Exploring The Trust Economy: Uber, Airbnb and Wandaroo
Uber, the world’s largest taxi company , owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation, owns no real estate.
– Tom Goodwin, Tech Crunch
Strangers. How did something that seemed so taboo a few years ago become so mainstream? Would you have guessed five years ago you would actually consider staying in a complete stranger’s home, let alone getting into a car with them? It seems like the type of thing we were raised to be cautious about — like looking both ways before crossing the street.
Today, most of us wouldn’t hesitate to do all of the above, which brings me to my question: At what point in time were we instilled with fear? I see the sharing economy taking us a few steps back in time. I’m imagining communication by post or messenger, no public transit systems, long journeys on unpaved roads, etc. I would think back then people might have been a little more reluctant to open their doors and take in travelers and passer-bys on their long journeys. When did this all disappear? When did strangers become a threat rather than an opportunity to make new friends or meet great people? These are all intriguing questions on the verge of becoming relevant once again. Somehow, with the rebirth of the sharing economy, people are once again opening their doors for complete strangers. What changed?
AN ATMOSPHERE OF TRUST
Many of us view the Internet as an opportunity and as a new frontier of possibilities. Others view it as as a burden, an industry crusher, something terrible and invasive, but I think it has actually brought us all back together and maybe even closer than before. The progression of what the Internet is becoming, along with major advancements in current technologies ranging from tech that allows us access to the web, better algorithms and machine learning technologies and the growth of open-source networks are creating opportunities for new markets and ways of connecting with more people everyday. Maybe we are so connected and have shared so much of our lives with other people that we’ve slowly formed a bond with curiosity itself.
An intriguing thought: could social media have went viral just like reality TV because there is something so genuinely intriguing about other people’s lifestyles whether it serves as entertainment or inspiration? Today, we form bonds with people we don’t even know and can find someone we relate to and “connect” or “follow” them. This new connectivity has broken a barrier between people. It has created an atmosphere of trust — an atmosphere that has allowed sharing platforms to thrive and spread like wildfire.
Uber, a rideshare company, is a platform allowing individuals to use their own cars and give a complete stranger a ride to wherever they’re going. In an awesome exchange, drivers make money with their car and riders get a decently discounted lift. Originally founded as “UberCab” in 2009, Uber is both the biggest and fastest growing rideshare company in the world.
Uber is an interesting concept that seems so simple, yet we are hardwired to never get in a car with a stranger. So how did Uber become the sensation it is? When did we put so much trust in a stranger that we will now hop in the car with them without hesitation? Perhaps the concept isn’t so far fetched. Many of us have had some sketchy cab rides, yet we still continue to use the service. Why? While I may not have a decent answer, I do know it doesn’t feel anymore foreign being in someone’s personal car than it does being in the back of a cab, and along with a usually good conversation, it’s significantly cheaper than taking a cab.
Airbnb, a real estate sharing company, is a platform allowing individuals to rent out their homes to complete strangers, whether it’s a single room or their entire home. Homeowners make money by sharing their home and guests get a discounted stay. Originally founded as “AirBed & Breakfast” in 2008, Airbnb is the number one provider of real estate and overnight rentals in the world.
The thought of allowing a complete stranger into your home a couple years back probably shouted an instant ‘no’ in your head. Yet, Airbnb gained an incredibly large user-base and continues to grow. In an article written by Ryan Lawler from Tech Crunch, he talks about 2012 when Airbnb commissioned a study to find the impact of a peer-to-peer lodging marketplace on the local economy of San Francisco in comparison to the hotel and tourism industry. The results showed from June 2011 — May 2012 Airbnb guests spent an average of $12.7 million in lodging and an additional $43.1 million that went directly to local businesses. The money that guests were saving on their stay was being poured back into the local economy, thanks to longer stays and affordable rates. That’s huge! Some hosts are so passionate about their guests having a great time in their city that they operate like a bed & breakfast and even help with finding things for guests to do on their visit. With Airbnb, the fear of strangers in our homes seems to be dissipating as we see opportunities for new streams of income and a great opportunity to meet new people.
Wandaroo, an experience sharing company, is a platform allowing locals to create custom experiences, which travelers can book. In this exchange, locals make money showing off the best of their city to travelers while travelers get to see the best of their destinations for an affordable rate by the people who know their city best. Founded in 2014, Wandaroo is taking on a new sharing market, aiming to be the most exclusive traveler resource for destination adventures and experiences.
With the growing sharing economy and an apparent shift in how people are classifying trust, we have now offered up our vehicles and opened the doors of our homes to strangers. In what seems like a leap forward yet an odd step back in time, we have once again become a trust economy. If we are opening up our personal doors to people, then why not also open the doors to our cities and show them what being a local is all about? With no physical asset, locals can now offer nothing more than time to share the best of their city and provide travelers with unforgettable experiences. Additionally, locals and travelers aren’t the only ones that benefit, now entire cities can benefit by creating new markets for tourism and adventure, ultimately stimulating the local economy.
A VIRTUAL TWIST
The above and a handful of other companies are paving the way for the growth of a sharing economy (or should I say a trust economy) that is rapidly evolving. As we move forward into this frontier of trust, services and experiences that were once readily available and have slowly faded into the past are being reintroduced with a virtual twist. I think it’s fair to say that the trust economy is just getting started and that we have a pretty exciting future on the horizon.