As we emerge from the crisis can the Sharing Economy help us build a more connected and caring future?
Originally published in CityAM June 5th 2020.
At the beginning of 2020 an Ipsos MORI poll found that 48% of people in the UK had recently bought, sold, swapped, rented, shared or donated something using the sharing economy. With the sector predicted to be worth £1.6bn to the UK by 2025, its rapid growth in recent years has also given many of us hope for a more productive and sustainable future economic model - one that enables us to share more and waste less.
Then Covid-19 hit.
The challenge for digital businesses that depend on real world connection
Of course the disastrous impact of lockdown on our highstreets, the closure of bars, restaurants and bricks and mortar retailers, was immediately obvious. While the negative impact on digital businesses has, by definition, been less visible. Headline news that Jeff Bezos of Amazon has been “the biggest winner’ during the Coronavirus pandemic has certainly contributed to the common assumption that all online businesses have benefitted from lockdown. Not only does this oversimplified interpretation not take into account the fact that behind the scenes most digital businesses are having to cope with many of the same resource, supply, demand and safety challenges. But it also makes the outdated assumption that there are two distinct online and offline worlds rather than understanding how our digital and physical experiences are intimately connected in our daily lives.
The Sharing Economy presents perhaps the most explicit example of this.
Made up of platform businesses that allow people to trade their space, skills and their stuff peer-to-peer, the sharing economy is tech enabled but powered by real people. You can book, buy or do a deal remotely but most platforms facilitate a real world connection at some point. Buying a secondhand bike online from Gumtree is easy. But for the exchange to work you have to get off the sofa and pick it up from a stranger’s house in your neighbourhood.
Or not, in lockdown.
Peer-to-peer trading platforms that rely on a doorstep exchange are having to review their practices with Gumtree recently partnering with Parcel2Go to ensure contactless collection services. And whilst Victoria Prew from peer-to-peer fashion rental platform HURR says hygiene and cleanliness guidelines are stringent in the sector, perception and transparency is key when it comes to renting or buying second hand. And for now fear of contagion has been a major factor for people deciding to buy new or stick with what they’ve got.
The thing is for the sharing economy it’s the human connection that counts. Connection generally with strangers. The one thing we’re all attempting to avoid at all cost right now. So the peer-to-peer exchange of physical goods and skills has been severely impacted by lockdown and will continue to suffer in the short term.
Sharing economy ‘disruptors’ may suffer more than traditional businesses in certain sectors
Compounding this problem is the fact that many of the most successful sharing economy businesses have been disrupting sectors now worst hit by Covid-19 such as travel and hospitality.
Home sharing businesses, from global brands like Airbnb to companies like Camplify, Beds on Board and Trusted House Sitters, have of course been severely impacted by global restrictions on travel in the short term. And people will be cautious about entering other people’s homes for a while yet. But as travel looks to return it’s clear that environmental concerns and financial pressures, that have both emerged in lockdown, are already inspiring people to look at more local, isolated and affordable accommodation for their first trip. Slow travel, and local travel will be a huge opportunity for sharing economy companies like Airbnb, Camplify and Beds on Board to appeal to travellers in the ‘new normal’.
Travel restrictions have meant that car sharing and peer-to-peer car rental companies have also been badly hit. However because sharing economy businesses are so deeply connected to their local communities we’ve also seen them responding to the crisis in really positive and productive ways. Karshare has facilitated free peer-to-peer vehicle hire for NHS staff, volunteers and key workers who have needed or wanted to commute by car rather than use public transport during lockdown. And in the longer terms, there are some signs of optimism for car-sharing to meet the needs of cities wanting to address the challenges of public transport and continued social distancing requirements and at the same time wanting to reduce the number of cars on the road. Ali Clabburn says although overall car journeys with Liftshare are down 50% of pre lockdown levels, the average car occupancy has increased by 2%. A good sign for the future given that each Liftshare’s latest data which predicts that each 1% increase in car occupancy will save 1 billion car miles.
Cancelled events inspire new ways to show love from a distance
The events industry is of course the other sector that has been disproportionately hit by Covid-19. Not just the global brands hosting and supporting international sports and music, entertainment and business events but the small businesses and independent creatives that supply products and services for weddings, birthdays and other celebratory occasions. Andrew Needham, CEO and founder of HeadBox peer-to-peer venue booking platform, says with lockdown event bookings immediately fell by 97% with revenue down 50% boosted only by their business subscription service. My own group gift platform Patchwork has been hit hard with 90% of people using the site as an alternative wedding registry or honeymoon fund - almost all now postponed until 2021. But there are signs for hope for sharing economy platforms naturally agile, responsive and able to adapt. Lockdown and the emergence of the ‘Isolation celebration’ has been a new opportunity for Patchwork - a way for families to come together online to chip in towards a group gift and show their love from a distance. While HeadBox has responded to social distancing measures by launching it’s virtual and hybrid events service that combines live event assets with virtual interaction to create memorable experiences.
Communities come together to share resources and offer peer-to-peer support
Already intimately connected to the real-world communities they serve, sharing economy businesses have been quick to respond to the crisis. And there are many positive stories from those platforms able to support and benefit local communities at this time. Whilst these businesses suffer the same challenges - the exchange of human skills or physical stuff - the increased sense of community brought about by Coronavirus has meant more people seem prepared to take the perceived ‘risk’ to do good and help others. While people might be more reluctant to use sharing economy platforms to hire gardeners for themselves or buy second-hand toys for their own kids, they are prepared to donate food, share tools or volunteer their skills to help their neighbours in need.
TaskRabbit has launched Tasks for Good where vulnerable people can be safely partnered with local Taskers happy to volunteer their time and skills to help with jobs and errands. Depaul UK has helped ensure 90% of people sleeping rough have been able to find temporary accommodation by partnering individuals with hotels able to offer rooms. While Patchwork has seen weddings postponed, people are now using the platform for community fund-raising. With over £5000k raised to thank NHS staff in one London hospital in the first week of lockdown, we’re now seeing the platform being used to organise support and raise funds for care homes, homeless shelters and women’s refuges and also to organise support for vulnerable individuals living in local communities.
It’s also interesting to see how innovative businesses within traditional sectors are using sharing economy principles in order to adapt and respond to the crisis. We’ve seen some brilliant examples of companies using existing technology, tools and equipment to produce new products in response to Covid-19 - from BrewDog using its distillery in Aberdeen to make hand sanitizer to Lego using its factory in Billund using to make face masks. Or course this is a short term, practical response to meet demand and not a pivot for either business. But both are nice examples of businesses thinking laterally and adopting the principles of the sharing economy to empower their people to utilise existing skills and resource for the common good.
And of course it’s that sense of community that has been widely applauded (quite literally) during lockdown. The Coronavirus has helped us all to better understand what we have in common, experience how connected we all are and appreciate how much we depend on each other. The neighbourhood Whatsapp groups and posters offering support on streets up and down the country, the Mutual Aid groups, community co-operatives, the crowd funds and the weekly Clap for Carers are all examples of a more caring, sharing ethos emerging out of the Corona crisis that will benefit the Sharing Economy and our wider society in the long term.
Intergenerational connection made possible with older audiences adopting new tech
One of the most obvious outcomes of enforced social distancing has been the increased adoption of technology with new audiences overcoming previous (real or perceived) barriers to discover the benefits digital brings. In work and in life technology has enabled us all to be more resourceful, productive and connected during lockdown. Whether it’s joining a Zoom meeting or celebrating with House Party we’ve collectively relied on digital products and services to help us connect with the real world. Companies have discovered flexible, remote working is not only possible but often actually increases productivity and reducing travel - where a city commute or international air travel - not only reduces carbon emissions but benefits our mental and physical health too. This experience during lockdown will hopefully improve trust in technology and give more people the confidence to participate with sharing economy platforms whether for work or pleasure in the future.
What we need now to help the sharing economy survive
Described as a new and disruptive sector, the sharing economy is the oldest economy in the world. People have been swapping, sharing and trading their space, skills and their stuff throughout human history and will continue to. So the survival of the sharing economy itself is not in question. In fact, as we face an almost inevitable global recession combined with a climate emergency, participation in and reliance on the sharing economy will only increase in the coming years. We’re pleased the UK Government recognises the crucial role the sharing economy will play to help us achieve our net zero goal by 2050 and we’re ready for the challenge. However Covid-19 has negatively impacted many of the sharing economy businesses our trade body represents and so our sector does in support in the short term. Our immediate asks are for:
Increase productivity: At a time of economic crisis, where many people are facing financial hardship, we ask the government to support those looking for ways to supplement their income by raising the property and trading allowance tax break to £5,000.
Build our trusted community: the Sharing Economy sits across a number of economic sectors from transport to tourism, finance to fashion. Our membership is working tirelessly to ensure that the Sharing Economy remains a trusted and safe option for consumers and we ask that the Government supports and endorses the self-regulatory measures pursued by all our members, and our own Code of Conduct as a trade body.
Sustainability at the heart of recovery: The sharing economy helps people to do more, with less - saving energy and water, while reducing waste and greenhouse gases. We ask the government to appoint a Sharing Economy Expert Panel to advise policymakers on sustainable innovations to economic recovery. From a reduction in VAT for rental services and those selling second hand products to dedicated funding for businesses that prove they reduce waste, innovative sharing and circular economy businesses helping the UK to achieve net zero should be incentivised and rewarded.
Real opportunities for the sharing economy to help us thrive in the future…
Beyond the immediate challenges, if we are to take seriously the opportunity coming out of the crisis to rebuild our economy in a genuinely sustainable way that improves productivity, supports communities and protects our environment, we need the Government to take a much more comprehensive approach to promote, invest in and facilitate participation in the sharing economy going forward. This should include further investment in digital connectivity across the UK; new policies to promote remote, flexible working; infrastructure to support bike and car sharing schemes and dedicated funding, tax incentives and rewards for sharing economy businesses that reduce waste.
Heartbreaking for many families and devastating for many businesses, Covid-19 has also given us an unprecedented opportunity to stop and reflect on our lives, our work and the world around us. Queuing for food and cooking at home has required patience and resourcefulness and made us more mindful of the things we consume. Restricted use of cars has meant we’ve appreciated the benefits of quieter, cleaner, safer streets. We’ve embraced a new sense of community, supported our neighbours and connected with nature on our doorstep. And we’ve discovered the possibilities technology brings for flexible and productive remote working that’s more compatible with family life. So let’s not blindly go back to ‘Business as usual’. Instead let’s look to the future and invest now in a transition to a sharing economy that enables us to generate prosperity while supporting communities and protecting our planet. Afterall, we are 7.5 billion people living in a world with finite resources, facing global recession and a climate crisis. If we want to survive and thrive in the future we’re all going to need to connect, care and share more.
Written by: Olivia Knight, Chair of Sharing Economy UK and founder of Patchwork.
