The Rise of the Sharing Economy

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13 THE RISE OF THE SHARING ECONOMY

IS GROWING FAST, Over the past decade, the world has witnessed the rise of a new sharing economy – one where DISRUPTING TRADITIONAL people use Internet and mobile technologies to access goods and resources provided by their peers, rather than a traditional corporate vendor. MODELS, and will rival the rental As of 2013, the five main sectors(2) of the sharing (1) economy comprised a market of about US$ 15 market in size by 2025 Billion globally, according to PwC. By 2025, PwC says, this market will grow to US$ 335 Billion, more than 20 times its current size and equal to the traditional rental market

Size of Sharing Economy (based on 5 Primary Sectors(2)) vs. Traditional Rental Market over Time xx Company (In US$ Billion, 2013 and 2025) Airbnb Skillshare (xx) Year Founded +37 million +1,000 classes nights stayed CAGR (2010) (2008) +2.9% Vinted Kickstarter CAGR +29.5% +14 million +US$ 1.7 billion clothes listings pledges 335 335 (2008) (Latest Available Data) Streetbank TaskRabbit +61,700 things 1.25 million shared Netﬂix 240 57.4 million joiners 2013 (2010) subscribers RelayRides (2008) (1997) +2,300 cities served (2010) LiquidSpace +16,000 user companies (2010)

15 Elance 2.5 million Uber DogVacay employments 2013 2025 260 cities +20,000 listed (1999) Served pet sitters Spinlister (2010) Sharing Economy (Based on 5 Primary Sector Revenues) Traditional Rental Market (2011) 100+ countries (2012)

Notes: (1) Includes equipment rental, B&B and hostels, car rentals, book rental, DVD rental, and equipment rental (2) The sharing economy sectors being peer-to-peer lending and crowdfunding, online staffing, peer-to-peer accommodation, car sharing, and music and video streaming Source: “The Sharing Economy: Sizing the Revenue Opportunity”, PwC, 2014

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LA_PublicVersion(Bleed3175)_ENG_V22.indd 108 10/28/15 1:28 PM MANY SHARING ECONOMY SECTORS— INCLUDING Sharing economy businesses using “peer-to- peer” models are growing in influence, with top CAR AND HOUSE RENTAL-- performers attracting subscribers and funding at exponential rates and taking business from traditional players. While traditional WILL GROW MUCH FASTER rental industries are unlikely to disappear anytime soon, their growth will be sluggish. THAN TRADITIONAL RENTAL For example, while the car rental market is projected to grow at a CAGR of 2% through 2025, the car sharing market will grow more SECTORS than 11 times faster

Projected Compound Annual Growth Rate for Key Sharing Economy Sectors (In % 2013-2025)

Sharing Economy Sectors Traditional Rental Sectors

70 63 60 50 40 37 31 30 23 20 17

10 5 4 3 2 0 -10 -5

Crowd Online Stafﬁng Peer-to-Peer Car Sharing Music & Video Equipment Bed & Book Rentals Car Rentals DVD Rentals Funding/Lending Accommodation Streaming Breakfast and Hostels

Leading Sharing Economy Enterprises Impacting Traditional Business (2014 or Latest Available Data)

xx Company Airbnb Skillshare (xx) Year Founded +37 million +1,000 classes nights stayed (2010) (2008) Vinted Kickstarter +14 million +US$ 1.7 billion clothes listings pledges (2008) (Latest Available Data) Streetbank TaskRabbit +61,700 things 1.25 million shared Netﬂix 57.4 million joiners 2013 (2010) subscribers RelayRides (2008) (1997) +2,300 cities served (2010) LiquidSpace +16,000 user companies (2010)

Elance 2.5 million Uber DogVacay employments 260 cities +20,000 listed (1999) Served pet sitters Spinlister (2010) (2011) 100+ countries (2012)

Source- Upper Chart: “The Sharing Economy: Sizing the Revenue Opportunity”, PwC, 2014 Sources- Lower Chart: Company websites; Literature Review

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LA_PublicVersion(Bleed3175)_ENG_V22.indd 109 10/28/15 1:28 PM P2P BUSINESSES ARE CHANGING THE WAY PEOPLE In the sharing economy, peer-to-peer (P2P) accommodation, car sharing and taxi services TRAVEL both domestically and have been among the fastest-growing sectors. By 2016, Airbnb is expected to surpass the number abroad of rooms booked per night by the world’s largest hotel chain, and it already accounts for 10% of overnight stays in London. As of March 2015, Uber drivers globally were providing more than twice the number of rides per day as all the taxis in New York City. The car sharing industry grew by a factor of more than 15 between 2006 and 2014

Examples of the Sharing Market for Accommodation and Car Rental

Accommodation Airbnb Nights Booked Globally Airbnb Nights Booked (In Millions of Nights, 2008-2016) Globally Hotel (In Millions of Nights and Accommodation In % of Total, 2008-2016) Forecast 130 Bed & Breakfast Accommodation 120 110 19 100 Hostel 16 90 Accommodations 80 12 70 60 Others 50 40 30 Peer-to-Peer Accommodation 20 10 Airbnb 10.4% 11.9% 17.2% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 London Paris New York

Car & Ride Sharing Growth of the Global Car Sharing Market (In US$ Billion, 2006-2014)

Traditional Car Rental & Taxi Service 4.94 5 Number of Taxi Rides per Day (In Number of Rides, 2014) 4 3.48

3 1,000,000 On Demand Car 2.34 Rental Over 2 260 485,000 Cities 1.16 Peer-to-Peer 1 Car Sharing 0.67 0.35

0 Peer-to-Peer 2006 2008 2010 2012 2013 2014 New York Uber (Global) Taxi Service Taxis

North America Europe Asia Australia

Sources- Upper Chart: “Airbnb will soon be booking more rooms than the largest hotel chains”, Quartz, 2015; Airbnb Sources- Lower Chart: “Strategic Insights of the Global Carsharing Market”, Frost & Sullivan, 2014; 2014 New York City Taxicab Fact Book; Uber

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LA_PublicVersion(Bleed3175)_ENG_V22.indd 110 10/28/15 1:28 PM CROWDFUNDING/ CROWDSOURCING MAY Crowdfunding has raised an estimated US$ 20 Billion-plus for start-up enterprises since 2010. PRODUCE US$ 500 BILLION Today, there are more than 500 crowdfunding platforms worldwide. While the US and Europe dominate the crowdfunding market, accounting for IN CAPITAL BY 2020 59% and 35% of funds raised in 2012 respectively, the World Bank estimates the potential market in the developing world could reach US$ 96 Billion by 2025. This is more than 6 times the amount of venture capital allocated globally in 2013, excluding the US (US$ 15.4 Billion)

Funds Raised Through Crowdfunding over Time (In US$ Billion, 2010-2014 and 2020)

(1) Estimate Forecast Total Venture Capital 500.00 + Funding Globally 500 (In US$ Billion, 2013)

10.00 + Rest of the World 10

15 (31.8%) 5.10 5 48.5 33 2.70 (68.2%) 1.47 US 0.85 0 2010 20112012 2013 2014 2020

Potential 2025 Crowdfunding Market in the Developing World (In US$ Billion, 2025)

China

Europe & Central Asia 347.8 30.1% 45.0

13.7% 13.8 Middle East & North Africa South Asia 23.4 47.6 23.4% 32.4 Latin America & the 5.6 15.1% Caribbean 4.9 6.1% Sub-Saharan Africa East Asia & Paciﬁc

6.5% 38.7 180.5 12.0% 66.9 2.5

8.0 11.0

Net Foreign Direct Investment (FDI) Inﬂows 2025 Crowd Funding (In US$ Billion, 2013) Market as % of 2013 FDI Crowd Funding Market (In US$ Billion, 2025 Projection)

Note: (1) Projection based on current growth rates Sources- Upper Chart: “The Rise of Crowdfunding”, Wall Street Journal, 2014; “Crowdfunding Seen providing $65 Billion Boost”, Entrepreneur, 2014; “Global Venture Capital Insights & Trends 2014”, Ernst & Young, 2014 Sources- Lower Chart: World Bank Databank; “Crowdfunding’s Potential for the Developing World,” World Bank, 2014

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