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The Rise of Collaborative Consumption

Insider Blog: Trust and Collaborative Consumption

Trust and Collaborative Consumption

Stephen from Crashpadder gives us some insight into how they create trust between strangers.

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By Stephen Rapoport on March 4, 2011

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A CC Blog Guest Post by Stephen Rapoport, founder of Crashpadder.

Since the industrial revolution, Western societies have become increasingly dependent on large, national and global organisations to supply goods and services. In many respects the benefits of consuming via global companies are clear, including:
a) increased scale economies
b) highly specialised suppliers.

However, in other instances, consumers’ needs are not best served by multinationals and this means we pick up the tab for unnecessary corporate overheads. In these cases the consumer is offered a narrower range of poor quality products, often at an inflated price. We’re now a society that has become addicted to multinationals and we’re paying the price. We are in this position for a number of reasons, but these reasons are becoming increasingly easy to overcome…

Bigger = Safer …doesn’t it?
We’ll often choose to transact with multinationals because of ‘trust issues’. We are encouraged to mistrust the minor inconsistencies that arise when one relies on a larger number of small suppliers. These inconsistencies are most pronounced when you consider peer-to-peer commerce - also known as Collaborative Consumption, or ‘buying things from strangers’.

Obviously, when it comes to Collaborative Consumption, each transaction and each product are different. It’s like comparing a shop-bought, pre-packed sandwich with a home-made one (as we elaborate on in ‘The Great Sandwich Allegory’); there are clear benefits to both but the fact that the latter is less ‘formulaic’ doesn’t necessarily make it any less delicious.

Tackling trust issues.
To address this issue in any depth we need to consider two key questions:
1) Is our mistrust of smaller suppliers justified - or are we modern-day consumers just too cautious?
2) How can we discern which of our concerns are justifiable and which aren’t?

Technology holds the answers to both of these questions. The safer consumers feel in transacting with smaller suppliers, the less cautious they’ll become. And, by increasing the number of transactions conducted with smaller suppliers, the more consumers will be exposed to the benefits and shortcomings of peer-to-peer commerce. Then, assuming the relevant marketplaces take notice of any negative feedback and respond accordingly, the more prevalent Collaborative Consumption will become.

So, given it’s at the heart of the issue, let’s examine exactly how technology can empower consumers to trade directly with one another, rather than large multinationals.

Crashpadder.com - Collaborative Consumption in action
Crashpadder.com offers a collaborative alternative to hotels across the world. We operate a marketplace that enables people to browse, filter and book overnight accommodation in friendly local’s homes. We offer travellers an alternative to cheap hotels and short let accommodation, while hosts use the site as a sociable way to supplement their income.

Crashpadder_home.jpg

Homestays such as this have previously failed to take hold on a large scale due to trust issues. Opening one’s home to a stranger goes well beyond the simple type of peer-to-peer transaction that may take place on the likes of eBay - and so the trust issues are magnified.

However, due to the social nature of the internet, we have been able to develop technological solutions that help our users overcome their trust issues. As such they’re empowered to make meaningful connections with other Crashpadder.com members in a way that ensures they’re comfortable and protected. Below is a list of common concerns that our hosts have shared with us, and the technological solutions we have developed to help them overcome these concerns:

Tech overcomes trust table.jpg

Trust in numbers.
The graph below provides a tangible snap-shot that demonstrates the growth of trust among our membership. The graph shows that the more Crashpadder guests a host has put up, the fewer messages they tend to exchange before accepting a new booking request. Quite simply, their experience means they are more trusting of the site and of the community, so don’t feel the need to ask so many questions about the guest before they arrive.

trust growth.jpg

Finding the tipping point
This tiny example reflects what I hope will be a larger trend among consumers. I believe that, as time goes by and the Collaborative Consumption movement takes greater hold, this trust, harnessed by independent platforms, will become a type of currency that can be transported elsewhere. So, with a bit of luck and a lot of ingenuity, the trust and trustworthiness created by the likes of Crashpadder.com and eBay will benefit the users of other collaborative marketplaces such Zopa and ParkatmyHouse.

Once we can achieve this we will reach a societal tipping point of sorts; consumers will default to trusting one another, unless given a compelling reason not to. This will give us access to a wider range of products and services at a greatly reduced cost.

Number of comments: 5
Posted under the category: CC Company
With the tags:

Comments › Jump to Most Recent
Barbara Pantuso’s comment is:

Thank you for this, Stephen. And also the Great Sandwich Allegory.

There is an excellent documentary recently released called the Economics of Happiness that covers the topic of globalization and multinationals and the true costs of that.

Indeed a move to a more localized economy with smaller peer-to-peer suppliers relies on a system of trust. Thanks for sharing your system. I imagine that related to the frequency of hosting, the frequency of stays a potential guest (and any feedback they've received) has also makes a host feel more safe.

Thanks for helping to lead the way in building trust in this collaborative consumption space!

On Mar.08.2011 at 10:57 PM


Lauren Anderson’s comment is:

Thanks for your comment Barbara!

I've been keeping an eye on the Economics of Happiness, hoping to catch a screening near me soon. Have you seen the film? Would love to hear your thoughts.

On Mar.24.2011 at 04:36 PM


Phillip Jackson’s comment is:

Good post. I'm wondering a couple of things as a work on a site that will also require the development of trust.

Is there any data that would suggest that younger generations are more likely to trust someone online?

Also, I wonder what new signals will be help to build trust? Linking to one's social accounts? For example if a restaurant in an unknown town had a lot of cars in the parking lot that's a signal that it's probably a good place to eat. Or if the merchant had a large ad in the yellow pages or local paper we assumed they were trustworthy.

What are the signals of the conducting online business, is it as simple as the ratings?

On Mar.28.2011 at 02:17 PM


Dustin Byrne’s comment is:

This post really struck a cord for me since the trust issue comes up for us almost everyday at Givmo. Our users are giving away physical items, so the concerns are are different than those of Crashpadder users, but we've also found that technology helps alleviate those concerns.

For example:

Concern: Meeting a stranger to give/sell them an item can be scary.
Technology: Integration with shipping service (UPS).
Resolution: Givers get a free shipping label to ship their item so the person getting the item doesn't have to come to your home. The giver can remain anonymous.

On Apr.02.2011 at 07:46 AM


Stephen Rapoport’s comment is:

Thanks for the comments and feedback guys. It's great to hear about others who are helping to lead the charge for a more trusting, integrated society.

@Phillip - we don't see a specific trend of younger people being more trusting necessarily. It does seem, however, that they understand the space in a more sophisticated way. On one hand this means that they are more informed as to the risks of transacting online. On the other they better understand the nature of the value of our security measures.

Trust signalling is a fascinating question, and one which is a long way from being answered. There isn't really a solution for displaying someone's social graph yet but I'm sure it won't be long.

Integration with social networks is a contentious issue, as their purpose is to encourage direct contact between people. If you connect a potential host and guest on Facebook, for example, they may choose to transact directly with one another rather than through our marketplace, which is problematic for two reasons.

- Commercial; we would not generate revenue, and some of our host inventory would become unavailable.
- Security; in bypassing our booking system, users don't benefit from many of the trust-enabling tools listed above and the integrity of our platform could be undermined.

I hope this helps - feel free to email me directly if you have any more thoughts/questions: stephen@crashpadder.com

On May.03.2011 at 09:19 PM











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