A Sharing Economy

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torque data @Torque Solutions (Australia) Pty Ltd Commercial in Confidence a sharing economy 5th September, 2014

description

The new sharing economy concept is all about trust and if you're not 4.9, you're nothing!

Transcript of A Sharing Economy

Page 1: A Sharing Economy

@Torque Solutions (Australia) Pty Ltd Commercial in Confidence

torque datatorque data@Torque Solutions (Australia) Pty Ltd

Commercial in Confidence

a sharing economy5th September, 2014

Page 2: A Sharing Economy

“In the sharing economy, you’re 4.9

or you’re nothing”Anon Twitter User

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what is thesharing economy?A.K.A: Social Lending, The Mesh Economy, Peer-to-Peer Economy, Collaborative Economy, Collaborative Consumption

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what does it do?+ Distributes, shares and reuses excess capacity in goods and services

+ Participants share access to products or services, rather than having individual ownership

+ Allows individuals and organizations to directly share existing resources rather than wait for third-party businesses or governments to deliver the desired goods and service

Access is better than ownership.

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how are we doing it?

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how are they doing it?For these businesses to be able to offer products and services at a discount to mainstream competitors…

They rely on replacing regulation with trust

Institutionalised Trust (Regulation) is “high-friction”, I.E. labour-intensive and costly

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what are the rules?for the time being, the boundaries of the sharing economy are protected fairly rigidly. for example:

+ If you’ve ever been caught driving more than 20 miles over the speed limit, you can’t rent a car on RelayRides

+ Aspiring Lyft drivers must pass a background and DMV check and get approved by a mentor, who judges applicants not just on driving ability but on personality

+ DogVacay hosts go through a five-step vetting process that includes training videos, quizzes, and a telephone interview http://www.inc.com/christine-lagorio/sharing-economy-trust-pipe-dream.html

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How do weavoid risk?+ Reputation - Crowd source regulation - Peer-review Spreads work and cost Increases range of experience (more data points) Reduces risk

+ With a suitable range of peer-review, risk can be reduced to a degree where it is feasible for agencies to guarantee user’s products and services

+ The ability to gather, store, and present large volumes of data makes this possible

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to trust or not to trust?here are some of the problems:

+ You’re relying on ‘secondary trust’

+ The reviews may make you trust the provider, but why should you trust the review? Are other people’s expectations / standards the same as yours? Do you trust the reviewers opinion? What effect does reciprocity in reviews have? Opportunists/fraudsters gaming the system bought reviews

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are peoples standards the same as yours?

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netflix user ratings

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http://tomslee.net/2013/09/some-obvious-things-about-internet-reputation-systems.html

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Reviews:Retribution or collusion?The tightness and sequence in timing suggest that sellers reciprocate positive feedback and ‘retaliate’ negative feedback.

Seller retaliation also explains why more than 70% of cases in which the buyer gives problematic feedback and the seller gives positive feedback (blue dots in Figure 1), involve the buyer giving second – the buyer going first would involve a high risk of retaliation.

http://ben.orsee.org/papers/engineering_trust.pdf

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how do you combat fraud?Transferring existing analysis and modelling experience from search and matching to fraud identification

Built mainly on open source technology and analysis tools but how many hours of resource are required?

http://nerds.airbnb.com/architecting-machine-learning-system-risk/

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scale and trust. + Small communities leave little room for fraudsters and opportunists. + Smaller groups mean greater levels of familiarity + Risk/reward not as great for the effort involved in perpetrating fraud + Significant growth means addressing the increased risk of fraud through your platform Increased “friction” Potentially significant development

+ How do small companies easily address these issues without the need for significant investment? Service provision?

BUT + Many sharing economy companies are funded via venture capital from Start-up

Venture capital demands fast and Significant growth

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thankyou.