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 outlining his target of putting Britain 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.”
While the most popular sharing economy categories across the world are transport and travel, with 127 and 111 companies within those two industries respectively, Stephany feels as the sector becomes more and more familiar and widespread, it will “grow to be pervasive in an even wider array of industries”, with healthcare, education, farming and insurance all areas that could be hotspots in the coming years.
TrustedHousesitters is another UK success for the sharing economy. The site offers house sitting for free and said it has presided over one million nights of successful house sitting since its creation in 2010, effectively saving members more than $150m in accommodation costs.
Members pay the same subscription fee for a year in order to offer their housesitting services or request someone else to housesit for them. A particular popular use for the site has been dedicated pet owners – keen to help look after others’ animals while they’re away, or for a reliable person to look after their pets.
It was after Andy Peck looked after dogs and cats in a villa in Spain that he realised how tricky it often was for those with pets to find suitable arrangements for while they were away, and he set up TrustedHousesitters as a result.
The site now has members in over 100 countries, and Peck feels the UK has the edge when it comes to being at the forefront of the sharing economy as it “has always been quick to adopt new and innovative ways to live”.
“In a world where the cost of living is rising everyday, the zeitgeist is moving quickly from owning to sharing,” he added. “It is the confluence of this sharing zeitgeist with the speed of digital innovation and entrepreneurial ingenuity that the UK is famed for that has seen the sharing economy grow from strength to strength.”
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