Gordon Innes is CEO at London’s official promotional and economic development company, London & Partners. In this article, he explains why London has the opportunity to become the sharing economy capital of the world.
Nothing stands still in London. In fact, the city’s population is set to hit nine million before New York and approach 10 million by 2030. But as we continue to attract the world’s best students, tourists and businesses, London is becoming an increasingly resource-constrained economy with demand outstripping supply.
To support its growth, we need to look to new ways to help our infrastructure and services to be more responsive to London’s needs.
Technology has a vital role to play in finding a long-term solution to these challenges.
The sharing economy
As innovations in technology continue to gather pace, we have seen a new wave of digital businesses with the potential to change the way we make the most of our assets, resources, time and skills – otherwise known as the sharing economy.
The sharing economy is not only re-imaging the way we do business, it is also one of the fastest growing areas of London’s booming technology sector, with a recent report from PwC predicting the global sharing economy to be worth $335bn (£225bn) by 2025.
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London is well placed to take advantage of this opportunity. As Europe’s largest technology hub with unrivalled access to talent, growth capital and international markets, we have an ideal environment for sharing economy businesses to scale and grow.
Sharing economy businesses can also benefit from national and London-specific government-backed initiatives, such as the recently created trade body, Sharing Economy UK, and the Mayor’s Smart London plan.
As a result of these favourable conditions, we have already seen a large number of sharing economy businesses making London their home. From accommodation services such as One Fine Stay and Love Home Swap to peer-to-peer lending companies such as Zopa, London has more sharing economy businesses than any other city in Europe.
However, over the past few years, we have also seen a backlash against disruptive sharing economy services – you only have to look at the recent debate over the regulation of Uber and how it has polarised city planners across the world.
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In order for these businesses to continue to thrive, it is important we encourage regulatory policies that are even handed, while not stifling innovation. However, those policies should also take into account the opportunity for digital sharing economy services to make our cities work more efficiently.
Take the transport sector, for example. Congestion is an issue for London and other cities but new digital car sharing services BlaBlaCar and Liftshare have helped to reduce the number of cars on the road and strain on public transport.
Likewise, London based start-up Justpark has helped to reduce the number of cars in central London by providing an easy-to-use digital platform that allows property owners to rent out their driveway. Last year, 20,000 people rented out their driveways, with Londoners making an average of £810.
This notion of making the best use of under-utilised assets such as spare rooms and driveways is another benefit of the sharing economy model and has the potential to turn London into a city of micro-entrepreneurs.
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The travel industry is another area where traditional offerings are being transformed by digital sharing economy services.
For the past two years, London has been recognised as the most visited tourist destination in the world and is projected to welcome 18.82 million international visitors by the end of 2015. Through online platforms and mobile applications we can better manage the movement and disbursement of large number of visitors to London
More importantly, digital services can help to improve the tourist experience. For example, instead of eating by yourself while travelling you can use apps such as HomeDine to join people for a home cooked meal. Likewise, visitors looking for a more personalised tour guide experience can use apps like Vayable which pair locals with visitors.
Recognising the impact technology is set to have on the travel industry, earlier this year London & Partners launched the UK’s first dedicated travel technology incubator in partnership with The Trampery.
When creating the Traveltech Lab we saw a unique opportunity to bring our corporate partners closer to a travel focused community of entrepreneurs, creating a centre of expertise with benefits for both the members and those who interact with the space.
Charles Armstrong, founder of the Trampery, said: “Since 2009 The Trampery has developed seven buildings in London to turbo-charge the capital’s entrepreneurs. Just nine months after opening Traveltech Lab with London & Partners we’ve already seen an astonishing impact with investments, awards and commercial success.
“Now it’s becoming increasingly clear that London’s size and complexity make it fertile ground for the sharing economy.”
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We have already seen three companies graduate from the lab – Lu Lu Trip, Much better Adventures and MiceBook. The space is also home to Localoids, a sharing economy business that connects travellers with locals to share experiences.
Prashant Lagisetti, founder of Localoids, said: “We have a unique opportunity here as London is the most popular tourist destination globally, the most culturally diverse city in the world and a sharing economy cluster, with many more sharing economy businesses than any other city in Europe.”
From travel to healthcare, we can expect the sharing economy to transform the way consume and goods and services for many years to come. But we should also be harnessing the sharing economy model to make London more efficient and a better place for everyone to live and work.
As one of the world’s leading early adopters of new technologies and with a booming digital sector, London has a strong opportunity to become the sharing economy capital of the world.