March 9th, 2015
The sharing economy, also known as collaborative consumption is set to be one of 2015’s global trends and it is forecast to be worth £9bn in the UK by 2025. There are already 113 million sharers in the US, UK and Canada alone, accounting for 40% of the adult population.
Early success stories such as AirBnb and Zipcar, have ignited interest in this rapidly growing economy and are starting to become household names. Airbnb, for example, since its inception in 2008, now boasts more than one million listings in 190 countries and the company is valued at more than $13 billion.
One of the main reasons why these companies are successful is that by using a peer to peer network they are able to offer services considerably cheaper than their more traditional competitors. They are also proving popular from a community perspective, as they unite strangers with a common interest and at the same time they are sympathetic to eco values such as sustainability and waste reduction.
The sharing economy is not in fact a new idea; it is really a repositioning of the practice of sub-letting. However this does not engage the tech-savvy millennial, these early adopters of the sharing concept want access over ownership but in order to appeal to them companies must present themselves in a more modern and innovative way: think sharing not sub-letting.
The sharing economy is here to stay and it is already shaking up a number of markets ranging from education to tourism. Who would have thought that the country’s esteemed universities would be facing the threat of cheaper degrees accessible online and contemplating Google as their biggest competitor?
Innovative transport platforms are shaking up the taxi industry, the loan of personal vehicles is disrupting the vehicle ownership model, home sharing is the new alternative to hotels, peer to peer lending or crowd funding offers alternatives to traditional finance models and so on. The impact of the new sharing model is evident across a number of industries today. Does this therefore beg the question whether our traditional institutions need to re-brand or revise their existing products to appeal to today’s millennial consumers? If not and we bury our heads in the sand will this be the road to stagnation rather than success?
Matt Dredger observes, “It is clear that individuals are joining forces through sharing economy platforms. I recently came across Etsy, an online craft market, where users are helping each other to grow their own businesses. Their users regularly meet up in real life across the world to share stories and skills; this includes things such as showing each other how to leverage SEO, digital marketing and social media, as well as understanding taxes in different regions, or merely to enjoy a greater purchasing power with suppliers.
Similarly there are groups of individuals coming together under peer to peer lending platforms and gaining ground on traditional lending channels. I don’t believe it will stop here. Imagine a group of people coming together in a local area to create a car sharing club; what is to stop them approaching local businesses as a quasi-car leasing enterprise? Such actions are bound to have far reaching ramifications for car leasing and rental firms.”
Matt himself swapped his job as Sales Director to set up his own new sharing business called Borroclub. In keeping with the concept of collaborative consumption, Borroclub is championing a desire for bringing together the local neighbourhood. The online platform accessed via www. borroclub.co.uk brings together a community of sharers and enables lenders to monetise their idle household items and borrowers to have access rather than ownership of these personal assets for a fraction of their purchase cost. High purchase costs can be avoided or simply a more informed purchase decision can be made once a borrower has had the opportunity to try a product before deciding to buy it outright at a later date. Matt says, “I’ve been in the leasing industry since I was 16 and the sharing economy has been a wake- up call to explore new possibilities within a related market. If I can change then so can others. It’s good to look at things with fresh eyes and think out of the box.”