Millennials and Gen Zs are reducing their outgoings by hundreds of pounds a month in the wake of coronavirus through the sharing economy, according to new research. The study, carried out by flexible car insurance provider, Cuvva found that the trend is likely to continue, with 50% of millennials already sharing their car, mortgage and even clothes to save cash. Almost half (45%) of those who car share said they decided to do so in order to save money on public transport, saving on average £100 per month.
Don Slater, Associate Professor and Reader of Sociology at the London School of Economics, predicts that these trends will be intensified in the current pandemic:
“Particularly after the pandemic, and Brexit, precarity, inequality and poverty are likely to grow; at the same time, culture and technology shifts are likely to continue to make sharing opportunities more mainstream, creative and valued by people.
“What’s new with millennials and Gen Zs is that the usual culture shifts have collided with massively unstable social conditions. They cannot get houses, cars, workspaces, etc., and have learned to pool resources and to look for micro-savings through sharing or renting, rather than owning.”
It is estimated that within the next 10 years, more than 50 percent of the global economy will be derived from the sharing economy sectors – with the trend driven by technological advancements.
And, as with Airbnb, which was founded in the wake of the 2008 financial crisis, the economic downturn caused by coronavirus could lead to a number of industries being revolutionised.
According to a recent study from Frost & Sullivan, car sharing was on track to more than double globally by 20253 before lockdown.
Slater also predicts economic uncertainty will lead to a greater need for on-demand, flexible business models.
“Flexibility and mobility – enabled by technology – are lifestyle essentials because they are key to everyday survival. Both production and consumption are increasingly based on the just-in-time principle so that you don’t commit resources forward into an unpredictable future. Sharing is one way of pooling scarce resources in order to spend just enough for now, and no more.
“A car insurance app is a perfect example of this: supporting flexible car and travel use on a per trip or short term basis.”
Freddy Macnamara, founder of Cuvva, said: “Flexible business models have been gaining ground, simply because they’re better suited towards customers’ actual needs.
“Car insurance is a particularly good example of an industry in serious need of modernisation, fairness and more flexibility. Car usage is shifting to suit people’s current needs and on-demand lifestyles – long-term annual car policies are no longer fit-for-purpose for many Britons.
CAR SHARE – NOT JUST A GREAT ROMCOM
Ryan Oates, 28, a sales manager from Leeds, comments on how the pandemic will continue to change the way he and his girlfriend commute to work: “Even before the lockdown, my girlfriend and I decided to start driving into Leeds together for work, mainly because it made so much sense, saving time and a lot of money. It used to take her at least an hour to get to work on the bus.
“Since August 2019, we’ve been travelling in to work together which has saved us around £60 per month, which we’re hoping to be able to put towards a holiday in Thailand once things go back to normal! Once restrictions are lifted, we’ll continue to commute this way as not only does it save us money, but it’s a much safer option that abides by social distancing measures.”
Pippa Nicholls, 26, a dentist from Harrogate bought her current home with her friend: “We decided to buy a property together as friends after we moved back home from university. The area where we both wanted to live is quite expensive and it would have taken us a couple of years to save up a deposit to buy on our own. Seeing as we both had similar ideas on where we were looking and what we were looking for, we decided to buy together which meant we were able to buy after only one year.
“It was a great decision which meant we got into the property market earlier and mortgage payments are also more reasonable.”
The sharing economy – and the flexibility it offers – is here to stay, with more industries likely to see the same disruption seen in the hospitality industry.
“We’re about to see some big changes in how people spend their money,” adds Macnamara. “Who knows – car sharing could be this decade’s Airbnb.”
For further insight into the future of the sharing economy, and tips on how to pool resources to save time and money, visit: https://www.cuvva.com/car-insurance/temporary/insights/what-the-future-holds-for-the-car-sharing-economy