Lessons Learned from Sharing Economy

The two leaders of the sharing economy Airbnb and Uber have now developed from questionable startup services into matured companies transforming economies and industries. Despite numerous regulatory issues, the sharing economy continues to grow, urging traditional companies to rethink and readjust their business models.

We have witnessed how the economy based on “access to” rather than “ownership of” goods, skills, time and space eliminates environmental concerns, improves efficiency and connects people. Sharing economy has become more than just a trend or a business sector, it’s a socio-economic movement stemming from  political, cultural and environmental concerns.

So what are the key drivers behind this booming movement? First of all, there are significant technological drivers such as the increase of P2P technologies, the rise of mobile and social networking that create an excellent environment for users to interact, collaborate and share. These technologies have propelled the sharing marketplace by making immediate and impulsive purchases possible. The experience of sharing, communicating and completing transactions has become completely frictionless.

The second driver of collaboration and sharing is related to socio-economic factors such as desire for communication, environmental concerns, and cost consciousness. More and more people are becoming dissatisfied with the consumerist culture, turning to more sustainable and interacting options.

So what fundamental lessons can be learned from booming sharing economy startups?

1) Transparency Rules

Sharing economy has transformed our attitude towards collaboration, suggesting that it is safe to do business and share goods with strangers. In peer-to-peer marketplaces, users start off by verifying their identity to increase trust, and from there start developing their reputations. This model demands a high levels of trust. Adding more transparency and reducing the fear and friction that can occur when strangers do business is key.

2) More Humanity in Communications

Conventional terms of service agreements, and cancellation policies with boring details are now substituted with engaging taglines, and smart banners. This approach incorporates the trust-based model into your brand while delivering the message in a noninvasive way. This adds friendliness into the whole experience making it more personalized and inviting.

3) Make Liability Part of Your Brand

In order to associate your brand with security and trust you must deliver a clear message about your liability and safety policies. Unfortunately, many companies learn this lesson the hard way. Airbnb had to take immediate action after the case of vandalism that had the potential of paralyzing the company. After the incident, Airbnb has developed a comprehensive Trust section outlining renters verification process and reimbursement for home damages.

As sharing economy continues to boom, we will be keeping a close eye on the main pillars of this movement, learning more lessons on trust and collaboration.

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