UK’s key sharing economy sectors could deliver £140 billion by 2025

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.”  

Ends.

Notes for editors.

For more information visit: http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/outlook-for-the-sharing-economy-in-the-uk-2016.html 

1. In 2014, our global study into the sharing economy suggested that platform revenues generated in the UK would rise from £500mn in 2013 to £9bn in 2025. Two years on and we have revisited the question of the market opportunity from the sharing economy within the UK context.

Whilst the thorough market sizing and forecasting approach we have taken is consistent across the 2016 and 2014 studies, better data availability and granularity have enabled us to deepen our analysis and refine the selection and definition of the sectors we cover. For example, in 2014 we included the video and music streaming sector within our sectoral coverage, but did not estimate on-demand household services, which we have covered within our updated analysis. Whilst direct comparisons between the findings of the two studies should therefore be avoided, both studies reinforce our view of the significant economic potential for the sharing economy over the next decade and suggest a similar order of magnitude for the size of this opportunity. Please email [email protected] for a more detailed description of our methodology.

2. The projections we cite in this press release builds on, but is separate to, the research we were asked to undertake by the European Commission on the current size and presence of the sharing economy within Europe. This research is available here: http://ec.europa.eu/DocsRoom/documents/16952/attachments/1/translations/en/renditions/native

3. On the UK's decision to leave the EU, Rob Vaughan, economist at PwC, comments: “While our analysis was carried out ahead of the UK’s vote to leave the EU, at present we do not expect the decision to alter our long-term trajectory for the sharing economy's substantial growth by 2025.

   "Although economic and political uncertainty will act as a headwind to growth across every sector of the economy in the short-term, the fundamental drivers of the sharing economy - technological advancements, demographic change and urbanisation - will continue to drive adoption in this space over the long-term. We will monitor the exit negotiations closely and would encourage all sharing economy enterprises to engage in this process to make their case for a supportive policy and trading environment across the region."

For further information please contact Tilly Parke: [email protected] / +44 20 7804 8761