Procurement Rebecca Smith · 23 September 2015
How London became the sharing economy hotspot of Europe
Some of the UK’s successful startups in the sharing economy talk to Business Advice about what’s put London ahead of the curve when it comes to the sector. New research from JustPark has found that the UK houses ten per cent of businesses involved in the sharing economy worldwide, which is more than Germany, France and Spain combined. While the US has the most companies involved altogether, London is the sharing economy capital of Europe one in 12 companies in the sharing economy is based there. When it comes to the rest of the world only New York and San Francisco surpass London for new firms involved in the sharing economy with 89 and 131 to London’s 72. Of those, ten are P2P lending or finance startups, with Funding Circle, Crowdcube and Seedrs all on the list. The report reflects how significantly the sharing economy has grown over the past few years over half of today’s businesses operating within the shared economy were founded in 2013 or later. Over 80 per cent of the firms were founded from 2011 onwards. Its presence has undoubtedly shone in recent years research from PwC last year found that the UK’s sharing economy is worth an estimated 500m, with the global value at 15bn a year. By 2025 this was projected to grow to 9bn for the UK and 335bn worldwide, so it’s not particularly surprising to see so many new firms aiming to tap into the vast potential. While bigger companies like taxI app Uber and property rental service Airbnb have become household names and established leaders of the market, the rise of smaller businesses getting involved and their role in the sharing economy’s progress has been less explored. Vrumi is one of the later entrants into what is becoming an increasingly diversified market renting out space that many leave empty between typical working hours, from a living room to a’study as affordable workspace? for others. The team behind it wanted to convert daytime room rental into workspace others could use for a reasonable price an ongoing challenge for many of the capital’s self-employed. Earlier this year, VrumI became one of five new members to joining SEUK, the trade body for the sector, which aims to remove barriers for entrepreneurs operating in the sharing economy. But why is it London seems to be such a proponent of the sharing economy, pushing ahead of the rest of Europe? Roddy Campbell, one of the founders of Vrumi, told Business Advice that as London is seen by many as the capital of Europe, it’s natural it’s leading the way in the sharing economy in Europe, adopting new ways of doing things and sharing assets, both physical and human. With George Osborne outlininghistarget of puttingbritain at the forefront of the online sharing economy? in this year’s Budget, Campbell also pointed out that the government has been on the ball in allowing businesses like his to grow. witness the sweeping away of restrictions across Greater London on sub-letting that threatened the growth of that part of the sharing economy, the government review of the sharing economy that resulted in the established of SEUK and the meetings we’ve had with, for example, HMRC to clear the way for growth, he pointed out. In his support for the sharing economy, Osborne also encouraged those working for the government to make use of the services to cut transport and accommodation costs. The experience Uber has had in London compared to numerous other European capitals is a good example of the more hospitable environment for businesses like Vrumi, Campbell feels. As an area, it also boasts ‘scale, geographical, financial and human, while being a young city with a huge expat population, Campbell says London has a dynamism to it that is difficult to rival. As everyone knows particularly those who live there London’s also an expensive city, which has driven firms like Vrumi, which feel they can help others financially. that means it has a large self-employed, micro business startup and creative sector. These are all people and businesses who generally don’t want fixed expensive work locations, Campbell explained. He added that it’s also at the forefront of agile working in general, predominantly due to office rents. Where those like VrumI have excelled is by catering here, while also generating income for householders with expensive property and rents to manage. Campbell’s business has continued to grow bookings are consistently on the up, with an average of 53 per cent growth in registrations through 2015, reflecting the ongoing appetite for the sharing economy, notably in London. JustPark’s CEO, Alex Stephany, feels the UK as a whole can go further. We have the opportunity to position the UK as a global leader in this space, he said. Digital is helping to move forward the economy as a whole and we should do all we can to drive innovation and job creation in the sharing economy.
ABOUT THE EXPERTRebecca Smith
Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.