Growing up we’re taught to expect the worst from strangers: Their candy is poisoned. If they sleep on your couch they’ll also steal from you. And if you get into a stranger’s car, you’ll never see home again.
And yet we’ve grown to love companies like ClassPass, Airbnb, Uber, Rent the Runway, and Zipcar—companies built on trust among strangers. Yes, they’re inexpensive and convenient, but how is this “sharing economy” thriving when our trust in other people is lower now than at any point in the last 40 years?
According to PricewaterhouseCooper (PwC), “If trust in individuals and institutions is waning or at best holding steady, faith in the aggregate is growing.”
What that means in English: “While I don’t trust you, Random Guy Driving Me Home, I do trust the 4.9-star rating from all the people who’ve been in your car before.” And maybe, “I don’t know much about you, Mysterious Traveler Sleeping in the Next Room, but the 12 other people you’ve stayed with during your trip have vouched for you.”
So what is it that transforms a skeptical population into a trusting customer?
Reviews. In a shared economy, reviews are the cornerstone that builds trust. They also give us insight into others’ experiences that either validates or outweighs our skepticism.
For Uber, every driver and passenger is rated on a scale of one to five stars. Drivers who have an average rating lower than 3-stars—as well as passengers who are less than ideal—are weeded out. For Airbnb, guests and hosts recount their experience with 500-word reviews along with four different star ratings.
Collecting positive reviews opens doors and sets an expectation for anyone interacting with you. And because negative reviews limit your opportunities in any sharing economy, they become an incentive to exert model behavior.
With the standards set, we took a look at some of our favorite “shared economy” brands and found a few important themes:
The vast majority of these companies have found a perfect balance between sophisticated algorithms and a human touch. ClassPass, for instance uses complex algorithms to curate the workout classes in your city and allow members to reserve a space online with ease. At the same time, real people respond to concerns or questions with honest, transparent answers.
They’re Affordable & Transparent
Successful companies are exceptionally transparent in their transactions, immediately disclosing what customers have paid—as well as when there are surcharges.
The best trust-driven companies have the best options available first. Airbnb is a great example: while seedy apartments may be listed by users, they rarely appear as primary options in a search.
All this adds up to four important lessons as we move forward:
- The sharing economy is no trend.
PwC projected this group will pull in as much as $335 billion in global revenue by 2025.
- Trust is built from hearing about others’ experiences.
The sharing economy isn’t driven by trust between individuals—or even between individuals and organizations. Rather, it’s built on the trust between individuals and the collective experience of others.
- The focus is on “access over ownership.”
Primary consumers in the sharing economy place less importance on ownership, and instead prefer sharing or renting. That’s because this market allows for lower costs, more convenience, and more control over your experience.
- Since trust has shifted, so too must our approach to gaining it.
Take tourism for example. Companies like Airbnb, TripAdvisor, Yelp, and others provide convenient lodging and honest restaurant reviews.
So how does a tourism board curate the same kind of recommendations without a review-based system? Can destinations create their own version of Airbnb? What about organizations like Visit Indy? Is there a way to harness the logic of a sharing economy and re-package it to encourage people to travel to the city we love?
While there are still many unknowns to the sharing economy—how it’ll grow or the ways it’ll affect other markets—we’re determined to stay on top of it. Hello, Airbnb International!