This post originally appeared on Wall Street Journal blog.
Have you heard of Airpnp? (And no, that’s not a typo for Airbnb.)
Airpnp is an actual service based in New Orleans, which allows “entrepeeneurs” to rent out their bathrooms to needy users (like Mardi Gras attendees with full bladders), who find available toilets via a handy mobile app. According to Airpnp’s founders, the service is expanding and poised to make a splash in dozens of cities around the globe.
Welcome to the new collaborative economy, which has extended way beyond spare rooms and shared cars. Pretty much anything can – and is – being shared for a price these days, from pet boarding (DogVacay) and boats (Boatbound) to conference rooms (LiquidSpace,ShareDesk) and expertise assembling IKEA furniture (TaskRabbit). These transactions aren’t always seamless and serious questions remain in many cases around legalities, taxes, security and insurance. But something extraordinary is obviously happening, which wouldn’t have been imaginable even a few years ago.
According to a new report by digital research firm Vision Critical, the sharing economy is far more pervasive than is generally thought. The firm surveyed 90,112 people and discovered that nearly 40 percent of Americans have participated directly in the collaborative economy – either buying or selling pre-owned goods online or using one of the latest generation of sharing sites, like AirBnB.
The transformation owes to a confluence of factors: the ubiquity of smartphones, the growth of the so-called “Internet of Things” (tagged and wirelessly tracked cars, goods, etc.) and a lingering economic downturn that has made bargain-hunting a national obsession. But at its root, the sharing economy wouldn’t be possible without something much more elemental: trust.
As little as a decade ago, trust was something that really didn’t exist online. When I was younger, I spent years on BBSs and the forums that populated the early Internet, without ever leaving a trace. No one used real names then; everyone hid behind handles. The Internet of that not-so-distant past was a Wild West – an anonymous space with little accountability and few community standards.
So what changed all of that? The first site where I freely volunteered personal information to the public was LinkedIn, which launched in 2003. Here was a serious tool to connect with colleagues and employers; hiding behind a goofy username was out of the question. LinkedIn – whether deliberately or not – incentivized transparency and gave people a reason to come out of the shadows.
Credit goes to Facebook for taking this a huge step further. Tacitly, then explicitly, Facebook imposed a real name policy on its users. Handles, pseudonyms and even nicknames were ultimately barred. The eye-opener here, of course, was that volunteering personal information – in many cases – made everyone feel safer, not less safe. Connections made online had real world implications, leading to greater accountability, more civility and a sense of community that extended beyond the computer screen. (Whether, having shed our anonymity, we’ve now swung too far in the opposite direction – as seen in the recent wave of #aftersex selfiesposted on Instagram – is another blog post entirely.)
This willingness to share updates, photos and personal information online ultimately made possible today’s collaborative economy. Social media cemented the idea that the Internet was a place for interacting with real people and that a virtual community could self-police, vet and validate its members. “The collaborative economy today works because trust can be verified electronically through social networks,” notes one of the authors of the Vision Critical report, Jeremiah Owyang. “Social media lets the collaborative economy run smoothly.”
Airbnb, poster child for the new sharing culture, offers a great example. The site functions a lot like a social network. Guests (using real names, of course) rate and comment on hosts and, in return, hosts post feedback on guests. Subpar properties and problem users are quickly ferreted out by the community, whose members have built up a critical level of mutual trust. Deeper still, Airbnb – like many marketplaces in the collaborative economy – is also backed indirectly by Facebook. Users who log in via Facebook can automatically see not just ratings from other guests but also which properties their Facebook friends have stayed at – adding an extra layer of trust and personal connection.
In fact, it’s hard to overstate how central Facebook is to the sharing economy, so many of whose participants log in and interact using their Facebook credentials. Because it’s exceedingly difficult to fake a Facebook profile – and because that identity is verified over and over again through countless interactions with friends, colleagues and companies (the all-important “social graph”) – Facebook has become the defacto notary of the digital age.
All of this raises an interesting question, posed by insiders like Owyang and others: Is the collaborative economy just a new type of social media, where things are shared instead of updates and photos? “The first phase of online sharing is media and ideas,” Owyang explains. “The second phase is using the same principles to share the physical world.” The collaborative economy, just like social media, is decentralized and crowdsourced. It runs on a unique mix of technology and trust. Anyone can share, and just about anything – even a “Porcelain Paradise near Jackson and St. Charles” during Mardis Gras – can go viral.