The UK could become a global centre for the sharing economy for years to come. This was the conclusion of a recent Government-commissioned report into how the UK Government can best support these businesses, which are encouraging consumers and companies to share assets and skills.

The report, written by Debbie Wosskow, the founder and CEO of Love Home Swap, came out in November 2014 and has kick-started a nationwide recognition of this new sector in which well-known participants include Airbnb and ZipCar. We have since been involved in the launch of Sharing Economy UK, the new trade body set up to represent sharing economy businesses, and the Government has responded positively to the recommendations made in Debbie’s report.

The final Budget of this Government even saw the Chancellor make several references to the UK’s sharing economy, including enabling government employees to use sharing economy solutions to book accommodation and transport when travelling on official business, where this represents value for money.

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We are certainly seeing positive changes, which will do much to encourage participation in the UK’s blossoming sharing economy community. And yet there are important questions which have yet to be answered, in particular around regulation and insurance. Sharing economy businesses are typically Internet-based platforms and as such are border-less, with an automatic potential global consumer base.

The question then is how can participants in the sharing economy properly navigate both UK and international regulation to ensure compliance with existing laws? And what, if anything, can the Government and policy-makers do to support such a booming British market?

Who is using these businesses?

According to Nesta, in 2013/2014 25% of adults in the UK used an online technology to share their assets or resources. With clear consumer support for sharing economy businesses – particularly as the likes of Airbnb and ZipCar gain increasing mainstream recognition – it is all the more important that sharing economy entrepreneurs recognise any potential insurance and regulation pitfalls, and come together to devise solutions.

Collaboration within the sharing economy

The launch of Sharing Economy UK is a great first step, which we at Osborne Clarke are hugely supportive of. Sharing economy businesses come from a wide range of industries – including travel, accommodation and retail – so until now they have had no single voice to represent the common challenges facing them due to their disruptive business models.

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Most of the UK’s existing laws were created to serve bricks and mortar businesses so it’s perhaps not surprising sharing economy businesses often find them hard to navigate.  For example, this year’s Deregulation Act has been necessary in order to ease restrictions on the short term sharing of property in Greater London which dated back to the 1970s.

So where does this leave sharing economy businesses? There is an opportunity for to join forces and develop innovative responses to these challenges with a single, strong and coherent voice. We’re already seeing developments of that nature, particularly in the field of insurance, where there is increasing recognition of the need to better service new sharing economy business models.

The British Insurance Brokers’ Association, for example, has produced a guide to insurance for sharing economy businesses, and there are already more tailored insurance products coming to market.

How realistic is regulatory change?

The UK is uniquely positioned to rise to the challenges facing sharing economy businesses. Much has already happened with the Government’s response to Debbie Wosskow’s independent report and with the formation of Sharing Economy UK. But we can – and should – go further, if the UK is to be seen as leading the way in the global sharing economy.

Crowdfunding is a great example of the role regulation can play. The UK’s crowdfunding regulation is arguably the best in the world – it is both well developed and acts proportionately for different participants. Crowdfunding in the UK is now blossoming and our regulation is seen as the poster child for the rest of the world.

At Osborne Clarke we are already seeing the impact of these changes and recognition of the need to make this international, with increasing Government interest in other European jurisdictions.

It is an exciting time for the UK enterprise and technology scene, and the impact these businesses can have both abroad and at home is huge. PwC’s figures suggest the global sharing economy is currently generating $15 billion in global revenues, but by 2025 this could be a much as $335 billion.

It makes economic and business sense for sharing economy businesses to work together, with Government and other partners, to make sure the UK regulatory landscape is as welcoming to sharing economy businesses as possible.

Andrew Saul is senior partner at Osborne Clarke

Further reading on The Sharing Economy: Government ‘removing barriers’ to sharing economy