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You Can't Always Trust The Sharing Economy

It has been great for some, but has been destructive for others

27Nov

Airbnb and Uber have changed the marketplace. Both companies are worth tens of billions of dollars, yet the average family owns more cars than Uber, and if you own a house, you own more bedrooms than Airbnb.

These companies operate using a new business model, and their rise has precipitated a number of business publications to call our current marketplace the 'sharing economy'. Airbnb, for example, acts as a facilitator. Founded in 2008, the company helps people rent out their rooms for short stays, taking a 3% commission every time a booking is made.

Having been celebrated for lowering the cost of accommodation and creating a new form of income for homeowners, Airbnb has come in for criticism recently. They are not alone either. Once compared to Rosa Parks for their willingness to tackle established laws, Uber's representatives have been in and out of court more times than any of their contemporaries, with the most recent hearing reaching the UK's high-court.

The taxi-hailing app is seeking clarification about whether their taximeters - which use GPS technology - can lawfully calculate a user's fare. If deemed unsatisfactory, the ramifications could be serious for the company's UK operations. In terms of reputation, Uber has been hit with some real PR nightmares. When one of its drivers attempted to abduct a passenger - the perpetrator returned the passenger after she started screaming and attracting attention - Uber barely acknowledged the incident, calling it an 'inefficient route' and allegedly refunding only part of her journey.

This goes against the general discourse surrounding the sharing economy, Uber and Airbnb in particular. Instead of being the Robin Hood of the taxi market, some of Uber's actions would seem to show that the company is all about the user, until they get in trouble. Airbnb - while appearing more pro-active in their stance towards misuse - have been in their fair share of ethical scrapes as well. Recent reports claim that the service is being used for 'hookups' - with hosts renting our their home for the sole purpose of having sex. Although not always met with displeasure, one user, in an interview on Business Insider said: 'I literally had to run away from my host in Paris and report him. [the host]' She later said: 'I got seriously afraid but I didn't want to say anything as I was scared about his reaction. The worst was on Sunday morning when I woke up and he was staring at me.'

Situations such as these are expected, but it's up to the company to issue a response which puts everyone's mind at rest. After the incident she complained to Airbnb's customer service team, but the company's response almost trivialized the incident. The email stated: 'ultimately it's your word against his' and that they couldn't take his money away. Although they did give her a £60 coupon, it's only recently that Airbnb has promised to investigate the case further, suspending him until the case has been resolved.

We shouldn't forget that both Airbnb and Uber are young companies, still learning about their customers. It is clear, however, that trust is crucial. Andi Piftor [https://medium.com/@pufan] raised an interesting solution. The sharing economy's scope is such that we can use it to order food, host people and hire service professionals, so why not create a cross-purpose trust platform? As Piftor states: 'If I proved to be a responsible driver when renting your car, that already tells you something about me, as opposed to a blank slate. Why can’t that experience count when I am looking for a host on AirBnB?'

Something has to change. The driver - who Uber have been quick to remind everyone isn't actually one of their employees - now has the women's home address - and as she explained to Piftor over the phone - she's so shaken up that she's moved into a hotel.

These occurrences stand as a reminder that although the sharing economy lowers prices, it can also be dangerous.

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