Back to Zopa Blog

Sharing economy trends for 2015

In a couple of pieces at the end of last year we looked at the state of the sharing economy in the UK and the government’s views on the regulatory and policy changes that are needed in this country to fully exploit the growth in sharing.

So what developments in the world of sharing can we expect in 2015 and beyond?

Rules and regulations

The government’s sharing economy review highlighted the need for legislators to make changes that could allow the sector to flourish. But the increasing popularity of the likes of peer-to-peer lending, ride-sharing and property rental services means that these areas also face stricter regulation to ensure consumers are properly protected.

In P2P finance, a more mature market, substantial safeguards are already in place. But we can expect the likes of part-time hoteliers and taxi drivers to be subject to tougher requirements when it comes to the likes of insurance and paying tax on their earnings.

The prospect of consolidation

The most successful parts of the sharing economy are characterised by a high level of competition, with a lot of firms offering broadly similar services. So alongside Airbnb, say, you’ll find Lovehomeswap; as well as BlaBlaCar there’s Liftshare, and so on.

The question is whether there’s enough room for all these businesses to exist, or whether we’ll see the sort of consolidation witnessed in other tech sectors such as search or online auctions, with clear sector leaders emerging.

How traditional firms will react

The long-standing businesses that are being disrupted, as the jargon has it, by the new sharing economy services aren’t going to take these changes lying down. The question is, what action is necessary for them to survive in this brave new world?

As business analyst PWC points out in a recent report on the impact of sharing services on the hotel industry, the music and TV sectors were “behind the curve” when it came to identifying threats from new technology and new rivals.

Perhaps the best approach should be, “If you can’t beat them, join them”: motor manufacturers and car-rental companies, for example, have already begun making strategic investments in sharing firms – Avis has a stake in Zipcar while BMW has backed JustPark.

And major banks are starting to use P2P lending platforms as a way of accessing borrowers they couldn’t previously reach.

Redefining the sharing economy

The sharing economy is a pretty broad church at the moment: it’s really just a way of describing a lot of fairly disparate businesses that use new technology – the internet and smartphones – to cut out traditional middle-men, from banks and black cabs to hotels and car-hire firms.

Perhaps in 2015, we will come up with more accurate terminology to help us talk about and differentiate these services.

For a start, as New York venture capitalist Fred Wilson points out, the sharing economy is more aptly described as the rental economy: no one is really sharing anything, inasmuch as these are almost all financial transactions.

The four issues described above are all clear signs that the sharing economy, collaborative consumption or whatever you want to call it, is coming of age.

Soon, and perhaps even in the next 12 months, many of these services will surely throw off their “alternative” tag and become the mainstream option.