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The sharing economy generation

Posted on 24 Apr 2015 by Chris Torney

The global sharing economy is taking off, and young people are set to be its main drivers. Those are the conclusions of a report published earlier this month by analyst PwC.

The firm has carried out a large-scale survey into consumer attitudes towards sharing in the United States in order to help companies take advantage of this new way of doing business.

The results show a sharp generational divide over how sharing is perceived. Among 18 to 24-year-olds, for example, there is twice as much agreement with the idea that access to material goods such as cars is more important than owning them than among those aged 25 or older.

But among all age groups acceptance of the concept of sharing is high, with eight in every 10 respondents saying that there are genuine advantages in renting as opposed to owning items outright.

The report also shows how quickly sharing-economy services are growing. Around one-fifth of Americans are already active in the sector; meanwhile, accommodation provider Airbnb, for example, caters for 425,000 guests a night globally, almost a quarter more than the Hilton Worldwide hotel chain. Lift-sharing service Uber operates in more than 250 cities around the world, and has recently been valued at more than $40 billion (£26.7 billion).

PwC says that in the five most significant sectors of the sharing economy – namely, travel, car sharing, finance, staffing and music or video streaming – current annual revenues of around $15 billion (£10 billion) a year could rise to $335 billion (£223.2 billion) within the next decade.

So what are the next steps on the road to such impressive growth for these services?

The PwC report identifies one or two potential stumbling blocks which will need to be overcome before this prediction is realised.

These mainly relate to trust between consumers of sharing economy service and their providers: in the survey, 69% of respondents said they would not trust a sharing economy business unless it was recommended by someone they knew. And almost three-quarters said they were worried that the quality of the service or experience they received would be inconsistent.

Given that peer-to-peer lending was one of the earliest forms of sharing, and has been around for more than a decade now, it might not surprise you to learn that these issues have already been addressed in this sector to a large extent.

Zopa realised from a very early stage that winning the trust of its customers was likely to be the most significant factor in its success. As a result, the company was extremely careful in its first few years in particular to ensure the quality and creditworthiness of the people it lent to – an approach which endures to the present day.

If a business is charged with looking after people’s money then it is of course vitally important that its customers trust it. But, as PwC points out, building trust is also likely to play a crucial role in pushing the likes of accommodation- or transport-sharing services into the mainstream.

Category: Industry news
Tags: sharing economy

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