You might have read about the 'sharing economy', but what is it exactly? That’s a question the statisticians at the UK Office for National Statistics (ONS) have been wrestling with.
Speaking at RSS Conference on Wednesday afternoon, Pauline Beck gave an overview of the work ONS has done to date, all of which stemmed from a recommendation in the Bean Review of economic statistics, calling for more data on this relatively new part of the UK economy.
To quote the Bean Review directly, the report said: 'PricewaterhouseCoopers estimate that the UK’s five largest sharing economy activities generated revenues of £500 million in 2013 and projected this to rise to £9 billion by 2025. Yet the activity associated with this fast-growing sector is largely neglected in the official statistics.'
So where to start measuring it? According to Beck, the first challenge to overcome was the lack of an agreed definition for the 'sharing economy'. With no national or international statement to fall back on, ONS devised one of its own.
It defined the sharing economy as 'the sharing of under-used assets through completing peer-to-peer transactions that are only viable through digital intermediation, allowing parties to benefit from usage outside of the primary use of that asset'.
With the definition set, it was time to identify the companies that make up the sharing economy. Most people might instinctively suggest Airbnb, the holiday rentals company, or the taxi firm Uber. But ONS used a decision tree to help with its selection of businesses. Questions asked included: Does the company have an app or website? Does the app or website allow the matching of individuals? Does it enable transactions without the transfer of ownership?
Perhaps somewhat surprisingly, Uber was excluded from the ONS list of sharing economy companies on the basis that many of those offering taxi services through the firm see it as a full-time job. Instead, Beck said, the ONS was interested in sharing economy services that act as secondary jobs or side activities.
After working through the decision tree and coming up with a list of companies, ONS began adding questions about the sharing economy to its existing survey programmes, including the Internet Access Survey and the Annual Business Survey. The results of these surveys have been published in three reports to date.
Initial findings suggest that 22% of respondents have arranged accommodation through another private individual, and that 10% have arranged transport in a similar way (excluding Uber, remember). Meanwhile, it was found that sharing economy businesses tend to report higher purchase, advertising and employment costs than non-sharing economy business. However, in conversations with the relevant UK trade body, it was suggested to ONS that this might be explained by the relative youth of sharing economy companies – many of whom may still be in start-up mode and are thus having to make sizeable up-front investments in their businesses.
Beck said that ONS plans to add more questions to household surveys and is also exploring the use of admin data and web-scrapped data to learn more about the sharing economy in time.
- Pauline Beck’s talk was titled ‘The feasibility of measuring the sharing economy of the UK’. It was part of the session ‘Official Statistics & Public Policy: Innovative approaches’.