The Sharing Economy and Rentals
Why It Works: Trust, Ratings and Low Transaction Costs
Smartphones, digital payments and two-way ratings made it easy and safe to deal with strangers.
Technology solved trust problems.
Search
Apps find a nearby match in seconds.
Trust
Reviews and profile verification reduce risk.
Payments
Digital payments remove cash hassles.
Insurance
Platforms often offer some protection for both sides.
Two-way ratings
A rider rates the driver, and the driver rates the rider, both building a reputation.
Assuming ratings are perfect
They can be biased or gamed.
Key takeaways
- Apps cut search costs.
- Ratings build trust.
- Digital payments simplify deals.
- Insurance adds protection.
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