Trust Me: Reputation is the commodity of the sharing economy

Trust Me: Reputation is the commodity of the sharing economy

Tonight 785,000 people in 191 countries will either stay in a stranger’s home or welcome one into theirs, thanks to Airbnb [1].


Tomorrow, 1 million trips will be booked through Uber [2] .


The sharing economy matches people with assets, skills and time to utilise, with people who need them. What fuels this peer-to-peer marketplace is not necessarily money or assets, but rather the technology that’s being used to build trust between strangers [3].


Trust is the secret sauce that allows us to unlock the idling capacity and value of all kinds of assets. It is forcing us to rediscover a humanness in making transactions that we lost somewhere along the way .

Trust enabling technologies are causing a rebalancing of the power relationship between corporate interests and individuals. Dealing with faceless customer service departments is no longer tolerable or necessary for consumers. Instead, consumers can rely on any one of thousands of individuals to provide the goods and services they need. These individuals are trustworthy and accountable, because their ability to attract business in the future depends on consumers’ experience.


Today, companies are designing for trust [6]– supporting the leap of faith that it takes for us to trust a stranger to drive us from A to B, or to assemble the IKEA flat pack we bought on the weekend. How? Reputation.

Reputation is simultaneously one of the oldest methods of valuing goods and services, and an entirely new technological means of trading between strangers [4] . Adam Smith [5] pointed out that a base level of trust is necessary for specialisation and economic growth; if I didn’t trust the butcher to give me quality meat without having to first inspect the cow, we wouldn’t get very far as an economy.

Unlike in Smith’s time however, trust is no longer based on word-of-mouth, but rather the reputation data that is collated every time we make a trade in the sharing economy.


Reputation Systems

Reputation systems like Uber ratings and Airbnb reviews help to build trust between strangers in several ways. They overcome the natural ‘stranger danger’ barrier between individuals, by providing information about a person- their name, photo and reviews from people who have used their services.

Reputation systems also help to overcome homophily- the phenomena that we tend to trust others who are similar to us [6]. A Stanford study showed that the Airbnb review system can counteract users’ unconscious biases and stereotypes [1]. Reputation information is so strong, it can overpower the social forces that dictate our most instinctive behaviours.

Reputation systems are credible because reviews don’t benefit the individuals who leave them; they benefit future guests, and validate the reputation of the host [6].

What powers reputation systems is the incentive to be a good host and guest, driver and passenger, lender and borrower, seller and buyer. The better we are, the more likely we are to receive business, or be provided with services. We also enjoy the validation we receive from a good review, and in turn make an effort to earn the positive review that will make it easier to book accommodation or a ride next time.  The blind review systems of Airbnb and Uber reinforce this because reviewers don’t fear ‘punishment’ as a result of negatively reviewing our experience.


Reputation dashboards- the future?

I wonder how long it will be before we have a ‘reputation dashboard’ [3] that aggregates our reputation on various platforms in one place- a credit score for the sharing economy. This may seem scary from a privacy perspective, but it may not be that far off. Startups like Connect.Me, Legit and TrustCloud are investigating this very idea. Capturing and correlating reputation data is a huge challenge- contextual (platform-specific) reputation data is difficult to aggregate for one, and the quantity of data collected is huge.

The saying that your reputation precedes you takes on a whole new meaning when we consider the future of the sharing economy. Every trade we make leaves a reputation web of how well (or not) we have behaved, so be careful, because you never know where that information will end up.


[1] Gebbia, J. (2016) How Airbnb designs for trust. Retrieved from:


[2] Cardenas, P. (2014) Uber Newsroom: Our Commitment to Safety. Retrieved from:


[3] Botsman, R. (2012) The currency of the new economy is trust. Retrieved from:


[4] Klein, J. (2013) Reputation Economics: Why Who You Know Is Worthy More Than What You Have, St Martin’s Press, New York, p 12.


[5] Heilbroner, RL. (1986). The Essential Adam Smith. W.W Norton and Company, New York.


[6] Newman, R., and Antin, J. (2016) Building for Trust: Insights from our efforts to the fuel for the sharing economy. Retrieved from: