FT Sharing Economy European Summit

The sharing economy has conquered transport and re-invented holidays, and technology pitch nights resound with the claims of start-ups calling themselves ‘the Uber of x’ and ‘the Airbnb of y’.

Yet, as Financial Times technology and innovation correspondent Sally Davies observes, it is too soon to say whether the peer-to-peer business model is ready to out-compete conventional big business across the board.

‘These are very interesting and exciting business models, but they’re new and quite unproven,’ Davies tells LS:N Global. ‘Most of these businesses are loss-making, heavily subsidised by venture capital money, so it remains unclear whether the unit economics in terms of whether they can make money over the long term stack up.’

Uber and Airbnb have brought new consumers into taxis and spare rooms. ‘They’re not just capturing the existing market, they’re building new ones,’ says Davies. Can those models become mainstream? Speaking at the FT Sharing Economy European Summit, Davies observed that regulatory concerns – most notably about workers’ welfare – are unlikely to go away.

Technology has a sex appeal that has given it a corporate social responsibility, 'get-out-of-jail-free card', says Davies. But, she warns, in Europe especially, 'this idea that technology is an unalloyed public good… is starting to unravel.’

Long-established businesses are starting to test the waters of the sharing economy, as Dax Lovegrove, director of sustainability and innovation at Europe’s largest home improvements retailer, Kingfisher, explains. 

‘We are keeping abreast of the unfolding sharing economy,’ Lovegrove tells LS:N Global. ‘Both of our online platforms – Streetclub in the UK and Les Troc Heures in France – are test beds, enabling us to learn how this is starting to play out, what customers are responding to and the increasing appetite for sharing products and skills.’

For companies such as Kingfisher, integrating peer-to-peer platforms within existing services is about getting the balance right and helping customers to benefit from new values of exchange in a way that feels seamless with the brand.

‘The sharing economy is so fast-moving, and there is an explosion of entrepreneurial outfits,’ says Lovegrove. ‘We need to see that evolve and mature to give us a better idea of how we might engage.’

Kingfisher will be keeping a close eye on equipment- and skills-sharing platforms such as The Handy Squad and TaskRabbit, and with the advantage of time, will be able to take stock of what strategies can be brought and developed in-house, or where it might be better to explore new partnerships.

LS:N Global first caught up with Nicholas Russell, CEO of We Are Pop Up, when the company was starting out.

Two years later, the P2P property platform, which rents out empty retail spaces on flexible leases, is expanding its customer base to include more lucrative business clients.

'We have built one of the world’s first P2P property platforms, enabling people to connect and share retail space in the same way you would use Airbnb,’ says Russell. ‘By doing that we have opened a whole new avenue for retail innovation, and now we’re seeing B2B services. We’re acting as a digital property agency.’

With this kind of growth in a fledgling market, We Are Pop Up is facing the challenges inherent in a double-sided market.

‘We’re seeing people who have built their business on the back of the We Are Pop Up platform. They started with a pop-up and now they’ve been in place for a couple of years they’re using the platform to host other small business. It’s ended up being this eco-system that combines P2P and B2B.’

‘The big change in the currency of trust has been peer-to-peer reviews,’ says Debbie Wosskow, CEO of Love Home Swap and founding chair of not-for-profit trade group Sharing Economy UK (SEUK). ‘It can be a big ask for people to trust someone they have never met before.’

Sharing economy companies are keen to express the rigour of their internal vetting, and Wosskow’s government-commissioned report Unlocking The Sharing Economy suggests that Westminster is starting to take the idea of external regulation more seriously.

SEUK, while ‘championing the sector, ensuring best practice and acting as a single voice for the industry’ that counts Airbnb, ZipCar and JustPark as founding members, hopes to become established as the leading kitemark for sharing economy businesses, a sort of Which? for The New Value Economy.

As the mark of value changes from ownership to access, many people are asking how we can ensure a consistent level of quality and corporate responsibility in such a decentralised economy.

‘The kind of things we’ll be measuring are around standards, insurance, messaging and peer-to-peer reviews,’ says Wosskow.