:00:00. > :00:12.no prior knowledge of the incident. And now The Bottom Line with Evan
:00:13. > :00:17.Davis. Consumers in developed economies have got used to owning
:00:18. > :00:22.things. Cars, homes, clothes. You name it, they bite. If they do not
:00:23. > :00:29.buy at a rent it from a large company. Today we will look at and
:00:30. > :00:32.alternative model, it is sometimes called collaborative consumption. It
:00:33. > :00:36.is about renting possessions out to each other. It is beginning to take
:00:37. > :00:39.off and three enthusiasts will tell us what it has to offer and discuss
:00:40. > :01:08.why some people do not like it. Let's start by spending a few
:01:09. > :01:11.minutes meeting each of my three guests. All of them represent
:01:12. > :01:19.companies in the area of facilitating sharing. The oldest of
:01:20. > :01:25.the companies is Liftshare. Ali Clabburn you found that company back
:01:26. > :01:32.in 19 87 before we had an Internet. What you do? Any member of the
:01:33. > :01:34.public could say they were travelling from London to Bristol
:01:35. > :01:40.and you could find a match. The challenge was we could not run a
:01:41. > :01:45.business that way. I could not you run a business that way? We were
:01:46. > :01:50.matching people together but there was no financial transaction for us.
:01:51. > :01:58.It were paying each other. We could not get our hands on the cash. Then
:01:59. > :02:01.we had a stroke of fortune when Glastonbury contacted us saying they
:02:02. > :02:04.were having trouble getting Sony people down to the festival without
:02:05. > :02:09.annoying the council because they had such a congestion. We set them
:02:10. > :02:15.up with a branded version of the Liftshare site we had and it was a
:02:16. > :02:19.great success. So it was a Glastonbury Liftshare scheme and we
:02:20. > :02:23.were doing the back office. We ran the lift sharing scheme before them
:02:24. > :02:27.and they promoted 200,000 people going to the festival. For us was a
:02:28. > :02:31.great way to promote the service. We started getting phone calls from
:02:32. > :02:35.people who had gone to Glastonbury asking if we could do something
:02:36. > :02:38.similar for the company. We had approaches companies in London,
:02:39. > :02:45.wrestle and Norfolk. Saying could you run car sharing scheme for our
:02:46. > :02:50.company. We run a thousand schemes. The biggest culprits, and all for
:02:51. > :02:54.very small companies who may have trouble getting places to -- people
:02:55. > :03:00.to their places of work. How many write a year are shared by
:03:01. > :03:09.Liftshare. It is about 12 million a year. But it is now probably 15
:03:10. > :03:14.million year -- next in chronological terms is the Airbnb.
:03:15. > :03:20.Most people would associate this was sharing economy. The country manager
:03:21. > :03:25.for the UK is Even Heggernes. The first Evan on this programme other
:03:26. > :03:33.than me. This was founded ten years after Liftshare, 2008. Give us a
:03:34. > :03:37.story of the origins? The founding story is interesting, two of three
:03:38. > :03:41.founders faced a problem. They did not have enough money to pay their
:03:42. > :03:50.rent. There would try to figure out what to do. They were both recently
:03:51. > :03:55.designed graduates, there was a big design conference taking place where
:03:56. > :03:59.they live. They had some air beds so they wanted to create a website
:04:00. > :04:05.called air bed and breakfast. Now we are in more than 75 countries around
:04:06. > :04:12.the world, we have 75,000 properties on our books. If I had a spare room
:04:13. > :04:17.or a spare house I can put it onto your site, if I look for one I put
:04:18. > :04:21.it on your site. You will charge a fee for me using Airbnb as the
:04:22. > :04:27.finder 's fee? The business model as we charge a fee from the guest and
:04:28. > :04:33.the host. From the guest we charge between six and 12%, from the host,
:04:34. > :04:38.3%. We get on average 10% a booking. What is the scale of the Airbnb? We
:04:39. > :04:44.reached -- we recently reached 10 million guests and 6 million was
:04:45. > :04:57.2013. The third business, this is much younger. This is the founder of
:04:58. > :05:04.Rentez-Vous. This is Fiona Disegni. The company. Tell us what we have a
:05:05. > :05:09.fashion rental market place. Women can rent clothes to one another and
:05:10. > :05:16.rent designer creations. They came up with the idea with the fact that
:05:17. > :05:20.I always find I have too many clothes in my wardrobe and nothing
:05:21. > :05:27.to wear. I realised that was the case of every woman. From the study,
:05:28. > :05:31.we do not wear 70% of our clothes. I have to admit, Liftshare I get, that
:05:32. > :05:38.existed before the Internet. The Internet makes it easier. Bedroom
:05:39. > :05:41.sharing, house sharing, that I can understand. Clothing sharing, there
:05:42. > :05:46.is something more personal about clothes. It is more awkward, they
:05:47. > :05:51.may not fit. Someone goes to the party in the clothes. The clothes
:05:52. > :05:57.may not come back in the state they left. Allsorts are problems I can
:05:58. > :06:05.imagine? That is correct. We are going into more emotional kind of
:06:06. > :06:09.things. You will rent a place or a car because you cannot afford it.
:06:10. > :06:13.With clothes, it is all about the fact fashion is changing every time.
:06:14. > :06:18.You do not want to wear the same things every day. We do not need to
:06:19. > :06:23.overconsume. We do not need to buy. The customer experience is I get the
:06:24. > :06:28.thing clean and I handed that drycleaned. We have partnership with
:06:29. > :06:38.dry cleaners. Local partnerships in London and Paris. We also have
:06:39. > :06:42.deposit, that's accuse the rental. -- that's accuse the rental. There
:06:43. > :06:46.is a big problem or the clothes are not given that we give the money to
:06:47. > :06:50.the owner. We have the measure of all your businesses. Do you see
:06:51. > :06:54.yourselves as commercial businesses or something a little different,
:06:55. > :07:03.around the lifestyle or ethos of sharing? For Liftshare, when I set
:07:04. > :07:07.it up, set it up for my social problem. I could not afford to get
:07:08. > :07:12.back from university. I set it up for personal reasons. In is trying
:07:13. > :07:17.to find out how to spread it around. It was a social thing to go round
:07:18. > :07:20.other university -- University is encouraging it. Then you get the
:07:21. > :07:25.understanding of how wonderful sharing is. Then you understand it
:07:26. > :07:30.is not only wonderful from a sharing point of view but it is an
:07:31. > :07:33.environmental thing and a financial thing. Whatever way you look at it
:07:34. > :07:38.it is a win-win. There are many benefit is, you can not be in the
:07:39. > :07:42.sharing economy and look at yourself as a normal corporate financially
:07:43. > :07:48.based business. The benefits are far greater than any financial benefit.
:07:49. > :07:52.I had to second you. A lot of people sign up on errant B because they
:07:53. > :07:57.want to make extra money, then they stay on because of the experience.
:07:58. > :08:01.It is more about access than ownership. If you go a couple of
:08:02. > :08:06.decades back, we'll want to buy a car, but now it is more about access
:08:07. > :08:11.of things. The technology of today we made it more possible. Ten years
:08:12. > :08:14.time, all you need to own as a mobile phone. That will give you
:08:15. > :08:18.access to everything you need. People love to own their own home.
:08:19. > :08:23.More than just a financial thing. They feel it is their own. There are
:08:24. > :08:27.certain things and certain different people, the young people, the way
:08:28. > :08:32.they view things is different. It is not limited to the young. You go
:08:33. > :08:36.back that years ago, sharing was commonplace. In the old days,
:08:37. > :08:41.sharing was a substitute because he could not afford to do something
:08:42. > :08:45.different. Now people can afford it. It has become more a choice. You
:08:46. > :08:52.feel more part of this kind of values. You realise you can get more
:08:53. > :08:57.than just the product itself. We had to make a change on how we consume.
:08:58. > :09:02.There is a limited amount of resources on the planet. If we keep
:09:03. > :09:06.on spending or wasting the resources as we do today, there will not be
:09:07. > :09:10.too many generations after us that can experience the planet the way it
:09:11. > :09:15.is today. We need to make a change. We do not have a choice. The three
:09:16. > :09:21.options are reduced the population, use less or share more. Let us be
:09:22. > :09:25.clear, you are all giving noble views of what your businesses about,
:09:26. > :09:28.you would all like to make money out of this? If you can float the
:09:29. > :09:34.businesses and make millions that would be great? We have come through
:09:35. > :09:40.15 years and we have come with ups and downs. Airbnb has gone down the
:09:41. > :09:46.investment route. We have always tried to be self investing. We do
:09:47. > :09:52.not want to be pulled by venture capitalists. Airbnb is very
:09:53. > :09:59.profitable? What we have in the middle of the business is the
:10:00. > :10:07.experiences. Airbnb and the family in Copenhagen, you had to spend an
:10:08. > :10:12.hour with my kids. No stinking maybe somebody wanted a free babysitter.
:10:13. > :10:22.They ask me all these questions, what food I like eating. What do I
:10:23. > :10:27.do for work. Then the woman told me I had to spend money with my kids.
:10:28. > :10:31.This is bigger than a roof over your kids, these children are more
:10:32. > :10:37.open-minded. They more knowledge. A lot of the bad things happen in the
:10:38. > :10:42.world because we are afraid. It is a commercial organisation, not a
:10:43. > :10:48.charity? We have a massive organisation behind making this
:10:49. > :10:51.possible. Our communities in the centre and that is what we care
:10:52. > :10:57.about. The issues around making enough money to cover cost and do
:10:58. > :11:00.better than that, you have problems in the early days, you found they
:11:01. > :11:06.were paying each other the people that were sharing? You could not get
:11:07. > :11:14.a bit of it. The first there we went to we were charging people ?10 to
:11:15. > :11:21.join. It was a freshers fair. Join up with Liftshare, we will help you
:11:22. > :11:27.travel country. We made it ?5. Then when it was free, 50 people joined.
:11:28. > :11:30.We decided it had to be free. We went round other freshers fares and
:11:31. > :11:35.the same thing. 100 people joined but we had no financial model I had
:11:36. > :11:38.to go to work at pubs or wherever I could get the money to get a website
:11:39. > :11:43.developed. It took three years before we got first contract. You
:11:44. > :11:50.did very well because you adapted to find a mum tree model. How about you
:11:51. > :12:01.on the revenue side? We already charge the user a fee when they
:12:02. > :12:08.rent. We also integrate some emerging designers for them to rent
:12:09. > :12:12.creations. They pay us to get access to the community. What would I be
:12:13. > :12:20.paying for a rental? A designer dress? It is about 20% of the
:12:21. > :12:29.purchasing price. For the rental. We take 20% off of the fee. And for the
:12:30. > :12:35.designers, 30%. You take 4% of the purchase price? One of the biggest
:12:36. > :12:40.financial challenge is to this market is taking the middleman
:12:41. > :12:45.transaction. Looking at Liftshare, if I give someone a lift from
:12:46. > :12:49.Bristol to London that is ?10, Lafai as the organisation who makes that
:12:50. > :12:55.match takes a cut, we say what is reasonable, 10%? Once you've gone
:12:56. > :12:59.through the thing of that money going through the merchant service
:13:00. > :13:03.or a bank, they take their percentage. When you pay the money
:13:04. > :13:08.out to that person they take a percentage. You can end up spending,
:13:09. > :13:14.or every pound we taken it can be 60p going to the bank. We have
:13:15. > :13:19.bigger transactions, ?100 a room it is worth spending to a half percent
:13:20. > :13:25.on that. For our business, acting as a middleman would not work. One
:13:26. > :13:29.thing in your favour, each of you is running a -- natural monopoly.
:13:30. > :13:39.Airbnb seems to be the one people go to. There were others. That makes
:13:40. > :13:46.sense, if you have 30 of these things, you cannot crack the
:13:47. > :13:52.market? As we grow, there are more competitors trying to do what we do.
:13:53. > :14:01.It is a huge market. We always keep focus on developing the service. To
:14:02. > :14:08.always be innovative. If I go to -- if I go to a place and I want to
:14:09. > :14:12.work rent a room, I want one that lots of rooms. The big one is more
:14:13. > :14:20.likely to have that rather than a smaller full -- smaller one. We have
:14:21. > :14:24.private people running their microbusinesses on our side. They
:14:25. > :14:27.say, "Go on Airbnb. That's where we get our man." That's why they keep
:14:28. > :14:31.coming back to us. You've got competition, haven't you, Ali?
:14:32. > :14:36.There's Liftshare competition? There is. We have 8% of the UK market. As
:14:37. > :14:38.a critical mass, we've got it. The interesting thing now, in the market
:14:39. > :14:44.place, is they're coming with big backing. They're spending a huge
:14:45. > :14:51.amount of advertising. So Liftshare, you'll see three brands ahead of
:14:52. > :14:56.ours. There is a French one, Car Pooling from jeemple. And within
:14:57. > :15:01.London there are National Cars, a Go Car Share locally. My prediction,
:15:02. > :15:03.they won't all stay in the market, because they'll consolidate. It
:15:04. > :15:07.doesn't make sense to have the market split. There will definitely
:15:08. > :15:10.be consolidation. OK, well, we have been having a good
:15:11. > :15:15.conversation about the sharing economy. I have learned a lot about
:15:16. > :15:19.the positive attributes and your enthusiasm shines through. Let me
:15:20. > :15:25.ask this rather important question - is some of the value of what you're
:15:26. > :15:31.doing undercutting regulation and rules that would apply and impose
:15:32. > :15:34.standards on professional, corporate providers of the services you're
:15:35. > :15:40.competing with? So, let's take, for example, Airbnb. Hotels have to meet
:15:41. > :15:45.all sorts of environmental safety standards, fire safety standards,
:15:46. > :15:52.catering cleanseliness standards, there are all sorts of things they
:15:53. > :15:56.have to meet, right? To what extent is Airbnb just able to get where it
:15:57. > :16:02.is because it doesn't have to face all those standards? I think that a
:16:03. > :16:05.lot of tech companies popping up today, brand-new business models,
:16:06. > :16:09.the technology we have today we didn't have X amount years ago. And
:16:10. > :16:13.a lot of the laws that we're facing today was created. So we're spending
:16:14. > :16:17.a lot of our time working with stakeholders and regulators all over
:16:18. > :16:20.the world, educating them about our business model, what we're doing.
:16:21. > :16:26.And trying to find a way where we can work together. Yeah. Cos a lot
:16:27. > :16:30.of people don't like Airbnb. I mean, I know a lot of policymakers don't
:16:31. > :16:35.like it, do they? Of course we have some that is seeing is Airbnb as a
:16:36. > :16:39.threat. And I think that what we offer compared to some of our
:16:40. > :16:42.competitors is completely different. Staying in someone's private home is
:16:43. > :16:47.completely different from actually staying in a hotel. More than 80% of
:16:48. > :16:51.our hosts are private people renting out their primary residence. That's
:16:52. > :16:55.the majority of our... What proportion of the people renting
:16:56. > :16:58.out, of those 80%, of ordinary people renting out their home, what
:16:59. > :17:02.proportion of them do you think are paying tax on the income they
:17:03. > :17:06.dearrive? We require every single host on our site to follow the rules
:17:07. > :17:10.and regulations in the area they're living, including paying taxes. We
:17:11. > :17:13.are encouraging them, by sending out tax forms. So if the British tax
:17:14. > :17:17.authorities said to you, "Can you give us a list of everybody who's
:17:18. > :17:22.rented out a room so we can collect a tax?" We're not sharing the data.
:17:23. > :17:27.No. There must be a suspicion... I mean, in your one, Ali, do you think
:17:28. > :17:32.they pay tax on the income they derive? They don't make a profit.
:17:33. > :17:35.The difference of Liftshare to most of the challenging ones now are that
:17:36. > :17:39.very early on, we looked into the insurance issues. And there were a
:17:40. > :17:44.few insurance companies who said, "We won't let people share cars." We
:17:45. > :17:47.got them basically to change their policies to clarify they will let
:17:48. > :17:50.people share cars, as long as they don't make a profit. As long as you
:17:51. > :17:59.don't make a profit from giving someone a lift, you're not seeing as
:18:00. > :18:03.higher for reward. We've got people saving up to ?6,000 a year. One guy
:18:04. > :18:07.has set up a website that shows exact southerly how much money he's
:18:08. > :18:11.saving so he can show the tax man he's not making a profit. Do any of
:18:12. > :18:21.you think the sector has grown as fast, as quickly as it has because
:18:22. > :18:25.it does allow some circumvention of things. It has stopped a lot
:18:26. > :18:29.paraphernalia sharing going on. And businesses have been set up within
:18:30. > 3:33:56that regulationulation, whether it's sharing taxi, hotels, they have run
3:33:57 > 0:11:37normal businesses. Now the world is changing fast and the regulators are
0:11:38 > 0:11:37struggling to catch up with it. The challenge is whether it is worth
0:11:38 > 0:11:37breaking those rules. And in many circumstances, the rules have
0:11:38 > 0:11:37stopped people from living sharing lives, using goods really
0:11:38 > 0:11:37efficiently. That's gotta be changed. If the regulation is
0:11:38 > 0:11:37stopping sharing, it's the regulation that's wrong, rather than
0:11:38 > 0:11:37the sharing that's wrong. Yes. In France they have been quite negative
0:11:38 > 0:11:37about it? Yeah. Really. With taxidrivers in France, in Paris, and
0:11:38 > 0:11:37in Lion, basically, the traditional taxidrivers don't accept the fact
0:11:38 > 0:11:37that online and mobile taxidrivers' company could get customer easier.
0:11:38 > 0:11:37So, taxidrivers vandalise the other taxidrivers. Physically vandalise?
0:11:38 > 0:11:37Physical lip vandalise. Yeah, so it shows that there is a kind of an
0:11:38 > 0:11:37upheaval, in a way, in France based on the fact that new model are
0:11:38 > 0:11:37disrupting traditional. It's a lot of ill feeling, then, really, to the
0:11:38 > 0:11:37disruptors. Yeah. And I think that people are kind of freaking out.
0:11:38 > 0:11:37Which is the jurisdiction which has been most negative about Airbnb?
0:11:38 > 0:11:37Because there have been problems here and there. So, now I'm based in
0:11:38 > 0:11:37the UK, but I'm sure you have seen that we have been - facing some
0:11:38 > 0:11:37issues in New York. There was a case with a guy renting out and he was
0:11:38 > 0:11:37found breaking some regulations. Zoning regulations. So he's running
0:11:38 > 0:11:37something that looks like a hotel in an area with no licences. He rented
0:11:38 > 0:11:37out a private room in his residence. We appealed and are working closely
0:11:38 > 0:11:37with regulators in New York to work together. You won the appeal? We won
0:11:38 > 0:11:37the appeal. It must be annoying for you. You're in 170 countries, and
0:11:38 > 0:11:37each of them has their own view about what's allowed, what isn't
0:11:38 > 0:11:37allowed? That's the beauty of the world, things are different
0:11:38 > 0:11:37everywhere. Where does this sharing economy go? What are the limits? Is
0:11:38 > 0:11:37there entrepreneurial activity in this area? We've got you, Fiona,
0:11:38 > 0:11:37you're obviously the upstart in the room here. Are there lots of others
0:11:38 > 0:11:37in London? Tech city, London, they call it. Are you the only one there
0:11:38 > 0:11:37in this space? Yeah, there are in France as well. There is this global
0:11:38 > 0:11:37movement that has been borne in France that is actually like the
0:11:38 > 0:11:37kind of organisation that represents sharing economy. So, it's really
0:11:38 > 0:11:37important in France but also here. Office sharing, so that is new
0:11:38 > 0:11:37companies trying to, yeah, go into this field. And a lot of our
0:11:38 > 0:11:37sustainable fashion. But I think what is really interesting is that
0:11:38 > 0:11:37we bring values to traditional companies. And that's something that
0:11:38 > 0:11:37is not really seen yet. But basically I think that we change a
0:11:38 > 0:11:37model and we actually create value for these companies as well. So, I'm
0:11:38 > 0:11:37just not quite sure I understand why you would be better at that. You
0:11:38 > 0:11:37were agreeing, Ali, but... I agree because of the conversations. Say
0:11:38 > 0:11:37we're working with the corporates, some of the biggest corporates in
0:11:38 > 0:11:37the country, the schemes. One of the reasons, they set it up normally to
0:11:38 > 0:11:37reduce parking. Buff the feedback we get, saying there's a senior
0:11:38 > 0:11:37director sharing with someone on the shop floor, talking every day, going
0:11:38 > 0:11:37to work. The silos they're break down, getting sharing into the heart
0:11:38 > 0:11:37of some of these bigger companies inspect disrupting them in ways that
0:11:38 > 0:11:37was never possible before. Big companies, how do they respond to
0:11:38 > 0:11:37this movement? That you're obviously all very passionate about and feel
0:11:38 > 0:11:37very committed to? Do they co-opt it? Do they fight it? Do they join
0:11:38 > 0:11:37it? I mean, what do you see their response as being and what would be
0:11:38 > 0:11:37your advice to the established players? Of the bright ones are
0:11:38 > 0:11:37embracing it. Marx and Spencers. You have I have aies, who bought Zip Car
0:11:38 > 0:11:37for a lot of money. They're diversifying their portfolio by
0:11:38 > 0:11:37bringing that under their umbrella. They have - I think they have to
0:11:38 > 0:11:37embrace it, but embrace it with care, but understanding that it will
0:11:38 > 0:11:37disrupt what they're doing. If they don't do it, others will. I think
0:11:38 > 0:11:37the challenge for everybody - we are lacking in resources. And I think
0:11:38 > 0:11:37all the traditional company also have is the same challenge and they
0:11:38 > 0:11:37will have to adapt new models for that as well. Tell us what you would
0:11:38 > 0:11:37do if you were running a big hotel chain now? When I talk about
0:11:38 > 0:11:37disruption, I also like to think of that as progress. And in the world
0:11:38 > 0:11:37I'm from, there is space for everyone. We're offering completely
0:11:38 > 0:11:37different things and in the end that will be better for the consumer.
0:11:38 > 0:11:37Look, thank you all very much for sharing your thoughts with us. Ali
0:11:38 > 0:11:37Clabburn of Liftshare, Even Heggernes of Airbnb, and Fiona
0:11:38 > 0:11:37Disegni of Rentez-Vous. I'm gonna be back with more guests
0:11:38 > 0:11:37next week. Don't forget the downloads of The
0:11:38 > 0:11:37Bottom Line are vaifenlt details are on our website. And, of course, you
0:11:38 > 0:11:37can -- are available. Details are on our website. We also like to get
0:11:38 > 0:11:38your e-mails. Drop us a line.