Total transactions for the UK’s five most prominent sharing economy sectors – collaborative finance, peer-to-peer accommodation, peer-to-peer transportation, on-demand household services and on-demand professional services – could see a 20-fold increase to £140 billion by 2025, up from £7 billion today, according to new analysis by PwC.
Across Europe, sharing economy transactions could rise to €570 billion by 2025, up from €28 billion today.
Over the past year the UK’s sharing economy has grown faster than the rest of Europe, with the total value of transactions increasing by 92% compared to 77% across Europe from 2014 to 2015. The UK’s position at the heart of Europe’s sharing economy has been driven by the recent establishment of London as a global FinTech hub, with the capital flowing through collaborative finance platforms expected to increase to £70 billion per year by 2025 from £3 billion today.
Between now and 2025, PwC analysis predicts the sharing economy will grow at over 30% per year, with growth broadly spread across the five key sharing economy sectors. Consequently, there will be a substantial injection of cash into the pockets of the micro-entrepreneurs providing these services, who are predicted to take home 87%, or £122 billion, of the total UK transaction value by 2025.
Commenting on the potential for growth in the UK’s sharing economy, Rob Vaughan, economist at PwC, said:
“The sharing economy has matured into an established socio-economic trend that is fundamentally changing the way we lead our lives. From freelancing platforms altering the way we work to food-sharing platforms creating ways to connect in local communities, sharing economy businesses are enabling new economic and social interactions within the UK and across Europe.
“This is especially true in the UK, which is, and we expect to remain, a hub in the European sharing economy landscape. A strong start-up scene and proactive support from policy-makers and regulators has empowered the UK’s position so far, but other European countries are hungry for a slice of the action. As more policy frameworks are updated and the reach of sharing economy players expands outside their most mature markets, we expect other countries to gradually catch up with the UK.”
Europe has the potential to build on its position as a major global marketplace for the sharing economy, and the incubator to many of its leading innovators. Across Europe, PwC analysis estimates revenues accrued by platforms in the five key sectors of the sharing economy could reach €83 billion by 2025, up from just €4 billion today. In the UK, platform revenues could increase from £1 billion to £18 billion.
In both the UK and Europe, PwC forecasts on-demand household services to be the fastest growing of the five sharing economy sectors, expanding revenues by roughly 45% per year in the UK and 50% per year in Europe to 2025. The sector’s development is being driven by a new generation of consumers who are increasingly turning to on-demand services to resolve their needs around the home, such as Deliveroo for restaurant food delivery and TaskRabbit for DIY tasks.
Rob Vaughan commented:
“Rather than just being a headline, major sharing economy enterprises are becoming household names and the default mode of choice for younger cohorts in society. There’s also emerging evidence that sharing models are influencing wider consumer behaviour.
“On-demand ridesharing apps like Uber are changing the way we get around our cities, while peer-to-peer accommodation sites like Airbnb are encouraging a new generation to travel more often and to different places.
“The rise of the sharing economy is changing the face of European business – creating opportunities for new entrants, challenges for incumbent players, and searching questions for all stakeholders. We think it will be those that respond to the new reality the quickest that stand the best chance of creating advantage and capturing the value in this space.”