Focus Magazine BNP PARIBAS

Five million nights have been booked on Airbnb in the past six months alone. 30 million rides have been shared on Carpooling.com. This year, two billion dollars worth of loans will go through peer-to-peer lending platforms. Mind blowing numbers, don’t you think? A couple of years ago, renting an apartment or a bedroom is a stranger’s house seemed like a crazy idea. Now, what’s happening these days, is humans begin to understand the power of technology which helps to unlock the idling capacity and value of all kinds of assets, from skills to spaces in ways never possible before. It is a new economic culture of collaborative consumption, through which people are becoming micro-entrepreneurs.

The collaborative economy is partially something that is called a shared economy. Sharing consumption is the economy of supply. You have something “extra” that you do not use, and you offer it to others. Sharing economy is an economy of abundance instead of an economy of scarcity. Think about it, all commercials are built on one principle: it makes us want something that is «missing» from our life (health, beauty, rest, luxury, freedom), by offering goods to compensate for this scarcity. The sharing economy is completely different: you understand that you have something «additional», and you share it. This makes you feel freer, happier, feel like you are creating value.

However, the magic behind collaborative consumption does not lie only in making money for living, but in creating trust between strangers by using the power of technology. Some studies say that an active Facebook user is three times as likely as a non-Internet user to believe that most people are trustworthy. Using technology as an instrument to build meaningful connections, in a way rediscovers humanity that we all lost somewhere on the way in the last decade. As Rachel Botsman explains in her TED Talk back in 2012: “The currency of the new collaborative economy is trust”. You need to have trust in order to buy a product that is not new or lend your house keys to a complete stranger. In such terms, e-reputation becomes extremely important. Rachel says that reputation is a currency that will become more powerful than our credit history in the 21st century. Reputation will be the currency that says «you can trust me».

Sharing economy companies started to understand the importance of trust in early 2013. Airbnb, for example,  introduced identity verification to its platform, this way creating transparency and the fear that users might experience when renting out from or to a complete stranger. Identification of the owner of a flat, along with reviews from the people who stayed there previously helps in creating their online reputation. However, the uncertainty does not only come from the side of a person who is renting a place but also from the owner of the flat towards the lodgers. Here’s where an issue of customer identification arises. As more and more of us around the world start to interact in the collaborative marketplace, there is a real need for quality and trust metrics for both the provider and the user of the service. Trust is an elusive concept, and yet we depend on it for our lives to function. A trust leap happens when we take the risk to do something new or different to the way that we’ve always done it. Do you remember when you first bought your airplane ticket online, or the first time when you traveled by BlaBla Car or renting a room through Airbnb. Those are all examples of trust leaps. In the 21st century, there’s a clear tendency of shifting from institutional trust to unknown trust. People are coming to a realization that reputation that they build online has value beyond the environment where it was generated. And that is what makes it so beneficial. In the 21st century, new trust networks, and the reputation capital they generate will probably reinvent the way we think about markets, power, and personal identity, in a way that we can’t even imagine.