About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

Impact in the collaborative economy – the evidence so far

Not all collaborative economy companies measure their impact. They do not all measure the same things, and do not pursue the same strategies to do so. And the data quality varies greatly, as does the level to which it is openly and transparently shared.

To evaluate the state of impact measurement in the collaborative economy, I’ve reviewed publicly available evidence of impact for all the companies and initiatives in Nesta’s recent report.

So, what kind of impact do these organisations actually measure, and what methods do they use?

Measuring economic ripple effects

Economic impact was by far the most common type of impact evaluated by the organisations we looked at. However, this tended to focus on the wider impact of a project’s activities –rather than the direct effects of their collaborative operational model.

Demonstrating that your initiative has broad, yet significant positive benefits is one of the most powerful argument a company can deploy to justify its continued existence. For example, ebay was able to show that access to international markets through its online platform improves business survival rates for small commercial traders from 30-50 per cent up to 60-80 per cent in eight emerging economies. This is a powerful argument for global policy changes in favour of eBay’s model.

However, this type of impact analysis requires a lot of data and sophisticated economic tools (which can still miss the broader social and ecological impacts).

Companies that have commissioned this type of analysis are thus, unsurprisingly, the heavy-weights of the private, for-profit collaborative economy: Uber, Airbnb, and eBay.

Other collaborative economy organisations have been able to generate ripple effect evidence by collaborating with external researchers. Peer-to-peer finance platform Zopa (along with other major alternative finance UK platform) have allowed Nesta and Cambridge University unprecedented access to their data in order to evidence the extraordinary growth of the alternative finance sector, and its potential. Independent research and evaluation also have the added benefit of increased credibility, which initiatives and companies can leverage to attract more participants and funding, or to lobby for favourable policies and regulatory frameworks.

Measuring environmental impact

Despite claims that asset-sharing is good for the environment (as it can reduce the amount of goods produced and discarded), very few of the organisations we reviewed actually measured their environmental impact.

Zipcar is a notable exception. Its founder says the company was created with a deliberate environmental impact in mind, and their website claims that each Zipcar takes 15 cars off the road. However, since there’s no detail about where that number comes from, as far as I’m concerned, this claim remains unfortunately unconvincing.

For the majority of others, environmental impact seems to be considered a desirable (but far from guaranteed) side-effect of the collaborative economy rather than a core aim of the platforms. Where companies do pursue green organisational models, these are largely limited to technical, internal measures which have little to do with the company being collaborative. For example, eBay’s interactive ‘energy efficiency’ dashboard shows quarterly improvements in the levels of electricity consumed and CO2 produced by its data-centres.

But good intentions don’t necessarily make for positive outcomes. When measuring impact, collaborative economy players should also assess whether their activities have unforeseen negative ripple effects. Zipcar’s environmental impact measures should also seek to find out whether lowering economic barriers through sharing assets could actually be increasing use- and thus greenhouse gas emissions. And eBay could weigh out the overall benefits of international trade with the environmental costs of increased import-export activity, which it has at times tried to locally address in practical ways.

General environmental practices should be commended, but it doesn’t tell us anything about the collaborative economy. If our review is accurate, then we’re missing a big opportunity to rigorously measure the environmental impact of the collaborative economy. Indeed, confirming whether asset-sharing has the environmental impact we assume could be a wonderful argument to convince more participants to take part, and gather support from local politicians and regulators.

Measuring social impact

Many organisations within the collaborative economy have also suggested that social values are fundamental to their operations. While non-profit initiatives were more likely to have social good as a primary goal, larger for-profit collaborative companies seemed to largely rely on traditional CSR strategies to argue their positive social impact.

For instance, Lyft launched its CSR programme in 2013, and Zipcar encourages its employees to volunteer in the community. Another example is Streetclub, a free collaborative online platform for hyperlocal organising and tool-sharing that was set up entirely by DIY retailer B&Q’s CSR fund.

Even where the company’s main metrics are not available publicly, CSR programmes are likely to be publicised and backed up with both qualitative data (pictures, films, case-studies) and quantified impact data. Ebay’s interactive visualisation of the typhoon-relief charitable giving enabled through its platform is particularly impressive.

A large number of collaborative initiatives also use their blogs to record positive social outcomes, posting users’ thank you notes or inspiring stories. However, these tend to be individualised tokens, used to give projects human warmth rather than treated as impact data.

The Furniture Reuse Network is one of the few organisations in the report to quantify its primary social impact. They claim that the furniture and appliances re-use sector supplied 950,000 low-income households (at an estimated saving of £340M), and provides 15,000 traineeship opportunities a year.

In this blog, we’ve explored the kinds of impacts collaborative economy projects seem to care about, and looked at the ways in which they measure it (or fail to). For clarity’s sake, we’ve so far rather naively ignored that publishing impact data and/or methodology is not an innocent act. Organisations pursue growth and commercial ambitions which publishing impact data can enable or constrain. The next post will review the political implications of impact measurements, and when and how some organisations strategically use impact data to help fulfil their goals.


Zoe Jacob

Zoe Jacob

Zoe Jacob

Intern, Policy and Research

Zoé was a policy research intern. She worked with Madeleine Gabriel in the Public and Social Innovation team.

View profile