Is a new UK trade body for the ‘sharing economy’ an oxymoron?

To end the week on a searching note, Mariam Sharp looks at the remit of a new UK trade body and what the sharing economy really stands for

When the much used quote by science fiction author William Gibson  - ‘The future is already here – it's just not evenly distributed’ circulated in the 1990s, who may have imagined that our future lives might be ‘distributed’ too.

The fact that we no longer need to own assets such as cars, or accommodation or even more personal items such as clothing is leading some people to suggest that we are increasingly living distributed lives.

A freedom from ‘stuffication’ with information on the cloud and mobile in hand, everything can now be very easily rented while you’re moving from here to there.

Since 2005, there’s been a surge in brokerage services online which connect diverse sellers with customers in brand new ways and on a scale that was previously impossible. That's allowed companies like eBay, Airbnb and Uber and many others to grow in an unprecedented way.

With over a million listings in 34,000 cities and current bookings estimated to be around 37 million nights a year, a report by Barclays says that Airbnb has now overtaken the world’s largest hotel companies.

Digital media makes available markets much bigger - more people are able to sell, and more people can find what they want to buy. But while this increases quantity and diversity of supply, it also drives down prices. On the one hand, that’s great news for consumers but it’s also had implications.

There is growing evidence, as research from Boston University highlights, that independent hotels, those not catering to business travellers and lower-end hotels, are more impacted by Airbnb.

But even luxury brands, which may once have held a captive market of the wealthy elite, can no longer afford to bury their heads under a feather pillow. What is more, EyeforTravel hears that with corporate budgets tightening, increasing numbers of business travellers are looking to use Airbnb when on the go.

Trading with new branding

Whether intentional or not, the brokerage role played by Airbnb has been slightly obscured by soft language and naming such as ‘peer-to-peer’ or ‘collaborative consumption’ or ‘the sharing economy’. 

Defining organisations like Airbnb as part of the ‘sharing economy’ shifts the focus to the users - the sellers and buyers. And in doing so it detracts from the brokerage role, and where the big money is still being made.

Also evident, in the terms and conditions of these ‘brokers’, is that the liability is with buyers and sellers. So if they aren’t meeting legislative requirements, such as paying tax on income, the responsibility lies with them. But that’s proved a challenge for the authorities; upholding legislation with so many small-scale operators or individuals is difficult.

Another concern is that sites like this only serve to worsen the housing crisis. The argument goes that homes used for tourists can make it harder for students and the low waged to find accommodation in big cities. While most rental agreements include the clause that a property should not be sublet, many Airbnb users are not taking those seriously. However, last month a very active user lost a court case in New York, which means that tenants who let out their property are liable for eviction. The apparently socially aware landlord is quoted saying that he was concerned that the user was “abusing the family that might have legitimately lived in the apartment”.

One could argue then that the new slogan of so-called sharing, peer-to-peer firms could in fact be ‘helping only the fittest, smartest and commercially savvy to survive’.

These dilemmas have certainly got regulators thinking and in the UK’s Department for Business Innovation and Skills called for an independent review in a bid to understand how to ‘unlock the sharing economy’.

A new trade body for the UK

In the UK, a new trade body has been launched for the ‘sharing economy’. Twenty-one organisations are listed on the SharingEconomyUK (SEUK) website, which is described as: ‘a voluntary group that will represent the sharing economy sector, ensure best practice and act as a single voice for the industry’.

SEUK was established following a review by the UK government to understand how to ‘unlock the sharing economy’. The report, compiled by Debbie Wosskow, chief executive of Love Home Swap, has led to the launch of a new trade body. 

Part of SEUK’s work will be to work with the UK government to address some of the legislative challenges that the sector is facing. One example is deregulation of the 1973 Greater London Council Act that affects property owners in London letting out permanent properties on a short-term basis. 

This is currently being read in the House of Lords.  

Speaking last year about how the internet has changed the way we work and live, UK Communities Secretary Eric Pickles said: “the law needs to catch up”.

The UK has already reformed the rules on renting out unused parking space, now it wants to do the same with respect to renting out a home for a short period. In another vote of support for the ‘sharing’ economy, he also called the 1970s laws “outdated, impractical and restrictive” and it was time to change those so that Londoners could open their homes to visitors to make some extra cash.

Wosskow, who has been named chair of SEUK, is in agreement. She believes it’s an outdated law that stopped people turning council houses into a hotel and one that is “stopping the sharing economy from growing and innovating”.

What SEUK aims to do, she says, is create a kite mark that can be displayed by businesses, to develop trust and standards within the industry, and which will be upheld through audits.

Another aim is to create a programme of events to explore how businesses that are part of the sharing economy can scale and develop innovative business models. Research will also be part of the remit, to map the contribution to the wider economy, for example.

So in the end the sharing economy is really about trading – just in a different way.

Are you for or against the ‘sharing economy’? Email, tweet your views to @pamelawhitby or add your comments below

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