Sharing economy in Europe

While the hallowed airwaves of San Francisco may dominate much of the on-demand news spectrum, the European continent has surged ahead in its own right. With technological capabilities to match, and a healthy thirst for market disruption, we see Europe slowly but surely embrace the spirit of the on-demand economy. Many Uber for X start-ups have begun carving their share in the newly emerging market – this is a post to understand the big picture that the European economic climate paints.

Arguably, the European zone may not have been the most favoured for the on-demand economy – history and other systems in place show us that Europeans are not exactly the most receptive to capitalistic enterprise – which the on-demand economy seems to represent, what with its roots in the USA.

However, we have an alternative argument. Proponents and naysayers of the on-demand world aside, examining the spirit of the economy is what is needed. On one hand, it may lead to extreme profiteering due to many platforms simply facilitating a meeting ground for buyers and sellers with no tangible assets – the volatility, the speed and the hustle of the economy may only be fit for the millennial generation.

However, the ‘sharing’ nature of the enterprise cannot be ignored altogether. The recycling of commodities, the transparent nature of work, flexible scheduling options and the rejuvenation of stagnant industries – all of these happen to exist too. Ultimately, the way in which business is conducted dictates the positives and negatives – ethics prevail.

While working regulations and other policies clash all over the Union – an expected consequence, really, with an economy that disrupts the very rules of conventional business, we see rays of hope. Effective solidarity in the form of agreements and partnerships between the governments and these businesses is what will be key for future ventures.

A Wharton report declared that the sharing economy in 2015 garnered revenues of upto $31.7 billion – itself citing the European Commission, with a potential worth of upto $644 billion in the near future. It also dictates that 900,000 people currently work in this economy. This has significant economic implications for European economics. Even as US-backed companies are operating in full swing, taking advantage of regulatory voids and other such to amplify their business, the European landscape is changing to correct that void.

In addition, we have a few other players trying their own hand in these ventures – so let’s take a look at the whole picture.

Uber for 3 Reasons

While these reasons may sound overtly simplistic, Europe needs to consider the sharing economy positively for two glaring ones.

One, the labour market. As the income gap between the common worker and the industrial mogul becomes larger, the importance of manual labour may be stressed on by the sharing economy. Only if handymen get the right avenue for their services – the right amount of demand, and a forum on which to advertise adequately – only then can they thrive too. Individual specialists and contractors with no advertisement to back their skills are on the rise in Europe. Giving freelancers and labourers considerable buying power over these platforms will be essential, with regulations and strong policymaking changes thrown into the mix.

The second reason refers to the on-going political climate, largely dominated by the immigration discourse. Many lawsuits etc. arise because practices are being discriminatory in their approach to independent labour that is not their own – meaning, the sharing economy becomes altogether more important in establishing that neutral platform between commerce and culture, as it is truly cross-cultural.

The third and last reason is something glaringly obvious – the disruptive role of technology. Unless we manage a grand reset of sorts, technology is only surging ahead – with traditional business practices, or without them. If the sharing economy represents the marriage of the entrepreneurial spirit with powerful technology, then it is only natural that economics be considerably revised to accommodate for this exponential change. Here, the social aspects of this tech also become important considerations.

So what is Europe doing in this vein, this movement toward embracing practices that are becoming slowly known as the new way of managing businesses?

European Uber’s for X

NextJuggernaut already possesses some articles on noteworthy start-ups in Europe, notably the UK. Deliveroo is one such, competing with other stalwarts like UberEats – you can get the whole article here.

In fact, the UK happens to be a very profitable market for many players dabbling in this economy. PwC charts it’s course favourably, with sharing economy transactions increasing by 92% in the period of 2014-15. Currently, it has also established itself as the global Fintech capital with revenues of over £3 billion per annum today, expected to increase to £70 billion per year by 2025, all from collaborative finance platforms.

Moving on to the on-demand transportation sector. The European landscape has been significantly harder to get a grip on, considering the population density in certain clusters as compared to relatively even distributions in the USA. In that vein, what needs to be understood here is that cars are prime modes of transport in a taxi-hailing system may not work as well in Europe.

Enter SnappCar, which is the Netherlands’ answer to the density problem – it is based on a borrowing and lending model from your neighbours, or any car owners on that platform for that matter. All sorts of cars are available, and as the leasing periods on an average are smaller than those in the USA, this system works just fine. Environmental considerations also play a huge part in Europe’s eco-conscious citizenry, boosting SnappCar’s appeal immensely, with over 200,000 users now reported.

For the on-demand home services and ecommerce-based industries, we can take a look at Peerby, a Dutch start-up. This model is based on users renting whatever it is they need from their neighbours for a fixed time period. People who wish to rent out things simply put them up on offer, which you, as the user can then browse at your convenience. The uniqueness of items, along with recycling items that may have been useless to you is quite a USP to have, which this start-up rides on, now having acquired more than 250,000 users.

The accommodation-sharing market has been more flexible with their approach – even in terms of relaxing governmental policy. Last year, we saw the UK relax its laws as concerns home rentals etc. – re-structuring a 40-year old law in a constitution notorious for its rigidity. They have even made tax break exceptions for participants in the sharing economy. Airbnb now collects taxes over their normal revenue in order to comply with governmental policy in Amsterdam – change is slow, but inevitable.

One of the last mentions in this vein definitely goes to the European Sharing Economy Coalition, formed in 2013 at a formal hearing in the European Economic and Social Committee (EESC). With an aim to consolidate the growth of the sharing economy and aligning its growth with EU2020 objectives, this is an important step.

Mainstreaming, sustaining, scaling up and financing the sharing economy with full co-operation from private and public players alike is its goal – a goal that should be seen through, if we are to convert the European battlefield into a sanctum for profit-makers and workers alike.