What I’ve learned about the language of the sharing economy over the past decade
by Martin Gray, founder of boat share club Pure Latitude.
A new age of connectivity is changing the way we communicate, the way we do business and the way we spend our leisure time. We seek out new experiences more than ever before, we want instant gratification, and we look to other users to see what they think before we make a decision. We are more mobile and more interactive than any previous generation and, unconstrained by geography, are part of many more communities than simply our family, friends and workplace.
That shift is due to huge technological developments in a very short space of time. Just ten years ago, a list of the world’s biggest companies was dominated by oil and car manufacturing; now it is the tech giants – Apple, Google, Amazon, Facebook. Microsoft is the biggest, and the only one to have appeared in the league table a decade back. (1. Financial Times Global 500)
As a society, our life is very different now. One of the most significant changes is in being able to have occasional use of an asset when we choose, in preference to outright ownership, thanks to the digital solutions which can enable our on-demand access. We can hire a handbag, borrow a bedroom, or rent a ride-share, all with much reduced transactional friction.
To say that we were ahead of the curve back in 2007 when we launched Pure Latitude Boat Club is a bit of an understatement, as we were already round the cans before Airbnb launched in late 2008 and Uber in Spring 2009.
Since then, as the World Economic Forum recently reported “the sharing economy’s explosive growth has astounded even optimistic market pundits”.
Before I was able to spend my days pursuing my passion for boating, my work involved trading global network capacity for telecoms. It was all about throughput and efficiency of use, which is key whether you are trying to maximise on your £200 million investment in fibre technology or a 40-foot sailing boat. It was with this attitude towards resource efficiency that I came at the sailing market, which at that point had several shared or fractional ownership and rental models, but no one had come up with quite the degree of flexibility that I could see was feasible.
Like many others in the sharing economy, I drew inspiration from the holiday home destination clubs originating in the United States, which were the first real example of sharing high-value assets that would otherwise have low usage by a single owner.
Planes were another early choice for shared ownership, giving rise to the syndicate approach, where owners would come together to each buy a share and divide operating and maintenance costs between them.
The main distinction between these two early models is in how the asset is owned and run – centrally or privately – and since then various ‘sharing economy’ options have developed in between.
At Pure Latitude, we decided to buy the boats and run them, taking care of everything so members could simply decide how much sailing they wanted to do each year, and buy points that equated to this.
Variety would be key, so the points could be exchanged for time on different boats during the year, both motor and sail, and more recently for training days, social or race events.
How Pure Latitude Boat Club Works
The closest relation to our model is the supercar club, such as Autovivendi, making a fast depreciating asset like a 200mph supercar available to members who want to enjoy driving a selection of different cars, without the inconvenience and cost of ownership.
A more recent development is the rise of peer-2-peer (P2P) asset sharing, which effectively cuts out all the middlemen, with technology providing the interface to enable buyers to connect with those offering a time-share. This brings us to the platform economy, facilitator of much of the sharing economy, with house-sharing Airbnb or ride-sharing Uber the household names in this sector. They don’t own any assets, instead their commercial model is to provide the blue-sky thinking and create the necessary technological infrastructure to make that innovation happen. They receive a fee from every transaction and set the ground-rules for how the sharing takes place.
Many P2P examples are for more everyday needs, involving lower value items or lower point of entry cost, than high ticket boats, planes and holiday houses, but on the water there is Borrowaboat, bringing individual owners together with potential renters in a charter-style arrangement. While initial take up was focused more on existing charter boats, rather than individuals making the decision to let others on their boat, with the associated coding and insurance costs, this is certainly waking up the leisure boating sector.
But while Borrowaboat brings the platform economy to chartering, it does not provide a fundamentally different concept for the sector, which has generally been slow to move beyond the charter model and private shared ownership syndicates. The only significant developments are centrally-managed fractional ownership options from the builders and agents, such as the recently-launched offering from Ancasta. We have also seen a few smaller boat clubs come into the market recently, such as Trafalgar, and these are mostly offering members smaller motorboats and a limited range of usage. Lastly there is the Sailtime/Flexisail model, where an operator buys the boat and shares it between 8-10 users who pay a monthly fee, with the resulting restrictions on access to a single boat.
A common challenge is how bookings are managed for optimum service availability, ease of use and flexibility. Too often bookings must be made far in advance, maybe with restrictions on when they are available, and a ‘use it or lose it’ approach. When users are unable to make it on the day, the boat stands idle and the unit cost of each day’s sailing goes up. Not only has the member lost out on the sailing, it means there is little room for those seeking spontaneous, instant gratification in the on-demand nature of today’s sharing economy.
Our experience over the last decade shows that to live up to today’s experience culture, flexibility is what the typical time-poor leisure sailor is seeking, which has led us to some key differentiating factors:
1. Different experiences: The same boat on the same days in the same waters is not going to cut it. What you want to do at any time inevitably varies, so giving access to different boats, both motor and sail, in different ports in the UK and the Mediterranean enables this sort of choice. Combined with training, it also enables personal development, which adds value, as members can hone their skills and progress to bigger, higher-performance boats, without having to upgrade to a different membership plan or first sell their share.
2. Good availability: There are times when you know well in advance the dates that you want to be away, particularly for longer cruises or for racing events, but looking just a few weeks ahead is the way most of us plan our lives. Being able to book last-minute and know there will be availability on the sort of boat you want is the reasoning behind our model, which is based on our fleet being in use for no more than 35-40% of the year, if all our members used all of their points every season. When users are already time-poor, making it hard to use the asset will only drive them away.
3. Social dynamic: Bookings by our members are mostly of one or two days, not because of any availability or process restriction on our part, but because people are time-poor and a day or two is easier to fit in, and because it’s often hard to get crew together at all, let alone for a long time where everyone’s diaries must dovetail. Providing the opportunity to share time with other like-minded members, in a community that will enable you to maximise your time afloat, has proved a significant differentiating factor for us, whether through organised social events, training events, racing events or simply by allowing members to pool points to take out a boat together.
By making it easier to exchange resources on demand, the sharing economy can increase efficiency as well as provide experiences that might otherwise not be available, but it has yet to truly revolutionise and democratise the leisure boating sector.
Alongside peer-to-peer sharing and the platform economy, technology has also enabled the user review, which has become the currency by which we all judge. Recent statistics showed that 92% of people say they read online reviews such as Trustpilot or Google as part of their buying journey.
Those of us in the business of selling the sailing dream need to wake up to the opportunity, and those wanting to go boating should take advantage of it.
Membership Options and Pricing
Posted on: