By Chris Roche, travel.co.uk director and former Travel Republic commercial director
I love the ‘sharing economy’.
Technology has allowed people to extract value from assets they own.
Such assets may be property, local knowledge, a car – in fact anything one wishes to lend to another for a cost to earn a little extra income.
In difficult economic times, I am sure many people welcome some extra income. It’s innovation and it’s rejuvenating.
Of course, with innovation comes opposition and resistance from parts of various industries.
I recently read that the chair of Abta referred to the sharing economy as the ‘black economy’, specifically citing Airbnb and Housetrip. Strong words.
Within the broad definition of the travel industry, Airbnb is the most prolific business to appear. It’s a tremendous success and great model.
Such success, though, has attracted many critics and opposition because, now with scale, the model is seen as a threat to incumbents.
There are other argument too such as ‘its pushing up the price of rentals’ or ‘it’s worsening the housing crisis’ yet there is little evidence for any of these arguments that I have seen.
However, the model isn’t without problems.
A tenant may display a room on a sharing site without the permission of the landlord for example, and there are more issues of course.
But these are issues for the property owners, not the marketplace, to take responsibility for.
Those in opposition argue that Airbnb features ‘illegal’ hotels. Some believe it is driven by parties within in the hotel industry itself, which is driving the opposition.
I would not be surprised – some may see the new platforms as a threat to income and their business model and so rather than adapt, it’s much easier and cheaper to try to kill the competition.
New markets need legislation, but the question is where should it lie and who should set it?
Any legislation should not, under any circumstances, be imposed by those who operate within the same industry and see the new business as a threat.
It needs to be set by a centralised authority which is not lobbied by the industry stalwarts but can objectively review and understand the new markets and business models.
To call the sharing economy a ‘black market’ is a sweeping generalisation of any advertiser using any of the platforms. It also seems protectionist and conservative.
Our economy needs progression, not regression. We all want to improve our standards of living and this model allows people to do so, both buyers and sellers.
We should be encouraging such models.
Change, just like winter, is coming. In my opinion, it’s always better to embrace the tide of change rather than try to stop it. The market won’t stop.
Customer demand forms and directs markets, demand sniffs out good value.
It’s clear that in the eyes of the consumer the new markets and platforms in which they operate offer better value than some existing markets for some customers.
Change also brings opportunity, sometimes it might be hard to find, but it’s there.