Sam Stephens is the Founder of Streetbank, the UK's most successful collaborative consumption platform of its kind. Green Mondays asked Sam what he believes is the future of peer-to-peer:
We are going to be hearing a lot more about peer to peer business models over the next few years. Airbnb is probably the most successful and celebrated example of a peer to peer business that has already become mainstream. At the turn of the year more beds were booked each night on Airbnb than at the Hilton, the world’s (previously?) largest hotel chain.
Car and lift sharing is also beginning to break through. Blablacar, which connects drivers who have empty seats with people looking for a ride carries 600,000 a month. Drivvy, a website where you can hire a neighbour’s car (or rent out your own), is achieving 6,000 rentals a month in France with an average hire time of four days.
What is the appeal? Firstly, the price is significantly lower than the B2C equivalent. A recent study by Priceonomics suggested the average room on Airbnb was 49% cheaper than an equivalent room in a hotel. Hotels will struggle to compete - Airbnb can undercut hotel rooms in large part because of the lack of overhead. Secondly, these services are more relational. You deal with a person not an organisation. The service might be variable but those of us who have tried these services, invariably enjoy the variety – it is part of the charm - and make a friend in the process and pick up useful information about the area in the process.
These represent growing disruptions to the hotel industry, to car rental and potentially to transport. Other businesses have largely been unscathed. But what would be the implications for, for instance, retail businesses if neighbourhood sharing, as happens through Streetbank (lending eg tools, garden equipment, computer games, baby gear to your neighbours) became mainstream? If borrowing that hedgecutter or electric drill from your neighbour became as normal as popping down to B&Q. After all, these are things that sit idle in our homes for most of the year and a next door neighbour is more convenient. I started Streetbank for that reason – in reaction to the craziness of every house owning things that they seldom used – and because I’d found that many of my neighbours were great people who had become friends when we shared things.
As sites like Streetbank expand (we already have over 21,000 members and an inventory of things worth nearly £700,000) retailers could start to lose business. Meanwhile, consumers would save money. Moreover, all sorts of other social and environmental benefits could emerge. As people across the UK start to engage with their neighbours community spirit will be strengthened and individuals will gain a greater sense of belonging. In time, the vicious cycle of isolation, fear and mistrust might be replaced with virtuous circles of connectedness, belonging and trust. As high- and low-income households meet each other, tension will be reduced between socio-economic groups.
How should retailers respond? We think there is a business opportunity for retailers to focus on the enduring appeal and the robustness of their products – to focus on quality so that, for instance, clothes improve over time once they have been worn-in and fashions stay largely the same over time. BMW have kept the same look for the Mini and as a result their depreciation rate has been much reduced. Perhaps, there is an opportunity to create a mark of quality and robustness - eg designed for life or a five year guarantee on more products. Perhaps, there can be less emphasis on “the new” and “the latest” and a move towards quality. All to say, change is afoot. Peer to peer will play a part in that change – a change that will cause a shift or even a reimagining of conventional capitalism.