The sharing economy: Why are we so interested in borrowing?
PUBLISHED: 12:59 26 April 2018 | UPDATED: 12:59 26 April 2018
Like many aspects of business, the direction of modern consumerism is changing.
In a shift enabled by advances in technology, people are now able to find a range of products, services and experiences to enjoy without the pressure of purchasing – while simultaneously being able to find new users and make money for their own under-utilised possessions.
Consumers – and increasingly companies – can lend everything from bikes to houses through online marketplaces which instantly bring together those wanting to buy and sell.
And East Anglian businesses have been quick to see the opportunity, such as Essex-based Borrowaboat.com, which enables amateur and expert sailors alike to hire boats across 60 countries, from the River Orwell to Thailand.
Founder Matt Ovenden says ownership is becoming “less important” to people, particularly the younger generation who want their needs met instantaneously.
The next ‘sharing city’?
Meanwhile, Norwich has been highlighted by some as a fertile breeding ground for the “sharing economy”. From international bike-sharing brand Ofo to home-grown enterprises like service-sharing app Grabbit, city residents and visitors have taken to sharing and borrowing with such gusto that a campaign has been launched to make it the UK’s foremost “sharing city” by 2020.
The global initiative has already named Amsterdam and South Korean capital Seoul as sharing cities.
Steve Kirkendall, director of creative agency A Fine Studio, is part of the Norwich Sharing City team. He believes the fact that younger generations are less likely to want to – or be able to – own as much as previous generations could spark massive growth in sharing.
A “grass roots” social movement towards sharing was already evident in Norwich, he said.
“A sharing city is not just about physical things, it is about pooling skills and resources to tackle bigger problems, like air pollution or homelessness,” he said.
“It is gaining ground and we want Norwich to be at the forefront. Once we have stronger unity and more partners we may look to knock on the doors of other cities.”
Chinese bike-sharing company Ofo has seen promise in Norwich as a sharing city, choosing it as the fourth place it put its dockless bikes in the UK. Around 500 bikes are now roaming the city streets with another 500 set to join them in the coming months.
Head of operations at Ofo Matthew Thomas-Keeping said the company had received great local authority support and that Ofo’s performance in the city was now approaching that of Cambridge, the first UK city it launched in.
He added that the company – which has raised around $2bn in funding in the past two years – is looking to share data on people’s bike journeys and the most popular routes, gathered from on-board GPS trackers, with local authorities to improve cycling infrastructure.
“We have found that people in Norwich think it is a good way to operate. A bike can be used eight or 10 times a day in central areas which is great to see,” he said.
“Norwich really wanted it and was ready for it. Geographically it is quite far out but in terms of the sharing economy it is very up for it.”
The ‘share’ necessities
As well as attracting new sharing businesses Norwich is home to an industry veteran: car-sharing platform Liftshare, which turns 20 this year.
It was founded by Ali Clabburn, who turned a notice board at Bristol University offering lifts home for the holidays into a successful car-sharing model emulated around the world.
Despite his firm’s size, Mr Clabburn says multiplicity should be allowed to thrive in the sharing industry. “Sharing should not just be about one company, it’s about lots of little companies having a go.
“We are the biggest in the world at what we do and we have done that by working with people not against them,” he said.
“There is a need for this kind of economy, particularly here [in East Anglia] in areas like transport, accommodation and food.”
Mr Clabburn said there was an “openness” to sharing in the region, which he believed could stem from the prevalence of volunteering.
“I would love to see some lessons from the online sharing economy being able to help the volunteering sector. It is a huge part of the counties’ economy but has suffered from a lack of technological advances,” he said.
While a social enterprise like Liftshare is “about the mission rather than the money”, Mr Clabburn said the way to create a successful sharing business lies in ensuring your product has a market before building it.
From bikes to boats
Matt Ovenden runs Borrowaboat.com, a site which allows boat owners to rent out their vessels.
Only 18 months after launching, around 17,000 boats in 60 countries are now listed on the site from the River Orwell to the Caribbean and Thailand. A new mobile app which can take last-minute bookings and show people where their nearest available boats are is set to launch soon.
Mr Ovenden, from High Easter near Chelmsford, said his business was “following in the footsteps” of Airbnb and its ilk.
“This had not yet happened in the boating business, but it is a useful model when you have an under-utilised asset, and boats struck me as the most under-utilised asset as they spend most of the year not being used and boat owners typically have quite high costs just to keep a boat. It struck me as perfect for the sharing economy,” he said.
“We want to grow the business to be the ubiquitous place to get a boat, and to make it more accessible to people.”
He feels the sharing economy is coming into its own with the younger generation, who do not want the “burden of ownership”. “They want access to services and experiences and they want it instantly.”
The rise of Airbnb
Airbnb is a global poster child for the sharing economy.
The launch of the site in 2008 enabled anyone to rent space to travelling strangers, once solely the preserve of second-home owners looking for some extra earnings.
In the East of England Airbnb says it has 7,100 active listings with 213,000 guests staying in the region in the past year – year-on-year growth of 103%.
But the site’s popularity is turning some against it, with residents in cities like Barcelona saying the extra demand for property is squeezing locals out of the housing market.
Tom Ellis, director of holiday lettings firm Norfolk Country Cottages, believed the “trust factor” set traditional lettings agencies apart from Airbnb.
“Most of our customers prefer a high-trust, traditional model rather than a low-cost, technological, light-touch business solution,” he said.
He added that the difference in demographics for the two business types minimised competition for customers.
Analysis by Bethany Whymark
People talk about the sharing economy as a kind of newfangled trend for consumers and employers.
The truth is, you’re probably sharing already without knowing it.
Our desire to have our needs met quickly, from taxis to meals, and to be able to make decisions at the 11th hour has created a void in the marketplace which sharing economy firms are using technology to fill.
This model has been gathering pace for years as ownership becomes less important to consumers than experience.
Take Spotify for example, a global music streaming service with 160 million users – which enables people to essentially “rent” music rather than buying tracks or albums.
The trend for sharing is an extension of the equally booming rental market – which is benefiting as more people choose to get items from cars to washing machines on finance rather than save for such expensive purchases.