It’s Trust Or Bust For The Sharing Economy

Posted Friday, August 1st, 2014 by Sterling Talent Solutions

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It's Trust Or Bust For The Sharing Economy | SterlingBackcheck

The sharing economy has changed how we do business. It used to be that when you stayed out of town, you booked a room with a brand name national hotel chain. When you needed a ride, you simply called or hailed a taxi. Those days are fast disappearing as 39% of Americans participate in the sharing economy on some level and opt to buy or rent what they need from fellow consumers. Whether it’s AirBnb for a place to stay or Lyft for a ride to the airport, there has been a rapid shift to C2C style transactions. And the growth doesn’t stop there; 48% of the most active sharing group falls between the ages of 18 and 34 years old. Proponents argue that this is the commercial model of the future – it’s more cost efficient and environmentally-friendly. But the looming question from skeptics – is it safe?

For those who hesitate to jump on the what’s mine is yours bandwagon, it often comes down to an issue of trust. How can you trust a complete stranger? As you hop into the passenger seat beside a driver who you’ve never met before, you don’t know if they have a valid license or insurance. If you’re renting a room for a few nights or surfing the couch of a complete stranger that you met online, how do you know that they aren’t going to rob you blind – or worse? It’s a valid concern and companies in the emerging peer-to-peer sharing industry are challenged with putting their consumers at ease. Things like user reviews and ratings – a tactic used with success by eBay – start to build trust in the network but this can take time. And unlike eBay, a user review may not offer enough security to get into a car with a stranger.

One idea is for peer-to-peer sharing platforms to engage in some sharing activities themselves. Many consumers would like to see these platforms work together by sharing their data, specifically relating to banned users, complaints, reviews, and ratings. A centralized system could result in every sharing economy participant having a FICO-like score associated with their performance. Consumers could go to one place to find out if the person they are renting goods or services from has a good reputation across all of their sharing transactions. Unfortunately, the companies offering these platforms are self-admittedly young and in the middle of an aggressive growth spurt. Most are not interested in sharing data with competitors.

Lawmakers across the country are starting to weigh in and offer regulatory proposals to create greater trust in the sharing economy. In May, the Chicago City Council passed an ordinance making it mandatory for drivers participating in ride-sharing to undergo drug testing and background checks. For drivers working more than 20 hours per week, they will need to obtain a chauffeur’s license.

Background checks are one easy way that the sharing economy can build trust within their network of providers and users. Third party background screening companies provide an established method for validating the criminal history, driving record and even drug use of a person who might be driving you to the airport. It’s already fairly common practice for contractors, health care providers and other home-based service providers to undergo a background check first before entering your home. Trust is the best currency to boost our new sharing economy.

SterlingBackcheck provides background checking services that make the sharing economy a safer place to buy or borrow from other consumers. Whether it’s ride sharing, a place to say, or household services, the peace of mind provided by a background screen is well worth the cost.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.