Why trust is key to growing the sharing economy

Over the last few years, we’ve seen a rapid rise in the number of companies capitalising on the sharing economy. New technologies have spurred on collaborative cultures and made lending to and borrowing from a global network of neighbours to make the most of unused resources the new economic norm.

However, with recent figures from PwC estimating that the sharing economy could be worth £140bn in less than 10 years, it’s clear we’re only at the tip of the iceberg. With the industry still ironing out problems with credibility, trust and perhaps most importantly for the likes of Uber and Airbnb, regulation and backlash from traditional industries, there’s far more groundwork to lay.

What’s clear is that for the industry to move forward, we need to engender trust on all fronts, between platforms and their users, as well as throughout national and global communities. So how do we do this?

Put guarantees in place

It’s vital that companies within the sharing economy do not compromise on the quality of the service they provide. As an industry, the sharing economy essentially asks people to act against their instincts and trust strangers with their possessions, so it’s essential to ensure there’s adequate vetting of all participants to allay concerns.

If a user were to rent out their car for example, how do you ensure the renter is a responsible and reliable driver? What happens in the unlikely event of an accident or damage to the vehicle? Equally for renters, how do you support them if the vehicle does not come as described? Perhaps more so than in any sector, relying on a peer-to-peer model means it’s essential to have clear and transparent communication channels in place to ensure that relationships start on the right foot and expectations are clearly articulated from initial enquiry through to completing the rental.

Love thy neighbour

While there are many safeguards peer-to-peer companies can put in place, it’s not just trust between a brand and a user that is required. Encouraging users to communicate with one another and understand the community they’re participating in is just as important in helping people to establish faith and goodwill. This can be done through channels such as user and host profiles, reviews, ratings and feedback, and forums that enable members to share best-practice tips with one another, adding a further level of transparency to the process.

Encourage entrepreneurs

The rise of micro-entrepreneurs using sites like Airbnb and easyCar club – acquiring multiple apartments or cars to increase earnings – heralds the increasing professionalisation of P2P platforms. Following hot on their heels are service management companies like Guesty and City Relay that will take some or all of the administrative and logistical strain, improving the consistency of experience and helping to build a brand reputation. eBay has been through a similar evolution with the very small scale P2P nature of transactions in the early days being overtaken by the volume of transactions from large sellers whose business comes increasingly to rely on the ratings it receives.

'Co-opetition' is the key to success

Of course, creating direct links between peers to make the most of their unused possessions has disrupted a number of traditional industries, such as hotels and taxis. To date, the response has largely been retaliatory, but if trust could be established between both sides to develop a system of co-operative competition, recognising the benefits and strengths of both models and the differences between the consumers they serve, this could allow both newcomers and traditional businesses to continue to thrive in the evolving economy. For example, the availability of private houses and apartments for short stays could help hotel operators satisfy even the biggest spikes in room demand, and better use of idle cars could help traditional rental firms satisfy demand fluctuations without building excess capacity.

Trust affects all aspects of the sharing economy and is key to growing the industry. It’s not just limited to a brand and their consumers, but must be created and maintained at all levels, within the community, as well as between other businesses and regulatory bodies.

Ultimately the sharing economy relies on authentic peer relationships – it cannot risk those relationships by pushing human connections to the side.

Richard Laughton, CEO of easyCar Club

Image source: Shutterstock/Natasa Adzic