The sharing economy seems to be going from strength to strength – potentially doubling in the next 12 months. According to Forces, currently, nearly a quarter of population of the US, the UK and Canada engages in some form of economic sharing, whether that’s renting a spare bedroom on Airbnb, a car ride on Uber, a prom dress from Rent The Runway or giving away unwanted stuff on Yerdle.
The sharing economy is formally defined as “an economic model in which individuals are able to borrow or rent assets owned by someone else”. On one hand, this new economy seems to offer flexibility and greater options to consumers, while allowing nearly anyone to participate and benefit; on the other, these companies are often subject to less regulation and scrutiny than traditional businesses.
Although sharing economy saves people time, money and aggravation, it is still young and may face some growing pains. To date, the major issue facing is customer’s trust, what allows someone to take a ride from a stranger or rent a room in a house from someone they have never met. Due to their peer-to-peer model, they are often not held to the same legal and regulatory standards put in place to protect consumers, leading to a litany of criticisms. According to Pew Research, there are only 19% of Millennials (ages 18-33*) believe most people can be trusted, while 31% of GenX’ers (34-49) do. Take the case of Uber to be an example, there is a long list of incidents such as assaults, attempted kidnappings and ravishments, among others. There are also allegations that the background checks are not extensive enough, and as such, they are more likely than taxi services to have such incidents take place. In 2015, that was the case for San Francisco woman whose Uber driver threatened to rape and kill her after she canceled her ride. This shows that if the future is a peer-to-peer market place, it will require increasingly reliable, innovative ways to identify peers.
In details, verified identity helps peel back the first layer of trust between strangers, which is crucial for the success of the sharing economy. Realizing this, in April 2013, Aribnb added identity verification to its platform, adding more transparency and reducing the fear and friction that can occur when strangers do business. Therefore, Airbnb is making sure that something goes wrong, the host is covered.
In a sharing economy where companies like Uber and Airbnb link people globally, identity verification becomes very hard. Anyone with decent Photoshop experience can fake a government issued ID card or a driver’s license. The only way to solve it is establishing a biometric identity, which has the potential to accurately identify someone without a shadow of a doubt nearly 100% of the time. In details, these identities require face, iris, or fingerprint to register, which cannot be easily faked. Therefore, not only does it bring true piece of mind between the provider and the consumer, but it would also help companies control their employees.