Total revenues for the five most prominent sharing economy sectors – peer-to-peer (P2P) finance, online staffing, P2P accommodation, car sharing and music/video streaming – could rise to around £9bn in the UK by 2025, up from just £0.5bn today, according to new analysis by PwC. Globally, revenues from these sectors could hit $335bn by 2025, up from just $15bn today.
Over the last decade, the sharing economy has grown from dealings taking place between friends and family to a pool of global businesses which are being increasingly valued in the billions. They use digital platforms, offering consumers access over ownership (ie renting, subscribing) and often involve deeper social interactions than traditional sectors. Despite the hype around high profile sharing companies such as AirBnB, Uber and Spotify, current revenues are relatively small, but PwC analysis suggest considerable future growth potential.
Robert Vaughan, economist at PwC, said: “The sharing economy is a result of long-term megatrends colliding together, driven mainly by advances in technology, resource scarcity and social change.
“Over the next decade, our analysis highlights the potential for significant value to be created by five of its most prominent sectors, playing an ever more pronounced role in the commercial landscape. $15bn of global revenues in this five sharing sectors today could rise to well over $300bn by 2025. But achieving this potential will require important regulatory and competitive challenges to be overcome.
“The UK is positioning itself to take advantage of this growth, developing progressive policies towards the sector. For example, the government recently brought insurance leaders together to work out how they can better serve sharing economy business models. And officials have just announced plans to remove laws controlling short-term rentals, opening up the door for short-term P2P accommodation sites to expand.”
Several high profile companies have pioneered this sharing economy approach, disrupting some established organisations in the process such as Uber sparking protests by black cab drivers in London. At the same time, some have embraced the sector eg Avis buying Zipcar, a car sharing company.
John Hawksworth, chief economist at PwC, said: “In some ways, the sharing economy is a throwback to the pre-industrial age, when village communities had to share resources to survive. They built up trust through repeated interactions with people they had known all their lives. Modern digital communications allow sharing to happen across a global village of consumers and providers, with trust established through electronic peer reviews.
“Looking beyond the sectors where sharing is already well established, there are some very exciting growth opportunities that are yet to be fully realised: companies need to do an audit of which of their tangible and intangible assets could profitably be shared in future. We think this model could spread to other sectors such as energy, telecoms and retailing.”