Gigaom

Confronting Risk in the Web-Sharing Economy


The Airbnb horror stories that emerged in recent days have exposed the biggest pain point for the economy that has built up around using the Web to share "stuff," whether it’s a house (Airbnb, Crashpadder), a car (RelayRides, GetAround), or an item such as a tool (Zilok, NeighborGoods). Protecting the item being rented—as well as the person who owns it—and maintaining the trust of the community of users should be the largest investment that these "collaborative consumption" companies are making. Some of them seem to realize this while others do not.

In case you haven’t heard, there have been at least two Airbnb nightmare stories in which renters who essentially used fake identities trashed apartments they had rented and stole items. Both victims told the media that Airbnb executives were sympathetic and attentive but sent mixed messages about compensation for the damages. The story is spinning out of control, mainstream publications have picked it up, and Airbnb has a major PR problem on its hands, which it seems ill-equipped to deal with.

Peer-to-peer car-sharing companies, which include RelayRides, GetAround, and Spride Share, were able to launch their companies only after they figured out how to supply users with enough insurance, which called for some business-model innovation and successful lobbying for a bill to maintain drivers’ insurance while they participate in car sharing. RelayRides holds a $1 million supplemental insurance policy that goes into effect during each reservation period.

Car-Sharing Companies Know the Drill

Because cars are potentially dangerous and car drivers already have an insurance model set up, peer-to-peer car-sharing companies have evidently taken a proactive stance to protect their networks’ renters and owners. Such companies as RelayRides have gone even further to maintain security by using immobilizers, which prevent cars from being started without valid reservations.

It would seem natural that renting out something as valuable as an apartment calls for significant insurance policies, too. Collaborative-consumption sites that have built an economy around less valuable goods such as CDs or tools might not need such robust insurance, but every site needs a baseline security system.

Beyond security and damage control, there are privacy risks entailed in renting cars and apartments via peer-to-peer networks. One Airbnb victim is concerned that his birth certificate was taken and his identity remains at risk of being co-opted. This new breed of collaborative-consumption sites need to be far more diligent in protecting privacy than were such early peers as Craiglist.

My prime concern is that this budding movement to use the Web for sharing stuff—a disruptive and sustainable new trend, compared to ownership—could be damaged by companies that don’t invest sufficiently in security and privacy tools. As Craig Shapiro, a partner at Collaborative Lab, told me: "For pretty much anything related to sharing resources, thinking through trust and reputation is a critical first step —particularly as it relates to user acquisition." If these companies don’t make their communities feel safe, they won’t have access to communities anymore. The new green Web-sharing economy could suffer.

Also from GigaOM:

How to Leverage the Web-Sharing Economy Now (subscription required)

WD Media Players Get Hulu Plus

Facebook Snaps Up E-Book Startup Push Pop Press

Five Tips to Convince Collaborators to Buy Into Your Project

Wi-Fi Plus Android Apps Make for a Smarter Watch

Katie Fehrenbacher is a Senior Writer & Features Editor for GigaOM.

Later, Baby
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