Following the publication of the European Commission’s guidance for sharing economy firms, Rich Preece, Europe VP and managing director of Intuit, argues that London is at the centre of the sector.
The gig, sharing or on-demand economy is changing the way we buy and sell services – both in our professional and personal lives.
It hasn’t taken long for companies like Uber, Airbnb and TaskRabbit to shake up industries, become household names and make a significant contribution to jobs and growth.
The floodgates are open for more people to work and consume in a different way, and London has emerged as the sharing economy’s European centre.
The numbers
Around one in 12 of the world’s 865 sharing economy businesses is now based in the UK capital, according to research published last autumn. That’s fewer than in San Francisco or New York, but well ahead of rival European cities such as Madrid, Berlin and Paris.
Residents do not seem to need much convincing to take up their services, and our own research reveals the face of the typical sharing economy user in the UK is a 25-34-year-old male Londoner.
Let’s take a look at five factors helping the UK’s capital city to lead the phenomenon:
Advanced tech
The proliferation of mobile means the barriers to making income from the sharing economy are low.
Londoners have immediate access to huge customer bases, all within their pocket.
There is no need to invest in expensive, complicated back-end platforms or marketing to raise the profile of or run your offering – people come directly through your smartphone.
People can start renting out their spare room or car parking space with just a few taps on their mobile.
Evolving regulation
While many countries have attempted to ban disruptive new business models, the UK has welcomed sharing economy players.
This week, the European Commission announced new guidelines to ensure coherent regulation across the continent.
It’s welcome news for all the self-employed workers earning a living through these platforms.
Now, London must do what it can to stay ahead of competing European cities.
We can do this by offering sharing economy entrepreneurs tailored support around tax, retirement and parental leave – these things can be a minefield for anyone new to self-employment.
As with any significant shift in the way people work, we must continually review regulation and ensure that Londoners have processes in place to help ease the administrative side of the business.
Leading tourist destination
London is famed for its rich history, art galleries, architecture and good food.
The city has long been a dream destination for global travellers, topping MasterCard’s Global Destination Cities Index for five of the seven years it’s been published.
Last year was no exception; the ONS calculated that the city welcomed a record-breaking 31.5 million tourists in 2015, spending a total of £15bn.
A million of these visitors decided to rent beds directly from Londoners, rather than stay in hotels, through Airbnb.
Economic uncertainty
There are nearly 5 million self-employed workers in the UK, according to the ONS.
This number has ballooned in recent years as a direct result of the financial crash, which saw crowds of people moving from traditional job roles to self-employment.
The looming Brexit vote only adds to the economic uncertainty in 2016.
For the new wave of independent professionals looking to boost their income, embracing sharing economy services is paying off in a big way.
One in five of those already supplementing or creating income with these services are earning up to £1,500 a week, with 3% bringing in over £250,000 a year.
Two in five (39%) use profits made to save for the future, while a quarter (26%) spend cash made on luxuries or entertainment.
Some 14% say they use it to pay bills.
Death of the 9-5
Protecting our work-life balance is more important than ever.
Particularly in London, where working hours and commutes are notoriously long, people want greater control over when and where they work.
With ten separate boroughs of the city snagging the spots for the ten unhappiest places to live in the UK last year, it’s no surprise more people are looking for alternative lifestyles.
Our own research shows that a third (32%) of people believe the single best thing about the sharing economy is getting to work the hours they choose.
For some this still means working remotely, with the TUC reporting that 5% of London’s workforce regularly worked from home in 2015.
For others it’s about creating more than one source of income. That could be taking on two different jobs or supplementing a core job with money made from selling different services.
Full-time 9-to-5s with a benefits package in tow are becoming increasingly rare. In fact, just 13% of Brits expect to be working in a traditional role by 2025, while 70% would consider a less rigid working pattern.