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Implications for participants

Implications for participants

The sharing economy has some important implications for people who engage in peer-to-peer access. It provides the opportunity for participants to draw extra income from their skills and assets.

However, the sharing economy can also be unsafe or hazardous for participants. Last week we discussed discrimination of certain users, but there are more implications. Considering the ones offering goods and services are not legitimate and certified businesses, they might be unsafe to use. An example is the fire-safety of rooms rented out on airbnb. Alternatively, people offering services might suffer losses because the product they lended or rented out is destroyed by the user.

The Importance of Trust
Trust is the currency of the sharing economy. For instance, peer-to-peer access is built on trust—trust to let someone into your home, cook your meal or walk your dog. To create a level of trust between formerly complete strangers, companies in the sharing economy made ratings and reviews a core part of their business. These ratings and reviews about the users reveal their history and give other users an estimate of how trustworthy the person is.

When you purchase a product on Amazon or when you find a restaurant on Yelp, you are more likely to base your decisions on other people’s reviews of the product and the restaurant. This is most likely because you trust that such customers are providing an unbiased information on the “true” experience with the product or the restaurant. Similarly, in the sharing economy we use other people’s experience with a participant to know who to trust to exchange with.

On airbnb for instance, both the host and and the guest have to provide reviews on each other. A bad review by a guest could mean you cannot be trusted to provide decent accommodation as a host on airbnb. A bad review of a guest by a host could mean people cannot trust you to share their homes with that guest. Thus, feedback provided in the sharing economy through sites like Airbnb and TaskRabbit creates a virtual resume of trust that can deeply affect those who participate in the sharing economy.


Activity

Look-up 5 Airbnb listings in your neighbourhood. Scroll down to the bottom of the listings to have a look at the ratings and reviews for all hosts. Are the reviews from different guests consistent? When comparing the reviews to the description of the room, do you find large differences?

Post your findings in the Comments area.


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This article is from the free online course:

Business Futures: the Sharing Economy

RMIT University