Government launches independent review of the prospects for 'sharing economy'

Thu 02 October 2014 View all news

The Department for Business, Innovation and Skills has launched an independent review of the prospects for the UK to lead in the growth of the 'sharing economy' to build on the success of businesses such as Airbnb, Rentmyitems and Zipcar.

BIS' press release says that technology-based business models that help people share their property, time and skills are revolutionising traditional sharing practices and building a new wave of everyday entrepreneurs. From carpooling, to house swapping and time sharing, the sharing economy empowers people to hire out their power drills and spare rooms and get the most from their assets.

It is estimated that 25% of UK adults are sharing online, and current global revenues of around £9 billion could reach £230 billion per year by 2025. The sharing economy is forecast to reach 50% market share in key sectors such as holiday accommodation and car-sharing/car rental by 2025.

The review, which will be led by Debbie Wosskow CEO of Love Home Swap, will:

  • challenge and define the concept of the sharing economy
  • explore the potential benefits of the sharing economy to the UK, as well as any risks it may pose to traditional industries
  • understand the main issues faced by businesses within the sharing economy, such as the role of insurance policies on new firms like Airbnb
  • understand the regulatory burdens faced by sharing economy companies
  • understand the barriers to digital trust
  • understand how the sharing economy can reach its potential in the UK

The review team will work closely with a wide range of stakeholders, including consumers and more established businesses that are moving to new collaborative models, as well as mainstream businesses that are facing increased competition from these new services.

Business and Enterprise Minister Matthew Hancock said: "The sharing economy is disrupting existing markets and changing the face of business. By opening doors for everyday entrepreneurs to trade directly with each other online, these new market places are driving down costs and pushing the frontiers of innovation."

According to PwC, the 'rapid growth potential' of the sharing economy seems inevitable as several mega-trends - technological breakthroughs, resource scarcity, rapid urbanisation, social change and shifts in global economic power - start to collide and reshape the UK's economic and commercial landscape.

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