The internet has changed the way consumers shop: from booking holidays to buying groceries, booking a plumber or finding the perfect gift, more and more people are conducting their transactions online.
Amidst the expansion of traditional business websites to meet this demand, there has also been a rapid growth of new business models, particularly apps and websites that offer to ‘link’ a customer wanting an item/service directly with an individual able to provide it. Collectively describes as elements of the ‘collaborative economy’ these platforms present a new offering which turns traditional business models on their head and can present challenges for consumers, businesses, workers and regulators alike.
In essence, the collaborative economy (sometimes known as the ‘sharing economy’) operates by connecting people via online platforms in ways that enable the provision of goods, services, assets and resources without the need for ownership or (generally) business registration. Familiar examples include:
- generating income from under-used assets such as homes and cars (e.g. listing on Airbnb or Easycar);
- using their ‘spare time’ to provide services (e.g. as a Deliveroo driver or through sites like TaskRabbit);
- using their hobbies to supplement their income (e.g. through sites like Get-your Guide, Etsy or Viz.eats);
- selling unwanted items directly to other members of the public (e.g. through eBay, Shpock, or Gumtree).
A YouGov survey, commissioned by the Scottish Government in 2017, found that 35% of Scottish adults have already participated in the collaborative economy. But, while peer-to-peer sites like this offer consumer’s unprecedented choice, they generally operate within a fluid and ill-defined regulatory framework which can present a threat to established traders and can be confusing for consumers in relation to their rights, responsibilities and avenues for redress should something go wrong.
To respond to these challenges the Scottish Government established an Expert Advisory Panel on the Collaborative Economy in April 2017. Its role was to examine how Scotland could best position itself to take advantage of the opportunities presented by the growth of the collaborative economy, overcome any regulatory, economic and social challenges and ensure consumers (and communities) were protected and empowered in their dealings with this new business offering. Alongside the submissions made by businesses (both traditional and new), trade associations, consumer representatives and other expert stakeholders the Panel wanted to hear the views of the public before they made their final recommendations.
What we did
Involve was commissioned by the Scottish Government to deliver public engagement workshops to complement and inform the work of this Panel. The workshops were designed to explore public perspectives on five topics in order to ‘sense check’ some of the Panel’s emerging conclusions:
- What is the public’s overall impressions of the collaborative economy?;
- When does providing goods or services through collaborative economy platforms shift from feeling like ‘sharing’ to feeling like the provider is trading or operating a business?;
- What are consumer’s understanding, expectations, rights and protections in this emerging marketplace?;
- What are the public’s preferred options for regulating standards and competition and/or limiting supply, focussing on the peer-to-peer accommodation sector?;
- What should be put in place to protect workers, including the self-employed?.
This engagement work was intended to further inform the Panel’s understanding of consumers’ experience of collaborative economy platforms and their views on the impact of these on both individuals and communities.
Who was involved
50 members of the public took part in 2 full day workshops (28 in Edinburgh and 22 in Glasgow). Recruitment for the workshops was undertaken by Ipsos MORI Scotland, who also assisted with the facilitation at the events.
The participants were recruited to be a mini-public, representative of the population of each city, with the added criteria that they had each engaged with the collaborative economy in some way during the past 12 months. In the workshops we identified that:
- Over half of the workshop participants had used a peer-to-peer sales platform to both buy or sell goods;
- Approximately half of the participants had used a peer-to-peer accommodation or transport platform;
- 16% of participants identified as providers within either the peer-to-peer accommodation or transport sectors;
- At least 4% indicated that they had provided services through a peer-to-peer household or professional services site.
What was achieved
Overall the engagement process found that participants were very positive about their experience of using peer-to-peer platforms, spontaneously identifying a range of potential benefits to consumers, including convenience, ease, the range of products, value for money and immediacy. They were also generally quite optimistic about the continued growth of this marketplace and the opportunities that this gave individuals to get involved as providers in flexible ways.
They did however also identify a number of areas of potential risk relating to consumers within this market including: redress against fraud or false advertising; misleading reviews; personal safety when you don’t really know who people are when you arrange a transaction; and an overall lack of transparency and consumer understanding about how these platforms work.
It further appeared to be the case that the majority of consumers’, despite being users of these platforms, did not necessarily distinguish between the platform’s role in connecting an independent provider with a consumer and the type of company responsibilities they would expect when using another type of online service.
More details of the findings from this engagement can be found in our report Consumer Perspectives on the Collaborative Economy
The findings of the workshops were presented to the Panel in October 2017 and published with the papers from this meeting. The Panel’s final report, which was published in November 2017, reflected many of the conclusions drawn out in the workshops.
To find out more about the Deliberative Workshop method click here.