Cultivating Trust in the Sharing Economy

Trust is complex. It’s difficult to gain and hard to maintain, and there are many different factors which contribute to it. It’s at the core of any human relationship and plays an important role in business, too. So, as a company, what can you do to establish trust within your platform? How can you make sure it isn't a barrier preventing people from joining it? Earning a customer’s trust and keeping it is one of the main challenges for the Sharing Economy industry.

Sometimes earning a customer’s trust is simple because there is just one barrier — such is the case with mobile payment: once consumers overcome the fear of paying via their phones, they have no problem using the service. More often, however, there is more than one issue hindering the on-boarding process: potential customers may be afraid of receiving payments from someone they don’t know, have safety and insurance concerns or be wary of leaving their possessions in the hands of a stranger.

We’re going to examine the key questions around establishing trust and keeping it through time and change.

Building trust

If you are part of the Sharing Economy industry, chances are you are also in a startup company. While most people love the concept of entrepreneurship and innovation, many are not so keen on actually spending money on your service, as it hasn’t been verified. So, what are the challenges your particular business will face?

Broadly speaking, there are three kinds of trust within the Sharing Economy: a) trusting someone with your possessions; b) trusting someone with your personal safety; c) trusting someone is as qualified as they claim to be. Sometimes a business will be touched by one of these; other times, it will be affected by all three.

For instance, platforms such as Airbnb rely on their users to trust each other, arguably, with their most valuable possession: their house. Whilst this opens up many opportunities, it also opens up risk and, naturally, a certain level of security is needed. Services like Uber or BlaBlaCar, on the other hand, involve the user having faith in the person at the wheel. The nature of trust required of your users, therefore, will depend on your specific business, what you offer and what you expect from your customers.

Introducing new features

The challenge of identifying trust issues is that they will shift every time you change a fundamental feature of your business, as trust and the way your business operates are intrinsically connected. For instance, if a company decides to introduce a currency system (e.g. Echo’s ‘hours’, where users offer an hour of their expertise in exchange for another hour of a peer’s expertise), they need to understand how to generate trust in that currency.

Should a user not trust the currency, or not understand the value it represents, the business suffer from it. Without ensuring that the process is fair, accessible and clear to all users, some will start hesitating whether, if the example is sharing an hour of time, their hour is worth more than someone else’s.

Relying on third parties

Once trust among customers has been established, a company will begin to grow. While this is good news, expanding your business will affect operations. Doing everything in-house might become an impossible feat and you might need to rely on third parties to assist you with volumes. For instance if, as a tutoring company, you resort to a recruitment agency to bring in new tutors, you still need to guarantee to your customers that everything and everyone is in order. To this end, it is the company’s responsibility to carry out checks on all new tutors hired by the recruitment agency.

The difficulty here lies in finding the balance between growing your tutoring business and keeping track of the new teachers coming in so as not to expose yourself to risk. In-house background checking services will provide your company with the necessary tools to ensure your services are efficient and trustworthy.

Growing your community

You started out as an unknown, unverified company, have earned your customers’ trust and have managed to retain it while growing your business. This is all great. Now, however, your volumes have increased to the point where you need to establish new rules in order to maintain the existing levels of trust.

It all comes down to who your customers are, where they are located and how large your community is. When Facebook first started, it was made up of people from the same institution — Harvard University — who wanted to socialise. Through network effects, this spread to other universities and the company expanded. Initially, the trust issue was very small because everyone knew each other and any fraudsters could be easily identified; the link to the real world was sufficiently real. As the network grew to connect its users on a completely digital level, the way people trust the website and one another has changed. Facebook is now being pressured to introduce more forceful policies, both in terms of content management and in terms of individual verification.

You will need to think of ways to make up for the distance among your users using digital means. Customer reviews, ID verification or facial recognition systems can all compensate for how detached your customers are from one another.

It is a universal truth that successful companies must always take into account their customers. In the Sharing Economy, it is a a basic law of survival: no users, no platform. Always bear your users in mind. Grow, expand, move forward, but keep your feet on the ground and remember it was your customers who got you here in the first place. Their trust is your most valuable asset.

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Patrick is a Biz Dev at Onfido, and he's all about helping companies onboard more customers and prevent fraud. In his spare time, he learns code and hikes in the internet-less parts of this world.