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28 Jun 2016 12:30pm

Sharing economy sectors expected to grow by 30% every year, PwC study says

The major sharing economy sectors in the UK could grow to 20 times their current worth by 2025, new research has found

According to research by PwC, collaborative finance, peer-to-peer accommodation, peer-to-peer transportation, on-demand household services and on-demand professional services could see their total transactions rise to £140bn in less than 10 years.

The sector, which includes businesses like Airbnb, Uber and Netflix, currently delivers £7bn in the country.

PwC said Britain’s sharing economies have grown faster than the rest of Europe, thanks to the establishment of London as a global FinTech hub.

The total value of transactions rose by 92% compared to 77% from 2014 to 2015.

As a result, PwC expects capital flowing through collaborative finance platforms to increase to £70bn per year by 2025.

The sharing economy has matured into an established socio-economic trend that is fundamentally changing the way we lead our lives

Rob Vaugham, economist at PwC

Moreover, the sharing economy is likely to grow 30% every year. This means that micro-entrepreneurs could receive a substantial injection of cash into their businesses, taking home £122bn, according to the research.

Rob Vaugham, 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.

Vaugham said that, while the UK has a strong start-up scene and proactive support from policy-makers and regulators, 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.”

PwC expects revenues in the five key sectors across Europe to reach €83bn (£69bn) by 2025.

On-demand household services will be the fastest growing of the five sharing economy sectors, with revenues growing 45% per year in the UK and 50% in Europe, according to the study.

Vaughan said last week’s EU referendum vote result will not have an impact on these projections.

He said, “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 will continue to drive adoption in this space over the long-term.”

However, he urged sharing economy businesses to engage in the exit negotiations to make their case for a supportive policy and trading environment.

Jessica Fino

 

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