The sharing economy, also known as collaborative consumption, is set to be one of 2015’s global trends and it is forecast to be worth £9bn (€12.6bn) in the UK by 2025.
There are already 113 million sharers in the US, UK and Canada alone, accounting for 40% of the adult population.
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Early success stories such as AirBnb and Zipcar have ignited interest in this rapidly growing economy, and they are starting to become household names.
Airbnb, for example, since its inception in 2008, now boasts more than one million listings in 190 countries, and the company is valued at more than $13bn (€12.4bn).
One of the main reasons why these companies are successful is that by using a peer-to-peer network they are able to offer services considerably cheaper than their more traditional competitors.
They are also proving popular from a community perspective, as they unite strangers with a common interest and at the same time they are sympathetic to eco-values such as sustainability and waste reduction.
The sharing economy is not in fact a new idea; it’s really a repositioning of the practice of subletting. However if you were to try and engage the tech-savvy Millennial in subletting you may as well be talking a foreign language.
These early adopters of the sharing concept want access over ownership, but in order to appeal to them companies must present themselves in a more modern and innovative way: think sharing, not leasing.
Like it or not, the sharing economy is here to stay and it’s already shaking up a number of markets ranging from education to
tourism.
Who would have thought that the country’s esteemed universities would be facing the threat of cheaper degrees accessible online, and contemplating Google as their biggest competitor?
Innovative transport platforms are shaking up the taxi industry; the loan of personal vehicles is disrupting the vehicle ownership model; home sharing is the new alternative to hotels; peer-to-peer lending or crowdfunding offers alternatives to traditional finance models, and so on.
The impact of the new sharing model is evident across a number of industries today.
Does this, therefore, beg the question whether our traditional financial institutions need to rebrand or revise their existing products to appeal to today’s Millennial consumers?
If not, and we bury our heads in the sand, will this be the road to stagnation rather than success?
Profile: Matt Dredger
Matt Dredger is no stranger to the leasing and finance world, and he observes: "It’s clear that individuals are joining forces through sharing economy platforms. I recently came across Etsy, an online craft market, where users are helping each other to grow their own businesses," he explains.
"Their users regularly meet up in real life across the world to share stories and skills; this includes things such as showing each other how to leverage SEO, digital marketing and social media, as well as understanding taxes in different regions, or merely to enjoy a greater purchasing power with suppliers. "Similarly there are groups of individuals coming together under peer-to-peer lending platforms and gaining ground on traditional lending channels," Dredger adds.
"I don’t believe it will stop here. Imagine a group of people coming together in a local area to create a car sharing club; what is to stop them approaching local businesses as a quasi-car leasing enterprise? Such actions are bound to have far-reaching ramifications for car leasing and rental firms."
Dredger himself has made the leap of faith and swapped his job as sales director for multinational firm 3-Step IT, to set up his own new sharing business, Borroclub.
In keeping with the concept of collaborative consumption, Borroclub is championing a desire for bringing together the local neighbourhood.
The online platform borroclub.co.uk brings together a community of sharers and enables lenders to monetise their idle household items and borrowers to have access rather than ownership of these personal assets for a fraction of their purchase cost.
High purchase costs can be avoided or simply a more informed purchase decision can be made once a borrower has had the opportunity to try a product before deciding to buy it outright at a later date.
Dredger says: "I’ve been in the leasing industry since I was 16 and the sharing economy has been a wake-up call to explore new possibilities within a related market.
"If I can change then so can others. It’s good to look at things with fresh eyes and think outside the box. I’m sure the finance and leasing industry is up to the challenge!"
Dredger has worked in the leasing industry for 26 years, including positions within several multinationals.
While clearing out his garage one day he realised that he had accumulated many things that he might need to use again, but probably only once or twice a year. Meanwhile for most of the year they would lie around idle.
Dredger figured that many of his peers would be in a similar situation. After leaving his job at 3-Step IT, Dredger went on to create Borroclub, a marketplace for peer-to-peer personal asset lending.
He’s currently seeking funding to take this concept nationwide.
