Government encouragement and hands-off regulation are behind the UK’s booming sharing economy
The sharing economy in the UK is surging, attracting investment and providing budding entrepreneurs with a platform to take great ideas out to the population.
This nascent sector was already worth £500m in revenues in 2014 and could explode to reach £9bn a year, according to a report from PwC.
The need to create fertile ground led Urban Massage, along with other sharing companies including Airbnb and TaskRabbit, to contribute to a recent review compiled by Debbie Wosskow, the chief executive of Love Home Swap.
The government published its response to the review in March, promising to encourage the sharing economy by combining a hands-off regulatory touch with sensible support measures.
David Cameron and his team have decided to place trust in the likes of Airbnb and Uber. They asked the sharing economy platforms how they could help to make laws that benefit both public and operators. Here’s what the report revealed:
Five reasons why the UK is the home of the sharing economy
- Innovation support
UK government fosters innovation through the likes of Seed Enterprise Investment Scheme tax relief. It’s introducing bespoke tax guidance for entrepreneurs considering launching a sharing platform.
It has backed plans for the establishment of innovation centres to test the benefits of sharing services.
It is proposing two 2015-16 pilots in Leeds and Manchester to trial local sharing initiatives around car pools and other services and will work with the cities and innovation charity Nesta on the development of specific proposals.
- Sensible regulation
We’ve been encouraged to build trust and identity with consumers without lots of unnecessary regulatory curbs – unlike US cities Austin and Miami, which have clamped down on sharing startups, and France where the controversial “Thévenoud law” penalises the likes of Uber and SnapCar.
- Access to data
Sharing platforms have access to data via the Disclosure and Barring Service for checks on criminal records etc. The government is also looking at access to the identity verification system via GOV.UK Verify and has recommended the Office of National Statistics work to measure the UK impact of the sharing economy.
- Public sector trials
Government procurement plans to use sharing economy services as alternatives to trains and taxis.
Its response to Wosskow says: “The government will lead by example by enabling government employees to use sharing economy solutions to book accommodation and transport when travelling on official business where this represents value for money.
“The sharing city pilots will include: exploring options for replacing local council car fleets with car club membership; opening up more parking bays to car club parking; considering new street parking for car clubs; and exploring new approaches to public assets and services.”
- Insurance against risks.
The government backs the British Insurance Brokers’ Association commitment to working with the sharing economy on initiatives such as collective negotiation of insurance coverage.
In conclusion, the Government recognises that the sharing economy offers value to consumers. That it is facilitated by innovation and that London is a great hub for amazing entrepreneurs.
In his foreword to the response to Wosskow, Matthew Hancock, minister for Business, Enterprise and Energy, says: “These platforms have seen the emergence of the everyday entrepreneurs. They are the challengers, the innovators and the agitators – constantly seeking to shake up the market by solving other people’s problems.
“We back them and we want to help them make our lives easier. We are removing barriers that stop people sharing their assets, and will empower people to make more from their assets and skills.”
This approach of observing rather than blindly building regulatory frameworks is a real positive. It is an important driver of the sharing economy.