony. The co-founder of Grub Club, which brings together foodies and chefs for bookable supper club events, her clientele tends to be aged 30 to 50. “The early adopters are probably slightly against it now because it’s too mainstream,” she laughs.

Crucially, sharing makes accessible – and more affordable – things that once wouldn’t have been within our grasp. “It’s streamlining clunky processes that haven’t changed for decades,” says Alex Stephany, CEO of Just Park, which connects drivers with private parking spaces. His customers value the service because it costs less than leaving a car conventionally parked at many destinations, while those renting spaces out are keen to make ‘free money’. 

Zipcar, the UK’s largest pay-as-you-drive car club, is a prime example. If you drive only intermittently, why pay for a car’s upkeep? “It’s about giving people the freedom to access a car when they really need to” says Walker. “We’re about smart, convenient and cost effective access.” He refers to the “pay-as-you-live generation adopting a new kind of lifestyle,” and while that may overstate things, there’s no question we are becoming generally asset poorer, facing rising housing costs and the after-effects of the recession. Equally, we’re living longer and getting increasingly mobile in how we work and play. “Ownership is becoming more irrelevant than ever,” agrees Anna Bance of Girl Meets Dress, which rents designer frocks for a fraction of the retail price. Today, she adds, experience and time are our most precious commodities. 

Certainly, changing circumstances paved the way for the sharing economy. It took off when two main factors collided: the recession, and the emergence of digital tools to make peer-to-peer activity possible and safe. “In 2008 people were really struggling to get to market,” says Sibony. “People started being more creative.” With established models creaking and bank loans scarce, entrepreneurs sought new models while consumers became hungry to make their resources go further.

And even as the economy has recovered, sharing has gone from strength to strength, with increasing appetite for this kind of old-fashioned community spirit. We may not know our neighbours or have a friendly local shopkeeper, but sharing fills that gap, helping us meet like-minded people by providing a reason to connect. “That’s what’s so powerful,” says Sibony. “It’s something people would love to go back to. Technology makes it practical.”

Of course, back in the day we knew our local shopkeeper by face, not just username. The sharing economy has many virtues, but horror stories abound of Uber journeys gone awry or Airbnb properties being trashed. “‘Sharing’ means the customer should take care of the product as if it was their own,” emphasises Bance. But beyond good faith, how can a sharer guarantee that everybody is that conscientious?

Sharing businesses tend to have ample small print, often absolving them of liability, but as Trudgill points out, their insurance policy won’t protect you. “It’s vital that if you are letting people share your car, property, pet or anything else, you speak to your insurance broker to ensure you have the right cover,” he warns.
The more high-profile sites – those subject to media scrutiny – may be a better bet, and it’s worth looking for businesses with a back-office team to provide verification, rather than sites that are entirely peer-to-peer. “All parking space listings are approved by our team manually before they go live,” explains Stephany. And like many such businesses, Just Park allows you to contact the ‘sharer’ before you book. “These self-regulatory systems tend to work remarkably well,” he argues. “Trust is the lubrication that keeps these marketplaces working.”

Indeed, sharing businesses live or die by user reviews, so they know the value of good service; extra towels or local knowledge at an Airbnb property, for example. Fashion entrepreneur Bance, whose site has a landline helpline and live chat for fashion advice, says this personalised service is what makes sharing so much more desirable than shopping at a big chain, or a small store with fewer options. “Every customer is ordering a dress for a specific event,” she says. “It’s important that our customer service team is on hand.”

Meanwhile, the sector is professionalising as it grows. There is now a trade body, Sharing Economy UK, which is working to develop a kitemark for responsible practice. And the technology is evolving; Sibony is enthusiastic about background checking organisations like onfido, which attempt to limit manipulation of reviews by requiring users to scan multiple forms of ID. “The more the sharing economy grows, the security risk is undeniable,” she says. “Trust beyond the ratings will be necessary at some point.”

For now, the risks have not dampened the political zest for sharing. The sharing economy has “the potential to turn the UK public into a nation of microentrepreneurs,” enthused Love Home Swap’s Debbie Wosskow in a Government-commissioned report last year, and the Government appears to agree, with George Osborne announcing that he was upping Rent-a-Room tax relief in July. Ministers have also clarified that people should be able to rent parking spaces without planning permission, while a joint project by TFL and the London Councils to boost car club membership is underway.

So what next? Having made inroads in travel and hospitality, no one knows where the next big thing in sharing will be. “People have been talking about sharing for the last few years,” says Stephany. “But in terms of mass adoption – we’re just at the very beginning.” Yet as Walker says, wherever it heads, the fundamentals will remain the same: “underpinned by technology, there is an appetite for people to share.”

Sibony hopes to see growth in sharing possessions efficiently around communities; household items like stepladders that people use rarely “but when you need them you need them”. But as she says, it’s hard to second guess. Ten years ago if someone had suggested having a stranger stay in your home, “you’d think it would be all murderers and rapists”. But airbnb is now listing close to a million properties around the world.

What’s clear is that sharing is here to stay. Convenient, affordable and sociable, it’s arguably a better model for business. “We can continue to enjoy life while not pounding the earth’s resources, not having to build twice as many buildings to support restaurants and hotels, or being able to access a car without owning one,” says Sibony. “I think it’s something people will care about more and more.” 

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