The Future Of The Sharing Economy Depends On Trust
The sharing economy is growing and growing fast — potentially doubling in the next 12 months. Right now, nearly a quarter of the population of the U.S., the U.K. and Canada engages in some form of economic sharing, whether that’s renting a spare bedroom on Airbnb, a spare driveway on JustPark, a prom dress from Rent The Runway, a neighbor’s car through RelayRides or giving away unwanted stuff on Yerdle.
Sharing saves people time, money and aggravation. But what really greases the wheels of this fast-growing economy is trust; it’s what allows someone to take a ride from a stranger or rent a room in a house from someone they’ve never met. Yet it’s also one of the biggest concerns of using sharing economy services.
According to Pew Research, only 19% of Millennials believe most people can be trusted, while 31% of GenX’ers do. If the future is a peer-to-peer marketplace, it will require increasingly reliable, innovative ways to identify those peers. Making sure this emerging economy has high standards and strong values will allow it to continue to expand.
Sharing economy companies are beginning to understand the importance of that trust. In April of 2013, Airbnb added identity verification to its platform, adding more transparency and reducing the fear and friction that can occur when strangers do business. In a peer-to-peer marketplace, verifying user identity increases trust, and from there users begins to build their online reputations.
Airbnb was one of the first, but for the sharing economy to continue to grow the way it has, businesses will also have to find ways to authenticate the identity of consumers. That’s not as straightforward as it might sound. The peer-to-peer business model is more complicated than the business-to-consumer model. For example, not everyone using sharing economy services has a driver’s license or passport to upload, and they may not have a profile on Facebook or LinkedIn. But as more and more of us around the world start to interact in the collaborative marketplace, there is a real need for both quality and trust metrics.
Verified identity helps peel back the first layer of trust between strangers, which is crucial for the success of the sharing economy. This is the problem we’re trying to solve at Trulioo. We help international businesses verify identities online through our electronic identity verification product GlobalGateway, which currently provides identity authentication for over 3 billion people in more than 40 countries.
Clearly, technology and data are the big enablers in all of this. Put simply, we have created massive amounts of information about ourselves because of everything we do on and offline. And all of that data can be enormously valuable for putting together the puzzle of someone’s identity, especially for those who don’t possess more traditional ways of being verified. On their own, most of those pieces of data aren’t enough to understand just who someone really is, and they aren’t particularly well organized. But collect these pieces together, organize them, analyze them and they become an alternative — and surprisingly accurate — way to verify identity. Early adopters that have leveraged social data as an alternative, or as an addition, to the traditional forms of identity include Airbnb, eBay and Paypal.
With 2.7 billion people now online, we should continue to harness data to help put more certainty into the peer-to-peer marketplace, so that it can continue to grow and thrive. The more trust we have in our peers, the more sharing — and renting and bartering and trading — we’ll all be able to do.
This article originally published on Forbes.com
Stephen has founded and successfully sold several consumer data focused start-ups over the last decade. As a serial entrepreneur, Stephen likes to challenge the status quo and if it’s broken, he likes to fix it. In 2011, the identity veteran started his most recent startup, Trulioo, to help build a trust layer into the Internet, and fix the problem of broken identity that today affects so many online businesses.