The way we buy and sell services has changed dramatically in recent years. New online platforms like Etsy and TaskRabbit have quickly become household names, but they don’t sell any products or services themselves. Instead, they connect individuals from across the world.
The so-called 'sharing economy' has made it possible for entrepreneurs to make money from the assets or skills they own, while users can find bargains, unusual gifts or more personal travel experiences.
It is open to everyone, but London is one of the global leaders in the sharing economy. In research released last year it was revealed that 72 sharing economy start-ups are based in the UK capital - that’s more than Paris, Madrid and Berlin put together. So what gives London the edge over its rivals?
1.It’s the no.1 tourist destination: In 2015, the city that's home to the British Museum and Westminster Abbey hosted a record-breaking 31.5 million tourists. And, in a ranking of the most popular tourist destinations in the world, London came higher than any other European city. Significantly, a million of these visitors decided to rent beds directly from Londoners through Airbnb, rather than stay in hotels.
2.The shift to self-employment: The financial crash saw hordes of UK workers move from traditional job roles to self-employment, and the most recent ONS stats show self-employment is higher than at any point over the past 40 years. It’s little wonder that Londoners are exploring new opportunities to supplement or create income in the sharing economy. The potential rewards are huge; Intuit research shows that one in five earns up to £1,500 a week and 3% bring in over £250,000 a year.
3.The demand for a better lifestyle: London is renowned for its long working hours and long commutes, so the desire for a better work-life balance is high. The sharing economy offers an alternative lifestyle, and our own research shows that nearly a third (32%) of people believe the single best thing about it is getting to work the hours they choose.
4.Barriers to entry are low: There is no need to invest in expensive, complicated back-end platforms or marketing to raise the profile of your offering – it’s now possible for customers to come directly through your smartphone. There has always been an entrepreneurial spirit in London, but now people can start renting out their spare room or car parking space with just a few taps on their phone.
London has stolen an early march on its rivals and the next challenge is in maintaining its edge. I believe the answer is in offering sharing economy entrepreneurs more tailored support around tax, retirement and parental leave – these things can be a minefield for anyone new to self-employment. By continually reviewing regulation and support, London will continue to be a leader in the sharing economy.