As the digital economy continues to expand its reach, the UK - and more specifically London - has become Europe’s sharing capital. And while the US continues to lead the way in regard to the amount of startups it has, a senior manager at Airbnb called the UK the ‘centre of the sharing economy’.
With companies like Zipcar and Streetbank becoming mainstream, the British are now a nation of renters. Led by Millennials, 47% of people in the UK have used shared services, saving them on average £531.10 per person annually. Now, renting - perhaps barring property - is no longer the domain of those unable to afford to buy their own goods, but for the savvy looking to save money.
Uber and Airbnb remain the sharing economy’s most famous sons, and most hold both in high regard. The pair have taken on established industries and not only driven down prices, but also increased accountability. But with stories emanating from the US which don’t put either in such a good light, is it now the time to put the sharing economy - and the companies within it - under the microscope?
Airbnb has been accused of cutting into San Francisco’s rental market, with Business Insider claiming that 23% of housing units in the city are now exclusively available on the service. This saw the local government pass the ‘Airbnb law’ which states that as long as you’re a permanent member of San Francisco, it’s fine to rent your apartment out on the service for 90 days. According to ComputerWorld, all this has done is increase house prices in a city which is already too crowded and expensive. On the East Coast, New York residents aren’t so much concerned with the impact on the rental market, but the implications of having new dwellers live next to them every week.
Ever since it entered the market, black cab alternative, Uber, has experienced something comparable to a sibling rivalry with its biggest competitor Lyft. When Uber initially launched it was a black cab service, while Lyft allowed anyone to drive under its name. This was replicated by Uber with its ‘UberX’ service, and has since started a ferocious price war between the two. With both focusing on market growth, neither seems too worried about outdoing each other on price. To add to this, Uber has reportedly made false claims about its drivers salaries, forced UberX drivers to take out loans to pay for flashy cars, and routinely called out Lyft drivers with bogus ride requests. If this is true, it would go against Uber’s brand image, and instead demonstrate that they are willing to do anything - ethical or otherwise - to guarantee future growth.
Matt Weinberger sums up the fears surrounding the sharing economy by stating: ‘Everyone has to remember that value doesn't just appear from thin air. Everything has its cost somewhere down the line, whether its in inadvertently shoring up housing prices, causing a security risk in an apartment building, or making a driver work extra hours because you went for a car with the lowest rate’.
As he mentions, it’s not simply a case of paying less for something, everything ripples out eventually, and that’s where the problems lie with the sharing economy.