Special Report: Government vows to make UK ‘home of sharing sector’

Special Report: Government vows to make UK ‘home of sharing sector’

The government declared its determination to “champion” the sharing economy at the launch of the world’s first kite mark for the sector.

The minister for the digital economy, Matthew Hancock, described it as the government’s “goal” “to make the UK the natural home of the sharing economy”, and suggested user review ratings could remove the need to regulate the sector.

Speaking at the launch of TrustSeal, a kite mark for the sector, Hancock said: “We want to be champions of the sharing economy.”

Sharing Economy UK, the trade association for peer‑to‑peer platforms, unveiled the kite mark and the first four companies approved to display it – GrubClub, LiftShare, MyShowcase and UnderTheDoormat – in London.

Hancock singled out Airbnb, Love Home Swap and TaskRabbit for praise, saying: “They do what good businesses have always done – solve problems.”

He added: “The sharing economy provides more opportunities and flexibility on both sides. People have better services and more flexible opportunities because of the platforms available.

“When the printing press was invented, the cost of storing and transmitting information collapsed, and it had a profound social effect. The past few years have seen a collapse in the cost of storing data and it’s having a profound impact on the economy.”

Hancock pointed out that the government had relaxed restrictions on the private letting of residential accommodation in London through sites such as Airbnb, and introduced a £1,000 tax-free allowance for earnings through the sharing economy “so people can participate in a small way without too much on the cost side”.

He suggested: “There is strong evidence that the star-rating system common to so many platforms is, in some cases, better evidence of quality than a regulated regime. So we are introducing it in the NHS.

“This market is going to continue to grow and innovate, and I want to know what the barriers are – the questions around regulation, the questions around employment. “We want to hear what we need to do to achieve our goal of making the UK the natural home of the sharing economy.”

Love Home Swap chief executive Debbie Wosskow, founder and chair of Sharing Economy UK, said: “Our aim is for companies of all shapes and sizes, from all kinds of sectors, to embrace this kite mark as a symbol of high standards and best practice.

“We plan to roll it out in other countries. We hope TrustSeal will do for the sharing economy sector what the Fairtrade mark did for international fair trade standards.”

The TrustSeal will be awarded by a committee of Sharing Economy UK following an assessment by management services giant PwC of the accuracy of a self-declaration by a business.

Wosskow said: “The TrustSeal is not looking to be part of the debate about developing a level playing field [between hotels and accommodation sites such as Airbnb]. It is meant to give consumers a feeling of safety – that the provider has been through a process.”

TrustSeal is a system of robust self-regulation

Proponents of Sharing Economy UK’s new voluntary TrustSeal insist “legislation isn’t going to work for the sector”.

The TrustSeal kite mark was launched last week for peer-to-peer businesses that can demonstrate they comply with good practice on identity verification, criminal and background checks, transparency, customer support, secure payment, clear pricing, insurance and data protection.

Public policy consultant Nick Stringer, who advised Sharing Economy UK on TrustSeal, said: “A set of principles underpins TrustSeal. It’s about businesses putting policies and processes in place. Businesses have to self‑declare compliance, then are checked to see that they are doing what they say.”

He insisted: “Hard legislation isn’t going to work for a sector like this.”

Mark Gallagher, founding partner of communications agency Pagefield and a member of Sharing Economy UK’s expert advisory panel, said: “It’s a form of robust self-regulation. We’ve seen so many companies that are heavily regulated make the biggest mistakes – far better to have this form of enlightened self-regulation.”

Gallagher conceded: “Selfregulation doesn’t always work.” But he insisted: “It’s important we don’t allow mission creep. It’s crucially important to drive the sector and to drive growth, and you will never drive growth through regulation.”

The cosmetics platform MyShowCase is one of four businesses displaying the TrustSeal. Chief executive Nancy Cruickshank said: “We’re running businesses that are scaling quickly, so it [the TrustSeal process] is really easy.

“It’s a self-declaration that looks at eight areas. It is sent to PwC and they monitor the business.

“We’re an industry predicated on trust [and] the kite mark is a way to stamp companies adhering to high standards. It’s easy to sign up. You don’t require a team of auditors in your office.”

Expert expects a legal category for sharing economy

A leading lawyer whose clients include Airbnb and Uber believes there will soon be a legal category for work in the sharing economy.

Andrew Saul, senior partner at law firm Osborne Clarke, said: “The biggest issue [for the sharing economy] is the legal relationship between the platforms and those providing services because of the dichotomy of employed versus self-employed status.

“There’s often an incredibly fine line between whether people are employed or self-employed, but the consequences aren’t fine. The employed have employment rights and employers have to deduct tax. So there is a question of whether there is a third way.

“There will be a rethink on selfemployment and employment. A lot of people welcome the flexibility of the sharing economy and are less hung up about workers’ rights. There should be a change over time.”

Saul suggested: “Tax hopefully won’t be an issue [for sharing economy platforms] in five years’ time. The insurance industry will have a suite of products for the sharing economy, [and] we’ll have this self-employed third way.”


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