The rise of the sharing economy has been phenomenal. We depend more on complete strangers today than on people who are part of our core circle—we share cab rides with strangers, we get food delivered by strangers, we live in strangers’ homes during vacations.

Companies such as Amazon, Facebook, Google, Salesforce and Uber have created online universes that enable a wide range of human activity. Platform or sharing economies have allowed individuals and groups to make money from underutilized assets by drawing resources from a distributed crowd that inhabits digital spaces.

Despite this, we also often hear that “trust is declining" in the world. This seems counter-intuitive to the rapid rise of everything-as-a-service (XaaS). So, is it that we trust institutions and governments less, but trust other individuals more?

Debates around data privacy and security are many, but firms in the sharing economy understand the fundamental notion of designing for trust.

In July 2018, NewCities, an international non-profit working towards making cities more inclusive, launched a new research initiative, Designing for Trust: Security, Privacy and Collaborative Consumption, “to examine trust as an unexplored pillar of the sharing economy and its impact on behavioural patterns in cities". It looked at how features urban life intertwined with those of the sharing economy and trust came out as the binding factor.

Driving autonomy

Media theorist and author Douglas Rushkoff puts emphasis on driving human autonomy in the digital age. Sharing economies that centre on the core values of connection, creativity and respect find success and build lasting trust in the market.

In a recent PwC survey on the sharing economy, 89% of consumer panellists agreed that the sharing-economy marketplace is based on trust between providers and users, and 69% said they would not trust a sharing-economy company unless recommended by someone they personally trust.

Another PwC study on consumer attitudes toward brand leadership found that consumers today gravitate toward qualities like trustworthiness, authenticity, and reliability—compared to 1999, when they associated brands with qualities like innovation.

The emphasis on these values is only going to rise in the coming decade. Review and rating-based reputation systems form a core part of trust building across any digital interface. This is the most basic measure of “institutionalizing" word of mouth and exposing users to credible sources of feedback—other customers.

A 2017 Brookings report states more information shared on an online platform can lead to greater trust between users, but it can also lead to racial and gender bias. Hence, companies must work to combat bias on their platforms, both in their algorithms and users.

While there is a lot of talk about connecting humans as the core philosophy of these apps, the apps tend to mostly keep the peer-to-peer connection minimal. Riders don’t see other riders on Uber, customers on Swiggy can’t chat with active customers in their area and ask for suggestions.

So, who is the authority to decide what quantity and quality of information is enough for users to hop on to a platform and deem it trustworthy? How minimal or expansive should the connect be between different players in the ecosystem? Since the sharing economy was highly disruptive, governments around the globe were left playing catch-up with the required policies and regulations.

India, like many other major markets, has been facing issues in attributing liability appropriately. We could probably study examples like the TrustSEAL, the world’s first seal of approval to validate sharing economy platforms. It is a form of self-regulation for sharing economy firms to build trust with consumers. It was initiated by the Sharing Economy UK, which was created in 2015, as one of the first independent trade bodies representing the sharing economy community.

The sharing economy has successfully made its way around global markets and has substituted the core principle of ownership with accessibility.

The ongoing efforts to increase trust between market players, governments and civil society have paved the way for radical changes in how individuals work, socialize, create value in the economy, and compete for resulting profits. It will benefit firms to design an organization-trust strategy that analyses all existing business activities of the organization in terms of whether they inculcate or erode trust.

Purpose-driven brands that prioritize a greater goals over raw bottom-line results not only perform commercially better but are also thriving players in what can be called the trust economy.

Write to us at businessoflife@livemint.com

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