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Summary:

Scary incidents at companies like Lyft and Airbnb raise the question of whether regulation is the answer — or community response can work instead.

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Companies like Airbnb and Lyft are symbols of a new “sharing economy,” in which people use technology to find services like car rides or room rentals outside of traditional industry channels. The new services come with a gloss of community and friendship but, as recent incidents show, there’s also a dark side.

In the case of Lyft, the car service is in the news after a creepy texting incident and related anecdotes of drivers who stalk female passengers. Airbnb, which lets people rent out their place to travelers, has had some high-profile home trashings.

Such incidents, fortunately, are rare exceptions. But they are scary enough to create a reputation hazard for the companies involved — and to pose a threat to the growth of the sharing economy.

To respond to safety concerns, the companies have begun to require more information from users such as government ID or criminal background checks. This is a logical response and a good way to ensure safety, but it has drawbacks.

The biggest of these is that it undercuts the sense of trust that, for many people, is part of the appeal of the services in the first place. The idea of community and friendship is baked into the marketing of many sharing-economy companies; the introduction of a lot of formal rules risks transforming them into the regulated industries that the companies are trying to disrupt in the first place.

For now, the companies are finding ways to protect users outside of any government regulatory scheme.

In the case of Airbnb, the company is trying to preserve a sense of community through a growing “trust and safety” team. Lyft, meanwhile, says it relies on input from its users to identify and kick out bad drivers — which amounts to a form of community enforcement; it also masks phone numbers (users can also use services like Burner to add another layer of protection).

Sharing-economy companies will never be able to eliminate bad actors entirely. The big question is whether, as these companies grow, their communities can function as a form of regulation.

  1. Randall Scott White Wednesday, July 17, 2013
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