Doing business with your neighbours – the future?

‘Collaborative consumption’ essentially works on the principle that many of us own assets that sit idle for huge swathes of time. You can think of this as wasted (or spare) capacity in a particular ‘system of value’. Take space for example. The self-storage industry is a c. £350/annum industry in the UK and it remained in embarrassingly robust health during the recession; yet, according to research undertaken by storenextdoor.com, there is a huge amount of spare capacity in terms of unused space in domestic properties (even discounting for small business properties, clubs, churches and charity buildings which would likely more than double this amount). What has been unlocked in recent years – with the advent of such smart ‘peer-to-peer’ platforms (that link individuals together in online markets) – is the ability for this spare capacity to be unlocked and traded.

The Storenextdoor.com research estimates that the value of this untapped domestic space could be worth £445/year[1] for the average home-owner (and much more when large attics/garages are utilised). Further, their research shows that up to 10% of all homeowners have spare space and are willing to offer it online; if accurate, this new form of provision is but one example of how this new model can seriously disrupt the conventional/expensive alternatives.

A common ‘first reaction’ to such ‘earn money from home’ in a peer to peer way models is one of ‘can I trust the other party?’ variant. This is, to a degree, understandable; as befits any new way of doing business, you are right to examine the potential flaws. All the evidence, however, is pointing to the complete opposite revelation. When people-do- business-with-people and their ‘online’ reputations are put ‘on the line’ – especially at a local level – then the results are surprisingly positive. Incidents of abuse of such services are very rare indeed. Airbnb.com (an online market for B&B provision) was met with similar scepticism at launch in the US in 2008, but now there are more domestic rooms traded on its site (in New York as example) than there are hotel rooms!

But you are right to be judicious with regards the provider you choose. Before you sign up, look out for member verifications, member ratings (and a sense of community generally), good customer support, proper contracting, secure payments and, where relevant, insurance cover as part of such services. You should also ensure that any such income generation does not conflict with your existing policies (household insurance, mortgage policy etc) or any local council regulations. And, of course, don’t forget any income tax liability such an additional income might generate … albeit that, of course, is a nice problem to have when overall you are making a net contribution to your pocket.