Report of the FT Sharing Economy European Summit, 17 March 2015, London
In recent years, the sharing economy has developed enormously due to Internet technology. Mobile phone applications, rating systems and digital payments enable people to connect instantly with the demand and supply of goods and services, and carry out activities.
There is controversy if the sharing economy is really about sharing or that it is actually a new business model for selling. There is also controversy what includes the sharing economy: is it only about accommodation and car sharing? With Airbnb and Uber as global leaders in the space? Or does it also includes sub-sectors like peer-to-peer finance, online staffing and music/video streaming?
Whatever definition is used, it is clear that the sharing economy causes a shift in existing business models that has implications for on the one hand the established companies and on the other hand the regulatory bodies.
Understanding the risks and seizing the opportunities
The FT Sharing Economy European Summit organised by FT live focused on unlocking the potential of the sharing economy and creating a sharing mind set of this exciting new area of the economy. Will the sharing economy help or hinder businesses? How can regulations be implemented without killing off innovation? The participants of the Summit addressed these questions. On stage were representatives of sharing economy companies and traditional companies, insurers, regulators, government policy makers and academics. Carlien Roodink was invited to join a panel about innovation insights.
The right to innovate with minimal rules
The summit started with a keynote by Debbie Wosskow, CEO of Love Home Swap and Chair of the Sharing Economy UK (SEUK). Wosskow was asked by the UK government to write a report on the sharing economy – and to make recommendations as to how the UK could become a global centre for this fast-growing sector. The report saw the light in the last quarter of 2014. The UK government has not responded yet, but Mr. Vaizy, minister of DCMS and BIS, was a panel list at the Summit and made clear that a formal response will soon follow. He explained that the government encourage innovations (the right to innovate with minimal rules) and at the same time has to make sure that existing rules for established businesses are maintained in a fair way.
The sharing economy is growing faster than Facebook, Google and Yahoo combined
Benita Matofska took the stage to present the new report of Compare and Share: What We Know About the Global Sharing Economy. The sharing economy is valued at $15 billion in its first seven years compared to the combined growth of Facebook, Google & Yahoo of $11 billion. There are about 7.500 sharing platforms globally, 37% of sharing economy startups are VC funded and $28 million a day is invested in sharing economy startups. According to PWC, the global value of the sector will be £230 billion by 2025.
Game changing technologies
The tech part of the sharing economy was well addressed by Tony Douglas, Managing Director of BMW, who stated that Uber is not about being a taxi company, but it is about applying real smart coding in matching demand and supply. He also explained that the driver is still the most costly element in car sharing. He predicts that if you integrate an autonomous driving car within car sharing platforms, there will be a real game changer.
The currency of trust
Doing business with strangers is risky. Awareness, identity, trust, verification and insurance were recurring topics during the event. The ability for any company to be instantly reviewed and rated by their users has proven that the consumer has more power than ever. Various CEO’s and founders of sharing economy companies emphasized this statement. “You should have the willingness to take risks in the beginning, but the perception of risks is higher than the actual risks”. In essence, it is not about the reputation of a sharing economy, but it is about the reputation of the individual user. In this respect, the rise of the B2B sector in the sharing economy is very interesting. In the P2P space, your reputation follows you online till the end of your life whereas its owners can shut down businesses. (And these owners can open a new business again.)
Mainstream adoption seems unstoppable
A combination of a keynote, panel discussions about different topics, interviews and presentations resulted in a diverse and inspiring day. With the main take away being that mainstream adoption of the sharing economy seems unstoppable, but there are regulatory issues.