This document sets out the evidence and analysis that informed the work of the Scottish Expert Advisory Panel on the Collaborative Economy over the course of its work in 2017. The panel’s conclusions and recommendations are set out on the Scottish Government website.
The Scottish Expert Advisory Panel on the Collaborative Economy was set up by the Scottish Government in April 2017. Its purpose was to:
- provide advice, expertise and experience for policy development on the collaborative economy; and
- make recommendations to Scottish Ministers on how Scotland can position itself to take advantage of the opportunities of the collaborative economy and overcome any regulatory, economic and social challenges.
The collaborative economy connects individuals or communities via online platforms, thereby enabling the sharing or provision of goods and services, assets and resources, without the need for ownership.
The collaborative economy has grown exponentially over recent years, producing a significant impact on several sectors of the global economy. For example, Uber is now the world’s largest taxi company despite owning no taxis; similarly, Airbnb is the largest provider of short-term accommodation despite owning no real estate. This trend is likely not only to continue, but to accelerate over the coming years.
PwC  estimate that the five key collaborative economy sectors (peer to peer accommodation, peer to peer transportation, on-demand household services, on-demand professional service, and collaborative finance) generated revenues of around €4 billion and facilitated €28 billion of transactions across Europe in 2015. The pace of growth in these key sectors has accelerated significantly in the last few years, with platforms estimated to have more than doubled their revenues in Europe between 2013 and 2015. Although most collaborative economy platforms have originated in the US, hundreds of platforms have also been founded in Europe, with France and the UK having produced over 50 platforms each.
The collaborative economy in the UK has been growing rapidly, as evidenced by the formation of Sharing Economy UK ( SEUK) in 2015  , a nationwide trade body representing a number of collaborative economy organisations in the UK and aiming to champion the sector and ensure good business practices are adopted.
Much of the growth in participation is down to the impact of digital innovation on the search and transaction costs involved in matching supply of and demand for specialised products and services. Increasing internet speed and mobile access have expanded the number of potential participants into the collaborative economy, creating markets that would otherwise be unviable  .
A 2016 Eurobarometer opinion poll found that 52 per cent of EU citizens are aware of the services offered by the collaborative economy and 17 per cent have used these services at least once. Among them, UK citizens are particularly active: they are the most likely in the EU to make online purchases and are relatively computer-literate  .
In a 2014 survey, Nesta estimated that 25 per cent of the UK adult population are taking part in the collaborative economy  . Professor Diane Coyle estimated, based on a survey of SEUK members, that it is likely that more than a million people are participating as providers, equivalent to three per cent of the UK workforce  .
While a wide range of statistics are available on the impact of the collaborative economy at a UK, EU and worldwide level, as well as a large number of case studies focusing on individual cities and specific industries (e.g. peer to peer accommodation in Berlin, Amsterdam, Barcelona, etc.), the availability of Scottish specific data is more limited.
Building the knowledge base on the collaborative economy in Scotland
Throughout 2017, a number of steps were taken to close the existing information gap and inform the work and recommendations of the panel. In February 2017, the Scottish Government commissioned YouGov to undertake a survey exploring Scottish consumers’ views of, and experiences with, the collaborative economy  (some of the key findings of this survey are provided below).
In addition, a Key Considerations background paper was produced to highlight the prevailing global trends and potential lessons for the collaborative economy in Scotland  . Both the findings of the survey undertaken by YouGov and the Key Considerations report were provided to the panel ahead of their first meeting, held in May 2017.
The Scottish Government also issued a call for evidence, which was open between 24 April and 29 May, and returned 52 responses from a wider range of stakeholders, including businesses (11), business representative bodies (11), public sector organisations (14), other organisations (5), and individual respondents (11).
An analysis summarising these responses, produced by Craigforth, was provided to the panel ahead of their second meeting, and subsequently published in August 2017  . A brief summary drawn from this report of some of the key opportunities and challenges, benefits and barriers identified by respondents in relation to the collaborative economy in Scotland is provided in Annex A. This document also draws on the sectoral opportunities and challenges identified in the analysis and builds on these with the further evidence provided over the course of the panel’s work. This included some of the respondents to the call for evidence who were invited, alongside other relevant stakeholders, to provide additional evidence to the panel, both through written submissions and presentations during the panel’s monthly meetings, which were held between May and November 2017. Both the original responses to the call for evidence and the additional evidence submitted to the panel brought a significant contribution towards closing the existing information gap, and are available online  .
In addition, the Scottish Government, Scottish Enterprise and the Scottish Tourism Alliance commissioned Toposophy to produce a wide-ranging study, titled “The Collaborative Economy and Scottish Tourism”. It involved the collection of evidence from a wide range of stakeholders, both inside and outside the tourism sector, with the aim of helping Scotland making the most of the opportunities and overcoming the challenges posed by the collaborative economy. Initial findings from the Toposophy study were shared with the panel, and the full report is due for publication in February 2018.
The panel also commissioned Involve to organise two public engagement workshops on the collaborative economy, which took place in Glasgow and Edinburgh in October 2017. These workshops involved 50 participants, who were selected to be broadly representative of the wider population, but ensuring that they had engaged in some way with the collaborative economy. The findings emerging from these workshops were then presented to the panel.
Key findings from the research undertaken by YouGov and the workshops organised by Involve are provided below, while a wide range of sector-specific and topic-specific statistics and comments, collected from the responses to the call for evidence and any other submissions to the panel, are provided within the relevant sections in the remainder of this report.
Scottish experience of the collaborative economy
The YouGov survey found that 35 per cent of Scottish adults have used a collaborative platform, but the percentage is significantly higher among those aged between 18 and 34 (53 per cent) than among those over 55 (20 per cent). These figures appear to be broadly in line with findings from other surveys undertaken at a UK and EU-wide level.
The most common reasons among respondents for using collaborative economy platforms were found to be purchasing used/second hand goods online (46 per cent); contributing to an online fundraising project (38 per cent); receiving same-day/expedited delivery (24 per cent); using a ‘ride-hailing’ app (21 per cent); and using an online home sharing service (21 per cent).
The main benefits identified were that platforms are affordable/cheaper than alternatives (30 per cent); they offer an extra source of income (25 per cent); they are simple to use/convenient (23 per cent); and they allow people to make the most of under-used assets (23 per cent).
While the most common reasons for not using these platforms were linked to a preference for dealing with ‘traditional’ companies (33 per cent); unwillingness to borrow items from strangers (26 per cent) or share items with strangers (23 per cent); unwillingness to share personal information (25 per cent); and a lack of understanding of how to use these platforms (22 per cent).
Participants in the Involve workshops were asked to indicate when the provision of goods or services through collaborative economy platforms shifts, in their perception, from ‘sharing’ (i.e. making the best use of spare time and/or resources to supplement one’s income) to professional trading or operating a business. The most common ‘tipping points’ were identified in relation to the amount of the required financial investment (identified by 72 per cent of respondents), the amount of time invested and the motivation for engaging in the activity (both 56 per cent); the amount of money being earned (46 per cent); the regularity of providing the service (44 per cent); and whether the goods or services are provided through more than one platform (32 per cent).
Overall, there was broad consensus among participants that fair working conditions should be ensured for those working within the collaborative economy (96 per cent agreed on this point) and that any regulatory response should be measured and not overly constraining, allowing for the flexibility for people to engage as occasional providers (76 per cent). Participants also referred to the need to ensure that consumers are protected and aware of their rights and responsibilities (50 per cent), that providers operating as a business are regulated, with regulation scaled to reflect the size of the business (46 per cent), and that no blanket policy is adopted to regulate the collaborative economy (42 per cent).
Annex B provides a brief overview of the geography of Scotland and its implications for the collaborative economy. The coexistence of large cities and remote rural areas would suggest the adoption of tailored and localised solutions, rather than a blanket approach.
Annex C provides a range of good practice collaborative economy examples.
The remainder of this evidence paper covers six key sector-specific or topic-specific areas of discussion addressed by the panel during the monthly meetings throughout 2017:
- Peer to peer accommodation (21 June);
- Peer to peer transportation and logistics (26 July);
- Workers’ rights (26 July)
- Collaborative finance (31 August);
- Participation of consumers and providers, and digital skills (21 September); and
- Public and social value (26 October).
The paper aims to summarise the key points raised throughout both responses to the call for evidence and the subsequent submissions to the panel, and includes direct quotes and statistics provided by stakeholders in support of these points.