The drivers of uber and various other companies should be asked to verify their identities. They may use fake IDs. It should be properly verified. There are some companies like example IDMERIT which provides identity verification service. For more info visit them at https://www.idmerit.com/identity-verification/
Companies like Uber, Airbnb,… act like intermediaries between two groups of people : buyers and sellers. Thereby, not only their reputation has to be good but they have to build trust between these two groups of users. Why would I trust this driver? Can I be sure that passenger won’t damage my car? They can be some questions users of… Read more
Companies like Uber, Airbnb,… act like intermediaries between two groups of people : buyers and sellers. Thereby, not only their reputation has to be good but they have to build trust between these two groups of users. Why would I trust this driver? Can I be sure that passenger won’t damage my car? They can be some questions users of Uber are legitimate to ask themselves.
To maximize its users, sharing companies have built some mechanisms to ensure their consumers to have a good experience and come back. To this end, Anand Iyer (1) spotted some features well-managed marketplaces have to put in place. Of course, the most obvious one is a rating system. It allows companies to have an individual evaluation of every consumer – buyers or sellers- and, if necessary, remove them from their offer. For example, Uber doesn’t allow drivers with less than 3 stars to continue selling their services. It certifies that all actors of this sharing system are serious and can be trusted.
A second feature needed is to have carefully curated content. Indeed, users face many offers and don’t have the time, or patience to make a selection of good or bad offers. Companies have to make a pre-selection of the offers available and put in evidence the best ones. For example, nice pictured apartments will be on the top of Airbnb-website.
Users of such services don’t want to have the feeling to be dealing with a robotic system. As Iyer tells “They want to know that real humans work there and care”. An Uber user that doesn’t get its drive or a driver that doesn’t get payed have to be threaten by a human-centric approach, for example by phone call, personal emails… To encourage a “humanizing experience”, Lyft has given some tips to its drivers, for example by recommending them to make conversation with their passengers. Thanks to little actions like this, users will have the feeling to be part of a community and will tend to trust more.
Because peer-to-peer platforms need buyers but sellers too, companies in the sharing economy have to focus on the suppliers’ experience as well. A negative network-effect can appear in the “sellers group” and then intermediaries have to be sure that the offer still exists in a sufficient number or buyers won’t use their services. To build the sellers’ trust, companies can put in place platforms for them to share their experience, playbooks to know how to succeed…
In conclusion, we see that there are many ways for companies to build trust between its consumers, whether by allowing them to be part of users’ evaluation system or whether by providing quality service. As there are strong network effects in sharing economy, intermediaries have to be particularly cautious about their consumers’ satisfaction to use that network effect in their advantage.
As it is written in this article, the problem of the multi-sided platforms is the fact that the different sides may have some difficulties to trust the other parties. It is why the intermediary platform has to play the role of trusted third-parties and ensure that the different sides can trust each other. There are many different ways to do… Read more
As it is written in this article, the problem of the multi-sided platforms is the fact that the different sides may have some difficulties to trust the other parties. It is why the intermediary platform has to play the role of trusted third-parties and ensure that the different sides can trust each other. There are many different ways to do that and I will try to explain the techniques used by the companies (and especially Uber).
First of all, Uber uses a rating system which consists of rating the drivers with stars (from 1 to 5 stars) like Ebay for example. Moreover, it is possible for the passengers to post a comment after the rating to explain why they gave this rating. It is also possible to send a message to Uber in case of problem during or after the travel. It allows to feel more in security and reassure the clients in order to make the service more reliable. (1)
Nevertheless, Uber goes further and ask the drivers to come to its office if they have a low rating to explain why there is the case. Uber can also ask them to stop to use the service if their performances are too low. In order to avoid this situation of low rating, Uber put in place several tutorials and tips to get the 5 stars at each drive. Helping the drivers to get the best rating and so to perform better is a good way to have better drivers using the service and giving the best image possible and giving more credibility for Uber. In addition to this, the drivers are obliged to take a picture of them before using the application (at each connection). It reassures the clients because they know approximatively what the driver looks like and they can recognize him more easily.
Recently, Uber adds the “Sixth Star Award”. It is an award for the best drivers in the world given by Uber each month, they receive an additional star and an Uber gift package and 1000$ from American Express. It is also a way to motivate the drivers to be better and therefore give a better image of the service. (1) (2)
Then, there are several partnerships between Uber and companies. These companies offer a lot of gifts, reductions, bonus points … for the users of Uber. It is a good way not only to promote the service but also to give more credibility because the service is supported by (well-known) companies. Furthermore, in the case of partnership between Uber and Midas in South Florida for instance, it gives an incentive to the drivers to go there to make the maintenances of the car. Therefore we can guess that the car is well maintained and it provides a better quality of the services. It is really interesting for the credibility and for Uber. (3) (4)
Another sign of trust can be the accreditations that the Uber drivers have to get or the tests that they have to pass to drive in some countries. For example, in Australia the drivers have to pass a test of 55 questions to get the accreditation to be considered as an Uber driver. It is a guarantee of quality. Even if it is obliged by the law in this country, it could be interesting to do it in other countries (where it is not obliged by the law) to give a better quality of the service and also a better image of Uber. Uber could give some incentives like a better payoff to the drivers or something else to put this in place. (5)
Finally, some well know people give promo codes which gives a reduction of 20$ (or euros) for the new riders which use this promotional code. It is the case of the (famous) French blogger: Jeremstar. If you use the code : “Jeremstar” for your first ride, you will save 20€. It allows to attract new clients because they can try the service (almost) for free. In addition to this, it gives a good image for Uber and more credibility because our “star” uses the service. Furthermore, Jeremstar talks a lot of Uber on Snapchat and also record a lot of his travels and after posts it on Snapchat. It is a good publicity for Uber. (6) (7)
In conclusion, finding a way to improve the trust between each side of the multi-sided platforms is really important. There are several performant ways to do it as mentioned in this commentary. However, we can never be totally sure and there would probably always be a light fear to use the service…
In this article, Professor Belleflamme raises a question that the new Peer-to-Peer (P2P) platforms are facing since their launch: How do we build trust between our users?
Obviously, P2P platform cannot use the same mechanism of trust as a traditional company. In the sharing economy, people are dealing with other people through the use of a digital platform that plays… Read more
In this article, Professor Belleflamme raises a question that the new Peer-to-Peer (P2P) platforms are facing since their launch: How do we build trust between our users?
Obviously, P2P platform cannot use the same mechanism of trust as a traditional company. In the sharing economy, people are dealing with other people through the use of a digital platform that plays the role of intermediary. Those companies are not asking to be believed by their customers, they ask to their customers to believe in other people.
First of all, I would like to say that trust is a complex concept that depends on the beliefs of every person. There is no real definition of trust and it varies depending on the situation (1). That is something that can make the creation of trust more complicated for P2P platforms.
One first solution, which has been put in place by AirBnB in 2013, is the verification of the users of the platform (2). By visiting different websites, every Internet user give a lot of information about themselves. In the case of sharing economy, companies such as Trulioo are able to collect and to analyse all the data’s of the users of a website. Platforms such as eBay or AirBnB are working together with that company to check their users and to improve the services (3).
In the same idea, AirBnB also offer the possibility to the user to be verified through their service ‘Verified ID’. To be checked, you need to give a picture of your ID, a phone number or to sign in with a Facebook or a LinkedIn account (4). Even if it can be on the limit regarding privacy protection, it helps to create trust among users.
A third way to improve the trust is to give the opportunity to users to rate them among each other. For example, after each trip with an Uber, the user can rate the ride on a scale of 1 to 5. It allows to the platform to detect bad drivers and to help them to improve themselves or to delete them from the system. At Uber, 4.6 out 5 is the minimum rating accepted before being invited to improve the service (5). This is also a way to improve the trust between users.
Finally, the community has an important role in the building of the trust. When someone sees that there are a lot of users, he will believe that the services offered are good and he will try it (1). It is called the Network Effect that also helps people to trust the platform.
To conclude, even if it is difficult to define, there are a lot of different ways to build the trust among the users. Nevertheless, even if the platforms put a lot of systems in place, users have to be aware that they are never really protected from a bad experience.
As said in the Anand Iyer’s article, sharing platforms have put in place many similar mechanisms in order to increase trust towards their platform and utilization. Firstly, it begins with speaking to the customer in his own language. Then the article explores the different mechanisms put in place: such platforms have to create a managed environment and carefully curate… Read more
As said in the Anand Iyer’s article, sharing platforms have put in place many similar mechanisms in order to increase trust towards their platform and utilization. Firstly, it begins with speaking to the customer in his own language. Then the article explores the different mechanisms put in place: such platforms have to create a managed environment and carefully curate content in order to filter bad and good users. Frictionless Payment can facilitate the experience of users. This article talks also about a human system which learns like a machine: “All of these marketplaces may be enabled by technology but they are powered by people”. [1] The service should rely on a human-centric customer service strategy. That means phone calls and personal communications from employees to the customer. They follow up and report bad experiences and sometimes offer a discount. [2]
But they should also be focused on supply, to be sure than for example the taxi drivers enjoy the work through the platform. It’s an important point that is often too less taken into account. The day when Uber will not find any car drivers, the platform would have to close. And it is not that much improbable in my opinion. Does Uber offer enough security and comfortable salaries to these car drivers? It should be considered in a long-term perspective. I don’t completely agree with the idea that such platforms have to self-regulate themselves completely. When really bad experiences will appear with these services (death of passenger with a platform like Uber, intoxication with p2p cooking platform…), I am not really sure that they will succeed to bury the problem with their own rules or discount coupons. The third party in this type of cases is necessary. Moreover, in a classical scenario, if you have a problem with a taxi driver, you will probably not blame all the taxi drivers for it. If you have a problem with an Uber driver, you may blame Uber as a company. Uber is an umbrella brand for its entire “workforce”. But that’s another subject.
A good example of not only customer centricity but also supplier centricity is Airbnb. They have developed forums or community spaces where sellers or service providers can connect directly to share challenges and best practices and know how to be the best hosts possible, including providing fresh towels and a stocked fridge of treats as an example.
All previous examples are known but I would like to develop the last topic and observe the interesting new trends around it. Social proof is really crucial, marketplaces are social businesses, and they depend on relationships and network effects. The power of a few testimonials and positive quotes is huge. Most platforms have star-rating systems built somewhere into the process for both buyers and sellers. “For example, Uber, Flywheel and Lyft ask both drivers and passengers to rate their experience at the end of a ride. To actually make this data valuable, however, companies have to use ratings almost imperceptibly to filter out bad users and continually improve service.”[3]
Reputation is the measurement of how much a community trusts you. And it’s key in the p2p economy. It is valuable information to assess the level of trust you can have toward a stranger. Many platforms develop their own reputations systems for users but Rachel Botsman goes further in a ted talk, she talks about the new currency of sharing economy: trust.
There are actually several of startups like Legit or TrustCloud that are figuring out how you can aggregate, monitor and use your online reputation. They advocate that the Sharing Economy lacks accountability and Legit’s goal is to be the credit system of this Economy.[4]
There are huge transparency and privacy and thus ethics issues to solve, but if we can collect our personal reputation, we can actually control it more, and extract the immense value that will flow from it. An other problem is how can we assess trust of people who are not active online? On the other side, a reputation capital could create a massive positive disruption in who has power, trust and influence. Rachel Botsman believes that reputation will become a powerful currency compared to our credit history in the 21st century. Reputation could be the socioeconomic lubricant that makes collaborative consumption work and scale, but the sources it will be generated from, and its applications, are far bigger than this space alone. Ms. Botsman gives the example of stack overflow that becomes a reference system and helps programmer to find jobs.[5]
Uber may be seen as a sharing economy. This economy is different from the traditional industry by the fact that consumers are not passive consumers. They are both producer and consumer. Today many sectors extend over this type of economy such as: Airnb, BlaBlaCar ....
The collaborative economy was born with a connected community. This… Read more
Uber may be seen as a sharing economy. This economy is different from the traditional industry by the fact that consumers are not passive consumers. They are both producer and consumer. Today many sectors extend over this type of economy such as: Airnb, BlaBlaCar ….
The collaborative economy was born with a connected community. This economy is based on digital technology. The extent of Internet has upset companies that sell digitisable goods. For example the music industry with music files or the cultural sector with digitized books.
The taxi industry is currently facing expansion of internet. Indeed it is now possible to use communication methods between individuals connected. A mobile application is therefore used to find a free car. The Uber app can identify people who have to more or less the same route at the same time. The platform Uber bring together a supplier and an applicant with features like geolocation. The platform only serves to create a contact.
The key to the success of this contact between these 2 agents is confidence and risk assessment. Indeed this type of economy is based on information technology to create links between people who do not know each initially. In addition the risk assessment is important because in this type of market they are used well. These goods are therefore more difficult to assess. Furthermore they do not enjoy the confidence of capital that is usually attached to a brand. Trust can be seen as a new form of currency in this type of economy
Ratings systems are implemented. Consumers can given comments to reassure and can given criteria of choice and judgment. This is the qualitative confidence. The quantitative satisfaction operate via the stars. Uber’s customer evaluate the drivers and vice versa.
Trust can be based on past experience “that went well before, so it will be fine next time.” Trust can build word of mouth “it went well with others, so it will be fine with me.” An example is BlaBlaCar confidence. BlaBlaCar imposes an online payment to remove the risk that some cars do not come at the appointment.
But confidence devices are not very developed. It seems that the safety devices are less important in these new areas of freedom online.
Sociability in this type of service is important because the two sides spend some time together. A client of Uber contact most often the same driver for the same trip.
Finally, legislation can be adopted for Uber, but be careful to not exclude the concurrency in order to protect established actors.
I believe there a number of things that companies can do to help ensure that there is trust within the platform between the two users and that they are certainly paramount to long-term success, however, I believe as platforms get larger and larger and more economically important to either side of the platform, ensuring that the intermediary is fair and… Read more
I believe there a number of things that companies can do to help ensure that there is trust within the platform between the two users and that they are certainly paramount to long-term success, however, I believe as platforms get larger and larger and more economically important to either side of the platform, ensuring that the intermediary is fair and balanced in the way it treats both sides is of equal importance.
In my experience, the most prevalent form of self regulation is the rating system based on previous transactions on the network. A system employed by market places (Ebay, Amazon, Etsy) as well as by other newer multi sided networks such as Uber. This works by ensuring that quality participants on the network receive favourable ratings after each transaction, ensuring that they will be a favored participant in future transactions, with any bad actors receiving lower scores which will ultimately lead to being shut off from the network by virtue of consensus. The other popular means of creating trust involves direct involvement from the intermediary that ensures the legitimacy of one side of the network – such as the newly created peer-to-peer lending sites such as Lending Club or Prosper. this signals the other side of the network (the lenders) that their counter-parties have passed at least rudimentary pre-screening.
However, there has been multiple instances of this effect being to much in favour of one side of the platform that it discourages activity on the platform. For example, there have been a number of complaints for creators on the Etsy Platform [1] that involve a number of elements that cause successful creators off the network in the interest of providing a better experience to the buyers on the platform. This effect is also quite rampant on other online market places such as Ebay/Paypal [2]. This turned into such a large problem it required Ebay to change its merchant policies to even the playing field more [3]
A major problem that occurs with these rating systems that it suffers from an adverse selection problem – According to the Pew Internet project, only 26% of users have rated a product or service. This suggests that the small subset of people actively leaving reviews could skew overall ratings by not reflecting the true average experience on a platform. [4]
Uber is what we can call an “explorer” firm. Indeed, they excel at developing new, radical knowledge but are not strong at exploiting existing knowledge. [1] So they try to play in an existing market but trying to impose new rules. Because of that, it is really difficult to trust this “new” entrant on the market. We can see… Read more
Uber is what we can call an “explorer” firm. Indeed, they excel at developing new, radical knowledge but are not strong at exploiting existing knowledge. [1] So they try to play in an existing market but trying to impose new rules. Because of that, it is really difficult to trust this “new” entrant on the market. We can see that in order to establish trust between the company and the customers, the p2p ride sharing have to put in place some mechanisms. Here we will take few example of a non-exhaustive list.
First, they allow the customer to check the information about the driver which is really primordial for customers. They can so see their name, some pictures of them and all the information needed about his car. Once the ride is done, the customer has the possibility to rate the driver. Furthermore, to not lose their customer because it is a global business, the users do not have to switch to a local language. So, they are able to understand all the information about all the drivers in the world, no matter where they are.
Secondly, one of the most important issue for Uber for example is the security of the passengers and of the drivers in terms of road security as well as the confidentiality of their information. In order to be as effective as possible, they have a security policy that we can consult on their website.
Finally, even there is some conflict with the regulations, it is important to highlight that the p2p car sharing are legal. And they repeat it constantly Uber described the ruling as a victory for common sense and took aim at plans by TfL to impose new regulations on the company. “Now the high court has ruled in favor of new technology, we hope Transport for London will think again on their bureaucratic proposals for apps like Uber,” said Jo Bertram, Uber’s regional general manager for UK, Ireland and the Nordics. [2] It is really important to them that customers realize that these kind of service as a legal aspect, providing cheaper ride than Taxis.
In conclusion, efforts are made by p2p ride sharing to adapt the transportation to the new technologies. They try to combine efficiency, quality and trust. We can see that there is a huge battle between the taxi and p2p ride sharing but I personally think that something good will result from these battle: if you can’t beat them, join them [3].
New born platforms face many issues when arriving on the market. First of all the chicken and egg problem, which basically mean that in order to attract a group of customer on the platform the other group is required and reversely. Several mechanisms, as different entry price, exist to counter this problem.
Another big issue that platforms face is trust.… Read more
New born platforms face many issues when arriving on the market. First of all the chicken and egg problem, which basically mean that in order to attract a group of customer on the platform the other group is required and reversely. Several mechanisms, as different entry price, exist to counter this problem.
Another big issue that platforms face is trust. At every time, especially when we are in a service platform, the consumer of the service needs to be sure about the quality of the service provided. The platform needs then to act as the guarantor of the quality, ensure high quality services and discourage or delete low-quality ones. We will here present some mechanisms set in place by platforms in order to guarantee that trust between the users.
A way to improve the quality of the service is to give rewards to good users. For example, Youtube used to organize competition where they offered rewards to the videos that had the most upvote. By doing so, they increased the incentive to produce good quality services by the users.
Another way of building trust, is to give the opportunity to the groups to judge the level of service provided by the other one. Wikipedia, is allows to the readers to raise concern about the quality of an article. If an IP address, or a writer, raise too much suspicion, his account will be deleted and he will no longer have the possibility to write again on the website. The same systems applies to other platforms like secondemain.be, that allows the buyers to give a score on 5 to the seller, based on the quality of the second hand product, the ease of the sale, etc. The aim of this mechanism is that later, the buyers will be able to see the average grade of the seller, and will be able to tell if he is reliable or not.
Finally, some platforms perform a background check of the users, before giving them access to it. Here it is the platform owners themselves that judge if the service provider is capable of offering good quality services.
All those mechanisms are doing what we call curation. Curation can be done in three ways:
– Editorial: It is the editors of the platforms that decides whether or not someone is trustworthy.
– Algorithmic : based on several figures, data, etc. coming from the platform, an algorithm is deciding whether or not the users are trustworthy
– Social: As in the Wikipedia and secondemain.be case, it is the community of users that takes the decision.
In conclusion, there are several ways of helping building trust between the users of a platform, but they are left to the platforms developers alone. Some help from the regulation in order to make those mechanisms more consistent would probably be much more helpful.
My first thoughts when developing trust goes to reviews and the TripAdvisor model. Sharing these reviews between customers help prospective clients make the optimal choice. They have the opportunity to rate the place they have visited. Hotels, restaurants and bars often place a sticker on their window to show the customers’ rating in order to attract them. It is a… Read more
My first thoughts when developing trust goes to reviews and the TripAdvisor model. Sharing these reviews between customers help prospective clients make the optimal choice. They have the opportunity to rate the place they have visited. Hotels, restaurants and bars often place a sticker on their window to show the customers’ rating in order to attract them. It is a safe way of being sure that what you pay for is actually worth the money. It’s an insurance policy in a way. These reviews generate external effects, as we have recently seen in the course, the behavior of one group (reviewers) has an impact on the behavior of another group (prospective customers). Here the TripAdvisor platform serves as the intermediary, without this platform, customers would highly reduce the number of echoes, reviews about a certain place. In fact, they could only rely on the venue’s website or if lucky on people who have already been there. TripAdvisor has a positive cross-side effect since the more the reviews the more the rating is reliable.
What Uber and others do is a two-way rating system, for the driver but also for the passenger since no driver wants rude or filthy passengers in their car, moreover, all Lyft riders have to link their account to Facebook which creates a more personal and reliable relationship. What Uber has done is removing all 3 stars or less drivers, as a result you hardly have any chance to see a badly rated driver on the roads. This helps passengers not worrying about having a bad driver but also builds trust in the whole system. Here, it’s also a positive cross-side effect.
Customers also want a more human experience, Lyft drivers all have phone chargers to give the opportunity for riders to recharge their phone, drivers are also recommended to make the conversation if customers are incline to. All this to make the customer feel like being in a community and enhance the human experience.
Moreover, when customers experience bad transits, customer service sends an email to get more details about the incident and if justified, gives discounts.
Furthermore, companies should focus on mobile development and payment processing. Mobile development is very important in order for customers to have a seamless experience. More and more people use smartphones and more and more order things thanks to their smartphone, that’s why there should be huge improvements in this sector, apps should be easy and beautiful. Another concern is payment processing, people should not be afraid of paying on the internet or thanks to their smartphone, the transaction should be flawless. The topic of this paragraph is about design decisions of the platform.
Another example is Airbnb, here customers don’t want to rent a dirty apartment or from somebody who is unkind. What the company has done is hire community managers who continuously remove apartments with bad ratings and feature the best ones. AirBnb does a trade-off between quantity and quality although the amount of places per city is innumerable.
Uber can be defined as a two-sided platform, and more specifically as a “sharing economy” platform connecting service providers and consumers. Furthermore, such Internet-based platform depends on relationships and network effects since the more the service is adopted, the more its users value it. That is why it should lower barriers to entry for new consumers, and promote that many… Read more
Uber can be defined as a two-sided platform, and more specifically as a “sharing economy” platform connecting service providers and consumers. Furthermore, such Internet-based platform depends on relationships and network effects since the more the service is adopted, the more its users value it. That is why it should lower barriers to entry for new consumers, and promote that many people use and value its service.
It is worth noting that Uber faces two main concerns : regulation and drivers selection. The latter has a crucial role if the platform wants to be considered as a trusted intermediary. In order to certify the quality and reliability of its service, Uber implemented a rating system for both parties. At the end of an Uber ride, passengers and drivers can give one another a rating from one to five stars. The Mental Floss has published an interesting article saying that customer’s rating is in fact mostly irrelevant but how passenger rates the drivers does matter.
It seems that drivers almost always give passengers five stars and do not even look at the rating before accepting a passenger. “That’s because drivers only have a few seconds to accept an incoming ride request before it gets passed along to the next closest Uber car, and most drivers would rather make a few bucks off of a rude passenger with three stars than make no money while holding out for a five-star rider.” (1) On the other hand, driver’s rating is utilized by Uber to create an average score for each driver. If the score drops below a certain amount, the driver could be expelled from the system. In short, rating system tries to encourage correct behaviour on behalf of passengers and drivers, and helps people trust that they will get what they are expecting.
Another mechanism putted in place by Uber to establish and maintain trust is the Uber guide for drivers. The guide includes information on why drivers get low ratings (bad route, poor attitude, poor driving, etc.) and on what drivers can do to improve their rating (offer bottle water, clean the vehicle, open the door, etc.) (2) It actually helps transportation network companies to build a more human experience and avoid the brand to become robotic. For example, Lyft tries to strengthen trust by making customers feel like part of a “community” : it provides phone charger to riders if needed and encourages drivers to make conversation with passengers.
Another best practice is to integrate payment into the service experience. Uber succeeded in making customers trust the brand by making every transaction seamless. There is never any payment issue thanks to completely cashless payment. Moreover, take the case of Amazon. When it introduced one-click payment, the platform “[…] upped its annual revenue by an estimated $2.4 billion a year. People enter their information once and never have to worry about it again.” (3)
In my view, in future, Uber should focus on convincing regulators since it has already convinced the users.
One may wonder why Uber maintains the rating of passengers if it does not give any relevant information… Does anyone have an explanation to propose?
Margot Detollenaere
To me, the rating of passengers gives in fact more relevant information to them than to riders. I hope that for some passengers, a bad overall rating can lead to positive changes. If you get a disappointing score after a ride, you should wonder how you can change your behavior to ensure a high-quality experience for both sides. To this… Read more
To me, the rating of passengers gives in fact more relevant information to them than to riders. I hope that for some passengers, a bad overall rating can lead to positive changes. If you get a disappointing score after a ride, you should wonder how you can change your behavior to ensure a high-quality experience for both sides. To this end, Uber posted on its website several tips to “ride like a pro”. The two-way ratings system could also be important for the brand image and reputation.
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Fournier
The American company “Uber” is a very disputed subject lately. It gives rise to interesting questions such as the problem of liquidity of such two-sided platform. It appears that benefits are correlated to user’s trust. Therefore how such companies are willing to earn and maintain their user’s confidence?
First of all, it seems that a rating system that allows users to… Read more
The American company “Uber” is a very disputed subject lately. It gives rise to interesting questions such as the problem of liquidity of such two-sided platform. It appears that benefits are correlated to user’s trust. Therefore how such companies are willing to earn and maintain their user’s confidence?
First of all, it seems that a rating system that allows users to rate their own experience of the ride helps people to trust the application. Users are apparently looking for better structure and for a preconcieved application that does all the work for them. For example, users are expecting the application to weed out bad riders. That could explain why it is impossible to find a driver with a lower rate than a 3-star out of 5 on Uber.
In order to establish trust among clients, some two-sided platforms such as Uber are demanding client’s feedback. It seems that clients like to use an application that evolves over time. By demanding client’s feedback, clients can complain about their bad experience. It has been proven that giving a way for clients to complain increases loyalty. It could be interesting for such companies to hire employees that are constantly looking for feedbacks of users and by taking care of their needs for the future in order to improve the application.
Then it seems that such companies increase benefits by making an easier way to pay. If we take the example of Amazon, all you have to do is to enter your payment’s informations once. It is the same for Uber that has implemented a frictionless payment methode. Indeed payment has to be integrated in the product experience, which means guarantee on one hand and allows to avoid last-minute problem on the other hand.
From a personal point of view, it seems important to me to increase transparency between end users and the application. Giving full information about the company could do it. A clean presentation of the company and its values could enlarge confidence.
In my opinion, companies such as Uber, which have been built on trust, can also lose easily confidence’s clients. For example, the complete Delhi region has banned the Uber application because of a rape orchestrated via Uber. That’s why those companies could need a constant follow-up of their e-reputation for instance. That’s another matter that has been discussed recently. That’s an innovante market where professional firms sells a service and help companies by keeping an eye on their e-reputation and what’s it’s saying about them on internet. Those firms can limit it by injecting positive flow of information about the company. The point here is that companies can maintain confidence by keeping an eye on their external image too. Indeed reducing the lost of users due to bad reputation or international incidents is also a way to keep confidence of the current users.
Finally, it seems quite obvious that giving full informations about the driver could increase confidence. Indeed more control from the application is a good way to do this. For instance, the application could in the first place match the identity card and the driver’s license directly. Or even quite simply by obligating drivers to post their driver’s license on their profile.
The aim of a multi-sided web platform is to put people who have coordinated needs in touch. However, as in all transactions, the buyer wants to know if the seller is trustworthy and the problem, on the internet, is that you cannot see your interlocutor (or at least before you finally meet him). So, how can these platforms build trust… Read more
The aim of a multi-sided web platform is to put people who have coordinated needs in touch. However, as in all transactions, the buyer wants to know if the seller is trustworthy and the problem, on the internet, is that you cannot see your interlocutor (or at least before you finally meet him). So, how can these platforms build trust between the different sides of the transaction? This problem is important to solve as being a warranty of good quality service is the best way for the platform to attract people.
Even if the using of these peer-to-peer platforms is constantly increasing, there are still only a few “trust systems” used by them to build confidence between the actors.
The most used one is probably the marking/evaluation of the peers system. This mechanism can be qualitative, where the user can rate the service provider (with stars, points,…), or qualitative (method giving to users the possibility to leave comments about their experience). Sometimes, this system is used in two ways (e.g. Uber) and the seller can also rate the buyer.
Another mechanism for the platform is the setting of regulations/limits on the payment methods. For example, BlablaCar imposes the only use of online payments to have control on the money and avoid situations where the driver takes the money without providing the service he was paid for. Some platforms like ILokYou (P2P renting platform) unfreeze the money only at the end of the service as a warranty for the renter. In this way, the trust is transferred to the technical device.
Furthermore, some platforms sometimes check the quality of service by themselves. This method is used by the well-known AirBnB : they encourage the hosts to have a fire detector (sometimes they even send it themselves, as a free service), they check the identity of some users (wanting to have a special distinction of “verified user”) by asking a copy of your ID card and details about you. [1]
Finally, there exist more classical ways such as insurances provided by the platform to both sides of the transaction. Again, AirBnB is a good example as they have special insurances for the hosts and the travelers. [1]
We can see here that the intermediaries have well understood that they can transfer the trust issue existing between the two actors on the platform by being a “proof of trust”. This situation meet the vision of sociologist Claus Offe, who thinks that people “must build trust on account of what they know not about the trusted, but about the institutions under which the trusted act”[2].
However, the platforms are not always the only ones wanting to build trust in the transaction. Sometimes, the users care by themselves about trust issues. We can see these last years the importance of e-reputation and new trends/intermediaries appearing. These intermediaries provide the service of “e-reputation harmonization” as they try to regroup in one site all the ratings, comments,… about one user (e.g. Fidbacks, French startup).
You can read above about a few mechanisms that intermediaries use to build trust between users. Finally, there is, in my opinion, one last trust-building effect in this situation. I will call it the “membership effect”. Indeed, some people tend to trust more easily another person if this person is member of the same group, community. I personally think that this effect is playing when you’re in transaction as you think that people sharing the same view of sharing economy than you, are ready to play the game honestly like you.
References:
[1]https://www.airbnb.fr/
[2]How Can We Trust Our Fellow Citizens? Claus Offe
[3]http://digital-society-forum.orange.com/fr/les-forums/359-comment
It is firstly prudent to note, that every new business, particularly ones that create a new market like the carsharing companies Lyft and Uber will face difficulties in establishing consumer trust. Uber an Lyft, offer such a significant saving on traditional hired car transport like Taxi cabs that this trust issue is somewhat mitigated.
These companies have in place several… Read more
It is firstly prudent to note, that every new business, particularly ones that create a new market like the carsharing companies Lyft and Uber will face difficulties in establishing consumer trust. Uber an Lyft, offer such a significant saving on traditional hired car transport like Taxi cabs that this trust issue is somewhat mitigated.
These companies have in place several mechanisms, both implicit and explicit in order to create a more profound and trusting link between passenger, driver and the company as a whole. Explicitly, these services like Lyft use a review system in which the driver and the passenger both review each other on a ranking scale of 5 stars. This mutual rating system established trust between driver and passenger as both are capable of reviewing each others prior history before agreeing to the service. Lyft also has a brief bio of the driver including a picture of the driver and details on the car he/she will be driving.
Veering away from explicit forms of gaining trust, these companies also rely heavily on implicit benefits gained from offering a service they believe is superior. have personally used both Lyft and Uber whilst in California for the Summer and found them to be unequivocally cheaper than Taxi’s whilst offering a similar, if not friendlier experience. Uber and Lyft also proved cheaper than public transport when the car was shared between myself and a couple of my friends.
Lyft advertises itself as “your friend with a car”. This sense of community and friendship is integral to its marketing strategy and has acted as a catalyst in the trust building process and creates a relaxed atmosphere between driver and passenger. These convenient, friendly car sharing services will gain trust through word of mouth and have generated as David Edelman says, the “loyalty loop”. (Edelman, 2010) This loyalty loop is invaluable to new companies in the digital age as peers promote the company and act as a trusted source of pseudo-advertisement and recommendation for these nascent companies. I have personally used both Lyft and Uber whilst in California for the Summer and found them to be unequivocally cheaper than Taxi’s whilst offering a similar, if not friendlier experience. I would (and have done so) recommend either of these ride sharing companies to a friend, which is integral to their trust development and future growth.
As the article states, if you want to act as a platform operator, you first need to establish trust between the both sides you are trying to attract by playing as a thrusted third-parties.
It is not always easy to establish trust and some mechanisms exist in order to gain the trust of the users.
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Indeed , it is very likely for… Read more
As the article states, if you want to act as a platform operator, you first need to establish trust between the both sides you are trying to attract by playing as a thrusted third-parties.
It is not always easy to establish trust and some mechanisms exist in order to gain the trust of the users.
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Indeed , it is very likely for a new internet-based platform to face some difficulties to gain trust at the beginning as the users could feel threathen by the anonymity of the interactions and transactions.
Internet-based platforms could then put in place an actionable rating system such as star rating system in order to evaluate both sides and reduce this anonymity.
But it might appear quite quickly that it won’t be enough as it allready exists many ways to get around actionable rating system.
It might then be interesting to use a reputation-based trust supporting framework such as PeerTrust that could appear to be one of the best mechanism to use in order to gain trust.
That kind of framework includes a coherent adaptive trust model for quantifying and comparing the trustworthiness of peers based on a transaction-based feedback system, and a decentralized implementation of such a model over a structured P2P network.
This kind of mechanism could seriously reinforce the trust users will put in the proposed services but it need to be remembered that even if it can diminish strongly doubts about the users, it will never be perfect and some risks will always exists.
After having used that kind of mechanims to create a safe environment for the users, an internet-based platform should focus on well designing a web page/mobile app that can go along way towards reducing work for participants and increasing the cost of switching to another platform.
The internet based-platform should also integrate the payment into the product experience.
The more technology can be leveraged to make payment an invisible process, the better. For example : Uber succeed to gain the trust of his clients in order to store their payment information
In conclusion, creating an internet-based platform is not an easy task but some mechanisms exists and will permit to increase the trust people will put in the platform.
A great way to build trust between two sides is a way to rate people you’ve dealt with, like Ebay does. On their website, sellers are not allowed to leave a bad evaluation on a buyer [1]. Ratings are there to rate sellers more than buyers, as you can chose the person you buy from but not to.
The reason is… Read more
A great way to build trust between two sides is a way to rate people you’ve dealt with, like Ebay does. On their website, sellers are not allowed to leave a bad evaluation on a buyer [1]. Ratings are there to rate sellers more than buyers, as you can chose the person you buy from but not to.
The reason is that sellers have more transactions than buyers, so one bad rate doesn’t have the same impact on them. After you purchase a product, ebay send you an e-mail to leave an evaluation. If you don’t do it, they will continue to send you emails.
The rate is a really important information for buyers to see if the seller is serious or not.
This could easily be applied to Uber.
Another way to establish trust is to personify the riders and the customers by having them put a picture of them. I think it would be easier to put your trust in a person if you can see his face. They could also add a total of the number of kilometers already covered, etc.
The thing to remember is that what most of new platforms (or any company) need is time. You can’t open an application like Uber and expect people from both sides to react rightaway. By being present on social media will help, as well as a lot of advertising. As word of mouth is really important in the case of apps, their idea to make it free for one week (even if it’s wasn’t their goal) was a good one.
A good example we saw in class today is TopCoder. It’s a platform “that allows competitions to develop software solutions for companies and reward participants” [2]. Basically, it offers software solutions to companies by having competitions between programmers, which allows a virtuous cycle of competition between them.
“At TopCoder, trust is earned. It’s not a fluffy feel-good euphoria, but rather a metric driven predictability that bolsters your trust in community. Of course, trust is also formed over time by consistent performance from the members who comprise your community. » [3]
Just by curiosity, in which class did you hear of Topcoder? I find it very interesting when students make links between the different courses that they attend. I wish I was able to coordinate more with my colleagues to facilitate such links.
Debuisson Nicolas
To address this problem of trust, Uber could learn from what other platforms have already put in place to address this problem.
Uber could set up a mystery customer system to test the quality of drivers. This type of system is already widespread for restaurant or hotel reservation platforms (as Michelin or booking.com for example). Uber employees could pretend to be… Read more
To address this problem of trust, Uber could learn from what other platforms have already put in place to address this problem.
Uber could set up a mystery customer system to test the quality of drivers. This type of system is already widespread for restaurant or hotel reservation platforms (as Michelin or booking.com for example). Uber employees could pretend to be normal clients and test the different drivers. The tests may be performed randomly or in a targeted way, in case of a customer complaint, for example. In this way, the worst drivers could be spotted and discarded from the Uber services. This test system is a pressure and an additional incentive for the drivers to provide better quality service.
This mystery customer system can be complementary with the rating system. Drivers who have the lowest scores could be tested by mystery shoppers employed by Uber. This system is a good way to test the quality of drivers. If the quality of service is actually bad, the driver could be moved away from the Uber service.
There are many other examples of system in place to test and improve the quality of a service platform, but this system is for me the most relevant for Uber.
Actually, Uber used ‘mystery customers’ not to check its own drivers but to try to recruit the drivers of Lyft (a competing platform). See here. This is a twisted form of competition between platforms that would be interesting to study.
Gérard Christophe
One of the problem of each Internet platform is the importance of trust among users. If you can’t provide it, your website/platform « will not survive ».
A mechanisms that Tripadvisor uses to increase the trust among users is the « rating system » based on the « Facebook Connect ». The principle of this website is that each user can… Read more
One of the problem of each Internet platform is the importance of trust among users. If you can’t provide it, your website/platform « will not survive ».
A mechanisms that Tripadvisor uses to increase the trust among users is the « rating system » based on the « Facebook Connect ». The principle of this website is that each user can give a feedback on hotels and restaurants they visited. The first problem this kind of website has to face is the sincerity of comments. When a restaurant only has positive feedback, users could wonder if these comments are not writting by the boss, the manager or their employees. That’s why Tripadvisor solve this problem with the « Facebook Connect » which provides the authentication of the person who comments.
Secondly, the reputation of a website is also realy important. In order to be well reputated, you have to prove you’re reliable. We can take the example of Ebay. A lot of people trust in this website and could pay more only to use this platform. Here the question is « Why this website is more reliable than others sales website » ? (2ememain.be,..). Ebay uses different methods to ensure trust for both parties (Buyers and sellers). First of all, every sellers and buyers have to enter personal information (Address, Credit card, …) to sell or buy products. Thanks to these information, you can be sure you deal with real people and not a con who comes from Ivory Coast and who wants to steal your money. Moreover, Ebay provides an other security with Paypal which is the best reputated means of online payment. For instance, if you pay less than 500 euros for a product and you don’t receive it, Ebay pay you back. Finally, in order to be sure of the reputation of a user, you can rate your buyer or seller only after a transaction and in any other case.
To conclude, I think building trust is the key of success and if you want to achieve this goal, you have to prove to customers you’re reliable by different ways.
Building trust is indeed one of the biggest issue in multisided platforms. Moreover, we can establish that the perception of an unequal balance of power is the underlying problem. Sellers risking lending to a bad renter who will destroy his good, and thus risking for him way more than the renter, or buyers risking ordering a good online that is… Read more
Building trust is indeed one of the biggest issue in multisided platforms. Moreover, we can establish that the perception of an unequal balance of power is the underlying problem. Sellers risking lending to a bad renter who will destroy his good, and thus risking for him way more than the renter, or buyers risking ordering a good online that is way under the quality established in the description, risking thus way more than the seller, in his point of view. This perception might be damaging for all sides, including the intermediaries. For example, Airbnb, a multisided platform for renting houses, has suffered in 2011 from a bad customer that trashed one of Airbnb user’s house. The affair went so viral that a lot of Airbnb lenders left the website, considering that they risk way too much in comparison with the renters [1]. Obviously, less lenders lead to reducing the frequentation of the website, and a pure loss for Airbnb.
To overcome this problem, the intermediary should show to both sides that he is an ally that they can count on. To achieve that, the intermediary should first take clearly his responsibilities. It goes by showing that buyers and sellers are protected (legally and economically) in that platform, and showing what really are the risks. Trying to keep the true risks hidden might be the worst, for there’s a high risk of bad reputation if they customers find out about it. Then, it is extremely important to repair the error as fast as possible. Especially in internet based multi-sided platforms, viral bad reputation gained after a long and non-repaired problem is extremely damaging for the intermediary. Finally, anticipating the risks and being proactive might protect the platform from those error. For example, Relayrides, a company offering the same kind of platform as Uber, invested 1 million dollar for insurance policies to prevent cars from being rented without prior reservation [2].
However, we have to know that no system is perfect where human relations are involved. Leaks can always be exploited to bypass or hijack the system, notwithstanding the legal policies. For example, Ebay has for long time suffered from buyers who were threatening sellers to leave a bad feedback if they were not adding some products or services to their offer. Despite being clearly not allowed in Ebay’s policy [3], we can still see this nowadays [4]. The explanation is that the strength that has been linked to the “good feedback ratio” is so high that sellers can risk way more than buyers for having a bad feedback. The loss from a bad feedback (elasticity) might be so high that the seller might end up suing the buyer for his bad review[5].
Firstly, the intermediaries play a big role. These intermediaries must absolutely ensure the quality and reliability of their drivers because the slightest mistake and the whole platform collapses. Knowing this, passengers are more likely to use the platform if they know that prior control has been completed and they know it is in the interest of all parties to maintain… Read more
Firstly, the intermediaries play a big role. These intermediaries must absolutely ensure the quality and reliability of their drivers because the slightest mistake and the whole platform collapses. Knowing this, passengers are more likely to use the platform if they know that prior control has been completed and they know it is in the interest of all parties to maintain a high level of quality which facilitates trust. If the intermediary collect information about the quality of conduct of the drivers and make them public, this may reassure the passengers if, for example, they see that a driver has already made 100 trips without any problems.
For example on the website “Kangride”, this site has a tight control on the behavior of its members.
Kangride also provides access to some statistics relating to the seniority of a given driver, as well as evaluations of passengers who have already traveled with him or her. This is an excellent mechanism to build trust because statistics are easy to read and clearly shows the experience of the driver and his quality. Evaluations of other passengers are also extremely important. If for example a driver harvest an average of 9/10, trust will be built almost directly. Also, users can leave comments to share their experience. For passengers, read a number of positive reviews may encourage them to also participate and this also helps to build some trust.
But the interaction between passengers is not the only important one. The one between the two sides is also very important. The fact that the passenger and the driver can interact allows both parties to build some trust. They can ask each other questions to see if the type of driver / passenger fits their requirements.
Thirdly, after-sales service is also a great way to build trust. If we go back to our example of Kangride, it offers after-sales and has a satisfaction guaranteed policy if,teh user books a seat with one of tehir drivers and he is not completely satisfied, Kangaride will provide him with a booking credit for a future ride of his choice. Knowing that if there is a problem with our booking, the platform puts things in place to overcome these problems, this also leads to trust.
Finally, if the site is approved by the government, which would set some regulations, it takes another dimension to the user and he says it’s a trusted platform if the government gives his approval.
There are several mechanisms to establish trust; some are relevant and useful for all kinds of companies, others depend of the company’s sector, objectives, …
First of all, as the company Uber did, a multi-sided platform needs to have quality contends because customers don’t know you and they will so pay much more attention to your added value and its quality… Read more
There are several mechanisms to establish trust; some are relevant and useful for all kinds of companies, others depend of the company’s sector, objectives, …
First of all, as the company Uber did, a multi-sided platform needs to have quality contends because customers don’t know you and they will so pay much more attention to your added value and its quality than a famous company where the customer just look at the brand. In relation with this quality aspect, the design of the platform must be attractive, the value of the company must be available/known,.. Moreover, by doing a mobile adapted platform, the firm will facilitate the navigation on its website by the consumer but also (and especially) it will show the professionalism of the company.
A second way to create thrust with the client is to be present on social media. Indeed, behind the fact that it increases the visibility of the brand, it also permits to bring closer the company with consumers which induces that it is easier to understand and answer to their needs. Another advantage of the social media is that the company plays the “transparency card” that reassures the existing and potential clients.
Three other ways to increase visibility are either by creating a buzz, or by being present on existing platform, or by trying to be one of the first in the search engines. For example, Google developed Google AdWords that is a way to increase its “ranking” on pages for some fees.
Some multi-sided platforms prefer pass by a “sponsorship” way to raise their reputation (and then have an influence on the thrust). A first kind of brand image is by having a famous person “related” to your platform. Approximately like George Clooney with the Nespresso brand but applied to an Internet platform. They can also have another company as sponsors. But firms need to be careful when they chose sponsors. Indeed, customers are able to remember only a few numbers of sponsors and more they are visible, more it leads to an “affection transfer” to the potential customer. Also, more the sponsor is related/similar to the two-sided platform; more these affection feeling is transferred to the consumer.
Finally the last mechanism (but not the least) is another mean than sponsors that companies have to increase its reputation. Indeed, companies may use the word of mouth between user and potential ones. By creating platform where consumers can share information, feelings, … platforms generate a community of users and network effects are then created.
In conclusion, I do believe that there are a lot of mechanisms that can help the platform to increase its brand reliability but companies need to take in mind that there isn’t one perfect way and they need to act by imaging that the consumer is not a trustful client.
Indeed, building trust is of capital importance and P2P platforms needs to keep a good reputation in order to remain viable. To achieve that goal, some systems already exist as the reputation one, where users can rate their peer based on the experience they had together. But it appears that it is not enough. Indeed, one bad driver might be… Read more
Indeed, building trust is of capital importance and P2P platforms needs to keep a good reputation in order to remain viable. To achieve that goal, some systems already exist as the reputation one, where users can rate their peer based on the experience they had together. But it appears that it is not enough. Indeed, one bad driver might be “sacked” because of bad reputation score he received from other users, but how do you know that he will not come back with another name? Since acting anonymously is far easier online than in real life, other tools have to be used.
Having recognized these issues, several entrepreneurs in different countries have begun to build portable cross-platform trust and identity systems meant to facilitate the sharing of assets between individuals, such as TrustCloud or Peertrust. These platforms aims “to develop a trust mechanism for such system so peers can quantify and compare the trustworthiness of other peers and perform trusted interactions based on their past interaction histories without trusted third parties.”(1)
Another aspect needed in order to build a sustainable trust/reputation system, is the transparency about how the reputation scores are established. As Mr.’s Pick states in one of her article : “every person should be able to understand the score and decide themselves whether they want to trust a person or not. Being a good driver is very different, for example, from being a friendly and reliable CouchSurfing host.”(2) To continue with this idea of letting the users judge themselves and decide who they want to trust, some P2P based platforms, such as AirBnb (which is designed to find guesthouses/rooms from particular all around the world) let its users create groups users can join, in order to find people with the same center of interests, or to upload video about themselves, in order to show more than what can leak out from an exchange of mails or private messages.
Finally, we must not forget that it is not because some users got some good reputation score in the past that he will always deliver good services. He could do something unforgivable one time, and his good reputation should not permit him to continue, so third parties should not base their trust on users only with that tool.
Here is another example of platforms acting as intermediaries (or service providers) for other platforms. There is, to my knowledge, very little (or no) research on that topic. Anyone interested?
Florent Dauvister
The main challenge that most internet companies face nowadays is undoubtedly building trust in the companies’ products and services. Using two examples, one for products and one or services I will cover most mechanisms and strategies used by IT companies to build trust with current and future customers.
Let’s take a look at Amazon, how can the biggest online product supplier… Read more
The main challenge that most internet companies face nowadays is undoubtedly building trust in the companies’ products and services. Using two examples, one for products and one or services I will cover most mechanisms and strategies used by IT companies to build trust with current and future customers.
Let’s take a look at Amazon, how can the biggest online product supplier also be one of the most trusted companies in the world?
First of all, the very basic of building trust in the IT sector is to respect the industry standard when it comes to payment transaction, data encryption, privacy policy and customer data sharing. Amazon has made it clear that it is on top of their priority list to ensure customer data safety, use the HTTPS standard and is constantly striving to improve its security systems to make sure that customers can trust the company with their personal data.
Secondly, thousands and thousands of product suppliers are present on Amazon and no company in the world would have enough manpower to check on each supplier’s products to ensure quality and safety in use. Amazon have developed a very thorough system based on customer reviews(3), delivery time and many other factors. This mechanism guarantees fewer risks for customers when buying from a supplier. On top of the review system based on customer ranking, a testimonial system is built in and provide other potential buyers with insight about delivery, product quality, customer care, refund policy …
Thirdly, Amazon’s help desk is the best in the industry, there is someone able to reply to a query 24/7 within minutes, the satisfaction rate is unprecedented and Amazon has built its reputation around it. They apply a money back guaranteed policy and often replace faulty products faster than any other competitor without making it a lengthy and tiresome process making it less stressful and risky for a customer to trust a third party supplier.
On the other side of the spectrum, service providers like Uber have to adopt the same industry standards as product suppliers: encouraging customer review and displaying them prominently, offering customer service, offering multiple and secure payment options.
On top of that, services like Uber have to offer a plethora of guarantees because it involves relying on someone else’s ability to guarantee your safety during a ride. Very thorough background checks on any driver that applies to become a Uber driver(2), insurance guarantees in case of a crash, no direct cash transfers to avoid mugging or theft, passengers and drivers are not anonymous which makes it much less likely to have a driver or a passenger abuse the system or behave poorly.
While product supplier were mostly relying on the product quality, a service supplier like Uber has to rely on making sure that the service they provide is up to the industry standard and most important protect the customers to the largest extent possible.
Lastly, Uber provides a loyalty program based on studies by Nielsen(3) that proves that loyalty programs are a great way for customers to trust and get involved in a company.
As the previous lecture showed, platforms often face the chicken-or-egg problem so they need to gain the confidence of the different groups of customers. They also have to show clearly their competitive advantage to the different groups and these must easily try and appreciate the platforms. Nowadays thanks to the new technologies, platforms can be real trusted third-parties. Here is… Read more
As the previous lecture showed, platforms often face the chicken-or-egg problem so they need to gain the confidence of the different groups of customers. They also have to show clearly their competitive advantage to the different groups and these must easily try and appreciate the platforms. Nowadays thanks to the new technologies, platforms can be real trusted third-parties. Here is some mechanisms they can put in place to become such platforms:
Uber has the advantage to be easy to register for drivers (https://partners.uber.com/drive/# ) and for passengers. due to this simplicity, Uber van reach a large part of the two side of consumers. On the other hand, if they are not convinced, they don’t have difficulty to leave the app because they didn’t pay a high cost to come in.
People could be douptfull about that kind of sharing-system, especially a passenger could fear to go in the car of a new driver who is a complete stranger. That’s why Uber created a rating about drivers and a community on the app where people can trust each other.
Of course, it may be not enough to reassure passengers about drivers’ skills and it’s difficult for them to be sure people have a good impression and will give positive feedbacks.
Nevertheless, in that case each (happy) passenger have a positive externality on other passengers and on drivers.
To create trust, they need to have a good brand-image with clear representation. They can’t be a new or obscure service on the internet. That’s why they have a nice and usefull website ( https://www.uber.com/ ). They must have a good reputation, in that circumstance their conflicts with taxi unions and cities are a real issue.
Shortly, platforms as Uber must be easy to use, create confidence and have a good communication. It sounds logical for a organization dealing with multi-side of consumers, such platforms must be consumers oriented.
P2P ride-sharing is an easy way to connect passengers with private drivers for on-demand trips. Companies such as Uber, Lyft or Sidecar are three examples of companies currently operating in cities across the world.
The important matter about sharing economy is related to the idea of utilization and no longer about the old idea that you need to possess something… Read more
P2P ride-sharing is an easy way to connect passengers with private drivers for on-demand trips. Companies such as Uber, Lyft or Sidecar are three examples of companies currently operating in cities across the world.
The important matter about sharing economy is related to the idea of utilization and no longer about the old idea that you need to possess something in order to claim its use. According to the sharing economy, the ownership is no more considered as a need. Nowadays, those two concepts could be considered as independent from each other. Thanks to recent innovations in a diverse range of fields such as car sharing, accommodation sharing or simply property sharing, it has become much easier for a consumer to benefit from the use of an item without necessarily owning it. A growing number of people are coming around to the idea of sharing more and owning less.
This new trend tends to open the path to a new way of consumption.
In that kind of P2P ride-sharing economy, trust and reputation account for a substantial part. Most peer-to-peer sites now allow users to rate their experience while it was not possible in the past. In fact, only customers could give advices. For example, you can rate an owner on Uber but they can also rate you.
Increasingly, these reviews will attach themselves to our online persona. All informations but also history about customers and drivers will give them a reputation. A driver with a good reputation would generally be more trustworthy. That is the reason why reputation encourages people to behave properly. In that way, the P2P platform could partially (because there is not only reputation related to trust) overcome the trust issue related to its core business, the sharing of private goods.
Multi-sided platforms promote positive externalities between members of the community but there are also numerous opportunities for people to generate negative externalities through bad behaviors, which reduce the economic efficiency. Negative externalities affect the value creation of multi-sided platforms, hence the fact that many of them have developed mechanisms to build trust and cope with user’s bad behaviors to reduce… Read more
Multi-sided platforms promote positive externalities between members of the community but there are also numerous opportunities for people to generate negative externalities through bad behaviors, which reduce the economic efficiency. Negative externalities affect the value creation of multi-sided platforms, hence the fact that many of them have developed mechanisms to build trust and cope with user’s bad behaviors to reduce these negative externalities and create value. I will discuss about the private and public mechanisms that platforms put in place and use.
Firstly, multi-sided platforms develop private governance mechanisms to reduce harmful behavior. For instance, Facebook has created a community where fool language and faked identity are prohibited. Indeed, Facebook required that people use their real identity. To achieve that, Facebook controlled the registration of users and the content shared by them. At the beginning, Facebook was only accessible for people with a university email address (that starts with the Harvard address: Harvard.edu). Afterwards, the selection has been extended to groups like businesses with reliable email addresses. Moreover, Facebook deletes the pages with fake identities. As users of the platform, you thus have the possibility to signal content that appears as threatening, pornographic or with incitation to violence via a “report this” button. (1) Facebook has a special division (the User Operations) that examines all content reported by users through this button. Despite the fact that Facebook has successfully put in place mechanisms to build trust, one can observe that it has problem to build trust with the private data protection. Individual users can face negative effect from disclosure of their information while advertisers and application developers, who are other users of the platform can benefit from this disclosure of information.
Some anticipate the risk and protect the users. For instance Relayrides (2) holds a 1 dollar supplemental insurance policy for its car renters and installs immobilizer on the vehicle in order to avoid that the car will be used without a reservation.
Next to dedicated mechanisms like special division or “alert system”, multi-sided platforms also provide information to deal with negative externalities. Indeed, bad behavior can be induced by asymmetry of information . (3) The latter reduces the market efficiency by reducing the likelihood that users will find the matches that maximize the total value from trade. Opportunistic behavior due to asymmetric information can also increase uncertainty for people that use the platform. That’s why platforms provide as much as possible information about the products, services and the users. For instance, Amazon provides a mechanism that allows consumers to rate the merchants after the purchase. Thanks to the system, consumers are more reliable in the platform by buying to a merchant that has a high rating. This review system also limits the negative externalities that merchants impose to each other: it drives low quality users off of the platform. Indeed, good merchants tend to drop off the platform the bad merchants because consumers lower the expectations on the purchases they get from bad merchants. Amazon also provides information about the products and people that have bought the item have the possibility to leave a feedback and their feelings about the product.
Many multi-sided platforms have governance system, but it’s not the case for all platforms, for instance most advertising supported media tend to have a very limited screening of ads, they just focus mainly on prohibiting advertising that will offense the readers.
Secondly, multisided platforms could rely on civil and criminal law and government regulation. Users have recourse to laws involving breach of contract, fraud or market manipulation for example. Multi-sided platforms also use IP rights to build trust and in particular the “Bouncer’s Right” identified by Strahilevitz . (4) The “Bouncer Right” is the possibility to exclude agents of the platform and admit them selectively to the platform. For instance, eBay has specific agreements (5) for buyers and sellers. This agreement prohibits bad behavior (for instance, you can’t “distribute viruses or any other technologies that may harm eBay, or the interests or property of users or post false, inaccurate, misleading, defamatory, or libelous content”) and tells that eBay has the right to restrict the access to the platform and exclude users that don’t respect the user-agreement.
I will now conclude by a comparison between private and public mechanisms and policy for antitrust. According to Evans (6) , private control is likely to be more efficient than social control (through laws and regulation) in dealing with negative externalities on platform communities because the platform owner can deal with this harmful behavior more expeditiously than a public regulator since they have more information about the problems. For different reasons, platforms don’t only rely on public laws: they are able to enforce rules more rapidly that the public laws (for instance an e-commerce platform can drop one merchant of its platform after few complaints). Public laws and regulation may be also incomplete (government has other priorities that recognize problems).
Finally, one should be aware that the possibility to exclude agents from the platform is a good way to ensure trust but one should also keep in mind that a platform can abuse of its market power and have an anti-competitive effect by excluding firms from the relevant market.
As said in the article, social ridesharing has grown up in the last few years and is more and more successful. We have seen different companies playing the intermediaries in order to link drivers and passengers. I have personally worked for one of them: Djump. By experience, I know that trust is the hardest part to get in that kind… Read more
As said in the article, social ridesharing has grown up in the last few years and is more and more successful. We have seen different companies playing the intermediaries in order to link drivers and passengers. I have personally worked for one of them: Djump. By experience, I know that trust is the hardest part to get in that kind of application.
But first, if we go a few years back, we know that taxis had a monopoly in the market and also had the trust of passengers. So, how did companies like Uber and others to create a community of drivers and users? The price strategy was an important fact they had to work on. Where taxis are really expensive due to different taxes [1] as their license, Uber’s drivers don’t need license to take passengers and thus they can reduce the price asked for a ride [2]. Uber is thus almost twice cheaper than a classic taxi. But, personally, I believe that externalities have played a role like different incidents with taxis that have been published in the press as rapes by fake taxi men [3]. A general impression is also that taxi men are not always nice with the passengers they take. But when a taxi man gives a bad impression to passenger because of his lack of sympathy, passengers don’t have the possibility to report it to any company and even if they could, nothing would change because the only objective of taxi companies is to drive one or several passenger from a point A to point B. The P2P transport companies have different objective than taxi men. Of course, the primary objective is also to drive a passenger from point A to point B but after the ride, the passenger has the opportunity to mark the driver and make different remarks about him. Like that, the next passenger will see the remarks about the driver whatever it concerns the way of driving, the time he takes to arrive or his social skills. Thanks to those characteristics, it is easy for the company to judge a driver and throw the rotten apple before it infects the others.
The possibility of grading drivers is very helpful to gain the trust of passengers but companies that make social riding also have to attract drivers! How could they attract them? They create a community of passengers where you need to be accepted before taking a ride. And when you are a part of the community, drivers will also mark the passengers and make some remarks about them. Thus, If a passenger has payment issues, doesn’t wait where he is supposed to or has social skills issues, the drivers see it directly and can choose to take the ride or not. On the contrary, if the passenger always gives a tip and is nice, it is also seen by the driver. This way, it is easy to keep the bag of apple clean because everybody receive a mark by others and if someone has several bad “grades”, he can easily be taken off the community.
The last point I would like to talk about is the fact that when someone ask to enter in the community as a passenger (because a driver must be interviewed before coming in), how a driver can know that the passenger can be trusted and that the passenger will be where he asked for a driver? Djump has handled the problem by putting someone at the support, someone who can be contacted at any time. The role of this person is also to call people who use the system for the first time to control that the passenger is trustable. Thanks to this system, the trust of both part increase and the system continues to be healthy!
This comment sheds some instructive light on today’s taxi strike in Brussels (see here). Thanks
Masson Martin
Since internet exist, the numbers of multi-sided platform increase every day and in every areas. But when money transactions take place, people are always prudent. Establish trust between the different users is a must. How does internet-based platforms act? Many different mechanisms are used to resolve that problem. Indeed insure trust will be benefit for the platform. And it is… Read more
Since internet exist, the numbers of multi-sided platform increase every day and in every areas. But when money transactions take place, people are always prudent. Establish trust between the different users is a must. How does internet-based platforms act? Many different mechanisms are used to resolve that problem. Indeed insure trust will be benefit for the platform. And it is important that the consumer know he can still enforce his right.
A rating system with multiple criteria defined by the intermediary and enabling electronic word of mouth is the most simple and common. It is for me also the best one because consumers provide feedbacks for others consumers. Trust is linked to the reputation, a good reputation is what make people confident to use your service our buy your product. Even if with that system some problem can still occur such as false comment posted by false or paid user. That is why control by independent organism are needed and most of the times used to ensure legitimacy of comments. (Example: http://www.tripadvisor.fr/vpages/review_mod_fraud_detect.html)
Intermediary have also to create a social media presence or website where people can follow each other’s and where video are posted describing how the transaction generally take place from the beginning to the end of it.
But those video can be considered by some as marketing campaigns where people are paid actor and not simply common user of the platform. (Example: uber facebook page)
There is also of course the terms agreement that is asked by the intermediary to the different users when subscribing to the platform in order to have power and increase trust. Even if those are most of the time not completely read, it allow them to take actions and close your account or ask for compensation in case of non-respect of the rules.
The intermediary also often ask personal data such as national register number or bank account number, credit card number, address, etc… that are checked before and certified the profile of the users. That makes the users more imply and enable them to go to court in case of trouble and have some guarantee.
Call centre and email address are a must for the company. Those procure the consumer a middle to complain and to quickly find solutions to their problems (example: yoopies.fr)
Finally, the website / the app of the intermediary need to be clear and well organized to create a favourable environment to the transaction. It is the first step to instore a confident climate between all the users.
To conclude we can say that the benefits of multiple-sides platform are obvious for users but trust need to be built in a conscientiously way by his inventor to make it efficient and risk-free.
On one hand, the problem of establishing trust is a major problem of Internet-based platforms. For example, during the launch years of Amazon, many people were not sure that, by ordering on the platform, they would get the product, be able to return it, be repaid, etc. On the other hand, before the Internet exists, there was already a trust… Read more
On one hand, the problem of establishing trust is a major problem of Internet-based platforms. For example, during the launch years of Amazon, many people were not sure that, by ordering on the platform, they would get the product, be able to return it, be repaid, etc. On the other hand, before the Internet exists, there was already a trust issue : for example when people decided to prepay a hotel via post office, to buy a land or a house abroad, etc. Thus this problem of establishing trust is not a problem specific to Internet-based platforms but it is even more important in this case because people do not have in front of them tangible things such as an office or people who they can address to.
These platforms can put in place some mechanisms to ensure trust such as :
– Internal regulation : some actions should be taken internally to ensure self-regulation, control, high quality level, a simple way to lodge complaints, a rapid answer to complaints, a limited number of complaints, etc.
– Regulation linked to the opinion of users : consumers should have the possibility to share their advices about the service quality. On some platforms consumers can give a rating about the products but also about the service providers. Users feed the database and ensure that service providers are listed. Thus it would be in the interest of the service providers to behave in the best way possible to get a good rating and to be allowed to stay on the platform.
– Publish a charter : rules imposed and controls applied to service providers should be put online to be seen by users.
– Communication : any platform that wants to create trust should have a communication strategy via well-known media and they should achieve to convince them about the quality of their offering. As consumers trust journalists, if journalists trust these platforms, it will result in a favorable opinion.
– Internet website : it is essential to create a clear website that gives all information about the service and that allows to interact. The website will be the visible part of the company and this will create trust. If this website collaborates with well-known companies (in terms of payment, posting, etc) it will generate more confidence.
– Helpdesk : consumers should be able to call a helpdesk that is easily available and understandable, and that addresses issues and complaints effectively.
In short, these platforms should have a customer-oriented policy. It means that they should offer services that create confidence among consumers, such as favourable refund policy, a good value for money, short response time, etc. Consequently, it will create a word of mouth effect about the good service quality. In the other way, if there is any problem there will also be a word of mouth effect and it will quickly damage the reputation. Therefore platforms should have a self-regulating role and create rules to ensure their business model to work.
Finally, when a consumer buys on a platform he should have the impression that the service will be better than by buying in a physical store. A good example is Amazon : if a consumer returns a product, the referral fees are supported by Amazon, the consumer does not need to justify the reason for the return, he is repaid in the week, etc. In this way, the service gets better on the platform than in a physical store. To conclude, the platform should be designed in such a way that it gives the feeling to the consumer that the service quality is not lower, that it is not less reliable and that it is not more virtual than any other company which the consumer is in contact with.
In general, it is quite hard for a totally new product entering any market to gain instant trust. With internet-based platform it might be even harder as for our generation the internet is still seen as a potential evil, a group of dishonest people hiding behind a service/screen to extort credulous people. Services such as Uber then try to use… Read more
In general, it is quite hard for a totally new product entering any market to gain instant trust. With internet-based platform it might be even harder as for our generation the internet is still seen as a potential evil, a group of dishonest people hiding behind a service/screen to extort credulous people. Services such as Uber then try to use different mechanisms to establish trust but in my opinion whether it works or not is highly dependent on peoples’ gullibility.
One of the main ways those companies use in trying to provide the sense of trustfulness are the evaluation, reviews and written testimonials. They usually give all their users the opportunity to say what they thought or the service and recommend it or not to others. Those opinions are usually semi-anonymous which can be a great thing in the field of maintaining the writer’s privacy but it has its shortcomings. It is basically a stranger giving advice to another stranger so why should it be taken into account. It also opens the way for the companies themselves to uses this media to publish false reviews in order to make their services seem appreciated.
Another way are video testimonials, basically a user explaining in a short video why he/she likes the service. The fact that you can see the person gives the impression that he/she is less of stranger and help people to relate. But then again, it can shake people’s trust as it is usually part of marketing campaign. This might raise questions : Are those actors or real users? Are they paid users? Are there any bad testimonials?
Then there is the idea that you usually have to agree to “General terms and condition “ or sign some kind of confidentiality agreement. They usually states what can or cannot be done while using the service,… and could be a base for setting up trust between the users and also towards the company. Unfortunately they are usually quite long and there is some kind of social agreement that nobody reads those before agreeing, the initial purpose is then lost.
Finally the best way for those companies to gain trust is word of mouth. But this would imply convincing people to trust the service, provide an excellent service and then give them the incentives to talk to their friends, family about it.
So in conclusion those companies have to take a gamble counting on people with low risk aversion and quite trusting to promote their services. In that sense they usually try to provide the best possible service in order to assure themselves of this publicity and that is not something that all new companies can directly provide hence a fairly limited amount of those companies succeeding so far.
As many comments mention it, it is more than obvious that the key success factor for firms like Uber is to build trust between the two sides of the platform. Drivers and passengers have both an economical interest to use this service thanks to the indirect network effect (the passengers can find a ride for a lower price while the… Read more
As many comments mention it, it is more than obvious that the key success factor for firms like Uber is to build trust between the two sides of the platform. Drivers and passengers have both an economical interest to use this service thanks to the indirect network effect (the passengers can find a ride for a lower price while the drivers can recover their fuel’s cost). However, despite the economic point of view, Uber (and others) must be careful on a more human factor, i.e. trust.
Many persons are doubtful about this new “sharing-system”, where you must face a stranger that you have never met before. The successful idea of putting a rating on every rating is crucial to reassure the passengers by seeing the previous experience of former travelers. A positive externality of this is the creation of a communities where people trust each others.
However, since trust is based on the human perception (and hence really subjective), it is really hard to control and manage. It is a work on a long-run based on creating a good reputation, making the clients satisfied and understood, having a powerful word of mouth, …
However, firms like Uber can be criticized on many aspects. First they should more take care of the safety of the passengers. Many drivers in the U.S. where accused of sexual assault. Next, they should put as much efforts for the drivers as for the passenger.
To sum up, there is no need to argue on the economic point of view, it is clear that it is profitable for both sides. All the focus must be on the trust management by building a good reputation of the app.
Collaborative consumption P2P models have grown a lot in the last few years and will continue to do so in the near future. In fact, it appears to be a cheaper, more eco-friendly and resource-efficient way to exchange goods and services. It includes many different businesses, be it car sharing, apartment lending, clothes exchanges, etc.
The main problem with this… Read more
Collaborative consumption P2P models have grown a lot in the last few years and will continue to do so in the near future. In fact, it appears to be a cheaper, more eco-friendly and resource-efficient way to exchange goods and services. It includes many different businesses, be it car sharing, apartment lending, clothes exchanges, etc.
The main problem with this collaborative platforms come from the fact that they can only work if both side of the platform can trust each other. In fact, if someone needs a ride and decide to use a car sharing platform to find a driver, it’s essential for this person not to have to wonder whether the driver she will find will be reliable or not. In order to do that, platforms need to find creative ways to establish and maintain trust for the users.
Beside the already well-know mechanisms that exist to create or maintain trust at a high level, like the rating system where users of both side of the collaborative platform can give a mark to the quality of the service they experienced or the good they received, a new type of business has appeared in order to enhance trust in platforms. In fact, firms like Trulioo, which provide online global identity verification, have already helped many collaborative platforms establish a framework of trust simply by providing basic data on the users. In fact, if you can verify someone’s idendity, you can more easily make business with them, especially in the case of P2P exchanges where it’s most of the time between complete strangers. Moreover, they provide data for addresses, which is very interesting for every platform that needs to make sure they ship the products to the correct location.
In fact, the platform needs to make sure that users of both side can trust each other (that they do not cheat on the quality or the characteristics of the product they exchange) but also that users of both side can trust the platform itself. This is why verified addresses is a very valuable asset for these firms. Trulioo even provide an automated watchlist which helps detecting fraud and unreliable users.
To conclude, we can see that establishing trust among users of a collaborative platform has become a business itself.
Interesting to see how intermediation is also needed for intermediaries.
Dellis Adèle
Since the world has access to Internet, we have seen developing more and more two-sided platforms. Nowadays, nearly everything is feasible online. You can meet people thanks to Meetic and other dating websites, do grocery shopping on-line with your favourite store, sell your furniture or anything online thanks to eBay or book a room for a city trip though Booking.com.… Read more
Since the world has access to Internet, we have seen developing more and more two-sided platforms. Nowadays, nearly everything is feasible online. You can meet people thanks to Meetic and other dating websites, do grocery shopping on-line with your favourite store, sell your furniture or anything online thanks to eBay or book a room for a city trip though Booking.com. Nevertheless, how can we trust these website?
Most of the time websites propose to rate the service or product offered on their platforms. Therefore, the other users can have an idea of what to expect from the other side. As human being we need to compare if others have experimented and approved before rushing into any purchase. Moreover, in some case you can signal if anything goes wrong like with eBay and then the platform will investigate the case. This proves that you can rely on the website.
As for many platforms you have to enroll first and you can access to the site. Therefore, to ensure the authenticity of the person you cannot use a pseudonym. You are asked to give your real name and a real picture of you. Another mechanism would be to activate the payment only after the service or product has been delivered. This means that you pay through the platform and you receive a code. Then, you send the code to the other side if everything went well in order to achieve the payment or if you do not it will be automatically sent. Otherwise, you communicate to the platform if you have to declare something wrong. Personally, I am quite reluctant when I have to pay in advance for a hotel or a good that I will receive later. I would rather pay after like for carpool with Blablacar.
Nowadays, many people prefer to use P2P platform. P2P platform is to be a third party, if it can operate very well , then it can help to realize benefits of a two-side or even multi-side. But how to realize benefits and how to establish trust of a two-side, these become problem that we should consider deeply.
Take Taobao for example,… Read more
Nowadays, many people prefer to use P2P platform. P2P platform is to be a third party, if it can operate very well , then it can help to realize benefits of a two-side or even multi-side. But how to realize benefits and how to establish trust of a two-side, these become problem that we should consider deeply.
Take Taobao for example, Taobao is a website (but they also have app) that seller can sell things in this website and buyer can buy something in this website. Taobao is to be a third party, is a mediator of seller and buyer. I am totally agreed that a business opportunity emerges for a two-sided (or multi-sided) platform when three conditions are met. So Taobao is also having met three conditions. Firstly, there have seller and buyer two groups. Secondly, there have a indirect effects that maybe one buyer have demand to coordinate with many other seller, not just one. Lastly, if you don’t use Taobao, you will very difficult to contact with seller.
Now this website does a lot of effort to establish trust. Firstly, they have an evaluation system, after you received goods you not only can write comments and upload pictures of good, and also can give a mark to this seller’s service, the quality of good and the speed and service of logistics. These marks will represent by a shape of crown, if the seller have more crown , that mean he is a good quality seller , it can bring he a lot of consumers and profits, so seller will put more effort and good service to buyer. By contrast, if they have a low mark many times and received a lot of complain, then Taobao will punish he, maybe will drive he out of this website. And also seller can give mark and comment to buyer, because maybe some competitor pretend a buyer to write wrong information and to want decrease their competitor.
Internet business is different from traditional business; self –regulatory is can’t enough, because some things you can’t resolve by self. Like the special policy will regulate the internet business, because Taobao can seller many things, so government should observe and regulate, in order to avoid harmful things like pornography things. So internet business should combine self-regulatory with government monitor.
With more and more webpages being developed on the lines of the P2P sharing and negotiation, i've particularily been dealing with two platforms that deal with the same, pretty much: https://www.airbnb.es/ and http://www.housetrip.com/ . Both these webpages are effective on getting in contact travellers from all over the world with people decided to rent their places for short stays,… Read more
With more and more webpages being developed on the lines of the P2P sharing and negotiation, i’ve particularily been dealing with two platforms that deal with the same, pretty much: https://www.airbnb.es/ and http://www.housetrip.com/ . Both these webpages are effective on getting in contact travellers from all over the world with people decided to rent their places for short stays, mainly in touristy places.
For the travellers, the advantage is obvious: better value for your money when it comes to an overnight stay for example, and the possibility of getting a place of their own for the time in the city they are getting to know. For the people renting their places, it’s a new source of money, and they have the ability of renting their place whilst they aren’t using, without the intermediary of a real-state seller, and gaining a few extra bucks.
So much for the motivation: clients and renters are both encouraged to get onto these webpages, but how to trust them?
In both cases, the places to rent are based on a scoring system based on the reviews past clients submit, and thus when any new client arrives at the webpage and submits a search, the first results will be those with the best results on these reviews. That, as it is the case of Uber mentioned on the article, encourages renters to try to make their guests as comfortable as possible, And, on the other hand, new customers have the ability to read all past reviews and thus are more comfortable with the place they’ll choose to rent.
But really, in escense, since one could actually enter the site without registering until the payment is done, there is no real feedback on whether the travellers are well behaved, whether their proposal is honest and so on. So, finally there is no real channel through which renters are able to trust their travellers, and only depend on the comments and messages the travellers sends them prior to the rental period.
I believe this is the same case with many other P2P softwares, including Uber, since there is no real information about the clients, of course, and only about the drivers.
There are however some exceptions, like http://www.mercadolibre.com.ar/ , the argentinian E-Bay type of webpage. In this case, not only the sellers recieve reviews and get a certain score for their interacations, but also buyers. This is thanks to the fact that many of the users are both buyers and sellers, and thus have an account logged in to the page, and all these users are ranked and have their own reputation. This is thus, the way on which trust works both ways.
Personally , I am always suspicious again a product online and I would always account e-reputation before using a service. According to me, the word-of -mouth and online scoring systems to create a relationship based on trust between the customer and supplier are key indicators.
So I think that the hotel owners, put fake comments appreciation on the internet to… Read more
Personally , I am always suspicious again a product online and I would always account e-reputation before using a service. According to me, the word-of -mouth and online scoring systems to create a relationship based on trust between the customer and supplier are key indicators.
So I think that the hotel owners, put fake comments appreciation on the internet to promote their business .The trust is broken because it’s well known that such practice exists. The credibility of each comment is doubted.
Thus, knowing the person who posts the comment increases the transparency. I feel that the opinion of friends or relations on a service has more consequences than the opinion of a stranger. Thus, I believe it is important to be transparent about the identities of those who wished to give their opinions in order to increase confidence.
In addition , the company must establish internal controls to ensure the quality of their services. For example, make user surveys and test the service by investigators are still signs that the company is listening to its customers and ensure their comfort.
P2P grid environments demand the correct execution of tasks to guarantee good performance. However, in these environments, there are malicious users that affect the grid performance. These users modify the tasks results and even cheat security mechanisms.
The grid environment provides resources for various applications, such as storage, analysis and data virtualization. They are also characterized by the fact that users,… Read more
P2P grid environments demand the correct execution of tasks to guarantee good performance. However, in these environments, there are malicious users that affect the grid performance. These users modify the tasks results and even cheat security mechanisms.
The grid environment provides resources for various applications, such as storage, analysis and data virtualization. They are also characterized by the fact that users, beside donate their resources can also run their applications on P2P grid. Since the P2P grid can be formed by heterogeneous machines, located in different network domains and different types of users is possible, then, that there are malicious users, whose behaviour can decrease the performance of the grid. A well-known example is the malicious users who modify the results of the tasks of the grid.
The trust management is an important issue for ubiquitous applications, particularly those that run on P2P environments, where unknown entities (peers) need to cooperate and work together for common interests. Management models of trust can be built with reputation systems, determining the approval or rejection of transactions with partners (known or not) based on their reputation and the risk associated with them. The reputation of an entity is usually estimated based on its historical relationships with others.
However, the buyer should make sure that the seller is honest, that actually executes the sold service and that the information is consistent with what was advertised.
In this trade model the buyer remains in a vulnerable position in relation to the seller in the physical world, because there is not always information of the qualification, or it cannot be trusted. This vulnerability increases due to the inability to see and test the products they want to buy, in addition to the payment being commonly anticipated. With this, we run the risk of not matching with what was described by the seller. The seller, however, is in a comfortable position because normally receive payment in advance.
Typically, an individual with good reputation induces others to estimate a high confidence in interacting with him, on the other hand a bad reputation leads to low confidence.
While trust can be described as a subjective personal factor, reputation can be considered as a measure of confidence collectively elaborated. To trust, each individual chooses attributes based on personal experience, references from others, given their reputation for social networking. To reputation, each individual uses their social network to infer how the group classifies an individual or another group. The use of social networks where individuals interact to judge and determine the reputation of its members (buyers and sellers, for example) is one way to ensure security of electronic transactions.
The simplest way to compute the reputation of an individual is adding separately positive and negative qualifications, giving it a total value with the difference of these sums. This simple model is used by eBay, although rudimentary, it does not consider the intrinsic electronic transaction as deadlines, promptness and value attributes.
eBay is the largest online auction service between persons, and it offers no secure warranties. The risks of the transactions shall be borne by buyers and sellers. Therefore, an accurate reputation system becomes essential to assist the buyer in choosing the seller.
Reputation systems must have the following requirements:
1. Entities longevity to ensure the expectation of new interactions. Thus, the identity of the interacting entities is persistent and unchanging, avoiding disposal reputation already computed.
2. Current interactions measures should be registered and distributed. The challenge of this requirement is to ensure that entities that interact record their measurements.
3. Registries of past interactions should serve as a system to make good decisions in the current interactions, which depend directly on the usability of the system.
In my view, when we talk about developing trust for internet-based platforms, the idea to get it is clear. For me, there are some easy tools that a company can use.
First, there is the recognition of quality from a professional of the subject. To be more specific, I’ll give an example. If we read a paper on Wikipedia and we… Read more
In my view, when we talk about developing trust for internet-based platforms, the idea to get it is clear. For me, there are some easy tools that a company can use.
First, there is the recognition of quality from a professional of the subject. To be more specific, I’ll give an example. If we read a paper on Wikipedia and we saw that it’s approved by a teacher from a university, we immediately give more credit to the information we can find in the text. The tool for companies is so to show approval from influent people.
Second, it’s a bit the same as the first tool but the difference is that we use quantity of advice instead of quality of them. By example, articles from Booking.com or Tripadvisor.com are highly trusted if they have a sufficient amount of (good) comments. The diversity of comment brings honesty because it’s hard to fake.
If we get the two tools, we have even more trust. The first example I have in mind is Allocine.com. On this website, we can find information about movies and there are two quotations: One from journalists and one from people who comment and evaluate the movie. In a short time, this website became a reference when we look advice for a movie.
Third, there is number of users. They don’t have to express themselves. Only because we know that there is a large amount of users, we give credit to the website. We can’t imagine that it’s a scam if there are so many people who are using it.
Finally, I think that the level of implication that becoming a member implies can also be a brake for trust. For me, this is also why websites have to use freemium-premium strategy. If becoming a member is too long and if you have to pay straight away, you may think more than ones before registering. Some websites as Bwin.com even give money to new members in order build trust (and, to be clear, also to create addiction).
The e-commerce is a great breakthrough for our lives that not few people are having troubles to get used to. The chiefly problem arises from one of the most ancient fears because humans, by nature, are not well prepared to trust in unknown others and more so if they cannot interact vis-à-vis where recognizing skills to screen untruthful sellers take… Read more
The e-commerce is a great breakthrough for our lives that not few people are having troubles to get used to. The chiefly problem arises from one of the most ancient fears because humans, by nature, are not well prepared to trust in unknown others and more so if they cannot interact vis-à-vis where recognizing skills to screen untruthful sellers take place. Even so, this sector have flourished because the consumers do believe the benefits are higher than costs. Intermediary platform realize this issue and employ different efforts so as to consumers maintain this expectations. Pavlou and Gefen (2004) argues the perception of effectiveness of these measures are the key for enticing consumers to buy in online marketplaces. Same authors and Dellarocas (2002) also point out the consumers formulate beliefs about the overall quality of the entire marketplace from single experiences so it is another reason why intermediary should care about.
Pavlou and Gefen (2004) presents four kind of instruments to enhance trust: 1) Feedback Mechanism, 2) Escrow Services (e.g. PayPal) and 3) Credit Card Guarantee (e.g. Master Card guarantee). The success of all of them depends on how consumers effectively diminish their aversion to be involved in online transaction. Lim et al (2006) study two trust-building strategies: 1) Portal Affiliation and 2) Satisfied consumers endorsements. The formers means the incorporation of sellers in known websites in which there exist a trust transference whereas the latter stands for the displaying testimonials from similar profiles to the potential buyer, creating a reassuring feeling of someone alike which chose certain products. In this study, the unit grouping effect by satisfied consumers endorsements (the latter one) turned out stronger than the portal affiliation for convincing consumers to buy online. This has an insightful contribution which means the consumers are reassured if they believe similar others have bought the same product. You are not willing to pay for specialised hobby stuff if you have no knowledge about the others’ satisfaction.
Dellarocas (2002) argues in some marketplaces where sellers can offer multiple products with different quality there might exist misleading information by standard feedback mechanism. Hence, the researcher propose a “Goodwilling Hunting” upgrade to the typical feedback system in which there is a threat of future biased quality announced for liar sellers. For instance, a seller who overstates constantly his quality over products will have later a punishment and the potential consumers will know about it. Conversely a understating quality will lead to a premium in reported quality for consumers.
Summing up, the consumers is the same irrational human since thousands of years, with feeling and fears in this dizzy and moving world economy. Normally they have aversion to transact with people that they do know their faces, it is quite natural. The intermediary have to deal with it through devices which appeal to emotions as the satisfied endorsements by similar consumers do and the like. The adoption of vehicles without animal force, namely cars, was once controversial but it brought certainly us more possibilities than ever before, so why not the e-commerce?
References:
1) Building Effective Online Marketplaces with Institution-Based Trust- Paul Pavlou and David Gefen
2) Do I Trust You Online, and If So, Will I Buy? An Empirical Study of Two Trust-Building Strategies- Kai Lim, Choong Sia, Matthew Lee and Izak Benbasa
3) Goodwill Hunting: An Economically Efficient Online Feedback Mechanism for Environments with Variable Product Quality – Chrysanthos Dellarocas
My analysis is based on the article "Managing Trust in a Peer-2-Peer Information System" by Karl Aberer and Zoran Despotovic http://www.cs.rit.edu/~jjp1820/distributed/Managing%20Trust%20in%20a%20Peer-2-Peer%20Information%20System.pdf
As we all know, trust establishment in a internet-based platform is a common issue and the most discussed one, as it is the key for the platform's success. This happens, because the peer-to-peer system relies in the most imperfect… Read more
As we all know, trust establishment in a internet-based platform is a common issue and the most discussed one, as it is the key for the platform’s success. This happens, because the peer-to-peer system relies in the most imperfect and mistake-making individuals: people, that wouldn’t be the case in a business to consumer kind of system. Today, there are lots of different mechanisms that attempt to control and regulate this kind of platforms, but like in every system, not all of them are successful. Governments are also involved in these issue, because it is an emerging collaborative “sharing economy” that hasn’t been well defined or properly regulated yet, and when it comes to market’s and people’s benefit, failure is not something that can be afforded.
One of the mechanisms used for trust management in peer to peer systems is the reputation-based mechanism, that is basically focused on keeping the trustable people in the platform and removing the non- trustable people from it, according to user’s evaluation of the service provided and their personal experience. This mechanism is based in a repeated prisoner’s dilemma, because in the case of ride-sharing services, the Nash equilibrium for both, passenger and driver, would be to provide the best service possible; on the contrary, they would obtain a higher personal benefit on the short run, but in the long run they would be kept out from the platform and from the benefits it provides.
In my opinion, the responsibility relies on the platform’s creators and administrators, because as long as the platform is well defined and properly controlled, it shouldn’t cause any problems for the users. In addition to that, the repeated prisoner’s dilemma should bring both passengers and drivers to make a good use of the platform, assuming that the users are benefit seeker on the long run.
It is known that peer-to-peer web platforms contain more risks than normal web platforms, because most of them involve meeting the "stranger" like in Uber, sharing a ride or in other apps that coordinate sharing apartments, the users have to directly interact with the other customers. This is the reason why trust is so important and difficult to build,… Read more
It is known that peer-to-peer web platforms contain more risks than normal web platforms, because most of them involve meeting the “stranger” like in Uber, sharing a ride or in other apps that coordinate sharing apartments, the users have to directly interact with the other customers. This is the reason why trust is so important and difficult to build, because a profile is not enough, it is known that many people don’t use their real information on the internet.
People tend to be skeptical about this new kind of system, thats why a big part of these applications are the ratings and reviews. This way the users can base their decisions on other people’s experiences and not only on the profile information. Creating communities is a way of building trust, because people often trust people they can relate to or that have similar experiences to them.
The complicated thing about trust is that it means different things for different people, it’s based on cognitive factors and thats what makes trust is so complex and difficult to build. Nowadays the electronic market is big and constantly growing, people join different social media everyday. For this reason companies have identified the rentability of this market and started to invest on research, and they have acknowledged the importance of trust management. This focuses on making the customer feel understood and satisfied, this way the customer will use the app again and probably talk about it to his friends and family. In other words focuses on built a good reputation, that clients can rely on.
Because peer-to-peer web platforms are decentralized environments where no central database is available, the users would be unfamiliar with the other customer but familiarized with the application and its reputation.
In conclusion building trust is a big challenge for peer-to-peer big platforms, but they can build a good reputation using an accurate rating program with positive reviews, so for Uber specifically has to concentrate on dismissing the bad reviews drivers, so no more people would have bad experiences.
First of all,i think that these new means of transport which are getting quite popular, will increase the competitivity in the transportation market as they lower the prices with a comparable quality. So, we can expect a growth in the market.
Then, i want to share my personal experiences about car sharing websites which are relative to the subject.The first car… Read more
First of all,i think that these new means of transport which are getting quite popular, will increase the competitivity in the transportation market as they lower the prices with a comparable quality. So, we can expect a growth in the market.
Then, i want to share my personal experiences about car sharing websites which are relative to the subject.The first car sharing website that i used is http://www.carpooling.fr which i heard from my brother who is a reliable resource for me.So, i decided to give it a try as train prices are too high and there is no big time difference between car and train.Finally, i found a car and texted him, because that is how the platform works, then he texted me back to confirm the journey.However, there was a problem,i didn’t have any piece of evidence that the trip will occur and if he didn’t come, i couldn’t do anything. Luckily, the driver came and the journey was fine, which made me put my trust in the website.But, the driver may not came,and the platform didn’t guarantee it, so it would be a real time and money loss for me.Being aware of this situation, afterwards they changed the system.Now, there is a reservation system,you write your name on the page of the driver and the decrease in the number of available seats is displayed, which is more reliable but not enough.
The other car sharing website that i used is http://www.covoiturage.fr . Even though i didn’t like the design of the website (sometimes which can be a confidence provider), i find it more reliable.The main reason is, you pay with credit card when doing the reservation which is different than the other site i mentioned ( the payment is made by cash to the driver when the journey ends ),preventing you to not to go there.On the other hand, the platform gives passengers codes to give to the driver in the end of the journey,to be able to take their money from the platform. Thus, the platform is playing here the role of trusted third-parties.
In conclusion, it’s important for these websites to provide systems to make their platform more reliable.Therefore, reliability doesn’t mean profit everytime because it requires investment and to gain it back, the company may need to charge consumers with booking fees which can lead them to look for the other less reliable but more economic website.
As I am not using a specific peer-to-peer site I cannot talk about the systems established to create a reliable consumer-to-consumer business. But I will try to issue some ideas to build trust upon the users of such site, based on what I have heard in the past or what I would do if I had a P2P business on… Read more
As I am not using a specific peer-to-peer site I cannot talk about the systems established to create a reliable consumer-to-consumer business. But I will try to issue some ideas to build trust upon the users of such site, based on what I have heard in the past or what I would do if I had a P2P business on the internet.
First of all, I completely agree about the fact that one rotten apple will waste a whole basket. I thus understand the point of a reliable site. If I was responsible for a P2P business based on the internet, I would first try to destroy the fear that my future clients could met. There is indeed no worse enemy than fear. On the internet, it is the fear of losing either your money or some personal information. To avoid such thing, I would make the subscription to the service more complicated for lunatics. By paying a fee of $100 for example, people with bad intentions (or not trustworthy) will think twice before subscribing to the site. Of course, for honest people I would create a system of grades that you receive after each month or service. If you collect enough good grades, you get your $100 back. It might be reluctant for these gentlemen to subscribe in the first place but I think it is the price to pay for a trustworthy business. Note that this system is partly used by Steam, a digital distribution platform of video games, where independent developers can submit their game to the shop if they have payed a once life time $100 fee. It avoids Valve, the company in charge of this business, the problem of having its shop completely flooded by irrelevant games.
For what I know, the system of good grades is used by Ebay, the peer-to-peer online market. It helps the consumers to highlight who are the people with whom you can make business.
Depending on the kind of service established, it would be nice to have a payment system allowing a sort of “buffer”: As long as the two part of the transaction are not correctly satisfied, the payment cannot be fulfilled. Of course some people might abuse of this system and steal some free services. But I think that the people in charge of the P2P business could manage to sue those fraudsters with the personal information that the fraudsters have submitted for their subscription. Otherwise, there is still the bad grades that will affect their profile. This will then quickly end their thefts.
Internet has connected people all around the world, but it has also brought some drawbacks. The lack of trust is probably one of the biggest issues, and it is a key challenge for peer-to-peer service companies. I’ll try to answer the question asked by sharing my personal experience with a ride-sharing website.
When I was in Erasmus 3 months ago, I… Read more
Internet has connected people all around the world, but it has also brought some drawbacks. The lack of trust is probably one of the biggest issues, and it is a key challenge for peer-to-peer service companies. I’ll try to answer the question asked by sharing my personal experience with a ride-sharing website.
When I was in Erasmus 3 months ago, I frequently used a ride-sharing website named amigoexpress (http://www.amigoexpress.com) for travelling all around the Quebec. I was told the website worked very well, and that it was very useful. Indeed, I signed up on the website and made many travels thanks to it. The principle is very simple as you register on the website, you have some information to give about yourself and then pay a fee for every travel you make. In return, you can access to the rides offered by the drivers who set the price they want to receive (and that you pay in cash after the ride). The concept is a little bit different from Uber, because the main goal is not to make money, but it is more to share an experience with other people, and get to know other people. Of course, it benefits both sides as it reduces the cost of travelling.
The website uses different methods to assure trust for both parties. As passenger, you have to give some information about yourself, included a phone number which allows to contact the driver in case of delay (for instance). Moreover you have to pay a fee on the website to take part of a ride which works as an incentive to be present. The drivers can directly enter in contact with amigoexpress if passengers do not show up in time and they can therefore be banned from the website. A critical issue is that you do not know the information of the person with whom you’ll travel before your reservation. It is only after your reservation that you can have access to information, such as the number of travels the driver has already done, etc. As drivers, you have to give information about yourself and the car. Amigoexpress checks (following their website) the driving license of all the drivers. The website gives also the opportunity to share experience and give feedback. Following my experience, the website is very popular, and most of the time works very well, as discussed with other users. In this particular case, both parts have an interest to be trustworthy.
More generally, a big part of the trust issue is the limited and potentially unreliable information about past transactions on the Internet [Resnick, P. (2001)]. But at the same time a bad experience can be recorded very quickly. The two-sided platforms encourage the disclosure of bad seller/buyer, and put in place mechanism to give credit to the users. For instance, ebay gives profile information (and rating) on sellers, because it is basically on them than the trust issues rely on.
I based my analysis on this article written by Monahan (http://www.triplepundit.com/2012/03/start-next-airbnb-solve-problems/). The author is exposing some solutions about in order to increase the trust on peer-to-peer models.
One of the main problems appears to be the fear influencing the trust that the customers can observe by interacting with others. One first solution is to set up what the authors call… Read more
I based my analysis on this article written by Monahan (http://www.triplepundit.com/2012/03/start-next-airbnb-solve-problems/). The author is exposing some solutions about in order to increase the trust on peer-to-peer models.
One of the main problems appears to be the fear influencing the trust that the customers can observe by interacting with others. One first solution is to set up what the authors call a vetting or a selection process. Some checks about the parts that will offer the service is mandatory. This person will then have to pass some tests, quizzes… That will give him a certain status to practice. Secondly, it is about creating a reputation, without any status here, the idea is to rate the person involved in the service, in order to increase trust hardly. It is actually the solution that Ebay is adopting by rating the users with a star’s system. Another solution is the use of social Medias, using for example Facebook profile in order to better know the other person, but it is less trustable than others as long as profiles can be manipulated. Finally, it is to enforce norms, as a users I will have no right to make any mistakes. In case of an error, I will be banned from the system. This final method is reducing risks only after making mistakes so it can be seen as too late in certain cases.
As a conclusion we can say that trust can be easily maintained but it depends of course on the objective of the platform. As long as there are some extensions on the network, you will lose control and then some problems could occur and the trust on your website will diminish. Therefore, I think that there is a certain limit to extension on peer to peer networks, and you can extend it as long as you have control on your users. Finally, I think that there is also a certain distrust that must be taken by the users especially in avoiding some websites that seem suspicious.
Based on past experiences, the trust develops after several interactions between the platform members. The mutual trust is the consequence of a social process between the users that interacting on the platform.
Two activities are in presence in a platform. On the one hand, the economic exchanges that allows trade goods or services in exchange for a price. On the other… Read more
Based on past experiences, the trust develops after several interactions between the platform members. The mutual trust is the consequence of a social process between the users that interacting on the platform.
Two activities are in presence in a platform. On the one hand, the economic exchanges that allows trade goods or services in exchange for a price. On the other hand, the social interactions between members of the platform, « social interactions refer to any behaviors in which each party tries to affect or take account of the other’s subjective experiences » (1). Trust can be seen as an indicator of quality. This implies a strengthening of trade relations. But a difficult task is to translate the trust that we know in the real world into the virtual one.
Thus, I think that the exclusion strategy is necessary in the platforms like Uber because the quality in the network is more valuable than the quantity. Each member evaluates the quality more than the quantity thus the exclusion should be organized depending on the degree of quality that the platform would like to achieve.
The quality criterion will be difficult to assess and to observe before interacting with the potential users. The price charged by the platform to access the services could be a good filtration to keep a platform into a high quality but it is not enough. The platform have to incur the cost of detecting quality of platform users . The platform provider has to collect a large mass of information to select quality people, it is a very demanding job that would be reflected in the pricing structure. We can imagine that the platform provider adapt his pricing provided that the user demonstrate is quality. In this way, the low quality users could leave the platform.
References :
(1) Chen, J., Zhang, C., & Xu, Y. (2009). The role of mutual trust in building members’ loyalty to a C2C platform provider. International Journal of Electronic Commerce, 14(1), 147.
(2) Azderska, T., & Borka Jerman-Blazic. (2013). A holistic approach for designing human-centric trust systems. Systemic Practice and Action Research, 26(5), 417-450.
In an peer-to-peer system, where “there is no notion of a client or server but only pairs of peers that work both as a client and as a server for other network peers”, exactly because they don’t depend on a server and all peers are interconnected allowing access to any peer, the network has high availability and sharing of resources… Read more
In an peer-to-peer system, where “there is no notion of a client or server but only pairs of peers that work both as a client and as a server for other network peers”, exactly because they don’t depend on a server and all peers are interconnected allowing access to any peer, the network has high availability and sharing of resources is greater. In order of this sharing of resources peers often have to interact with unfamiliar peers and need to manage the risk that is involved with the interactions. This is one of the main challenges of this type of system, because as there is no central trusted authority (like a server), they must to create mechanisms to build users’ trust. This also happens with all transactions between the internet (e-commerce).
In my point of view, is very important to create firstly, a good recommendation system based on a community where it is possible share experiences and knowledge between customers in order to get advices for bring confidence among users of the same service. Through a recommendation system it is possible that customers have a better insight into the quality of service and thus the service gain high reputation and trust that needs to “survive”. But otherwise, there may be customers who were not satisfied with the service and therefore will have an unfavorable opinion about the service, which may lead other customers to have a poor perception of the business. In these cases is necessary a regulation system that will combat these failures in order to avoid a drift of his reputation.
In order to get reputation they can also use a score-based recommendation system to rate the drivers, in case of Uber, this allows customers to have a better insight of what may choose and qualify better the service. This type of services need more established trust, and to make customers feel safe is necessary to insure that the drivers answer to a certain amount of criteria, like asking for their driving licence and accident history. Still in the same line of thinking, to promote customer confidence is necessary to ensure data privacy and personal information, as well as security of payment systems.
So I think that this type of service is required the customer has the most information possible about the driver and know from previous experiences in order to feel more secure and confident in the service that will acquire.
When we talk anything internet wise we know trust is always an issue, you never know what you can trust in the internet, but over the years a lot of platforms have been created to help businesses or individuals earn the trust of the clients. Some are well known some are not and it also differs from country to country.… Read more
When we talk anything internet wise we know trust is always an issue, you never know what you can trust in the internet, but over the years a lot of platforms have been created to help businesses or individuals earn the trust of the clients. Some are well known some are not and it also differs from country to country. Sometimes is not just a person you have to trust but a whole company or business. I haven’t had the need to use one of these services in particular of driver-passenger platforms, but I have used a lot a similar platform, the ones who compare hostels. For example: Hostel World or Hostel Bookers.
These platforms work in a similar way, you go to this platform because it’s a way to compare all the available hostels in a same page so you don’t have to go looking into their personal pages one by one, the platform suggest some hostels that they find are suitable for you, and then they also list the rest of the hostels that are available, but how to know if you can trust these hostels? Well they use client reviews, so you can read what other customers think about those hostels in this platform, the problem with this is that every one has different criteria as what they find as a suitable hostel, so even though there’s a average mark on the hostel, when you read the individual reviews you can find extremes, people who loved it, people who hated it or people who was indifferent. So the same question is presented in this type of platform, either you just trust the hostels that the page says are suitable or you trust the average comments of past costumers. The important part for this type of platforms to work when the clients write reviews is that the more clients use this platforms the more reviews you find and that way the extremes are less and less and you can see more people coinciding in the review. Even though the platform has no power over the reviews or a way to assure they are correct, they are just acting like an intermediary for people to share they experiences.
So in my opinion and in my experience I trust more the platforms that have more users and more reviews that I can compare with. I trust more when people share their experience than if a certain platform assures me quality without reviews.
I found information from “How trust is built in Peer-to-Peer Marketplaces” by Francesca Pick (2012) http://www.shareable.net/blog/how-trust-is-built-in-peer-to-peer-marketplaces .
It is true that there is much more risks in peer-to-peer marketplaces than in business-to-consumer e-commerce. This is why the necessary foundation for P2P is to have trust between strangers. Indeed P2P transactions need identity verification; so, in order to facilitate transactions, cross-platform… Read more
It is true that there is much more risks in peer-to-peer marketplaces than in business-to-consumer e-commerce. This is why the necessary foundation for P2P is to have trust between strangers. Indeed P2P transactions need identity verification; so, in order to facilitate transactions, cross-platform trust and identity systems have been created such as TrustCloud or Peertrust. They allow you to create a “pass” showing how trustful you are. Indeed, having a good reputation insured by other users is a good point as it decreases the risk of bad behavior. But also, if a user behaves badly, you can get back at him. Being sure about the identity is key to install trust.
In her article, she explained two ways to reach consumers trust.
First, transparency is important. Companies use trust scores to help people have opinion about other’s trustworthiness. In that case it’s essential to be transparent about how the scores are measured. The question about data privacy is also central as those kinds of system depend on the users’ willingness to give a third party their data in return for building their online reputation.
Second, we can use communities to build trust. A sense of community […] may even lead to more moral and selfless behavior. Indeed, in communities, users can self-regulate themselves. Trust can be implemented as everybody knows others users. She also explains that you have to connect people who have similar interests or values to make this works. She also gives the example about Airbnb that allows users to upload videos about themselves and created groups to lets users connect based on their preferences.
She also underlines some limits when building trust. The concept of trust is in itself complex as it is difficult to define. Also, the motivations behind customers’ willingness to share are disparate. And finally, the culture is to be taken into consideration as the trust varies across cultures.
In conclusion, building trust isn’t easy to implement but it’s the main key to success in a P2P platform. So it’s completely worthwhile to work on it. In her thesis, Francesca Pick offers two ways to build trust: transparency and communities.
In peer-to-peer industry, trust and reputation are indeed primordial. I think that, besides the platform’s utility, it is the most crucial thing to success and convince people to use your platform. However, P2P markets present difficulties to ensure quality and reliability of peers.
Concerning my experience, I totally agree with the comparison: « it suffices to have one rotten… Read more
In peer-to-peer industry, trust and reputation are indeed primordial. I think that, besides the platform’s utility, it is the most crucial thing to success and convince people to use your platform. However, P2P markets present difficulties to ensure quality and reliability of peers.
Concerning my experience, I totally agree with the comparison: « it suffices to have one rotten apple in the bag to spoil the rest of them in no time, something that a two-sided platform simply cannot afford. » Indeed, I do not use often this kind of platforms but when this is the case, I use and buy only because I know the reputation. However, if I have a bad experience from the start, I immediately lost my trust in this platform.
So, it is important for a “P2P firm” to organize reputation system and mechanisms to control the quality of their members. It is also important to allow to each user to know the quality of the others. However, reputation cannot be put in place directly. P2P platform have to build its reputation by implementing systems based on the implication of its members to create a community. I think that the more members are engaged and active, the more is the credibility and the dependence of this kind of platform from its members. For instance, regulated forums or space to share experience are often used. By sharing knowledge, affinity and confidence between members could emerge. By sharing knowledge, affinity and confidence between members could emerge.
Moreover, I think that to control and verify quality and reliability of a member from this kind of platforms, you have to have access to results of his previous experiences and his evaluation by the previous users. The more informations and transparency you have about members, the more you are able to use P2P platforms.
Peer to peer platforms are getting more and more important and in general they are very useful and profitable for the users from both sides.
But of course, without trust, those platforms can't work at all, you always need minimal trust in the person you are dealing with. That is the typical problem of those apps or websites, because when you… Read more
Peer to peer platforms are getting more and more important and in general they are very useful and profitable for the users from both sides.
But of course, without trust, those platforms can’t work at all, you always need minimal trust in the person you are dealing with. That is the typical problem of those apps or websites, because when you don’t see directly the person you are dealing with, you can’t make your own opinion.
So other additional mechanism to build trust are needed.
The most obvious one is of course the rating system, you can then build your trust with the rating the other users made of the person. This kind of system is very easy to put in place and it doesn’t cost to much for the company.
It gives you a better idea of the person you are dealing with but of course that doesn’t mean you will be satisfied at the end.
But the problem comes when a new provider arrives on the website, at that moment he never had any relation with any user of the platform, so he can’t have any rating from other users.
That means it will be difficult for a user to trust him, the user will prefer other persons with a good evaluation. So the rating system is hostile to new users, they have to wait until a user trust them without any proof they can be trusted.
For me, the best way to have a high rate of trust on the platform has to pass by the people who run the platform, because they are the intermediaries.
For example, they could put in place an entry exam for the new providers who want to enter the platform, that will reassure the users about them. In parallel, they can still keep the rating system in place, but that will reduce the problem of new users.
They could also use anonymous testers to verify the quality of the providers.
Of course these solutions represent a big cost for the company and depending of the type of service it can be more or less difficult to put in place.
The question is: will the users of the platform be ready to pay a bit more if that increases the general trust on the platform?
Depending on the answer such a system could raise the number of users if they prefer trust or reduce it if they prefer a lower cost.
First, I would like to give my own experience about a P2P platform. Then, based on my own experience, I will conclude by giving mechanisms that could establish trust.
When I was younger, I used to buy and sell computer materials using one of the older French website devoted to computer hardware and named hardware.fr. This website has a forum with… Read more
First, I would like to give my own experience about a P2P platform. Then, based on my own experience, I will conclude by giving mechanisms that could establish trust.
When I was younger, I used to buy and sell computer materials using one of the older French website devoted to computer hardware and named hardware.fr. This website has a forum with a big community where it is possible to have advices, to discuss about computer hardware and to buy or sell second hand electronic materials like computers, motherboards, processors, cameras, smartphones, and so on. This is like eBay but in a more archaic form. On this forum, transactions are based on trust and only trust. This is why it is in my opinion interesting.
I sold and bought some things on this forum without any issues. Indeed, I had a particular manner to verify whether a member was reliable or not:
– Checking its number of message;
– Checking quality of its message;
– Checking number of transactions. Each member who sell or buy has in his “banner” (that is to say, a frame below the message you post where it is possible to include some information) his feedback. It was so more easy to have a list of its transaction;
– Checking its date of registration;
Moreover, the forum has a black list where bad sellers/buyers are listed.
By doing all these steps listed above and by checking the black list, I was sure at 99% that a member was trustworthy or not.
Moreover, the reputation of the website played a major role in my decision to buy/sell or not on this forum. Indeed, members of this forum have good knowledge on what they sell/buy and they often participate actively in some topics. Concerning regulation, administrators of this forum do well their job in case of fraud or attempted fraud by removing crooks, registering complaints, and so on.
Based on my own experience and on what I have seen on other exchange platforms, I think that a P2P platform should put in place a good recommendation system based on quality of the service offered by a member. Indeed, a score-based recommendation system is nice to have an idea of the service offered by a person, but a personal opinion judging the quality of the service is in my opinion imperative. In my example above, each member who sell/buy has a feedback which lists comments about past transactions.
Then, as mentioned in the article, reputation is also important. While it could not be put in place directly, a P2P platform should build its reputation by implementing an efficient regulation system to avoid any drift. In my opinion, this reputation is also based on the implication of its members. I think that the more members are implied and the more a community is active, the more reliability of this kind of platform from its members.
Finally, I would like to focus on the importance of an active community. By sharing their experiences between themselves or by sharing knowledge, affinity between members could emerge. It could bring some good vibes and thus bring some confidence between members. Hence, a P2P platform should also focus on a smart community platform to allow members to share their personal experiences in order to create an active community.
Internet-based platforms, such as Uber, provide a space for buyers and sellers to interact. They also have an intermediary role of being a trusted third party, in providing certification of each actor (buyer and seller). It is true that they share the problem of establishing trust, when companies such as Uber involve the general public being left 'to their own… Read more
Internet-based platforms, such as Uber, provide a space for buyers and sellers to interact. They also have an intermediary role of being a trusted third party, in providing certification of each actor (buyer and seller). It is true that they share the problem of establishing trust, when companies such as Uber involve the general public being left ‘to their own devices’, it is hard to know whether the platform has found these actors to be fully reliable or not.
It’s simple enough to see why trust is such a huge necessity when building these platforms. Consumers talk. The classic ‘chatter’ or ‘word-of-mouth’ means that consumers will discuss their purchasing experiences, and not only that, fellow consumers will listen. They are much more likely to trust a peer rather than a company who claims safety/qualification or whatever the requirement may be. Thus, more formal signs are needed so that consumers can put a bit more trust into service providers. They need to know that someone has given this person/supplier the ‘go-ahead’ and that all is above board. It’s a question of security and familiarity among other things.
These formal signs, or mechanisms, which could be put into place to gain trust, must include certification, testimonies from previous users perhaps to induce credibility. According to a study done by Bryan Parno, Carnegie Mellon University 2010, (https://www.usenix.org/legacy/events/hotsec08/tech/full_papers/parno/parno_html/index.html) any commodity computers have come equipped with a ‘Trusted Platform Module’ (TPM) which is a software designed to establish trust on a computer, but there still lies a difficulty in executing this on a particular machine. He claims that perhaps the TPM could enhance an intermediary’s role as a ‘Trusted Third Party'(TTP). This could be done by equipping The TPM with a certificate provided by a trusted third-party or accreditation system which associates the TPM with a particular machine and can rate the trustworthiness or reliability of the seller. The verifier (user) can use the trusted third party’s public key (code) to verify the certificate and establish trust in the TPM’s public key. The verifier only needs to perform basic certificate checks, no hardware changes are needed, thus easier for the consumer. However, it is still unclear how the verifier could communicate the TPM’s location as specified in the certificate to the user in a clear and unambiguous fashion.
Another mechanism that could be used to establish trust is for platforms to go one step further with TTP and build trust is by using various labelling mechanisms such as trust marks to inform consumers of the reliability of the service provider. (http://www.brookings.edu/~/media/research/files/papers/2014/02/internet%20international%20trade%20meltzer/02%20international%20trade%20version%202.pdf)
This can demonstrate to consumers that the platform meets specific criteria, such as providing consumer protection against faulty suppliers (e.g. unlicensed drivers), enhancing and securing trust. Any ‘rotten apple’ would not spoil the market as they would need this mark of approval before entering in the first place.
Trust is an obvious issue in the reliance of potential consumers on drivers that are not controlled and recognized by the government. Other two-sided plateforms have build a rating system in order to address this problem.
The specific issue raised by services such as Uber comes from the fact that it involves a bigger risk. If you buy a $1.99… Read more
Trust is an obvious issue in the reliance of potential consumers on drivers that are not controlled and recognized by the government. Other two-sided plateforms have build a rating system in order to address this problem.
The specific issue raised by services such as Uber comes from the fact that it involves a bigger risk. If you buy a $1.99 app for your Smartphone, looking at the editor’s reputation and other products, the reviews and ratings of the app can help you figure out if it is worth spending that amount of money. Though, lots of these apps are freemium so you can try them out beforehand or, if they are not, you can always watch a video on the internet of them running to get a better idea of what you are considering buying. In the end, the small price, along with these testing possibilities, makes this purchase a very low risk decision. In contrast, trusting a stranger to drive you from point A to point B involves a lot possible problems. We won’t get into extreme cases of criminals using this service, but just considering the skills of the driver which are either completely unknown or unconfirmed raises the issue of trust. I believe that such a service has every incentive to only retain the best drivers and regulate its plateform very carefully to make consumers feel safe about using their service. If Uber takes mesure to insure the trustworthiness of its drivers by asking for their driving licence, car’s immatriculation and accident history, this service eventually be seen as equally trustworthy as cab companies. Other important aspects needed to be addressed are the driver’s responsibilities in case of accidents.
These points are important in order to protect both the drivers and the passengers from each other. Uber has already taken some mesures towards that by making payments possible through the app.
Before such mesures could potentially be implemented, the system needs an effective rating/review system that allows both drivers and customers to rate and review each other. A system that would be comparable to that of eBay, where important metrics are; the number of transactions, the average rating and the relevant critics brought up by the negative reviews. If applied correctly to the Uber app, bad drivers and passengers would quickly be out of the system and only the reliable ones would stay relevant.
After many other p2p services have emerged and gathered a trusting community of users (eBay, airbnb, Couchsurfing, …), it seems that Uber will find its community as well if it can survive the lobby pressure.
Trust is ”a kind of social capital which makes coordination and cooperation between people possible” (Kamari & Kamari 2012). Without trust there is anarchy, as the world relies very much on trust. As mentioned in the post and other comments, trust is generally gained or vouched by an official trusted entity (e.g. government, rating sites, Apple app store). But the… Read more
Trust is ”a kind of social capital which makes coordination and cooperation between people possible” (Kamari & Kamari 2012). Without trust there is anarchy, as the world relies very much on trust. As mentioned in the post and other comments, trust is generally gained or vouched by an official trusted entity (e.g. government, rating sites, Apple app store). But the problem of the initial trust needed to grow is difficult without these official entities, and there lies a higher risk for the first customers using a new service. My comment has an example of how online trust is structured and an possible (but unlikely) solution for a online official trusted entity.
Kamari & Kamari (2012) identify that online trust is created from four main blocks: professionalism, reliability, technologic incentives and consideration. Their paper concentrates on B2C websites, but I believe the results are applicable more widely in e-services. They identify professionalism as usability, branding, user interface and graphics, in common terms how legitimate the service feels like. These are possible to achieve in the beginning. Real-world presence, size and customer orientation are factors considered to reliability, but these are hard to have in the initial faze, where the egg-chicken problem is present. They effect mostly more developed products. The technologic incentives include security, payment systems and user’s privacy, which are necessary for services like Uber. These can be present in the initial trust building faze through security sertificates and usage of certain payment methods e.g. Paypal. The consideration part includes self-reputation and other-reputation. Self-reputation can be achieved through advertising, but other reputation requires experiences from other users, hence it cannot be present in the initial phase. Hence according to Kamari &Kamari (2012) the tools for building an online reputation in the initial phase lies in the product and advertising. If the product is perceived as a quality product (usefull, nice graphics, good interface, works well, safe to use) and is advertised to gain self-reputation the product or platform could be a success. The initial users need to be gained through a good product and advertising, and after that reputation and size will bring further online trust.
One solution to the problem asked is “The Trust Network” which would work as a trusted online entity (http://www.forbes.com/sites/kostaperic/2012/08/30/the-internet-the-digital-economy-and-trust-where-are-we/ ). The trust network is a network where you can show that you trust somebody. It’s sole purpose is to show how trustworthy you are. There are “Trust Anchors” which are founding members and newer members elected by the general members to become “Trust Anchors”, to lead the way and be of higher influence. They then trust other people and services, vouching for them. Normal members can also trust each other and the persons with highest trust levels are more influencial. However I don’t see it as becoming a general population entity as it has the same egg-chicken problem as other online services. The problem is that the gain from the active use is minimal, and hence I don’t believe it is going to grow very large. But it would be handy as other new platforms or services could gain trust from “the Trust Network” and thus be vouched for by an official entity.
Kamari, F. & Kamari, S. 2012. Trust in Electronic commerce: A New Model for Building online Trust in B2C. European Journal of Business and Management. Vol4, No.10.
As explained by my peers, establishing trust on the internet is challenging. It is even more complex when transactions are made between consumers. According to Mayer, R. et al (1995), trust can be defined as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a… Read more
As explained by my peers, establishing trust on the internet is challenging. It is even more complex when transactions are made between consumers. According to Mayer, R. et al (1995), trust can be defined as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party” [17, p. 712]. The main questions are: “who can we trust?” and “Are the reputation system sufficient in order to ensure it?” I will depict first my personal experience about P2P systems and then I will try to develop some specific mechanisms put in place by websites in order to build confidence.
I recently wanted to join some friends in Paris. In order to share the transportation costs, I decided to subscribe on eurostop. It is an intermediary platform as Uber which puts drivers and passengers into relation. Eurostop do not earn money from the deal (I guess it earns mainly through advertising) and there is not that much reputation system established. I used it because 3 friends of mine had already used it. They all told me that it was safe and that no worry happened to them. After having used it, I am not as confident as my friends and I won’t use it anymore. I realized that the entire transaction was relying on trust but nothing was established to ensure it. During my experience, a couple was interested in doing both ways with me. When we arrived in Paris, they told me they had no money but they will pay the entire amount once we get back in Belgium. I accepted and this was my mistake: I trusted them though I met them only 4 hours ago. When I arrived at the meeting point, the couple was not there. It occurs that they were just waiting at the wrong subway and that I found them 30 minutes later by driving around. However, it remains a bad experience which has pushed me to pay more attention to the reputation systems (even if they are not 100% reliable) when I make a deal on internet. Unfortunately, I believe that negative experiences with one seller tend to be generalized to the community of the seller. What are the mechanisms established to achieve trust?
A recommendation system bases its proposals on external events (purchase of music or books made by previous consumers who seem to have some identical tastes as yours). A reputation system is mainly based on explicit ratings made by a community. They may be falsified. Though the higher the number of ratings, the more it is thinkable that the product can be trustworthy (always be careful). Though, I suppose that a negative feedback is more influential than a positive one.
However, even if the reputation system is essential in building trust and promoting quality, it is often undernourished. Having a well established reputation system can make a website a success. On the basis of Amazon, I depicted 3 ways of estimating reputation:
1) The number of transactions accomplished or even the number of comments posted.
2) The score and ranking given to the product
3) The top reviewers opinions
Those three points are according to me transposable to Uber (which is already using some of those points) and Eurostop (which is not). However, I think that a personalized reputation system for each good or transaction is mandatory. The fact of asking a minimum 3 years driving license without having done any accident can be a proof of trustworthiness. According to me, such services need even more established trust than the simple fact of buying a book due to the fact that it implies the security (the life) of the consumer.
Mayer, R.C.; Davis, J.H.; and Schoorman, F.D. An integrative model of organizational trust. The Academy of Management Review, 20, 3 (July 1995), 709¬734
Online dating sites are another good example of online platforms that require trust and good reputation in order to attract consumers and generate revenues for the platform owner. This is perhaps due to the fact that one will have to give away personal details and share them with strangers, and also because of the potential risks associated with the services… Read more
Online dating sites are another good example of online platforms that require trust and good reputation in order to attract consumers and generate revenues for the platform owner. This is perhaps due to the fact that one will have to give away personal details and share them with strangers, and also because of the potential risks associated with the services provided (providing a stepping stone for potentially meeting total strangers in public, risk of humiliation by other members, identity theft etc.); also most crucial to a dating site’s reputation is its success rate in creating good matches between its members.
How do dating sites go about addressing these problems?
The information provided by members of dating sites is perhaps the single most important means to estimate whether one might get along with one another. This being said one might want to overstate personal characteristics to increase chances, e.g. by picking a profile picture that puts the individual in a favourable light, by inventing around etc. Also, people might create fake accounts to satisfy other goals (innocent cases perhaps include satisfying one’s curiosity wrt what these platforms look like, but there is also room for more or less ill-intentioned people, for instance wishing to set a phishing email trap).
A simple way of alleviating the latter and actually a side-effect of the effort to monetise the offered service could be to levy fees for becoming member. This might deter a majority of curious or ill-intentioned people from participating if their willingness to pay is lower than that of “serious” people. A problem with this of course is that the services offered by online dating sites are experience goods. Since people cannot tell the value they attach to the services in advance (except perhaps once good reputation is established), levying an upfront fee could hold them off from joining the platform. This is perhaps the reason why many dating sites give free access for a limited period of time (and a limited number of available features, e.g. you can see other profiles but not contact them) to new members.
Another way to address both problems in the above is through cross-verifications and testimonials between members of the site once they have actually met on face-to-face dates. This is for instance the approach taken by TrueDater.com (note: I haven’t accessed the sites mentioned; I instead got the information from some slightly outdated secondary sources so (1) I don’t know whether the site is still running and safe and if so, (2) I don’t know whether they have changed their approach). Again, this is only an imperfect solution since it could make members susceptible to blackmail à la: “If you leave a bad review, I do to.” At least, levying a positive fee and the nature of the services provided render artificial inflating of one’s reputation, e.g. through reciprocal “likes” between friends, unlikely also because being member of such platform is not necessarily something one would like people in his or her entourage to know.
Finally, some dating sites actually conduct background checks of their own on their members. These include criminal background investigations and public record screenings to check whether members are married as for instance done by True.com. Similarly some dating websites give their “premium members the opportunity to prove that their profile is consistent with their identity. Attaining a ‘Verified Member’ badge guarantees that the profile is genuine and that the related information is true, creating greater trust between members and making it safer to get in contact.” (elitesingles.ie).
As already stated by my colleagues and by the article, trust is one of the biggest challenges of Pee-to-Peer services companies. Indeed, you never know whether the person you are dealing with is serious and/or reliable.
When you are dealing with professionals (in this case : recognized taxi drivers), you establish your trust in the basic fact that they either have… Read more
As already stated by my colleagues and by the article, trust is one of the biggest challenges of Pee-to-Peer services companies. Indeed, you never know whether the person you are dealing with is serious and/or reliable.
When you are dealing with professionals (in this case : recognized taxi drivers), you establish your trust in the basic fact that they either have been recognized by an official institution, or that they are part of a company that takes over the liability of their employee in case something goes wrong.
But with pure peer-to-peer services, this trust is non-existent. You cannont rely on any “higher” authority to guarantee you will get what you have paid for or been offered. Te intermediary (in this case : Uber, for example) is already some kind of such a higher authority, but as we are still in a peer-to-peer relationship, people need more in order to trust the mechanism they are dealing with.
If we take the example of Djump – a Belgian based P2P community delivering similar services as Uber – they are working with two “trust-ensuring systems”.
The first one is that, to be a Djump driver, you need to have delivered the proof that you did not have any accident in the past 3 years.
The second one, and the one in common with most other platforms as eBay, Uber, couchsurfing, etc is a points- or star-based reputation system, allowing other users to rate the granted services and to then build the reputation of the services given.
Personnaly, I am completely in favor of the first system, which allows the intermediate to ensure the user that all its providers answer to a certain amount of criteria – which basically, comes to the same as a taxi licence (with fewer conditions). I reckon such a system is the best to ensure a basic trust among the users. It allows to set a certain bar of ensured quality, which should translate into user trust, if not misused.
But I am less confident in the efficacity of the second model I have talked about. The reputation system is good, it allows users to show their satisfaction and/or dissatisfaction. but this systems has its own limits. It is indeed way too easy to cheat on that system. It is for example well known for eBay users to boost their reputation models by agreeing on selling a certain good at discount against a positive comment or rating. Or for users to use the reputation system to blackmail sellers to give them a better pricing. Those systems sometimes also allow users to delete a negative comment fur some reasons, which are hardly controlled.
Personnally, I reckon Djump is using a pretty effective mix of the two systems to ensure user trust. As if they were only using one of them, I wouldn’t even consider using it.
thus, I think no company will ever be able to ensure P2P trust (as taxi companies can never insure you your driver will be polite and take the fastest route to your destination), but I think a set of legal regulations have to be created in order to enhance the intermediary’s reliability and thus even more reinforce the P2P services’ trust.
Have complete confidence in e-commerce or in any Internet-based platforms meets almost the impossible. People give hardly confidence to something or someone especially on Internet. Then, designers have to find mechanisms to put in place in order to establish a trustful atmosphere between "sellers" and "buyers" To achieve this goal, Internet-based platforms devise more and more ideas that could prove… Read more
Have complete confidence in e-commerce or in any Internet-based platforms meets almost the impossible. People give hardly confidence to something or someone especially on Internet. Then, designers have to find mechanisms to put in place in order to establish a trustful atmosphere between “sellers” and “buyers” To achieve this goal, Internet-based platforms devise more and more ideas that could prove their good faith to users and thus, increase their circle of trust. That’s what Uber try to implement with its two-side platforms.
Let’s take another similar application called “Djump”. This app recently launched on the market is a ride-sharing app available (up to now) only from Thursday to Sunday. Everyone who need a ride, no matter what time it is, goes to this app. Once you’re connected, you express your intention to take a lift; no matter where you are. At this time, you’ll do nothing else! Djump will search drivers available nearest you and ask both driver and user if you’re agree to pick up. When there is an agreement, Djump send you a notification and indicates in real time where is your driver. They are easily recognizable thanks to their large pink hat hanging on the roof of their car. Here are the basics: each driver is rewarded by Djump application. So, each “hitchhiker” doesn’t have to pay if they don’t want to. However, Djump set up a system where each driver can rate their customers depending for instance on their generosity in tips, their behavior, their social skills… In the same way, each user have the possibility to rate their drivers depending on their driving, kindness, hospitality,… It’s seems obvious that if, on a ten grade scale, you get only 2 or 3, the agreement between a driver and a customer will be difficult. On the contrary, if your rating is high, the user will be willing to pay more tips and the agreement will be done easily.
So here is another exemple of a platform that needs to know how to measure the reliance upon. As far as I am concerned, we can’t speak of true confidence but more a logical interest. Indeed, like I said earlier, people (no matter they’re Djump Driver or User) act in the interest of others in order to obtain the best service quality. Drivers will be friendly and welcoming for a generous tip and a good rating while Users will be kind and respectful to get a higher grade; so each one promotes his personal interest in supporting the common interest. So, blind trust and confidence by interest are very close to each other but It’s seems they have reached an equilibrium…
This comment will be divided in two sections. Firstly, I’ll describe what Uber has put in place as an intermediary between the drivers and the passengers to enhance trust. Secondly, I’ll present the reputation system in the peer-to-peer market.
In order to establish trust between both parties, drivers and passengers, Uber has to invest on reputation and high quality platform service.… Read more
This comment will be divided in two sections. Firstly, I’ll describe what Uber has put in place as an intermediary between the drivers and the passengers to enhance trust. Secondly, I’ll present the reputation system in the peer-to-peer market.
In order to establish trust between both parties, drivers and passengers, Uber has to invest on reputation and high quality platform service. On one side, the company only accept drivers above 21, insured and in possession of a driving since three years. On the other side, the customer has to give his credit card details to register and start using the platform. Furthermore, Uber asks during the registration to upload a photo so that the driver can verify the identity of the client. Also, if he wants to, he can rate the drivers. These measures are essential to provide quality in the service and keep their reputation.
Reputation systems allows one group of customers to rate or comment another group of customers and by doing that, it allows other customers to get a better insight of the service’s quality. This helps the customers to take a decision based on the reputation. But the main question is: can we really rely our decision on previous comments and ratings? As mentioned during the last course, most of the time, this system attracts very positive comments (that’s equal to 4 on a scale of 5 stars on most websites) or oppositely, it entices disappointed customers that don’t hesitate to paint a black picture of the company and service related.
Personally, depending on the product or service that I want to buy, I tend to look at previous comment. For example, IMDB is full of pertinent comments on films that help me in my decision to go and see a film at cinema or not. Booking.com such as many website of the same kind is a perfect example of distorted reputation because unhappy clients will “spit on” the hotel while a very satisfied client will give a ridiculous high rate. For us clients, it is important to verify the trustworthiness of the reputation system before relying on it.
I’d like to take the case of eBay, the famous internet C2C commerce platform, which is a great example of “collaborative sharing economy” that is “stimulating new consumption, raising productivity and catalyzing individual innovation and entrepreneurship”. If eBay started as an online auction website, it soon evolved into a more sophisticated system where users can set up online shops and… Read more
I’d like to take the case of eBay, the famous internet C2C commerce platform, which is a great example of “collaborative sharing economy” that is “stimulating new consumption, raising productivity and catalyzing individual innovation and entrepreneurship”. If eBay started as an online auction website, it soon evolved into a more sophisticated system where users can set up online shops and make businesses out of it. Many deals concern second hand items, but of course, the sales of new items and services are regulated, and the seller has to conform to the local legislation of his country in order to perform such commercial activities. However, unlike Uber’s very activity that is threatened by taxis monopoly legislation, eBay’s policy is mostly in line with local commercial rules.
The interesting point here is how trust is built between buyers and sellers, and how the two parties are protected from each other. eBay has a rather efficient reputation management system that has been in place for years (http://pages.ebay.com/help/feedback/allaboutfeedback.html). When a transaction is concluded, the buyer is asked to give positive, negative or neutral feedback about the seller and write a very short comment, which are displayed publicly on the seller’s page. But more importantly, the seller’s name is always and on every page associated with his number of positive evaluations, and the percentage, in a way that if the seller has a bad reputation, you cannot miss it. On the other hand, eBay’s policy is that a seller can only give positive feedback about a buyer, in order to avoid revenge from a negative feedback received. Other tools are provided in the resolution center (http://resolutioncenter.ebay.com/) where it is possible to open a case in order to get refund, etc.
Thus, on eBay and probably Uber as well, a seller/driver should always offer the best possible service in order to maintain a good reputation or face the risk of naturally losing the chance to attract any future customer. eBay’s efficient self-regulation system can in my opinion serve as a model for nascent P2P ride-sharing industry.
Trust is the biggest issue when it comes to P2P markets. Therefore, consumers have to be able to rely on efficient reputation systems before entering such a market. But that is hard to achieve when there is information asymmetry. Uber has managed to gain their user’s trust by enabling them to pay the service directly via the app and by… Read more
Trust is the biggest issue when it comes to P2P markets. Therefore, consumers have to be able to rely on efficient reputation systems before entering such a market. But that is hard to achieve when there is information asymmetry. Uber has managed to gain their user’s trust by enabling them to pay the service directly via the app and by making a rating system available where users can rate their drivers. But are reputation systems such as a rating system truly efficient?
I wouldn’t personally fully trust ratings as they are personal and subjective. When I take the example of eBay, which is a P2P service as well, you can have a review that correctly reflects the reliability of the user as you can have one that doesn’t. It is indeed very easy to bribe a fellow user on eBay. One example would be: “If you write me a negative review, I will write you a negative one too”. To avoid such behaviour and to make sure rating systems are utterly subjective, a third party needs to be involved. This third party shouldn’t be a user of the P2P service but has to work for it to defend its best interest. His job is to ensure the validity of a rating or a comment.
Sonja Buchegger and Jean-Yves Le Boudec suggest yet another solution to the subjectivity of the ratings in their study about Reputation System for P2P and Mobile Ad-hoc Networks(1). Their idea is the following: “From time to time first-hand reputation information is exchanged with others; using a modified Bayesian approach we designed and present in this paper, only second-hand reputation information that is not incompatible with the current reputation rating is accepted. Thus, reputation ratings are slightly modified by accepted information.” This means that a rating will only be validated by its congruity with next ratings.
The main problem with an app like Uber, is indeed the trust that the customers have into the app. This is also the case for all e-commerces on the Internet.
The trust is something difficult to create but there are some factors that enhance customer trust in your e-business like Uber.
According to Vaidyan J. en Koshy V., the factors are organized… Read more
The main problem with an app like Uber, is indeed the trust that the customers have into the app. This is also the case for all e-commerces on the Internet.
The trust is something difficult to create but there are some factors that enhance customer trust in your e-business like Uber.
According to Vaidyan J. en Koshy V., the factors are organized in 4 categories : functional factors, organizational factors, security factors, and infrastructure factors.
In my opinion, I think that the security factors and organizational factors are the most important to trust an app like Uber because you have to travel with a stranger.
The system of evaluation is a good way to give a feedback to all the users and so, a bad driver (or passenger) is quickly identified and black-listed. This is, for me, an important security factor and this is the same for an e-commerce.
« You don’t need cash when you ride with Uber. Once you arrive at your destination, your fare is automatically charged to your credit card on file – no need to tip. We’ll also e-mail you a receipt. »
Source : https://www.uber.com
This is for me, a second security factor and it is really important for the customer to have a proces of protected paiement.
In a nutshell, you can enhance the trust in your app by developing a good security system and to inform your customers about bad drivers.
References:
Vaidyan, J., & Koshy ,V. (2008). Factors that enhance customer trust in e-commerce Web sites: An examination of e-commerce success metrics using Internet audience rating. Capella University, ProQuest, UMI Dissertations Publishing.
Apps like Uber for example are becoming more and more popular nowadays, but it is a challenge to gain and to keep the trust of their consumers. There are three methods where, in my opinion, Uber did a great job to ensure there reliability.
First of all they launched their idea while complaints about professional taxi drivers are increasing. According to… Read more
Apps like Uber for example are becoming more and more popular nowadays, but it is a challenge to gain and to keep the trust of their consumers. There are three methods where, in my opinion, Uber did a great job to ensure there reliability.
First of all they launched their idea while complaints about professional taxi drivers are increasing. According to Techsportation the most common complaints are ‘drivers not picking them up because of their appearance’, ‘being overcharged’ and ‘drivers not taking credit cards’. Through the app the payment problems can be resolved. Indeed, paying for your ride happens on your smartphone, so there shouldn’t be any overcharging problems anymore. As for the credit card acceptance it won’t bother anyone anymore because everything goes through the app.
The second one, and also a solution for the number one complaints, is the rating of the drivers. Because drivers can easily be reported and thus easily get black listed on the Uber app, they will be more carefull on every level. Refusing a lift could have huge consequences for the driver. The same goes for his behavior on the road and with his customers.
Last but not least is the topic about the insurance when an Uber driver gets into an accident. They recently introduced a new system to insure their users. If the Uber app is off it’s the personal auto insurance that kicks in. If the app is on but the driver is not on a trip it’s also the personal insurance that will pay. If they refuse, Uber will cover for the damages to a certain point. In the last case, if the driver is on a trip the cover up can go to a million dollar. This so called Peer-to-Peer Rideshare Insurance Coalition makes is much safer to travel with a stranger using the app.
To be honest I’m not found of those kinds of ideas because I would be way too uncomfortable to share a ride with total strangers. But thanks to these three attempts to make the peer-to-peer ridesharing more trustful, I could one day reconsider peer-to-peer ridesharing with Uber.
Peer-to-peer markets present difficulties to ensure quality and reliability of peers as they often face ease of access for providing their services to online community. Therefore, reputation system were introduced to address two main issues: moral hazard and adverse selection [1]. However, reputation systems provided by websites may easily be manipulated via dishonest feedbacks, various contexts to assess people are… Read more
Peer-to-peer markets present difficulties to ensure quality and reliability of peers as they often face ease of access for providing their services to online community. Therefore, reputation system were introduced to address two main issues: moral hazard and adverse selection [1]. However, reputation systems provided by websites may easily be manipulated via dishonest feedbacks, various contexts to assess people are not always well integrated or even, do not always provide users with incentives to rate agents and thus, be penalized of negative rating [2].
eBay’s reputation system, for instance, presents limitations as it employs only one type of factor. Agents record either neutral, positive or negative rating and a peer’s reputation is made on the sum of rates they get. Thus, a peer who concludes many deals and decides to cheat once in a while, will see its reputation improve faster than the one who make deals less frequently even though he does not cheat.
Another existing type of reputation system is Digg’s. The latter is a social news website delivering “the most interesting and talked about stories on the internet right now” [3]. It consists of a pool of articles from diverse news websites that are marked by agent based on their content. Articles’ order of appearance is decided according to some specific algorithm that takes into account “the number of digs (i.e. likes) and buries (i.e. dislikes) an article has, and the prior rating activity of the users who provided the feedback” [3]. The latter is interesting as users’ past experience will impact their votes’ weight.
In order to cope with such issue of reliability, Xiong and Liu (2004) proposed the PeerTrust model which is a “reputation-based trust supporting framework, which include a coherent adaptive trust model for quantifying and comparing the trustworthiness of peers based on a transaction-based feedback system, and a decentralized implementation of such model over a structured P2P network”. They based their model on 5 different factors that should enable online platforms to assess trustworthiness of peers. Those are peers’ feedbacks got from users, the amount of transactions made, the credibility such as the feedback source, the transaction context and the community context (characteristics and vulnerabilities). As made understood based on previous examples, it is essential to diversify factors computing peer’s reliability to gain in objectivity and reduce the risk of incorrect evaluation.
The most important feature about two-sided markets is the network effects and since these markets are two-sided, it’s important to match the need of both groups. To solve the “chicken-and-egg problem”, or to get both sides on board need to build a certain price structure and to choose an appropriate investment strategy. On the other hand, antitrust issues, raised by… Read more
The most important feature about two-sided markets is the network effects and since these markets are two-sided, it’s important to match the need of both groups. To solve the “chicken-and-egg problem”, or to get both sides on board need to build a certain price structure and to choose an appropriate investment strategy. On the other hand, antitrust issues, raised by two-sided markets, especially in P2P business, need to be highlight.
So far, some cities have limited the use of rideshare firms. As far as I’m concerned, to limit is not the best solution since those kind of ‘sharing economy’ will become more and more important to our economy.
First of all, there exists a spontaneous market mechanism to establish trust among users. In order to get both sides on board, those P2P firms will design a trust control system in order to get trust from their customers. Take “airbnb” as an example, many p2p require or recommend customers on both sides to get identity verification. Moreover, many p2p service providers build rating system so that low-service providers or rude customers are limited from the p2p platform.
Secondly, despite self-regulatory mechanism ensures, most of the time, the credibility of both sides, it is still not a panacea for all. Market failure happens in some cases, especially in imperfect market (like monopoly…). So the second mechanism should be regulating the market and legislating against illegitimate trading or unqualified participators. California gave the green light to ridesharing enterprises last year, which became the first to take the move. Policy lagging behind innovation, governors should be more open-minded. Instead of limiting p2p platforms, they should start to establish rules and laws to regulate the newly emerging market.
Comments for What drives self-regulation in the nascent P2P “ride-sharing” industry?
The drivers of uber and various other companies should be asked to verify their identities. They may use fake IDs. It should be properly verified. There are some companies like example IDMERIT which provides identity verification service. For more info visit them at https://www.idmerit.com/identity-verification/
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Companies like Uber, Airbnb,… act like intermediaries between two groups of people : buyers and sellers. Thereby, not only their reputation has to be good but they have to build trust between these two groups of users. Why would I trust this driver? Can I be sure that passenger won’t damage my car? They can be some questions users of Uber are legitimate to ask themselves.
To maximize its users, sharing companies have built some mechanisms to ensure their consumers to have a good experience and come back. To this end, Anand Iyer (1) spotted some features well-managed marketplaces have to put in place. Of course, the most obvious one is a rating system. It allows companies to have an individual evaluation of every consumer – buyers or sellers- and, if necessary, remove them from their offer. For example, Uber doesn’t allow drivers with less than 3 stars to continue selling their services. It certifies that all actors of this sharing system are serious and can be trusted.
A second feature needed is to have carefully curated content. Indeed, users face many offers and don’t have the time, or patience to make a selection of good or bad offers. Companies have to make a pre-selection of the offers available and put in evidence the best ones. For example, nice pictured apartments will be on the top of Airbnb-website.
Users of such services don’t want to have the feeling to be dealing with a robotic system. As Iyer tells “They want to know that real humans work there and care”. An Uber user that doesn’t get its drive or a driver that doesn’t get payed have to be threaten by a human-centric approach, for example by phone call, personal emails… To encourage a “humanizing experience”, Lyft has given some tips to its drivers, for example by recommending them to make conversation with their passengers. Thanks to little actions like this, users will have the feeling to be part of a community and will tend to trust more.
Because peer-to-peer platforms need buyers but sellers too, companies in the sharing economy have to focus on the suppliers’ experience as well. A negative network-effect can appear in the “sellers group” and then intermediaries have to be sure that the offer still exists in a sufficient number or buyers won’t use their services. To build the sellers’ trust, companies can put in place platforms for them to share their experience, playbooks to know how to succeed…
In conclusion, we see that there are many ways for companies to build trust between its consumers, whether by allowing them to be part of users’ evaluation system or whether by providing quality service. As there are strong network effects in sharing economy, intermediaries have to be particularly cautious about their consumers’ satisfaction to use that network effect in their advantage.
(1) http://techcrunch.com/2014/03/04/how-modern-marketplaces-like-uber-and-airbnb-build-trust-to-achieve-liquidity/
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As it is written in this article, the problem of the multi-sided platforms is the fact that the different sides may have some difficulties to trust the other parties. It is why the intermediary platform has to play the role of trusted third-parties and ensure that the different sides can trust each other. There are many different ways to do that and I will try to explain the techniques used by the companies (and especially Uber).
First of all, Uber uses a rating system which consists of rating the drivers with stars (from 1 to 5 stars) like Ebay for example. Moreover, it is possible for the passengers to post a comment after the rating to explain why they gave this rating. It is also possible to send a message to Uber in case of problem during or after the travel. It allows to feel more in security and reassure the clients in order to make the service more reliable. (1)
Nevertheless, Uber goes further and ask the drivers to come to its office if they have a low rating to explain why there is the case. Uber can also ask them to stop to use the service if their performances are too low. In order to avoid this situation of low rating, Uber put in place several tutorials and tips to get the 5 stars at each drive. Helping the drivers to get the best rating and so to perform better is a good way to have better drivers using the service and giving the best image possible and giving more credibility for Uber. In addition to this, the drivers are obliged to take a picture of them before using the application (at each connection). It reassures the clients because they know approximatively what the driver looks like and they can recognize him more easily.
Recently, Uber adds the “Sixth Star Award”. It is an award for the best drivers in the world given by Uber each month, they receive an additional star and an Uber gift package and 1000$ from American Express. It is also a way to motivate the drivers to be better and therefore give a better image of the service. (1) (2)
Then, there are several partnerships between Uber and companies. These companies offer a lot of gifts, reductions, bonus points … for the users of Uber. It is a good way not only to promote the service but also to give more credibility because the service is supported by (well-known) companies. Furthermore, in the case of partnership between Uber and Midas in South Florida for instance, it gives an incentive to the drivers to go there to make the maintenances of the car. Therefore we can guess that the car is well maintained and it provides a better quality of the services. It is really interesting for the credibility and for Uber. (3) (4)
Another sign of trust can be the accreditations that the Uber drivers have to get or the tests that they have to pass to drive in some countries. For example, in Australia the drivers have to pass a test of 55 questions to get the accreditation to be considered as an Uber driver. It is a guarantee of quality. Even if it is obliged by the law in this country, it could be interesting to do it in other countries (where it is not obliged by the law) to give a better quality of the service and also a better image of Uber. Uber could give some incentives like a better payoff to the drivers or something else to put this in place. (5)
Finally, some well know people give promo codes which gives a reduction of 20$ (or euros) for the new riders which use this promotional code. It is the case of the (famous) French blogger: Jeremstar. If you use the code : “Jeremstar” for your first ride, you will save 20€. It allows to attract new clients because they can try the service (almost) for free. In addition to this, it gives a good image for Uber and more credibility because our “star” uses the service. Furthermore, Jeremstar talks a lot of Uber on Snapchat and also record a lot of his travels and after posts it on Snapchat. It is a good publicity for Uber. (6) (7)
In conclusion, finding a way to improve the trust between each side of the multi-sided platforms is really important. There are several performant ways to do it as mentioned in this commentary. However, we can never be totally sure and there would probably always be a light fear to use the service…
References:
Show less(1) http://ubersouthflorida.com/taking-your-first-trip/
(2) https://drive.uber.com/melbourne/how-can-we-help/how-to-uber/vicquality/
(3) http://www.chinadaily.com.cn/cndy/2015-02/28/content_19675394.htm
(4) http://ubersouthflorida.com/partnerperksenglish-1/
(5) https://drive.uber.com/melbourne/uberx/vichc/vicknowledge/
(6) http://ubersouthflorida.com/refer-riders
(7) http://brandandcelebrities.com/blog/jeremstar-promotion-uber-2015/
Very instructive, thanks.
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In this article, Professor Belleflamme raises a question that the new Peer-to-Peer (P2P) platforms are facing since their launch: How do we build trust between our users?
Obviously, P2P platform cannot use the same mechanism of trust as a traditional company. In the sharing economy, people are dealing with other people through the use of a digital platform that plays the role of intermediary. Those companies are not asking to be believed by their customers, they ask to their customers to believe in other people.
First of all, I would like to say that trust is a complex concept that depends on the beliefs of every person. There is no real definition of trust and it varies depending on the situation (1). That is something that can make the creation of trust more complicated for P2P platforms.
One first solution, which has been put in place by AirBnB in 2013, is the verification of the users of the platform (2). By visiting different websites, every Internet user give a lot of information about themselves. In the case of sharing economy, companies such as Trulioo are able to collect and to analyse all the data’s of the users of a website. Platforms such as eBay or AirBnB are working together with that company to check their users and to improve the services (3).
In the same idea, AirBnB also offer the possibility to the user to be verified through their service ‘Verified ID’. To be checked, you need to give a picture of your ID, a phone number or to sign in with a Facebook or a LinkedIn account (4). Even if it can be on the limit regarding privacy protection, it helps to create trust among users.
A third way to improve the trust is to give the opportunity to users to rate them among each other. For example, after each trip with an Uber, the user can rate the ride on a scale of 1 to 5. It allows to the platform to detect bad drivers and to help them to improve themselves or to delete them from the system. At Uber, 4.6 out 5 is the minimum rating accepted before being invited to improve the service (5). This is also a way to improve the trust between users.
Finally, the community has an important role in the building of the trust. When someone sees that there are a lot of users, he will believe that the services offered are good and he will try it (1). It is called the Network Effect that also helps people to trust the platform.
To conclude, even if it is difficult to define, there are a lot of different ways to build the trust among the users. Nevertheless, even if the platforms put a lot of systems in place, users have to be aware that they are never really protected from a bad experience.
Ressources:
Show less(1): http://www.shareable.net/blog/how-trust-is-built-in-peer-to-peer-marketplaces
(2): http://www.forbes.com/sites/theyec/2015/02/10/the-future-of-the-sharing-economy-depends-on-trust/#2255d72a58ff
(3): https://www.trulioo.com
(4): https://www.airbnb.com/help/article/450/what-is-verified-id
(5): http://uk.businessinsider.com/leaked-charts-show-how-ubers-driver-rating-system-works-2015-2
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As said in the Anand Iyer’s article, sharing platforms have put in place many similar mechanisms in order to increase trust towards their platform and utilization. Firstly, it begins with speaking to the customer in his own language. Then the article explores the different mechanisms put in place: such platforms have to create a managed environment and carefully curate content in order to filter bad and good users. Frictionless Payment can facilitate the experience of users. This article talks also about a human system which learns like a machine: “All of these marketplaces may be enabled by technology but they are powered by people”. [1] The service should rely on a human-centric customer service strategy. That means phone calls and personal communications from employees to the customer. They follow up and report bad experiences and sometimes offer a discount. [2]
But they should also be focused on supply, to be sure than for example the taxi drivers enjoy the work through the platform. It’s an important point that is often too less taken into account. The day when Uber will not find any car drivers, the platform would have to close. And it is not that much improbable in my opinion. Does Uber offer enough security and comfortable salaries to these car drivers? It should be considered in a long-term perspective. I don’t completely agree with the idea that such platforms have to self-regulate themselves completely. When really bad experiences will appear with these services (death of passenger with a platform like Uber, intoxication with p2p cooking platform…), I am not really sure that they will succeed to bury the problem with their own rules or discount coupons. The third party in this type of cases is necessary. Moreover, in a classical scenario, if you have a problem with a taxi driver, you will probably not blame all the taxi drivers for it. If you have a problem with an Uber driver, you may blame Uber as a company. Uber is an umbrella brand for its entire “workforce”. But that’s another subject.
A good example of not only customer centricity but also supplier centricity is Airbnb. They have developed forums or community spaces where sellers or service providers can connect directly to share challenges and best practices and know how to be the best hosts possible, including providing fresh towels and a stocked fridge of treats as an example.
All previous examples are known but I would like to develop the last topic and observe the interesting new trends around it. Social proof is really crucial, marketplaces are social businesses, and they depend on relationships and network effects. The power of a few testimonials and positive quotes is huge. Most platforms have star-rating systems built somewhere into the process for both buyers and sellers. “For example, Uber, Flywheel and Lyft ask both drivers and passengers to rate their experience at the end of a ride. To actually make this data valuable, however, companies have to use ratings almost imperceptibly to filter out bad users and continually improve service.”[3]
Reputation is the measurement of how much a community trusts you. And it’s key in the p2p economy. It is valuable information to assess the level of trust you can have toward a stranger. Many platforms develop their own reputations systems for users but Rachel Botsman goes further in a ted talk, she talks about the new currency of sharing economy: trust.
There are actually several of startups like Legit or TrustCloud that are figuring out how you can aggregate, monitor and use your online reputation. They advocate that the Sharing Economy lacks accountability and Legit’s goal is to be the credit system of this Economy.[4]
There are huge transparency and privacy and thus ethics issues to solve, but if we can collect our personal reputation, we can actually control it more, and extract the immense value that will flow from it. An other problem is how can we assess trust of people who are not active online? On the other side, a reputation capital could create a massive positive disruption in who has power, trust and influence. Rachel Botsman believes that reputation will become a powerful currency compared to our credit history in the 21st century. Reputation could be the socioeconomic lubricant that makes collaborative consumption work and scale, but the sources it will be generated from, and its applications, are far bigger than this space alone. Ms. Botsman gives the example of stack overflow that becomes a reference system and helps programmer to find jobs.[5]
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Show less[1] Anand IYER , http://techcrunch.com/2014/03/04/how-modern-marketplaces-like-uber-and-airbnb-build-trust-to-achieve-liquidity/
[2]ibid
[3]ibid
[4]http://www.legit.co/home/
[5]https://www.ted.com/talks/rachel_botsman_the_currency_of_the_new_economy_is_trust?language=en
Very interesting indeed!
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Uber may be seen as a sharing economy. This economy is different from the traditional industry by the fact that consumers are not passive consumers. They are both producer and consumer. Today many sectors extend over this type of economy such as: Airnb, BlaBlaCar ….
The collaborative economy was born with a connected community. This economy is based on digital technology. The extent of Internet has upset companies that sell digitisable goods. For example the music industry with music files or the cultural sector with digitized books.
The taxi industry is currently facing expansion of internet. Indeed it is now possible to use communication methods between individuals connected. A mobile application is therefore used to find a free car. The Uber app can identify people who have to more or less the same route at the same time. The platform Uber bring together a supplier and an applicant with features like geolocation. The platform only serves to create a contact.
The key to the success of this contact between these 2 agents is confidence and risk assessment. Indeed this type of economy is based on information technology to create links between people who do not know each initially. In addition the risk assessment is important because in this type of market they are used well. These goods are therefore more difficult to assess. Furthermore they do not enjoy the confidence of capital that is usually attached to a brand. Trust can be seen as a new form of currency in this type of economy
Ratings systems are implemented. Consumers can given comments to reassure and can given criteria of choice and judgment. This is the qualitative confidence. The quantitative satisfaction operate via the stars. Uber’s customer evaluate the drivers and vice versa.
Trust can be based on past experience “that went well before, so it will be fine next time.” Trust can build word of mouth “it went well with others, so it will be fine with me.” An example is BlaBlaCar confidence. BlaBlaCar imposes an online payment to remove the risk that some cars do not come at the appointment.
But confidence devices are not very developed. It seems that the safety devices are less important in these new areas of freedom online.
Sociability in this type of service is important because the two sides spend some time together. A client of Uber contact most often the same driver for the same trip.
Finally, legislation can be adopted for Uber, but be careful to not exclude the concurrency in order to protect established actors.
Sources:
Show lesshttp://digital-society-forum.orange.com/fr/les-forums/359-comment_saccorde_la_confiance
http://digital-society-forum.orange.com/fr/les-forums/357 les_promesses_de_la_consommation_collaborative
http://www.culturemobile.net/nouveau-monde-telecoms/7-cles-economie-collaborative
http://www.paristechreview.com/2014/12/31/economie-partage-reglementation/
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I believe there a number of things that companies can do to help ensure that there is trust within the platform between the two users and that they are certainly paramount to long-term success, however, I believe as platforms get larger and larger and more economically important to either side of the platform, ensuring that the intermediary is fair and balanced in the way it treats both sides is of equal importance.
In my experience, the most prevalent form of self regulation is the rating system based on previous transactions on the network. A system employed by market places (Ebay, Amazon, Etsy) as well as by other newer multi sided networks such as Uber. This works by ensuring that quality participants on the network receive favourable ratings after each transaction, ensuring that they will be a favored participant in future transactions, with any bad actors receiving lower scores which will ultimately lead to being shut off from the network by virtue of consensus. The other popular means of creating trust involves direct involvement from the intermediary that ensures the legitimacy of one side of the network – such as the newly created peer-to-peer lending sites such as Lending Club or Prosper. this signals the other side of the network (the lenders) that their counter-parties have passed at least rudimentary pre-screening.
However, there has been multiple instances of this effect being to much in favour of one side of the platform that it discourages activity on the platform. For example, there have been a number of complaints for creators on the Etsy Platform [1] that involve a number of elements that cause successful creators off the network in the interest of providing a better experience to the buyers on the platform. This effect is also quite rampant on other online market places such as Ebay/Paypal [2]. This turned into such a large problem it required Ebay to change its merchant policies to even the playing field more [3]
A major problem that occurs with these rating systems that it suffers from an adverse selection problem – According to the Pew Internet project, only 26% of users have rated a product or service. This suggests that the small subset of people actively leaving reviews could skew overall ratings by not reflecting the true average experience on a platform. [4]
[1] http://www.wired.com/2015/02/etsy-not-good-for-crafters/
Show less[2] http://www.theguardian.com/money/2014/jul/11/ebay-buyer-complained-decide-against-seller
[3] https://www.internetretailer.com/2015/09/10/ebay-unveils-more-merchant-friendly-rating-system
[4] http://www.pewinternet.org/2004/10/20/use-of-online-rating-systems/
Very nice comment!
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Uber is what we can call an “explorer” firm. Indeed, they excel at developing new, radical knowledge but are not strong at exploiting existing knowledge. [1] So they try to play in an existing market but trying to impose new rules. Because of that, it is really difficult to trust this “new” entrant on the market. We can see that in order to establish trust between the company and the customers, the p2p ride sharing have to put in place some mechanisms. Here we will take few example of a non-exhaustive list.
First, they allow the customer to check the information about the driver which is really primordial for customers. They can so see their name, some pictures of them and all the information needed about his car. Once the ride is done, the customer has the possibility to rate the driver. Furthermore, to not lose their customer because it is a global business, the users do not have to switch to a local language. So, they are able to understand all the information about all the drivers in the world, no matter where they are.
Secondly, one of the most important issue for Uber for example is the security of the passengers and of the drivers in terms of road security as well as the confidentiality of their information. In order to be as effective as possible, they have a security policy that we can consult on their website.
Finally, even there is some conflict with the regulations, it is important to highlight that the p2p car sharing are legal. And they repeat it constantly Uber described the ruling as a victory for common sense and took aim at plans by TfL to impose new regulations on the company. “Now the high court has ruled in favor of new technology, we hope Transport for London will think again on their bureaucratic proposals for apps like Uber,” said Jo Bertram, Uber’s regional general manager for UK, Ireland and the Nordics. [2] It is really important to them that customers realize that these kind of service as a legal aspect, providing cheaper ride than Taxis.
In conclusion, efforts are made by p2p ride sharing to adapt the transportation to the new technologies. They try to combine efficiency, quality and trust. We can see that there is a huge battle between the taxi and p2p ride sharing but I personally think that something good will result from these battle: if you can’t beat them, join them [3].
References:
Show less[1] Aligning HRM practices and knowledge strategies P. BIERLY & P. DALY, in CHOO C.W. (2002), chap 16 p277-295
[2] http://www.theguardian.com/technology/2015/oct/16/uber-wins-high-court-case-taxi-app-tfl
[3] https://www.ipdigit.eu/2015/12/taking-on-uber/
https://www.uber.com/safety/
https://www.uber.com/legal/security/
http://www.theguardian.com/technology/uber
http://firstround.com/review/How-Modern-Marketplaces-Like-Uber-Airbnb-Build-Trust-to-Hit-Liquidity/
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New born platforms face many issues when arriving on the market. First of all the chicken and egg problem, which basically mean that in order to attract a group of customer on the platform the other group is required and reversely. Several mechanisms, as different entry price, exist to counter this problem.
Another big issue that platforms face is trust. At every time, especially when we are in a service platform, the consumer of the service needs to be sure about the quality of the service provided. The platform needs then to act as the guarantor of the quality, ensure high quality services and discourage or delete low-quality ones. We will here present some mechanisms set in place by platforms in order to guarantee that trust between the users.
A way to improve the quality of the service is to give rewards to good users. For example, Youtube used to organize competition where they offered rewards to the videos that had the most upvote. By doing so, they increased the incentive to produce good quality services by the users.
Another way of building trust, is to give the opportunity to the groups to judge the level of service provided by the other one. Wikipedia, is allows to the readers to raise concern about the quality of an article. If an IP address, or a writer, raise too much suspicion, his account will be deleted and he will no longer have the possibility to write again on the website. The same systems applies to other platforms like secondemain.be, that allows the buyers to give a score on 5 to the seller, based on the quality of the second hand product, the ease of the sale, etc. The aim of this mechanism is that later, the buyers will be able to see the average grade of the seller, and will be able to tell if he is reliable or not.
Finally, some platforms perform a background check of the users, before giving them access to it. Here it is the platform owners themselves that judge if the service provider is capable of offering good quality services.
All those mechanisms are doing what we call curation. Curation can be done in three ways:
– Editorial: It is the editors of the platforms that decides whether or not someone is trustworthy.
– Algorithmic : based on several figures, data, etc. coming from the platform, an algorithm is deciding whether or not the users are trustworthy
– Social: As in the Wikipedia and secondemain.be case, it is the community of users that takes the decision.
In conclusion, there are several ways of helping building trust between the users of a platform, but they are left to the platforms developers alone. Some help from the regulation in order to make those mechanisms more consistent would probably be much more helpful.
References:
Show less1) http://platformed.info/scaling-strategy-platforms/
2) https://www.quora.com/How-should-peer-to-peer-marketplaces-deal-with-trust-and-safety-issues
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My first thoughts when developing trust goes to reviews and the TripAdvisor model. Sharing these reviews between customers help prospective clients make the optimal choice. They have the opportunity to rate the place they have visited. Hotels, restaurants and bars often place a sticker on their window to show the customers’ rating in order to attract them. It is a safe way of being sure that what you pay for is actually worth the money. It’s an insurance policy in a way. These reviews generate external effects, as we have recently seen in the course, the behavior of one group (reviewers) has an impact on the behavior of another group (prospective customers). Here the TripAdvisor platform serves as the intermediary, without this platform, customers would highly reduce the number of echoes, reviews about a certain place. In fact, they could only rely on the venue’s website or if lucky on people who have already been there. TripAdvisor has a positive cross-side effect since the more the reviews the more the rating is reliable.
What Uber and others do is a two-way rating system, for the driver but also for the passenger since no driver wants rude or filthy passengers in their car, moreover, all Lyft riders have to link their account to Facebook which creates a more personal and reliable relationship. What Uber has done is removing all 3 stars or less drivers, as a result you hardly have any chance to see a badly rated driver on the roads. This helps passengers not worrying about having a bad driver but also builds trust in the whole system. Here, it’s also a positive cross-side effect.
Customers also want a more human experience, Lyft drivers all have phone chargers to give the opportunity for riders to recharge their phone, drivers are also recommended to make the conversation if customers are incline to. All this to make the customer feel like being in a community and enhance the human experience.
Moreover, when customers experience bad transits, customer service sends an email to get more details about the incident and if justified, gives discounts.
Furthermore, companies should focus on mobile development and payment processing. Mobile development is very important in order for customers to have a seamless experience. More and more people use smartphones and more and more order things thanks to their smartphone, that’s why there should be huge improvements in this sector, apps should be easy and beautiful. Another concern is payment processing, people should not be afraid of paying on the internet or thanks to their smartphone, the transaction should be flawless. The topic of this paragraph is about design decisions of the platform.
Another example is Airbnb, here customers don’t want to rent a dirty apartment or from somebody who is unkind. What the company has done is hire community managers who continuously remove apartments with bad ratings and feature the best ones. AirBnb does a trade-off between quantity and quality although the amount of places per city is innumerable.
Sources:
http://firstround.com/review/How-Modern-Marketplaces-Like-Uber-Airbnb-Build-Trust-to-Hit-Liquidity/
Show lesshttp://www.wired.com/2014/04/trust-in-the-share-economy/
Evans 2011, Chapter 11.
Andrei Hagiu. (2007). Multi-Sided Platforms: From Microfoundations to Design and Expansion Strategies.
http://platformed.info/online-marketplace-metrics/
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Uber can be defined as a two-sided platform, and more specifically as a “sharing economy” platform connecting service providers and consumers. Furthermore, such Internet-based platform depends on relationships and network effects since the more the service is adopted, the more its users value it. That is why it should lower barriers to entry for new consumers, and promote that many people use and value its service.
It is worth noting that Uber faces two main concerns : regulation and drivers selection. The latter has a crucial role if the platform wants to be considered as a trusted intermediary. In order to certify the quality and reliability of its service, Uber implemented a rating system for both parties. At the end of an Uber ride, passengers and drivers can give one another a rating from one to five stars. The Mental Floss has published an interesting article saying that customer’s rating is in fact mostly irrelevant but how passenger rates the drivers does matter.
It seems that drivers almost always give passengers five stars and do not even look at the rating before accepting a passenger. “That’s because drivers only have a few seconds to accept an incoming ride request before it gets passed along to the next closest Uber car, and most drivers would rather make a few bucks off of a rude passenger with three stars than make no money while holding out for a five-star rider.” (1) On the other hand, driver’s rating is utilized by Uber to create an average score for each driver. If the score drops below a certain amount, the driver could be expelled from the system. In short, rating system tries to encourage correct behaviour on behalf of passengers and drivers, and helps people trust that they will get what they are expecting.
Another mechanism putted in place by Uber to establish and maintain trust is the Uber guide for drivers. The guide includes information on why drivers get low ratings (bad route, poor attitude, poor driving, etc.) and on what drivers can do to improve their rating (offer bottle water, clean the vehicle, open the door, etc.) (2) It actually helps transportation network companies to build a more human experience and avoid the brand to become robotic. For example, Lyft tries to strengthen trust by making customers feel like part of a “community” : it provides phone charger to riders if needed and encourages drivers to make conversation with passengers.
Another best practice is to integrate payment into the service experience. Uber succeeded in making customers trust the brand by making every transaction seamless. There is never any payment issue thanks to completely cashless payment. Moreover, take the case of Amazon. When it introduced one-click payment, the platform “[…] upped its annual revenue by an estimated $2.4 billion a year. People enter their information once and never have to worry about it again.” (3)
In my view, in future, Uber should focus on convincing regulators since it has already convinced the users.
SOURCES :
(1) Hullinger, J. s.d. “16 Things You Might Not Know About Uber and Its Drivers”. Online. http://mentalfloss.com/article/67010/16-things-you-might-not-know-about-uber-and-its-drivers
(2) Cook, J. 2015. “Uber’s internal charts show how its driver-rating system actually works”. Online. http://uk.businessinsider.com/leaked-charts-show-how-ubers-driver-rating-system-works-2015-2
(3) Iyer, A. s.d. “How Modern Marketplaces Like Uber and Airbnb Build Trust to Achieve Liquidity”. Online. http://firstround.com/review/How-Modern-Marketplaces-Like-Uber-Airbnb-Build-Trust-to-Hit-Liquidity/
Show lessOne may wonder why Uber maintains the rating of passengers if it does not give any relevant information… Does anyone have an explanation to propose?
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To me, the rating of passengers gives in fact more relevant information to them than to riders. I hope that for some passengers, a bad overall rating can lead to positive changes. If you get a disappointing score after a ride, you should wonder how you can change your behavior to ensure a high-quality experience for both sides. To this end, Uber posted on its website several tips to “ride like a pro”. The two-way ratings system could also be important for the brand image and reputation.
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The American company “Uber” is a very disputed subject lately. It gives rise to interesting questions such as the problem of liquidity of such two-sided platform. It appears that benefits are correlated to user’s trust. Therefore how such companies are willing to earn and maintain their user’s confidence?
First of all, it seems that a rating system that allows users to rate their own experience of the ride helps people to trust the application. Users are apparently looking for better structure and for a preconcieved application that does all the work for them. For example, users are expecting the application to weed out bad riders. That could explain why it is impossible to find a driver with a lower rate than a 3-star out of 5 on Uber.
In order to establish trust among clients, some two-sided platforms such as Uber are demanding client’s feedback. It seems that clients like to use an application that evolves over time. By demanding client’s feedback, clients can complain about their bad experience. It has been proven that giving a way for clients to complain increases loyalty. It could be interesting for such companies to hire employees that are constantly looking for feedbacks of users and by taking care of their needs for the future in order to improve the application.
Then it seems that such companies increase benefits by making an easier way to pay. If we take the example of Amazon, all you have to do is to enter your payment’s informations once. It is the same for Uber that has implemented a frictionless payment methode. Indeed payment has to be integrated in the product experience, which means guarantee on one hand and allows to avoid last-minute problem on the other hand.
From a personal point of view, it seems important to me to increase transparency between end users and the application. Giving full information about the company could do it. A clean presentation of the company and its values could enlarge confidence.
In my opinion, companies such as Uber, which have been built on trust, can also lose easily confidence’s clients. For example, the complete Delhi region has banned the Uber application because of a rape orchestrated via Uber. That’s why those companies could need a constant follow-up of their e-reputation for instance. That’s another matter that has been discussed recently. That’s an innovante market where professional firms sells a service and help companies by keeping an eye on their e-reputation and what’s it’s saying about them on internet. Those firms can limit it by injecting positive flow of information about the company. The point here is that companies can maintain confidence by keeping an eye on their external image too. Indeed reducing the lost of users due to bad reputation or international incidents is also a way to keep confidence of the current users.
Finally, it seems quite obvious that giving full informations about the driver could increase confidence. Indeed more control from the application is a good way to do this. For instance, the application could in the first place match the identity card and the driver’s license directly. Or even quite simply by obligating drivers to post their driver’s license on their profile.
Sources:
http://firstround.com/review/How-Modern-Marketplaces-Like-Uber-Airbnb-Build-Trust-to-Hit-Liquidity/
Show lesshttps://www.uber.com/safety/
http://www.nytimes.com/2014/12/08/opinion/we-cant-trust-uber.html?_r=0
http://www.webintravel.com/airbnb-uber-and-how-they-used-technology-to-build-trust-between-strangers/
http://www.npr.org/sections/alltechconsidered/2015/06/03/411538709/a-taxi-app-aims-to-build-trust-where-crime-is-high
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The aim of a multi-sided web platform is to put people who have coordinated needs in touch. However, as in all transactions, the buyer wants to know if the seller is trustworthy and the problem, on the internet, is that you cannot see your interlocutor (or at least before you finally meet him). So, how can these platforms build trust between the different sides of the transaction? This problem is important to solve as being a warranty of good quality service is the best way for the platform to attract people.
Even if the using of these peer-to-peer platforms is constantly increasing, there are still only a few “trust systems” used by them to build confidence between the actors.
The most used one is probably the marking/evaluation of the peers system. This mechanism can be qualitative, where the user can rate the service provider (with stars, points,…), or qualitative (method giving to users the possibility to leave comments about their experience). Sometimes, this system is used in two ways (e.g. Uber) and the seller can also rate the buyer.
Another mechanism for the platform is the setting of regulations/limits on the payment methods. For example, BlablaCar imposes the only use of online payments to have control on the money and avoid situations where the driver takes the money without providing the service he was paid for. Some platforms like ILokYou (P2P renting platform) unfreeze the money only at the end of the service as a warranty for the renter. In this way, the trust is transferred to the technical device.
Furthermore, some platforms sometimes check the quality of service by themselves. This method is used by the well-known AirBnB : they encourage the hosts to have a fire detector (sometimes they even send it themselves, as a free service), they check the identity of some users (wanting to have a special distinction of “verified user”) by asking a copy of your ID card and details about you. [1]
Finally, there exist more classical ways such as insurances provided by the platform to both sides of the transaction. Again, AirBnB is a good example as they have special insurances for the hosts and the travelers. [1]
We can see here that the intermediaries have well understood that they can transfer the trust issue existing between the two actors on the platform by being a “proof of trust”. This situation meet the vision of sociologist Claus Offe, who thinks that people “must build trust on account of what they know not about the trusted, but about the institutions under which the trusted act”[2].
However, the platforms are not always the only ones wanting to build trust in the transaction. Sometimes, the users care by themselves about trust issues. We can see these last years the importance of e-reputation and new trends/intermediaries appearing. These intermediaries provide the service of “e-reputation harmonization” as they try to regroup in one site all the ratings, comments,… about one user (e.g. Fidbacks, French startup).
You can read above about a few mechanisms that intermediaries use to build trust between users. Finally, there is, in my opinion, one last trust-building effect in this situation. I will call it the “membership effect”. Indeed, some people tend to trust more easily another person if this person is member of the same group, community. I personally think that this effect is playing when you’re in transaction as you think that people sharing the same view of sharing economy than you, are ready to play the game honestly like you.
References:
Show less[1]https://www.airbnb.fr/
[2]How Can We Trust Our Fellow Citizens? Claus Offe
[3]http://digital-society-forum.orange.com/fr/les-forums/359-comment
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It is firstly prudent to note, that every new business, particularly ones that create a new market like the carsharing companies Lyft and Uber will face difficulties in establishing consumer trust. Uber an Lyft, offer such a significant saving on traditional hired car transport like Taxi cabs that this trust issue is somewhat mitigated.
These companies have in place several mechanisms, both implicit and explicit in order to create a more profound and trusting link between passenger, driver and the company as a whole. Explicitly, these services like Lyft use a review system in which the driver and the passenger both review each other on a ranking scale of 5 stars. This mutual rating system established trust between driver and passenger as both are capable of reviewing each others prior history before agreeing to the service. Lyft also has a brief bio of the driver including a picture of the driver and details on the car he/she will be driving.
Veering away from explicit forms of gaining trust, these companies also rely heavily on implicit benefits gained from offering a service they believe is superior. have personally used both Lyft and Uber whilst in California for the Summer and found them to be unequivocally cheaper than Taxi’s whilst offering a similar, if not friendlier experience. Uber and Lyft also proved cheaper than public transport when the car was shared between myself and a couple of my friends.
Lyft advertises itself as “your friend with a car”. This sense of community and friendship is integral to its marketing strategy and has acted as a catalyst in the trust building process and creates a relaxed atmosphere between driver and passenger. These convenient, friendly car sharing services will gain trust through word of mouth and have generated as David Edelman says, the “loyalty loop”. (Edelman, 2010) This loyalty loop is invaluable to new companies in the digital age as peers promote the company and act as a trusted source of pseudo-advertisement and recommendation for these nascent companies. I have personally used both Lyft and Uber whilst in California for the Summer and found them to be unequivocally cheaper than Taxi’s whilst offering a similar, if not friendlier experience. I would (and have done so) recommend either of these ride sharing companies to a friend, which is integral to their trust development and future growth.
Sources:
Show lesshttp://www.wsj.com/articles/SB10001424052702304250204579433113467536876
David C. Edelman, “Branding in the Digital Age”, Harvard Business Review, 2010
https://hbr.org/2010/12/branding-in-the-digital-age-youre-spending-your-money-in-all-the-wrong-places
https://www.lyft.com
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As the article states, if you want to act as a platform operator, you first need to establish trust between the both sides you are trying to attract by playing as a thrusted third-parties.
It is not always easy to establish trust and some mechanisms exist in order to gain the trust of the users.
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Indeed , it is very likely for a new internet-based platform to face some difficulties to gain trust at the beginning as the users could feel threathen by the anonymity of the interactions and transactions.
Internet-based platforms could then put in place an actionable rating system such as star rating system in order to evaluate both sides and reduce this anonymity.
But it might appear quite quickly that it won’t be enough as it allready exists many ways to get around actionable rating system.
It might then be interesting to use a reputation-based trust supporting framework such as PeerTrust that could appear to be one of the best mechanism to use in order to gain trust.
That kind of framework includes a coherent adaptive trust model for quantifying and comparing the trustworthiness of peers based on a transaction-based feedback system, and a decentralized implementation of such a model over a structured P2P network.
This kind of mechanism could seriously reinforce the trust users will put in the proposed services but it need to be remembered that even if it can diminish strongly doubts about the users, it will never be perfect and some risks will always exists.
After having used that kind of mechanims to create a safe environment for the users, an internet-based platform should focus on well designing a web page/mobile app that can go along way towards reducing work for participants and increasing the cost of switching to another platform.
The internet based-platform should also integrate the payment into the product experience.
The more technology can be leveraged to make payment an invisible process, the better. For example : Uber succeed to gain the trust of his clients in order to store their payment information
In conclusion, creating an internet-based platform is not an easy task but some mechanisms exists and will permit to increase the trust people will put in the platform.
http://www.inc.com/john-rampton/building-trust-in-collaborative-marketplaces.html
Show lesshttp://ieeexplore.ieee.org/xpl/articleDetails.jsp?arnumber=1318566
http://firstround.com/review/How-Modern-Marketplaces-Like-Uber-Airbnb-Build-Trust-to-Hit-Liquidity/
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A great way to build trust between two sides is a way to rate people you’ve dealt with, like Ebay does. On their website, sellers are not allowed to leave a bad evaluation on a buyer [1]. Ratings are there to rate sellers more than buyers, as you can chose the person you buy from but not to.
The reason is that sellers have more transactions than buyers, so one bad rate doesn’t have the same impact on them. After you purchase a product, ebay send you an e-mail to leave an evaluation. If you don’t do it, they will continue to send you emails.
The rate is a really important information for buyers to see if the seller is serious or not.
This could easily be applied to Uber.
Another way to establish trust is to personify the riders and the customers by having them put a picture of them. I think it would be easier to put your trust in a person if you can see his face. They could also add a total of the number of kilometers already covered, etc.
The thing to remember is that what most of new platforms (or any company) need is time. You can’t open an application like Uber and expect people from both sides to react rightaway. By being present on social media will help, as well as a lot of advertising. As word of mouth is really important in the case of apps, their idea to make it free for one week (even if it’s wasn’t their goal) was a good one.
A good example we saw in class today is TopCoder. It’s a platform “that allows competitions to develop software solutions for companies and reward participants” [2]. Basically, it offers software solutions to companies by having competitions between programmers, which allows a virtuous cycle of competition between them.
“At TopCoder, trust is earned. It’s not a fluffy feel-good euphoria, but rather a metric driven predictability that bolsters your trust in community. Of course, trust is also formed over time by consistent performance from the members who comprise your community. » [3]
[1] http://pages.ebay.com/help/feedback/scores-reputation.html
Show less[2] Chapter 5 – Open Innovation, class of Coeurderoy Régis and Paque Benoit, “Management stratégique de la technologie et de l’innovation”
[3] http://www.topcoder.com/blog/the-3-dos-for-you-in-managing-open-innovation-challenges/
Just by curiosity, in which class did you hear of Topcoder? I find it very interesting when students make links between the different courses that they attend. I wish I was able to coordinate more with my colleagues to facilitate such links.
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To address this problem of trust, Uber could learn from what other platforms have already put in place to address this problem.
Uber could set up a mystery customer system to test the quality of drivers. This type of system is already widespread for restaurant or hotel reservation platforms (as Michelin or booking.com for example). Uber employees could pretend to be normal clients and test the different drivers. The tests may be performed randomly or in a targeted way, in case of a customer complaint, for example. In this way, the worst drivers could be spotted and discarded from the Uber services. This test system is a pressure and an additional incentive for the drivers to provide better quality service.
This mystery customer system can be complementary with the rating system. Drivers who have the lowest scores could be tested by mystery shoppers employed by Uber. This system is a good way to test the quality of drivers. If the quality of service is actually bad, the driver could be moved away from the Uber service.
There are many other examples of system in place to test and improve the quality of a service platform, but this system is for me the most relevant for Uber.
Show lessActually, Uber used ‘mystery customers’ not to check its own drivers but to try to recruit the drivers of Lyft (a competing platform). See here. This is a twisted form of competition between platforms that would be interesting to study.
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One of the problem of each Internet platform is the importance of trust among users. If you can’t provide it, your website/platform « will not survive ».
A mechanisms that Tripadvisor uses to increase the trust among users is the « rating system » based on the « Facebook Connect ». The principle of this website is that each user can give a feedback on hotels and restaurants they visited. The first problem this kind of website has to face is the sincerity of comments. When a restaurant only has positive feedback, users could wonder if these comments are not writting by the boss, the manager or their employees. That’s why Tripadvisor solve this problem with the « Facebook Connect » which provides the authentication of the person who comments.
Secondly, the reputation of a website is also realy important. In order to be well reputated, you have to prove you’re reliable. We can take the example of Ebay. A lot of people trust in this website and could pay more only to use this platform. Here the question is « Why this website is more reliable than others sales website » ? (2ememain.be,..). Ebay uses different methods to ensure trust for both parties (Buyers and sellers). First of all, every sellers and buyers have to enter personal information (Address, Credit card, …) to sell or buy products. Thanks to these information, you can be sure you deal with real people and not a con who comes from Ivory Coast and who wants to steal your money. Moreover, Ebay provides an other security with Paypal which is the best reputated means of online payment. For instance, if you pay less than 500 euros for a product and you don’t receive it, Ebay pay you back. Finally, in order to be sure of the reputation of a user, you can rate your buyer or seller only after a transaction and in any other case.
To conclude, I think building trust is the key of success and if you want to achieve this goal, you have to prove to customers you’re reliable by different ways.
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Building trust is indeed one of the biggest issue in multisided platforms. Moreover, we can establish that the perception of an unequal balance of power is the underlying problem. Sellers risking lending to a bad renter who will destroy his good, and thus risking for him way more than the renter, or buyers risking ordering a good online that is way under the quality established in the description, risking thus way more than the seller, in his point of view. This perception might be damaging for all sides, including the intermediaries. For example, Airbnb, a multisided platform for renting houses, has suffered in 2011 from a bad customer that trashed one of Airbnb user’s house. The affair went so viral that a lot of Airbnb lenders left the website, considering that they risk way too much in comparison with the renters [1]. Obviously, less lenders lead to reducing the frequentation of the website, and a pure loss for Airbnb.
To overcome this problem, the intermediary should show to both sides that he is an ally that they can count on. To achieve that, the intermediary should first take clearly his responsibilities. It goes by showing that buyers and sellers are protected (legally and economically) in that platform, and showing what really are the risks. Trying to keep the true risks hidden might be the worst, for there’s a high risk of bad reputation if they customers find out about it. Then, it is extremely important to repair the error as fast as possible. Especially in internet based multi-sided platforms, viral bad reputation gained after a long and non-repaired problem is extremely damaging for the intermediary. Finally, anticipating the risks and being proactive might protect the platform from those error. For example, Relayrides, a company offering the same kind of platform as Uber, invested 1 million dollar for insurance policies to prevent cars from being rented without prior reservation [2].
However, we have to know that no system is perfect where human relations are involved. Leaks can always be exploited to bypass or hijack the system, notwithstanding the legal policies. For example, Ebay has for long time suffered from buyers who were threatening sellers to leave a bad feedback if they were not adding some products or services to their offer. Despite being clearly not allowed in Ebay’s policy [3], we can still see this nowadays [4]. The explanation is that the strength that has been linked to the “good feedback ratio” is so high that sellers can risk way more than buyers for having a bad feedback. The loss from a bad feedback (elasticity) might be so high that the seller might end up suing the buyer for his bad review[5].
Sources:
Show less[1] http://techcrunch.com/2011/07/27/the-moment-of-truth-for-airbnb-as-users-home-is-utterly-trashed/
[2] http://www.onlineeconomy.org/building-trust-in-multi-sided-platforms
[3] http://pages.ebay.com/help/policies/feedback-extortion.html
[4] http://www.reddit.com/r/Ebay/comments/2rklnl/seller_is_making_threats_because_of_negative/
[5] http://www.dailymail.co.uk/news/article-1265490/eBay-buyer-sued-defamation-leaving-negative-feedback-auction-site.html
Very instructive, thanks.
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Firstly, the intermediaries play a big role. These intermediaries must absolutely ensure the quality and reliability of their drivers because the slightest mistake and the whole platform collapses. Knowing this, passengers are more likely to use the platform if they know that prior control has been completed and they know it is in the interest of all parties to maintain a high level of quality which facilitates trust. If the intermediary collect information about the quality of conduct of the drivers and make them public, this may reassure the passengers if, for example, they see that a driver has already made 100 trips without any problems.
For example on the website “Kangride”, this site has a tight control on the behavior of its members.
Kangride also provides access to some statistics relating to the seniority of a given driver, as well as evaluations of passengers who have already traveled with him or her. This is an excellent mechanism to build trust because statistics are easy to read and clearly shows the experience of the driver and his quality. Evaluations of other passengers are also extremely important. If for example a driver harvest an average of 9/10, trust will be built almost directly. Also, users can leave comments to share their experience. For passengers, read a number of positive reviews may encourage them to also participate and this also helps to build some trust.
But the interaction between passengers is not the only important one. The one between the two sides is also very important. The fact that the passenger and the driver can interact allows both parties to build some trust. They can ask each other questions to see if the type of driver / passenger fits their requirements.
Thirdly, after-sales service is also a great way to build trust. If we go back to our example of Kangride, it offers after-sales and has a satisfaction guaranteed policy if,teh user books a seat with one of tehir drivers and he is not completely satisfied, Kangaride will provide him with a booking credit for a future ride of his choice. Knowing that if there is a problem with our booking, the platform puts things in place to overcome these problems, this also leads to trust.
Finally, if the site is approved by the government, which would set some regulations, it takes another dimension to the user and he says it’s a trusted platform if the government gives his approval.
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There are several mechanisms to establish trust; some are relevant and useful for all kinds of companies, others depend of the company’s sector, objectives, …
First of all, as the company Uber did, a multi-sided platform needs to have quality contends because customers don’t know you and they will so pay much more attention to your added value and its quality than a famous company where the customer just look at the brand. In relation with this quality aspect, the design of the platform must be attractive, the value of the company must be available/known,.. Moreover, by doing a mobile adapted platform, the firm will facilitate the navigation on its website by the consumer but also (and especially) it will show the professionalism of the company.
A second way to create thrust with the client is to be present on social media. Indeed, behind the fact that it increases the visibility of the brand, it also permits to bring closer the company with consumers which induces that it is easier to understand and answer to their needs. Another advantage of the social media is that the company plays the “transparency card” that reassures the existing and potential clients.
Three other ways to increase visibility are either by creating a buzz, or by being present on existing platform, or by trying to be one of the first in the search engines. For example, Google developed Google AdWords that is a way to increase its “ranking” on pages for some fees.
Some multi-sided platforms prefer pass by a “sponsorship” way to raise their reputation (and then have an influence on the thrust). A first kind of brand image is by having a famous person “related” to your platform. Approximately like George Clooney with the Nespresso brand but applied to an Internet platform. They can also have another company as sponsors. But firms need to be careful when they chose sponsors. Indeed, customers are able to remember only a few numbers of sponsors and more they are visible, more it leads to an “affection transfer” to the potential customer. Also, more the sponsor is related/similar to the two-sided platform; more these affection feeling is transferred to the consumer.
Finally the last mechanism (but not the least) is another mean than sponsors that companies have to increase its reputation. Indeed, companies may use the word of mouth between user and potential ones. By creating platform where consumers can share information, feelings, … platforms generate a community of users and network effects are then created.
In conclusion, I do believe that there are a lot of mechanisms that can help the platform to increase its brand reliability but companies need to take in mind that there isn’t one perfect way and they need to act by imaging that the consumer is not a trustful client.
[1] http://economix.blogs.nytimes.com/2014/03/03/trusting-the-sharing-economy-to-regulate-itself/?_r=0
Show less[2] http://trust-itservices.com/tailor-made-communication-strategies
[3] http://www.jgbm.org/page/19%20ChingChiLiu.pdf
[4] http://www.strategie-aims.com/events/conferences/3-xviiieme-conference-de-l-aims/communications/197-quels-business-models-pour-les-plateformes-web-2-0-les-apports-de-la-theorie-des-marches-bi-faces/download
[5] http://www.theinnovation.eu/article/1041
[6] https://www.google.fr/adwords/costs/
[7] http://www.yola.com/blog/5-ways-to-build-customer-trust-with-reviews/
[8] http://innovation-regulation2.telecom-paristech.fr/wp-content/uploads/2014/11/TP.pdf
[9] http://www.rackspace.com/knowledge_center/whitepaper/building-your-ecommerce-strategy
[10] http://www.pycty.com/content-marketing/comment-gagner-la-confiance-de-vos-consommateurs-sur-le-web/
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Indeed, building trust is of capital importance and P2P platforms needs to keep a good reputation in order to remain viable. To achieve that goal, some systems already exist as the reputation one, where users can rate their peer based on the experience they had together. But it appears that it is not enough. Indeed, one bad driver might be “sacked” because of bad reputation score he received from other users, but how do you know that he will not come back with another name? Since acting anonymously is far easier online than in real life, other tools have to be used.
Having recognized these issues, several entrepreneurs in different countries have begun to build portable cross-platform trust and identity systems meant to facilitate the sharing of assets between individuals, such as TrustCloud or Peertrust. These platforms aims “to develop a trust mechanism for such system so peers can quantify and compare the trustworthiness of other peers and perform trusted interactions based on their past interaction histories without trusted third parties.”(1)
Another aspect needed in order to build a sustainable trust/reputation system, is the transparency about how the reputation scores are established. As Mr.’s Pick states in one of her article : “every person should be able to understand the score and decide themselves whether they want to trust a person or not. Being a good driver is very different, for example, from being a friendly and reliable CouchSurfing host.”(2) To continue with this idea of letting the users judge themselves and decide who they want to trust, some P2P based platforms, such as AirBnb (which is designed to find guesthouses/rooms from particular all around the world) let its users create groups users can join, in order to find people with the same center of interests, or to upload video about themselves, in order to show more than what can leak out from an exchange of mails or private messages.
Finally, we must not forget that it is not because some users got some good reputation score in the past that he will always deliver good services. He could do something unforgivable one time, and his good reputation should not permit him to continue, so third parties should not base their trust on users only with that tool.
1: http://www.cc.gatech.edu/projects/disl/PeerTrust/
Show less2: http://www.shareable.net/blog/how-trust-is-built-in-peer-to-peer-marketplaces
Here is another example of platforms acting as intermediaries (or service providers) for other platforms. There is, to my knowledge, very little (or no) research on that topic. Anyone interested?
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The main challenge that most internet companies face nowadays is undoubtedly building trust in the companies’ products and services. Using two examples, one for products and one or services I will cover most mechanisms and strategies used by IT companies to build trust with current and future customers.
Let’s take a look at Amazon, how can the biggest online product supplier also be one of the most trusted companies in the world?
First of all, the very basic of building trust in the IT sector is to respect the industry standard when it comes to payment transaction, data encryption, privacy policy and customer data sharing. Amazon has made it clear that it is on top of their priority list to ensure customer data safety, use the HTTPS standard and is constantly striving to improve its security systems to make sure that customers can trust the company with their personal data.
Secondly, thousands and thousands of product suppliers are present on Amazon and no company in the world would have enough manpower to check on each supplier’s products to ensure quality and safety in use. Amazon have developed a very thorough system based on customer reviews(3), delivery time and many other factors. This mechanism guarantees fewer risks for customers when buying from a supplier. On top of the review system based on customer ranking, a testimonial system is built in and provide other potential buyers with insight about delivery, product quality, customer care, refund policy …
Thirdly, Amazon’s help desk is the best in the industry, there is someone able to reply to a query 24/7 within minutes, the satisfaction rate is unprecedented and Amazon has built its reputation around it. They apply a money back guaranteed policy and often replace faulty products faster than any other competitor without making it a lengthy and tiresome process making it less stressful and risky for a customer to trust a third party supplier.
On the other side of the spectrum, service providers like Uber have to adopt the same industry standards as product suppliers: encouraging customer review and displaying them prominently, offering customer service, offering multiple and secure payment options.
On top of that, services like Uber have to offer a plethora of guarantees because it involves relying on someone else’s ability to guarantee your safety during a ride. Very thorough background checks on any driver that applies to become a Uber driver(2), insurance guarantees in case of a crash, no direct cash transfers to avoid mugging or theft, passengers and drivers are not anonymous which makes it much less likely to have a driver or a passenger abuse the system or behave poorly.
While product supplier were mostly relying on the product quality, a service supplier like Uber has to rely on making sure that the service they provide is up to the industry standard and most important protect the customers to the largest extent possible.
Lastly, Uber provides a loyalty program based on studies by Nielsen(3) that proves that loyalty programs are a great way for customers to trust and get involved in a company.
(1) http://www.amazon.com/gp/help/customer/display.html/ref=nav_cs_help?ie=UTF8&nodeId=508510
Show less(2) https://www.uber.com/safety
(3) http://www.nielsen.com/us/en/insights/news/2013/who-rewards-who-loyalty-program-availability-and-patronage-go-hand-in-hand.html
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As the previous lecture showed, platforms often face the chicken-or-egg problem so they need to gain the confidence of the different groups of customers. They also have to show clearly their competitive advantage to the different groups and these must easily try and appreciate the platforms. Nowadays thanks to the new technologies, platforms can be real trusted third-parties. Here is some mechanisms they can put in place to become such platforms:
Uber has the advantage to be easy to register for drivers (https://partners.uber.com/drive/# ) and for passengers. due to this simplicity, Uber van reach a large part of the two side of consumers. On the other hand, if they are not convinced, they don’t have difficulty to leave the app because they didn’t pay a high cost to come in.
People could be douptfull about that kind of sharing-system, especially a passenger could fear to go in the car of a new driver who is a complete stranger. That’s why Uber created a rating about drivers and a community on the app where people can trust each other.
Of course, it may be not enough to reassure passengers about drivers’ skills and it’s difficult for them to be sure people have a good impression and will give positive feedbacks.
Nevertheless, in that case each (happy) passenger have a positive externality on other passengers and on drivers.
To create trust, they need to have a good brand-image with clear representation. They can’t be a new or obscure service on the internet. That’s why they have a nice and usefull website ( https://www.uber.com/ ). They must have a good reputation, in that circumstance their conflicts with taxi unions and cities are a real issue.
Shortly, platforms as Uber must be easy to use, create confidence and have a good communication. It sounds logical for a organization dealing with multi-side of consumers, such platforms must be consumers oriented.
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P2P ride-sharing is an easy way to connect passengers with private drivers for on-demand trips. Companies such as Uber, Lyft or Sidecar are three examples of companies currently operating in cities across the world.
Show lessThe important matter about sharing economy is related to the idea of utilization and no longer about the old idea that you need to possess something in order to claim its use. According to the sharing economy, the ownership is no more considered as a need. Nowadays, those two concepts could be considered as independent from each other. Thanks to recent innovations in a diverse range of fields such as car sharing, accommodation sharing or simply property sharing, it has become much easier for a consumer to benefit from the use of an item without necessarily owning it. A growing number of people are coming around to the idea of sharing more and owning less.
This new trend tends to open the path to a new way of consumption.
In that kind of P2P ride-sharing economy, trust and reputation account for a substantial part. Most peer-to-peer sites now allow users to rate their experience while it was not possible in the past. In fact, only customers could give advices. For example, you can rate an owner on Uber but they can also rate you.
Increasingly, these reviews will attach themselves to our online persona. All informations but also history about customers and drivers will give them a reputation. A driver with a good reputation would generally be more trustworthy. That is the reason why reputation encourages people to behave properly. In that way, the P2P platform could partially (because there is not only reputation related to trust) overcome the trust issue related to its core business, the sharing of private goods.
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Multi-sided platforms promote positive externalities between members of the community but there are also numerous opportunities for people to generate negative externalities through bad behaviors, which reduce the economic efficiency. Negative externalities affect the value creation of multi-sided platforms, hence the fact that many of them have developed mechanisms to build trust and cope with user’s bad behaviors to reduce these negative externalities and create value. I will discuss about the private and public mechanisms that platforms put in place and use.
Firstly, multi-sided platforms develop private governance mechanisms to reduce harmful behavior. For instance, Facebook has created a community where fool language and faked identity are prohibited. Indeed, Facebook required that people use their real identity. To achieve that, Facebook controlled the registration of users and the content shared by them. At the beginning, Facebook was only accessible for people with a university email address (that starts with the Harvard address: Harvard.edu). Afterwards, the selection has been extended to groups like businesses with reliable email addresses. Moreover, Facebook deletes the pages with fake identities. As users of the platform, you thus have the possibility to signal content that appears as threatening, pornographic or with incitation to violence via a “report this” button. (1) Facebook has a special division (the User Operations) that examines all content reported by users through this button. Despite the fact that Facebook has successfully put in place mechanisms to build trust, one can observe that it has problem to build trust with the private data protection. Individual users can face negative effect from disclosure of their information while advertisers and application developers, who are other users of the platform can benefit from this disclosure of information.
Some anticipate the risk and protect the users. For instance Relayrides (2) holds a 1 dollar supplemental insurance policy for its car renters and installs immobilizer on the vehicle in order to avoid that the car will be used without a reservation.
Next to dedicated mechanisms like special division or “alert system”, multi-sided platforms also provide information to deal with negative externalities. Indeed, bad behavior can be induced by asymmetry of information . (3) The latter reduces the market efficiency by reducing the likelihood that users will find the matches that maximize the total value from trade. Opportunistic behavior due to asymmetric information can also increase uncertainty for people that use the platform. That’s why platforms provide as much as possible information about the products, services and the users. For instance, Amazon provides a mechanism that allows consumers to rate the merchants after the purchase. Thanks to the system, consumers are more reliable in the platform by buying to a merchant that has a high rating. This review system also limits the negative externalities that merchants impose to each other: it drives low quality users off of the platform. Indeed, good merchants tend to drop off the platform the bad merchants because consumers lower the expectations on the purchases they get from bad merchants. Amazon also provides information about the products and people that have bought the item have the possibility to leave a feedback and their feelings about the product.
Many multi-sided platforms have governance system, but it’s not the case for all platforms, for instance most advertising supported media tend to have a very limited screening of ads, they just focus mainly on prohibiting advertising that will offense the readers.
Secondly, multisided platforms could rely on civil and criminal law and government regulation. Users have recourse to laws involving breach of contract, fraud or market manipulation for example. Multi-sided platforms also use IP rights to build trust and in particular the “Bouncer’s Right” identified by Strahilevitz . (4) The “Bouncer Right” is the possibility to exclude agents of the platform and admit them selectively to the platform. For instance, eBay has specific agreements (5) for buyers and sellers. This agreement prohibits bad behavior (for instance, you can’t “distribute viruses or any other technologies that may harm eBay, or the interests or property of users or post false, inaccurate, misleading, defamatory, or libelous content”) and tells that eBay has the right to restrict the access to the platform and exclude users that don’t respect the user-agreement.
I will now conclude by a comparison between private and public mechanisms and policy for antitrust. According to Evans (6) , private control is likely to be more efficient than social control (through laws and regulation) in dealing with negative externalities on platform communities because the platform owner can deal with this harmful behavior more expeditiously than a public regulator since they have more information about the problems. For different reasons, platforms don’t only rely on public laws: they are able to enforce rules more rapidly that the public laws (for instance an e-commerce platform can drop one merchant of its platform after few complaints). Public laws and regulation may be also incomplete (government has other priorities that recognize problems).
Finally, one should be aware that the possibility to exclude agents from the platform is a good way to ensure trust but one should also keep in mind that a platform can abuse of its market power and have an anti-competitive effect by excluding firms from the relevant market.
(1) https://www.facebook.com/legal/terms
Show less(2) http://www.onlineeconomy.org/building-trust-in-multi-sided-platforms
(3) David S. Evans, Berkeley Technology Law Journal. Fall2012, Vol. 27 Issue 2, p1201-1250. 50p
(4)Strahilevitz, Lior Jacob Strahüevitz, Information Asymmetries and the Rights to Exclude, 104 MICH. L. REV. 1835, 1837 (2006).
(5) http://pages.ebay.com/help/policies/user-agreement.html
(6) David S. Evans, Berkeley Technology Law Journal. Fall2012, Vol. 27 Issue 2, p1201-1250. 50p
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As said in the article, social ridesharing has grown up in the last few years and is more and more successful. We have seen different companies playing the intermediaries in order to link drivers and passengers. I have personally worked for one of them: Djump. By experience, I know that trust is the hardest part to get in that kind of application.
But first, if we go a few years back, we know that taxis had a monopoly in the market and also had the trust of passengers. So, how did companies like Uber and others to create a community of drivers and users? The price strategy was an important fact they had to work on. Where taxis are really expensive due to different taxes [1] as their license, Uber’s drivers don’t need license to take passengers and thus they can reduce the price asked for a ride [2]. Uber is thus almost twice cheaper than a classic taxi. But, personally, I believe that externalities have played a role like different incidents with taxis that have been published in the press as rapes by fake taxi men [3]. A general impression is also that taxi men are not always nice with the passengers they take. But when a taxi man gives a bad impression to passenger because of his lack of sympathy, passengers don’t have the possibility to report it to any company and even if they could, nothing would change because the only objective of taxi companies is to drive one or several passenger from a point A to point B. The P2P transport companies have different objective than taxi men. Of course, the primary objective is also to drive a passenger from point A to point B but after the ride, the passenger has the opportunity to mark the driver and make different remarks about him. Like that, the next passenger will see the remarks about the driver whatever it concerns the way of driving, the time he takes to arrive or his social skills. Thanks to those characteristics, it is easy for the company to judge a driver and throw the rotten apple before it infects the others.
The possibility of grading drivers is very helpful to gain the trust of passengers but companies that make social riding also have to attract drivers! How could they attract them? They create a community of passengers where you need to be accepted before taking a ride. And when you are a part of the community, drivers will also mark the passengers and make some remarks about them. Thus, If a passenger has payment issues, doesn’t wait where he is supposed to or has social skills issues, the drivers see it directly and can choose to take the ride or not. On the contrary, if the passenger always gives a tip and is nice, it is also seen by the driver. This way, it is easy to keep the bag of apple clean because everybody receive a mark by others and if someone has several bad “grades”, he can easily be taken off the community.
The last point I would like to talk about is the fact that when someone ask to enter in the community as a passenger (because a driver must be interviewed before coming in), how a driver can know that the passenger can be trusted and that the passenger will be where he asked for a driver? Djump has handled the problem by putting someone at the support, someone who can be contacted at any time. The role of this person is also to call people who use the system for the first time to control that the passenger is trustable. Thanks to this system, the trust of both part increase and the system continues to be healthy!
[1] http://www.bruxellesmobilite.irisnet.be/articles/taxi/combien-coute-un-taxi
Show less[2] https://www.uber.com/fr/cities/brussels
[3] http://www.rtbf.be/info/regions/detail_plaintes-confirmees-pour-une-vingtaine-de-viols-dans-des-taxis-bruxellois?id=8197102
This comment sheds some instructive light on today’s taxi strike in Brussels (see here). Thanks
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Since internet exist, the numbers of multi-sided platform increase every day and in every areas. But when money transactions take place, people are always prudent. Establish trust between the different users is a must. How does internet-based platforms act? Many different mechanisms are used to resolve that problem. Indeed insure trust will be benefit for the platform. And it is important that the consumer know he can still enforce his right.
A rating system with multiple criteria defined by the intermediary and enabling electronic word of mouth is the most simple and common. It is for me also the best one because consumers provide feedbacks for others consumers. Trust is linked to the reputation, a good reputation is what make people confident to use your service our buy your product. Even if with that system some problem can still occur such as false comment posted by false or paid user. That is why control by independent organism are needed and most of the times used to ensure legitimacy of comments. (Example: http://www.tripadvisor.fr/vpages/review_mod_fraud_detect.html)
Intermediary have also to create a social media presence or website where people can follow each other’s and where video are posted describing how the transaction generally take place from the beginning to the end of it.
But those video can be considered by some as marketing campaigns where people are paid actor and not simply common user of the platform. (Example: uber facebook page)
There is also of course the terms agreement that is asked by the intermediary to the different users when subscribing to the platform in order to have power and increase trust. Even if those are most of the time not completely read, it allow them to take actions and close your account or ask for compensation in case of non-respect of the rules.
The intermediary also often ask personal data such as national register number or bank account number, credit card number, address, etc… that are checked before and certified the profile of the users. That makes the users more imply and enable them to go to court in case of trouble and have some guarantee.
Call centre and email address are a must for the company. Those procure the consumer a middle to complain and to quickly find solutions to their problems (example: yoopies.fr)
Finally, the website / the app of the intermediary need to be clear and well organized to create a favourable environment to the transaction. It is the first step to instore a confident climate between all the users.
To conclude we can say that the benefits of multiple-sides platform are obvious for users but trust need to be built in a conscientiously way by his inventor to make it efficient and risk-free.
Article consulted:
Show lesshttp://faculty.chicagobooth.edu/workshops/marketing/past/pdf/MultiSidedPlatformsHagiu.pdf
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On one hand, the problem of establishing trust is a major problem of Internet-based platforms. For example, during the launch years of Amazon, many people were not sure that, by ordering on the platform, they would get the product, be able to return it, be repaid, etc. On the other hand, before the Internet exists, there was already a trust issue : for example when people decided to prepay a hotel via post office, to buy a land or a house abroad, etc. Thus this problem of establishing trust is not a problem specific to Internet-based platforms but it is even more important in this case because people do not have in front of them tangible things such as an office or people who they can address to.
These platforms can put in place some mechanisms to ensure trust such as :
– Internal regulation : some actions should be taken internally to ensure self-regulation, control, high quality level, a simple way to lodge complaints, a rapid answer to complaints, a limited number of complaints, etc.
– Regulation linked to the opinion of users : consumers should have the possibility to share their advices about the service quality. On some platforms consumers can give a rating about the products but also about the service providers. Users feed the database and ensure that service providers are listed. Thus it would be in the interest of the service providers to behave in the best way possible to get a good rating and to be allowed to stay on the platform.
– Publish a charter : rules imposed and controls applied to service providers should be put online to be seen by users.
– Communication : any platform that wants to create trust should have a communication strategy via well-known media and they should achieve to convince them about the quality of their offering. As consumers trust journalists, if journalists trust these platforms, it will result in a favorable opinion.
– Internet website : it is essential to create a clear website that gives all information about the service and that allows to interact. The website will be the visible part of the company and this will create trust. If this website collaborates with well-known companies (in terms of payment, posting, etc) it will generate more confidence.
– Helpdesk : consumers should be able to call a helpdesk that is easily available and understandable, and that addresses issues and complaints effectively.
In short, these platforms should have a customer-oriented policy. It means that they should offer services that create confidence among consumers, such as favourable refund policy, a good value for money, short response time, etc. Consequently, it will create a word of mouth effect about the good service quality. In the other way, if there is any problem there will also be a word of mouth effect and it will quickly damage the reputation. Therefore platforms should have a self-regulating role and create rules to ensure their business model to work.
Finally, when a consumer buys on a platform he should have the impression that the service will be better than by buying in a physical store. A good example is Amazon : if a consumer returns a product, the referral fees are supported by Amazon, the consumer does not need to justify the reason for the return, he is repaid in the week, etc. In this way, the service gets better on the platform than in a physical store. To conclude, the platform should be designed in such a way that it gives the feeling to the consumer that the service quality is not lower, that it is not less reliable and that it is not more virtual than any other company which the consumer is in contact with.
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In general, it is quite hard for a totally new product entering any market to gain instant trust. With internet-based platform it might be even harder as for our generation the internet is still seen as a potential evil, a group of dishonest people hiding behind a service/screen to extort credulous people. Services such as Uber then try to use different mechanisms to establish trust but in my opinion whether it works or not is highly dependent on peoples’ gullibility.
One of the main ways those companies use in trying to provide the sense of trustfulness are the evaluation, reviews and written testimonials. They usually give all their users the opportunity to say what they thought or the service and recommend it or not to others. Those opinions are usually semi-anonymous which can be a great thing in the field of maintaining the writer’s privacy but it has its shortcomings. It is basically a stranger giving advice to another stranger so why should it be taken into account. It also opens the way for the companies themselves to uses this media to publish false reviews in order to make their services seem appreciated.
Another way are video testimonials, basically a user explaining in a short video why he/she likes the service. The fact that you can see the person gives the impression that he/she is less of stranger and help people to relate. But then again, it can shake people’s trust as it is usually part of marketing campaign. This might raise questions : Are those actors or real users? Are they paid users? Are there any bad testimonials?
Then there is the idea that you usually have to agree to “General terms and condition “ or sign some kind of confidentiality agreement. They usually states what can or cannot be done while using the service,… and could be a base for setting up trust between the users and also towards the company. Unfortunately they are usually quite long and there is some kind of social agreement that nobody reads those before agreeing, the initial purpose is then lost.
Finally the best way for those companies to gain trust is word of mouth. But this would imply convincing people to trust the service, provide an excellent service and then give them the incentives to talk to their friends, family about it.
So in conclusion those companies have to take a gamble counting on people with low risk aversion and quite trusting to promote their services. In that sense they usually try to provide the best possible service in order to assure themselves of this publicity and that is not something that all new companies can directly provide hence a fairly limited amount of those companies succeeding so far.
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As many comments mention it, it is more than obvious that the key success factor for firms like Uber is to build trust between the two sides of the platform. Drivers and passengers have both an economical interest to use this service thanks to the indirect network effect (the passengers can find a ride for a lower price while the drivers can recover their fuel’s cost). However, despite the economic point of view, Uber (and others) must be careful on a more human factor, i.e. trust.
Many persons are doubtful about this new “sharing-system”, where you must face a stranger that you have never met before. The successful idea of putting a rating on every rating is crucial to reassure the passengers by seeing the previous experience of former travelers. A positive externality of this is the creation of a communities where people trust each others.
However, since trust is based on the human perception (and hence really subjective), it is really hard to control and manage. It is a work on a long-run based on creating a good reputation, making the clients satisfied and understood, having a powerful word of mouth, …
However, firms like Uber can be criticized on many aspects. First they should more take care of the safety of the passengers. Many drivers in the U.S. where accused of sexual assault. Next, they should put as much efforts for the drivers as for the passenger.
To sum up, there is no need to argue on the economic point of view, it is clear that it is profitable for both sides. All the focus must be on the trust management by building a good reputation of the app.
Article used for the Uber critics:
Show lesshttp://www.fastcompany.com/3042107/why-ubers-success-means-nothing-if-it-cant-fix-its-reputation
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Collaborative consumption P2P models have grown a lot in the last few years and will continue to do so in the near future. In fact, it appears to be a cheaper, more eco-friendly and resource-efficient way to exchange goods and services. It includes many different businesses, be it car sharing, apartment lending, clothes exchanges, etc.
The main problem with this collaborative platforms come from the fact that they can only work if both side of the platform can trust each other. In fact, if someone needs a ride and decide to use a car sharing platform to find a driver, it’s essential for this person not to have to wonder whether the driver she will find will be reliable or not. In order to do that, platforms need to find creative ways to establish and maintain trust for the users.
Beside the already well-know mechanisms that exist to create or maintain trust at a high level, like the rating system where users of both side of the collaborative platform can give a mark to the quality of the service they experienced or the good they received, a new type of business has appeared in order to enhance trust in platforms. In fact, firms like Trulioo, which provide online global identity verification, have already helped many collaborative platforms establish a framework of trust simply by providing basic data on the users. In fact, if you can verify someone’s idendity, you can more easily make business with them, especially in the case of P2P exchanges where it’s most of the time between complete strangers. Moreover, they provide data for addresses, which is very interesting for every platform that needs to make sure they ship the products to the correct location.
In fact, the platform needs to make sure that users of both side can trust each other (that they do not cheat on the quality or the characteristics of the product they exchange) but also that users of both side can trust the platform itself. This is why verified addresses is a very valuable asset for these firms. Trulioo even provide an automated watchlist which helps detecting fraud and unreliable users.
To conclude, we can see that establishing trust among users of a collaborative platform has become a business itself.
Sources:
– http://www.inc.com/john-rampton/building-trust-in-collaborative-marketplaces.html
Show less– https://www.trulioo.com/
Interesting to see how intermediation is also needed for intermediaries.
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Since the world has access to Internet, we have seen developing more and more two-sided platforms. Nowadays, nearly everything is feasible online. You can meet people thanks to Meetic and other dating websites, do grocery shopping on-line with your favourite store, sell your furniture or anything online thanks to eBay or book a room for a city trip though Booking.com. Nevertheless, how can we trust these website?
Most of the time websites propose to rate the service or product offered on their platforms. Therefore, the other users can have an idea of what to expect from the other side. As human being we need to compare if others have experimented and approved before rushing into any purchase. Moreover, in some case you can signal if anything goes wrong like with eBay and then the platform will investigate the case. This proves that you can rely on the website.
As for many platforms you have to enroll first and you can access to the site. Therefore, to ensure the authenticity of the person you cannot use a pseudonym. You are asked to give your real name and a real picture of you. Another mechanism would be to activate the payment only after the service or product has been delivered. This means that you pay through the platform and you receive a code. Then, you send the code to the other side if everything went well in order to achieve the payment or if you do not it will be automatically sent. Otherwise, you communicate to the platform if you have to declare something wrong. Personally, I am quite reluctant when I have to pay in advance for a hotel or a good that I will receive later. I would rather pay after like for carpool with Blablacar.
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Nowadays, many people prefer to use P2P platform. P2P platform is to be a third party, if it can operate very well , then it can help to realize benefits of a two-side or even multi-side. But how to realize benefits and how to establish trust of a two-side, these become problem that we should consider deeply.
Take Taobao for example, Taobao is a website (but they also have app) that seller can sell things in this website and buyer can buy something in this website. Taobao is to be a third party, is a mediator of seller and buyer. I am totally agreed that a business opportunity emerges for a two-sided (or multi-sided) platform when three conditions are met. So Taobao is also having met three conditions. Firstly, there have seller and buyer two groups. Secondly, there have a indirect effects that maybe one buyer have demand to coordinate with many other seller, not just one. Lastly, if you don’t use Taobao, you will very difficult to contact with seller.
Now this website does a lot of effort to establish trust. Firstly, they have an evaluation system, after you received goods you not only can write comments and upload pictures of good, and also can give a mark to this seller’s service, the quality of good and the speed and service of logistics. These marks will represent by a shape of crown, if the seller have more crown , that mean he is a good quality seller , it can bring he a lot of consumers and profits, so seller will put more effort and good service to buyer. By contrast, if they have a low mark many times and received a lot of complain, then Taobao will punish he, maybe will drive he out of this website. And also seller can give mark and comment to buyer, because maybe some competitor pretend a buyer to write wrong information and to want decrease their competitor.
Internet business is different from traditional business; self –regulatory is can’t enough, because some things you can’t resolve by self. Like the special policy will regulate the internet business, because Taobao can seller many things, so government should observe and regulate, in order to avoid harmful things like pornography things. So internet business should combine self-regulatory with government monitor.
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With more and more webpages being developed on the lines of the P2P sharing and negotiation, i’ve particularily been dealing with two platforms that deal with the same, pretty much: https://www.airbnb.es/ and http://www.housetrip.com/ . Both these webpages are effective on getting in contact travellers from all over the world with people decided to rent their places for short stays, mainly in touristy places.
Show lessFor the travellers, the advantage is obvious: better value for your money when it comes to an overnight stay for example, and the possibility of getting a place of their own for the time in the city they are getting to know. For the people renting their places, it’s a new source of money, and they have the ability of renting their place whilst they aren’t using, without the intermediary of a real-state seller, and gaining a few extra bucks.
So much for the motivation: clients and renters are both encouraged to get onto these webpages, but how to trust them?
In both cases, the places to rent are based on a scoring system based on the reviews past clients submit, and thus when any new client arrives at the webpage and submits a search, the first results will be those with the best results on these reviews. That, as it is the case of Uber mentioned on the article, encourages renters to try to make their guests as comfortable as possible, And, on the other hand, new customers have the ability to read all past reviews and thus are more comfortable with the place they’ll choose to rent.
But really, in escense, since one could actually enter the site without registering until the payment is done, there is no real feedback on whether the travellers are well behaved, whether their proposal is honest and so on. So, finally there is no real channel through which renters are able to trust their travellers, and only depend on the comments and messages the travellers sends them prior to the rental period.
I believe this is the same case with many other P2P softwares, including Uber, since there is no real information about the clients, of course, and only about the drivers.
There are however some exceptions, like http://www.mercadolibre.com.ar/ , the argentinian E-Bay type of webpage. In this case, not only the sellers recieve reviews and get a certain score for their interacations, but also buyers. This is thanks to the fact that many of the users are both buyers and sellers, and thus have an account logged in to the page, and all these users are ranked and have their own reputation. This is thus, the way on which trust works both ways.
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Personally , I am always suspicious again a product online and I would always account e-reputation before using a service. According to me, the word-of -mouth and online scoring systems to create a relationship based on trust between the customer and supplier are key indicators.
So I think that the hotel owners, put fake comments appreciation on the internet to promote their business .The trust is broken because it’s well known that such practice exists. The credibility of each comment is doubted.
Thus, knowing the person who posts the comment increases the transparency. I feel that the opinion of friends or relations on a service has more consequences than the opinion of a stranger. Thus, I believe it is important to be transparent about the identities of those who wished to give their opinions in order to increase confidence.
In addition , the company must establish internal controls to ensure the quality of their services. For example, make user surveys and test the service by investigators are still signs that the company is listening to its customers and ensure their comfort.
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P2P grid environments demand the correct execution of tasks to guarantee good performance. However, in these environments, there are malicious users that affect the grid performance. These users modify the tasks results and even cheat security mechanisms.
The grid environment provides resources for various applications, such as storage, analysis and data virtualization. They are also characterized by the fact that users, beside donate their resources can also run their applications on P2P grid. Since the P2P grid can be formed by heterogeneous machines, located in different network domains and different types of users is possible, then, that there are malicious users, whose behaviour can decrease the performance of the grid. A well-known example is the malicious users who modify the results of the tasks of the grid.
The trust management is an important issue for ubiquitous applications, particularly those that run on P2P environments, where unknown entities (peers) need to cooperate and work together for common interests. Management models of trust can be built with reputation systems, determining the approval or rejection of transactions with partners (known or not) based on their reputation and the risk associated with them. The reputation of an entity is usually estimated based on its historical relationships with others.
However, the buyer should make sure that the seller is honest, that actually executes the sold service and that the information is consistent with what was advertised.
In this trade model the buyer remains in a vulnerable position in relation to the seller in the physical world, because there is not always information of the qualification, or it cannot be trusted. This vulnerability increases due to the inability to see and test the products they want to buy, in addition to the payment being commonly anticipated. With this, we run the risk of not matching with what was described by the seller. The seller, however, is in a comfortable position because normally receive payment in advance.
Typically, an individual with good reputation induces others to estimate a high confidence in interacting with him, on the other hand a bad reputation leads to low confidence.
While trust can be described as a subjective personal factor, reputation can be considered as a measure of confidence collectively elaborated. To trust, each individual chooses attributes based on personal experience, references from others, given their reputation for social networking. To reputation, each individual uses their social network to infer how the group classifies an individual or another group. The use of social networks where individuals interact to judge and determine the reputation of its members (buyers and sellers, for example) is one way to ensure security of electronic transactions.
The simplest way to compute the reputation of an individual is adding separately positive and negative qualifications, giving it a total value with the difference of these sums. This simple model is used by eBay, although rudimentary, it does not consider the intrinsic electronic transaction as deadlines, promptness and value attributes.
eBay is the largest online auction service between persons, and it offers no secure warranties. The risks of the transactions shall be borne by buyers and sellers. Therefore, an accurate reputation system becomes essential to assist the buyer in choosing the seller.
Reputation systems must have the following requirements:
Show less1. Entities longevity to ensure the expectation of new interactions. Thus, the identity of the interacting entities is persistent and unchanging, avoiding disposal reputation already computed.
2. Current interactions measures should be registered and distributed. The challenge of this requirement is to ensure that entities that interact record their measurements.
3. Registries of past interactions should serve as a system to make good decisions in the current interactions, which depend directly on the usability of the system.
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In my view, when we talk about developing trust for internet-based platforms, the idea to get it is clear. For me, there are some easy tools that a company can use.
First, there is the recognition of quality from a professional of the subject. To be more specific, I’ll give an example. If we read a paper on Wikipedia and we saw that it’s approved by a teacher from a university, we immediately give more credit to the information we can find in the text. The tool for companies is so to show approval from influent people.
Second, it’s a bit the same as the first tool but the difference is that we use quantity of advice instead of quality of them. By example, articles from Booking.com or Tripadvisor.com are highly trusted if they have a sufficient amount of (good) comments. The diversity of comment brings honesty because it’s hard to fake.
If we get the two tools, we have even more trust. The first example I have in mind is Allocine.com. On this website, we can find information about movies and there are two quotations: One from journalists and one from people who comment and evaluate the movie. In a short time, this website became a reference when we look advice for a movie.
Third, there is number of users. They don’t have to express themselves. Only because we know that there is a large amount of users, we give credit to the website. We can’t imagine that it’s a scam if there are so many people who are using it.
Finally, I think that the level of implication that becoming a member implies can also be a brake for trust. For me, this is also why websites have to use freemium-premium strategy. If becoming a member is too long and if you have to pay straight away, you may think more than ones before registering. Some websites as Bwin.com even give money to new members in order build trust (and, to be clear, also to create addiction).
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The e-commerce is a great breakthrough for our lives that not few people are having troubles to get used to. The chiefly problem arises from one of the most ancient fears because humans, by nature, are not well prepared to trust in unknown others and more so if they cannot interact vis-à-vis where recognizing skills to screen untruthful sellers take place. Even so, this sector have flourished because the consumers do believe the benefits are higher than costs. Intermediary platform realize this issue and employ different efforts so as to consumers maintain this expectations. Pavlou and Gefen (2004) argues the perception of effectiveness of these measures are the key for enticing consumers to buy in online marketplaces. Same authors and Dellarocas (2002) also point out the consumers formulate beliefs about the overall quality of the entire marketplace from single experiences so it is another reason why intermediary should care about.
Pavlou and Gefen (2004) presents four kind of instruments to enhance trust: 1) Feedback Mechanism, 2) Escrow Services (e.g. PayPal) and 3) Credit Card Guarantee (e.g. Master Card guarantee). The success of all of them depends on how consumers effectively diminish their aversion to be involved in online transaction. Lim et al (2006) study two trust-building strategies: 1) Portal Affiliation and 2) Satisfied consumers endorsements. The formers means the incorporation of sellers in known websites in which there exist a trust transference whereas the latter stands for the displaying testimonials from similar profiles to the potential buyer, creating a reassuring feeling of someone alike which chose certain products. In this study, the unit grouping effect by satisfied consumers endorsements (the latter one) turned out stronger than the portal affiliation for convincing consumers to buy online. This has an insightful contribution which means the consumers are reassured if they believe similar others have bought the same product. You are not willing to pay for specialised hobby stuff if you have no knowledge about the others’ satisfaction.
Dellarocas (2002) argues in some marketplaces where sellers can offer multiple products with different quality there might exist misleading information by standard feedback mechanism. Hence, the researcher propose a “Goodwilling Hunting” upgrade to the typical feedback system in which there is a threat of future biased quality announced for liar sellers. For instance, a seller who overstates constantly his quality over products will have later a punishment and the potential consumers will know about it. Conversely a understating quality will lead to a premium in reported quality for consumers.
Summing up, the consumers is the same irrational human since thousands of years, with feeling and fears in this dizzy and moving world economy. Normally they have aversion to transact with people that they do know their faces, it is quite natural. The intermediary have to deal with it through devices which appeal to emotions as the satisfied endorsements by similar consumers do and the like. The adoption of vehicles without animal force, namely cars, was once controversial but it brought certainly us more possibilities than ever before, so why not the e-commerce?
References:
Show less1) Building Effective Online Marketplaces with Institution-Based Trust- Paul Pavlou and David Gefen
2) Do I Trust You Online, and If So, Will I Buy? An Empirical Study of Two Trust-Building Strategies- Kai Lim, Choong Sia, Matthew Lee and Izak Benbasa
3) Goodwill Hunting: An Economically Efficient Online Feedback Mechanism for Environments with Variable Product Quality – Chrysanthos Dellarocas
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My analysis is based on the article “Managing Trust in a Peer-2-Peer Information System” by Karl Aberer and Zoran Despotovic http://www.cs.rit.edu/~jjp1820/distributed/Managing%20Trust%20in%20a%20Peer-2-Peer%20Information%20System.pdf
As we all know, trust establishment in a internet-based platform is a common issue and the most discussed one, as it is the key for the platform’s success. This happens, because the peer-to-peer system relies in the most imperfect and mistake-making individuals: people, that wouldn’t be the case in a business to consumer kind of system. Today, there are lots of different mechanisms that attempt to control and regulate this kind of platforms, but like in every system, not all of them are successful. Governments are also involved in these issue, because it is an emerging collaborative “sharing economy” that hasn’t been well defined or properly regulated yet, and when it comes to market’s and people’s benefit, failure is not something that can be afforded.
One of the mechanisms used for trust management in peer to peer systems is the reputation-based mechanism, that is basically focused on keeping the trustable people in the platform and removing the non- trustable people from it, according to user’s evaluation of the service provided and their personal experience. This mechanism is based in a repeated prisoner’s dilemma, because in the case of ride-sharing services, the Nash equilibrium for both, passenger and driver, would be to provide the best service possible; on the contrary, they would obtain a higher personal benefit on the short run, but in the long run they would be kept out from the platform and from the benefits it provides.
In my opinion, the responsibility relies on the platform’s creators and administrators, because as long as the platform is well defined and properly controlled, it shouldn’t cause any problems for the users. In addition to that, the repeated prisoner’s dilemma should bring both passengers and drivers to make a good use of the platform, assuming that the users are benefit seeker on the long run.
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It is known that peer-to-peer web platforms contain more risks than normal web platforms, because most of them involve meeting the “stranger” like in Uber, sharing a ride or in other apps that coordinate sharing apartments, the users have to directly interact with the other customers. This is the reason why trust is so important and difficult to build, because a profile is not enough, it is known that many people don’t use their real information on the internet.
People tend to be skeptical about this new kind of system, thats why a big part of these applications are the ratings and reviews. This way the users can base their decisions on other people’s experiences and not only on the profile information. Creating communities is a way of building trust, because people often trust people they can relate to or that have similar experiences to them.
The complicated thing about trust is that it means different things for different people, it’s based on cognitive factors and thats what makes trust is so complex and difficult to build. Nowadays the electronic market is big and constantly growing, people join different social media everyday. For this reason companies have identified the rentability of this market and started to invest on research, and they have acknowledged the importance of trust management. This focuses on making the customer feel understood and satisfied, this way the customer will use the app again and probably talk about it to his friends and family. In other words focuses on built a good reputation, that clients can rely on.
Because peer-to-peer web platforms are decentralized environments where no central database is available, the users would be unfamiliar with the other customer but familiarized with the application and its reputation.
In conclusion building trust is a big challenge for peer-to-peer big platforms, but they can build a good reputation using an accurate rating program with positive reviews, so for Uber specifically has to concentrate on dismissing the bad reviews drivers, so no more people would have bad experiences.
Based on:
Show lesshttp://www.shareable.net/blog/how-trust-is-built-in-peer-to-peer-marketplaces
http://www.cs.rit.edu/~jjp1820/distributed/Managing%20Trust%20in%20a%20Peer-2-Peer%20Information%20System.pdf
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First of all,i think that these new means of transport which are getting quite popular, will increase the competitivity in the transportation market as they lower the prices with a comparable quality. So, we can expect a growth in the market.
Then, i want to share my personal experiences about car sharing websites which are relative to the subject.The first car sharing website that i used is http://www.carpooling.fr which i heard from my brother who is a reliable resource for me.So, i decided to give it a try as train prices are too high and there is no big time difference between car and train.Finally, i found a car and texted him, because that is how the platform works, then he texted me back to confirm the journey.However, there was a problem,i didn’t have any piece of evidence that the trip will occur and if he didn’t come, i couldn’t do anything. Luckily, the driver came and the journey was fine, which made me put my trust in the website.But, the driver may not came,and the platform didn’t guarantee it, so it would be a real time and money loss for me.Being aware of this situation, afterwards they changed the system.Now, there is a reservation system,you write your name on the page of the driver and the decrease in the number of available seats is displayed, which is more reliable but not enough.
The other car sharing website that i used is http://www.covoiturage.fr . Even though i didn’t like the design of the website (sometimes which can be a confidence provider), i find it more reliable.The main reason is, you pay with credit card when doing the reservation which is different than the other site i mentioned ( the payment is made by cash to the driver when the journey ends ),preventing you to not to go there.On the other hand, the platform gives passengers codes to give to the driver in the end of the journey,to be able to take their money from the platform. Thus, the platform is playing here the role of trusted third-parties.
In conclusion, it’s important for these websites to provide systems to make their platform more reliable.Therefore, reliability doesn’t mean profit everytime because it requires investment and to gain it back, the company may need to charge consumers with booking fees which can lead them to look for the other less reliable but more economic website.
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As I am not using a specific peer-to-peer site I cannot talk about the systems established to create a reliable consumer-to-consumer business. But I will try to issue some ideas to build trust upon the users of such site, based on what I have heard in the past or what I would do if I had a P2P business on the internet.
First of all, I completely agree about the fact that one rotten apple will waste a whole basket. I thus understand the point of a reliable site. If I was responsible for a P2P business based on the internet, I would first try to destroy the fear that my future clients could met. There is indeed no worse enemy than fear. On the internet, it is the fear of losing either your money or some personal information. To avoid such thing, I would make the subscription to the service more complicated for lunatics. By paying a fee of $100 for example, people with bad intentions (or not trustworthy) will think twice before subscribing to the site. Of course, for honest people I would create a system of grades that you receive after each month or service. If you collect enough good grades, you get your $100 back. It might be reluctant for these gentlemen to subscribe in the first place but I think it is the price to pay for a trustworthy business. Note that this system is partly used by Steam, a digital distribution platform of video games, where independent developers can submit their game to the shop if they have payed a once life time $100 fee. It avoids Valve, the company in charge of this business, the problem of having its shop completely flooded by irrelevant games.
Show lessFor what I know, the system of good grades is used by Ebay, the peer-to-peer online market. It helps the consumers to highlight who are the people with whom you can make business.
Depending on the kind of service established, it would be nice to have a payment system allowing a sort of “buffer”: As long as the two part of the transaction are not correctly satisfied, the payment cannot be fulfilled. Of course some people might abuse of this system and steal some free services. But I think that the people in charge of the P2P business could manage to sue those fraudsters with the personal information that the fraudsters have submitted for their subscription. Otherwise, there is still the bad grades that will affect their profile. This will then quickly end their thefts.
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Internet has connected people all around the world, but it has also brought some drawbacks. The lack of trust is probably one of the biggest issues, and it is a key challenge for peer-to-peer service companies. I’ll try to answer the question asked by sharing my personal experience with a ride-sharing website.
When I was in Erasmus 3 months ago, I frequently used a ride-sharing website named amigoexpress (http://www.amigoexpress.com) for travelling all around the Quebec. I was told the website worked very well, and that it was very useful. Indeed, I signed up on the website and made many travels thanks to it. The principle is very simple as you register on the website, you have some information to give about yourself and then pay a fee for every travel you make. In return, you can access to the rides offered by the drivers who set the price they want to receive (and that you pay in cash after the ride). The concept is a little bit different from Uber, because the main goal is not to make money, but it is more to share an experience with other people, and get to know other people. Of course, it benefits both sides as it reduces the cost of travelling.
The website uses different methods to assure trust for both parties. As passenger, you have to give some information about yourself, included a phone number which allows to contact the driver in case of delay (for instance). Moreover you have to pay a fee on the website to take part of a ride which works as an incentive to be present. The drivers can directly enter in contact with amigoexpress if passengers do not show up in time and they can therefore be banned from the website. A critical issue is that you do not know the information of the person with whom you’ll travel before your reservation. It is only after your reservation that you can have access to information, such as the number of travels the driver has already done, etc. As drivers, you have to give information about yourself and the car. Amigoexpress checks (following their website) the driving license of all the drivers. The website gives also the opportunity to share experience and give feedback. Following my experience, the website is very popular, and most of the time works very well, as discussed with other users. In this particular case, both parts have an interest to be trustworthy.
More generally, a big part of the trust issue is the limited and potentially unreliable information about past transactions on the Internet [Resnick, P. (2001)]. But at the same time a bad experience can be recorded very quickly. The two-sided platforms encourage the disclosure of bad seller/buyer, and put in place mechanism to give credit to the users. For instance, ebay gives profile information (and rating) on sellers, because it is basically on them than the trust issues rely on.
Source: Resnick, P. (2001), Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay’s Reputation System. http://www.presnick.people.si.umich.edu/papers/ebayNBER/RZNBERBodegaBay.pdf
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I based my analysis on this article written by Monahan (http://www.triplepundit.com/2012/03/start-next-airbnb-solve-problems/). The author is exposing some solutions about in order to increase the trust on peer-to-peer models.
Show lessOne of the main problems appears to be the fear influencing the trust that the customers can observe by interacting with others. One first solution is to set up what the authors call a vetting or a selection process. Some checks about the parts that will offer the service is mandatory. This person will then have to pass some tests, quizzes… That will give him a certain status to practice. Secondly, it is about creating a reputation, without any status here, the idea is to rate the person involved in the service, in order to increase trust hardly. It is actually the solution that Ebay is adopting by rating the users with a star’s system. Another solution is the use of social Medias, using for example Facebook profile in order to better know the other person, but it is less trustable than others as long as profiles can be manipulated. Finally, it is to enforce norms, as a users I will have no right to make any mistakes. In case of an error, I will be banned from the system. This final method is reducing risks only after making mistakes so it can be seen as too late in certain cases.
As a conclusion we can say that trust can be easily maintained but it depends of course on the objective of the platform. As long as there are some extensions on the network, you will lose control and then some problems could occur and the trust on your website will diminish. Therefore, I think that there is a certain limit to extension on peer to peer networks, and you can extend it as long as you have control on your users. Finally, I think that there is also a certain distrust that must be taken by the users especially in avoiding some websites that seem suspicious.
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Based on past experiences, the trust develops after several interactions between the platform members. The mutual trust is the consequence of a social process between the users that interacting on the platform.
Two activities are in presence in a platform. On the one hand, the economic exchanges that allows trade goods or services in exchange for a price. On the other hand, the social interactions between members of the platform, « social interactions refer to any behaviors in which each party tries to affect or take account of the other’s subjective experiences » (1). Trust can be seen as an indicator of quality. This implies a strengthening of trade relations. But a difficult task is to translate the trust that we know in the real world into the virtual one.
Thus, I think that the exclusion strategy is necessary in the platforms like Uber because the quality in the network is more valuable than the quantity. Each member evaluates the quality more than the quantity thus the exclusion should be organized depending on the degree of quality that the platform would like to achieve.
The quality criterion will be difficult to assess and to observe before interacting with the potential users. The price charged by the platform to access the services could be a good filtration to keep a platform into a high quality but it is not enough. The platform have to incur the cost of detecting quality of platform users . The platform provider has to collect a large mass of information to select quality people, it is a very demanding job that would be reflected in the pricing structure. We can imagine that the platform provider adapt his pricing provided that the user demonstrate is quality. In this way, the low quality users could leave the platform.
References :
(1) Chen, J., Zhang, C., & Xu, Y. (2009). The role of mutual trust in building members’ loyalty to a C2C platform provider. International Journal of Electronic Commerce, 14(1), 147.
(2) Azderska, T., & Borka Jerman-Blazic. (2013). A holistic approach for designing human-centric trust systems. Systemic Practice and Action Research, 26(5), 417-450.
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In an peer-to-peer system, where “there is no notion of a client or server but only pairs of peers that work both as a client and as a server for other network peers”, exactly because they don’t depend on a server and all peers are interconnected allowing access to any peer, the network has high availability and sharing of resources is greater. In order of this sharing of resources peers often have to interact with unfamiliar peers and need to manage the risk that is involved with the interactions. This is one of the main challenges of this type of system, because as there is no central trusted authority (like a server), they must to create mechanisms to build users’ trust. This also happens with all transactions between the internet (e-commerce).
In my point of view, is very important to create firstly, a good recommendation system based on a community where it is possible share experiences and knowledge between customers in order to get advices for bring confidence among users of the same service. Through a recommendation system it is possible that customers have a better insight into the quality of service and thus the service gain high reputation and trust that needs to “survive”. But otherwise, there may be customers who were not satisfied with the service and therefore will have an unfavorable opinion about the service, which may lead other customers to have a poor perception of the business. In these cases is necessary a regulation system that will combat these failures in order to avoid a drift of his reputation.
In order to get reputation they can also use a score-based recommendation system to rate the drivers, in case of Uber, this allows customers to have a better insight of what may choose and qualify better the service. This type of services need more established trust, and to make customers feel safe is necessary to insure that the drivers answer to a certain amount of criteria, like asking for their driving licence and accident history. Still in the same line of thinking, to promote customer confidence is necessary to ensure data privacy and personal information, as well as security of payment systems.
So I think that this type of service is required the customer has the most information possible about the driver and know from previous experiences in order to feel more secure and confident in the service that will acquire.
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When we talk anything internet wise we know trust is always an issue, you never know what you can trust in the internet, but over the years a lot of platforms have been created to help businesses or individuals earn the trust of the clients. Some are well known some are not and it also differs from country to country. Sometimes is not just a person you have to trust but a whole company or business. I haven’t had the need to use one of these services in particular of driver-passenger platforms, but I have used a lot a similar platform, the ones who compare hostels. For example: Hostel World or Hostel Bookers.
These platforms work in a similar way, you go to this platform because it’s a way to compare all the available hostels in a same page so you don’t have to go looking into their personal pages one by one, the platform suggest some hostels that they find are suitable for you, and then they also list the rest of the hostels that are available, but how to know if you can trust these hostels? Well they use client reviews, so you can read what other customers think about those hostels in this platform, the problem with this is that every one has different criteria as what they find as a suitable hostel, so even though there’s a average mark on the hostel, when you read the individual reviews you can find extremes, people who loved it, people who hated it or people who was indifferent. So the same question is presented in this type of platform, either you just trust the hostels that the page says are suitable or you trust the average comments of past costumers. The important part for this type of platforms to work when the clients write reviews is that the more clients use this platforms the more reviews you find and that way the extremes are less and less and you can see more people coinciding in the review. Even though the platform has no power over the reviews or a way to assure they are correct, they are just acting like an intermediary for people to share they experiences.
So in my opinion and in my experience I trust more the platforms that have more users and more reviews that I can compare with. I trust more when people share their experience than if a certain platform assures me quality without reviews.
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I found information from “How trust is built in Peer-to-Peer Marketplaces” by Francesca Pick (2012) http://www.shareable.net/blog/how-trust-is-built-in-peer-to-peer-marketplaces .
It is true that there is much more risks in peer-to-peer marketplaces than in business-to-consumer e-commerce. This is why the necessary foundation for P2P is to have trust between strangers. Indeed P2P transactions need identity verification; so, in order to facilitate transactions, cross-platform trust and identity systems have been created such as TrustCloud or Peertrust. They allow you to create a “pass” showing how trustful you are. Indeed, having a good reputation insured by other users is a good point as it decreases the risk of bad behavior. But also, if a user behaves badly, you can get back at him. Being sure about the identity is key to install trust.
In her article, she explained two ways to reach consumers trust.
First, transparency is important. Companies use trust scores to help people have opinion about other’s trustworthiness. In that case it’s essential to be transparent about how the scores are measured. The question about data privacy is also central as those kinds of system depend on the users’ willingness to give a third party their data in return for building their online reputation.
Second, we can use communities to build trust. A sense of community […] may even lead to more moral and selfless behavior. Indeed, in communities, users can self-regulate themselves. Trust can be implemented as everybody knows others users. She also explains that you have to connect people who have similar interests or values to make this works. She also gives the example about Airbnb that allows users to upload videos about themselves and created groups to lets users connect based on their preferences.
She also underlines some limits when building trust. The concept of trust is in itself complex as it is difficult to define. Also, the motivations behind customers’ willingness to share are disparate. And finally, the culture is to be taken into consideration as the trust varies across cultures.
In conclusion, building trust isn’t easy to implement but it’s the main key to success in a P2P platform. So it’s completely worthwhile to work on it. In her thesis, Francesca Pick offers two ways to build trust: transparency and communities.
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In peer-to-peer industry, trust and reputation are indeed primordial. I think that, besides the platform’s utility, it is the most crucial thing to success and convince people to use your platform. However, P2P markets present difficulties to ensure quality and reliability of peers.
Concerning my experience, I totally agree with the comparison: « it suffices to have one rotten apple in the bag to spoil the rest of them in no time, something that a two-sided platform simply cannot afford. » Indeed, I do not use often this kind of platforms but when this is the case, I use and buy only because I know the reputation. However, if I have a bad experience from the start, I immediately lost my trust in this platform.
So, it is important for a “P2P firm” to organize reputation system and mechanisms to control the quality of their members. It is also important to allow to each user to know the quality of the others. However, reputation cannot be put in place directly. P2P platform have to build its reputation by implementing systems based on the implication of its members to create a community. I think that the more members are engaged and active, the more is the credibility and the dependence of this kind of platform from its members. For instance, regulated forums or space to share experience are often used. By sharing knowledge, affinity and confidence between members could emerge. By sharing knowledge, affinity and confidence between members could emerge.
Moreover, I think that to control and verify quality and reliability of a member from this kind of platforms, you have to have access to results of his previous experiences and his evaluation by the previous users. The more informations and transparency you have about members, the more you are able to use P2P platforms.
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Peer to peer platforms are getting more and more important and in general they are very useful and profitable for the users from both sides.
But of course, without trust, those platforms can’t work at all, you always need minimal trust in the person you are dealing with. That is the typical problem of those apps or websites, because when you don’t see directly the person you are dealing with, you can’t make your own opinion.
So other additional mechanism to build trust are needed.
The most obvious one is of course the rating system, you can then build your trust with the rating the other users made of the person. This kind of system is very easy to put in place and it doesn’t cost to much for the company.
It gives you a better idea of the person you are dealing with but of course that doesn’t mean you will be satisfied at the end.
But the problem comes when a new provider arrives on the website, at that moment he never had any relation with any user of the platform, so he can’t have any rating from other users.
That means it will be difficult for a user to trust him, the user will prefer other persons with a good evaluation. So the rating system is hostile to new users, they have to wait until a user trust them without any proof they can be trusted.
For me, the best way to have a high rate of trust on the platform has to pass by the people who run the platform, because they are the intermediaries.
Show lessFor example, they could put in place an entry exam for the new providers who want to enter the platform, that will reassure the users about them. In parallel, they can still keep the rating system in place, but that will reduce the problem of new users.
They could also use anonymous testers to verify the quality of the providers.
Of course these solutions represent a big cost for the company and depending of the type of service it can be more or less difficult to put in place.
The question is: will the users of the platform be ready to pay a bit more if that increases the general trust on the platform?
Depending on the answer such a system could raise the number of users if they prefer trust or reduce it if they prefer a lower cost.
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First, I would like to give my own experience about a P2P platform. Then, based on my own experience, I will conclude by giving mechanisms that could establish trust.
When I was younger, I used to buy and sell computer materials using one of the older French website devoted to computer hardware and named hardware.fr. This website has a forum with a big community where it is possible to have advices, to discuss about computer hardware and to buy or sell second hand electronic materials like computers, motherboards, processors, cameras, smartphones, and so on. This is like eBay but in a more archaic form. On this forum, transactions are based on trust and only trust. This is why it is in my opinion interesting.
I sold and bought some things on this forum without any issues. Indeed, I had a particular manner to verify whether a member was reliable or not:
– Checking its number of message;
– Checking quality of its message;
– Checking number of transactions. Each member who sell or buy has in his “banner” (that is to say, a frame below the message you post where it is possible to include some information) his feedback. It was so more easy to have a list of its transaction;
– Checking its date of registration;
Moreover, the forum has a black list where bad sellers/buyers are listed.
By doing all these steps listed above and by checking the black list, I was sure at 99% that a member was trustworthy or not.
Moreover, the reputation of the website played a major role in my decision to buy/sell or not on this forum. Indeed, members of this forum have good knowledge on what they sell/buy and they often participate actively in some topics. Concerning regulation, administrators of this forum do well their job in case of fraud or attempted fraud by removing crooks, registering complaints, and so on.
Based on my own experience and on what I have seen on other exchange platforms, I think that a P2P platform should put in place a good recommendation system based on quality of the service offered by a member. Indeed, a score-based recommendation system is nice to have an idea of the service offered by a person, but a personal opinion judging the quality of the service is in my opinion imperative. In my example above, each member who sell/buy has a feedback which lists comments about past transactions.
Then, as mentioned in the article, reputation is also important. While it could not be put in place directly, a P2P platform should build its reputation by implementing an efficient regulation system to avoid any drift. In my opinion, this reputation is also based on the implication of its members. I think that the more members are implied and the more a community is active, the more reliability of this kind of platform from its members.
Finally, I would like to focus on the importance of an active community. By sharing their experiences between themselves or by sharing knowledge, affinity between members could emerge. It could bring some good vibes and thus bring some confidence between members. Hence, a P2P platform should also focus on a smart community platform to allow members to share their personal experiences in order to create an active community.
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Internet-based platforms, such as Uber, provide a space for buyers and sellers to interact. They also have an intermediary role of being a trusted third party, in providing certification of each actor (buyer and seller). It is true that they share the problem of establishing trust, when companies such as Uber involve the general public being left ‘to their own devices’, it is hard to know whether the platform has found these actors to be fully reliable or not.
Show lessIt’s simple enough to see why trust is such a huge necessity when building these platforms. Consumers talk. The classic ‘chatter’ or ‘word-of-mouth’ means that consumers will discuss their purchasing experiences, and not only that, fellow consumers will listen. They are much more likely to trust a peer rather than a company who claims safety/qualification or whatever the requirement may be. Thus, more formal signs are needed so that consumers can put a bit more trust into service providers. They need to know that someone has given this person/supplier the ‘go-ahead’ and that all is above board. It’s a question of security and familiarity among other things.
These formal signs, or mechanisms, which could be put into place to gain trust, must include certification, testimonies from previous users perhaps to induce credibility. According to a study done by Bryan Parno, Carnegie Mellon University 2010, (https://www.usenix.org/legacy/events/hotsec08/tech/full_papers/parno/parno_html/index.html) any commodity computers have come equipped with a ‘Trusted Platform Module’ (TPM) which is a software designed to establish trust on a computer, but there still lies a difficulty in executing this on a particular machine. He claims that perhaps the TPM could enhance an intermediary’s role as a ‘Trusted Third Party'(TTP). This could be done by equipping The TPM with a certificate provided by a trusted third-party or accreditation system which associates the TPM with a particular machine and can rate the trustworthiness or reliability of the seller. The verifier (user) can use the trusted third party’s public key (code) to verify the certificate and establish trust in the TPM’s public key. The verifier only needs to perform basic certificate checks, no hardware changes are needed, thus easier for the consumer. However, it is still unclear how the verifier could communicate the TPM’s location as specified in the certificate to the user in a clear and unambiguous fashion.
Another mechanism that could be used to establish trust is for platforms to go one step further with TTP and build trust is by using various labelling mechanisms such as trust marks to inform consumers of the reliability of the service provider. (http://www.brookings.edu/~/media/research/files/papers/2014/02/internet%20international%20trade%20meltzer/02%20international%20trade%20version%202.pdf)
This can demonstrate to consumers that the platform meets specific criteria, such as providing consumer protection against faulty suppliers (e.g. unlicensed drivers), enhancing and securing trust. Any ‘rotten apple’ would not spoil the market as they would need this mark of approval before entering in the first place.
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Trust is an obvious issue in the reliance of potential consumers on drivers that are not controlled and recognized by the government. Other two-sided plateforms have build a rating system in order to address this problem.
The specific issue raised by services such as Uber comes from the fact that it involves a bigger risk. If you buy a $1.99 app for your Smartphone, looking at the editor’s reputation and other products, the reviews and ratings of the app can help you figure out if it is worth spending that amount of money. Though, lots of these apps are freemium so you can try them out beforehand or, if they are not, you can always watch a video on the internet of them running to get a better idea of what you are considering buying. In the end, the small price, along with these testing possibilities, makes this purchase a very low risk decision. In contrast, trusting a stranger to drive you from point A to point B involves a lot possible problems. We won’t get into extreme cases of criminals using this service, but just considering the skills of the driver which are either completely unknown or unconfirmed raises the issue of trust. I believe that such a service has every incentive to only retain the best drivers and regulate its plateform very carefully to make consumers feel safe about using their service. If Uber takes mesure to insure the trustworthiness of its drivers by asking for their driving licence, car’s immatriculation and accident history, this service eventually be seen as equally trustworthy as cab companies. Other important aspects needed to be addressed are the driver’s responsibilities in case of accidents.
These points are important in order to protect both the drivers and the passengers from each other. Uber has already taken some mesures towards that by making payments possible through the app.
Before such mesures could potentially be implemented, the system needs an effective rating/review system that allows both drivers and customers to rate and review each other. A system that would be comparable to that of eBay, where important metrics are; the number of transactions, the average rating and the relevant critics brought up by the negative reviews. If applied correctly to the Uber app, bad drivers and passengers would quickly be out of the system and only the reliable ones would stay relevant.
After many other p2p services have emerged and gathered a trusting community of users (eBay, airbnb, Couchsurfing, …), it seems that Uber will find its community as well if it can survive the lobby pressure.
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Trust is ”a kind of social capital which makes coordination and cooperation between people possible” (Kamari & Kamari 2012). Without trust there is anarchy, as the world relies very much on trust. As mentioned in the post and other comments, trust is generally gained or vouched by an official trusted entity (e.g. government, rating sites, Apple app store). But the problem of the initial trust needed to grow is difficult without these official entities, and there lies a higher risk for the first customers using a new service. My comment has an example of how online trust is structured and an possible (but unlikely) solution for a online official trusted entity.
Kamari & Kamari (2012) identify that online trust is created from four main blocks: professionalism, reliability, technologic incentives and consideration. Their paper concentrates on B2C websites, but I believe the results are applicable more widely in e-services. They identify professionalism as usability, branding, user interface and graphics, in common terms how legitimate the service feels like. These are possible to achieve in the beginning. Real-world presence, size and customer orientation are factors considered to reliability, but these are hard to have in the initial faze, where the egg-chicken problem is present. They effect mostly more developed products. The technologic incentives include security, payment systems and user’s privacy, which are necessary for services like Uber. These can be present in the initial trust building faze through security sertificates and usage of certain payment methods e.g. Paypal. The consideration part includes self-reputation and other-reputation. Self-reputation can be achieved through advertising, but other reputation requires experiences from other users, hence it cannot be present in the initial phase. Hence according to Kamari &Kamari (2012) the tools for building an online reputation in the initial phase lies in the product and advertising. If the product is perceived as a quality product (usefull, nice graphics, good interface, works well, safe to use) and is advertised to gain self-reputation the product or platform could be a success. The initial users need to be gained through a good product and advertising, and after that reputation and size will bring further online trust.
One solution to the problem asked is “The Trust Network” which would work as a trusted online entity (http://www.forbes.com/sites/kostaperic/2012/08/30/the-internet-the-digital-economy-and-trust-where-are-we/ ). The trust network is a network where you can show that you trust somebody. It’s sole purpose is to show how trustworthy you are. There are “Trust Anchors” which are founding members and newer members elected by the general members to become “Trust Anchors”, to lead the way and be of higher influence. They then trust other people and services, vouching for them. Normal members can also trust each other and the persons with highest trust levels are more influencial. However I don’t see it as becoming a general population entity as it has the same egg-chicken problem as other online services. The problem is that the gain from the active use is minimal, and hence I don’t believe it is going to grow very large. But it would be handy as other new platforms or services could gain trust from “the Trust Network” and thus be vouched for by an official entity.
Kamari, F. & Kamari, S. 2012. Trust in Electronic commerce: A New Model for Building online Trust in B2C. European Journal of Business and Management. Vol4, No.10.
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As explained by my peers, establishing trust on the internet is challenging. It is even more complex when transactions are made between consumers. According to Mayer, R. et al (1995), trust can be defined as “the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party” [17, p. 712]. The main questions are: “who can we trust?” and “Are the reputation system sufficient in order to ensure it?” I will depict first my personal experience about P2P systems and then I will try to develop some specific mechanisms put in place by websites in order to build confidence.
I recently wanted to join some friends in Paris. In order to share the transportation costs, I decided to subscribe on eurostop. It is an intermediary platform as Uber which puts drivers and passengers into relation. Eurostop do not earn money from the deal (I guess it earns mainly through advertising) and there is not that much reputation system established. I used it because 3 friends of mine had already used it. They all told me that it was safe and that no worry happened to them. After having used it, I am not as confident as my friends and I won’t use it anymore. I realized that the entire transaction was relying on trust but nothing was established to ensure it. During my experience, a couple was interested in doing both ways with me. When we arrived in Paris, they told me they had no money but they will pay the entire amount once we get back in Belgium. I accepted and this was my mistake: I trusted them though I met them only 4 hours ago. When I arrived at the meeting point, the couple was not there. It occurs that they were just waiting at the wrong subway and that I found them 30 minutes later by driving around. However, it remains a bad experience which has pushed me to pay more attention to the reputation systems (even if they are not 100% reliable) when I make a deal on internet. Unfortunately, I believe that negative experiences with one seller tend to be generalized to the community of the seller. What are the mechanisms established to achieve trust?
A recommendation system bases its proposals on external events (purchase of music or books made by previous consumers who seem to have some identical tastes as yours). A reputation system is mainly based on explicit ratings made by a community. They may be falsified. Though the higher the number of ratings, the more it is thinkable that the product can be trustworthy (always be careful). Though, I suppose that a negative feedback is more influential than a positive one.
However, even if the reputation system is essential in building trust and promoting quality, it is often undernourished. Having a well established reputation system can make a website a success. On the basis of Amazon, I depicted 3 ways of estimating reputation:
1) The number of transactions accomplished or even the number of comments posted.
2) The score and ranking given to the product
3) The top reviewers opinions
Those three points are according to me transposable to Uber (which is already using some of those points) and Eurostop (which is not). However, I think that a personalized reputation system for each good or transaction is mandatory. The fact of asking a minimum 3 years driving license without having done any accident can be a proof of trustworthiness. According to me, such services need even more established trust than the simple fact of buying a book due to the fact that it implies the security (the life) of the consumer.
Mayer, R.C.; Davis, J.H.; and Schoorman, F.D. An integrative model of organizational trust. The Academy of Management Review, 20, 3 (July 1995), 709¬734
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Online dating sites are another good example of online platforms that require trust and good reputation in order to attract consumers and generate revenues for the platform owner. This is perhaps due to the fact that one will have to give away personal details and share them with strangers, and also because of the potential risks associated with the services provided (providing a stepping stone for potentially meeting total strangers in public, risk of humiliation by other members, identity theft etc.); also most crucial to a dating site’s reputation is its success rate in creating good matches between its members.
How do dating sites go about addressing these problems?
The information provided by members of dating sites is perhaps the single most important means to estimate whether one might get along with one another. This being said one might want to overstate personal characteristics to increase chances, e.g. by picking a profile picture that puts the individual in a favourable light, by inventing around etc. Also, people might create fake accounts to satisfy other goals (innocent cases perhaps include satisfying one’s curiosity wrt what these platforms look like, but there is also room for more or less ill-intentioned people, for instance wishing to set a phishing email trap).
A simple way of alleviating the latter and actually a side-effect of the effort to monetise the offered service could be to levy fees for becoming member. This might deter a majority of curious or ill-intentioned people from participating if their willingness to pay is lower than that of “serious” people. A problem with this of course is that the services offered by online dating sites are experience goods. Since people cannot tell the value they attach to the services in advance (except perhaps once good reputation is established), levying an upfront fee could hold them off from joining the platform. This is perhaps the reason why many dating sites give free access for a limited period of time (and a limited number of available features, e.g. you can see other profiles but not contact them) to new members.
Another way to address both problems in the above is through cross-verifications and testimonials between members of the site once they have actually met on face-to-face dates. This is for instance the approach taken by TrueDater.com (note: I haven’t accessed the sites mentioned; I instead got the information from some slightly outdated secondary sources so (1) I don’t know whether the site is still running and safe and if so, (2) I don’t know whether they have changed their approach). Again, this is only an imperfect solution since it could make members susceptible to blackmail à la: “If you leave a bad review, I do to.” At least, levying a positive fee and the nature of the services provided render artificial inflating of one’s reputation, e.g. through reciprocal “likes” between friends, unlikely also because being member of such platform is not necessarily something one would like people in his or her entourage to know.
Finally, some dating sites actually conduct background checks of their own on their members. These include criminal background investigations and public record screenings to check whether members are married as for instance done by True.com. Similarly some dating websites give their “premium members the opportunity to prove that their profile is consistent with their identity. Attaining a ‘Verified Member’ badge guarantees that the profile is genuine and that the related information is true, creating greater trust between members and making it safer to get in contact.” (elitesingles.ie).
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As already stated by my colleagues and by the article, trust is one of the biggest challenges of Pee-to-Peer services companies. Indeed, you never know whether the person you are dealing with is serious and/or reliable.
When you are dealing with professionals (in this case : recognized taxi drivers), you establish your trust in the basic fact that they either have been recognized by an official institution, or that they are part of a company that takes over the liability of their employee in case something goes wrong.
But with pure peer-to-peer services, this trust is non-existent. You cannont rely on any “higher” authority to guarantee you will get what you have paid for or been offered. Te intermediary (in this case : Uber, for example) is already some kind of such a higher authority, but as we are still in a peer-to-peer relationship, people need more in order to trust the mechanism they are dealing with.
If we take the example of Djump – a Belgian based P2P community delivering similar services as Uber – they are working with two “trust-ensuring systems”.
The first one is that, to be a Djump driver, you need to have delivered the proof that you did not have any accident in the past 3 years.
The second one, and the one in common with most other platforms as eBay, Uber, couchsurfing, etc is a points- or star-based reputation system, allowing other users to rate the granted services and to then build the reputation of the services given.
Personnaly, I am completely in favor of the first system, which allows the intermediate to ensure the user that all its providers answer to a certain amount of criteria – which basically, comes to the same as a taxi licence (with fewer conditions). I reckon such a system is the best to ensure a basic trust among the users. It allows to set a certain bar of ensured quality, which should translate into user trust, if not misused.
But I am less confident in the efficacity of the second model I have talked about. The reputation system is good, it allows users to show their satisfaction and/or dissatisfaction. but this systems has its own limits. It is indeed way too easy to cheat on that system. It is for example well known for eBay users to boost their reputation models by agreeing on selling a certain good at discount against a positive comment or rating. Or for users to use the reputation system to blackmail sellers to give them a better pricing. Those systems sometimes also allow users to delete a negative comment fur some reasons, which are hardly controlled.
Personnally, I reckon Djump is using a pretty effective mix of the two systems to ensure user trust. As if they were only using one of them, I wouldn’t even consider using it.
thus, I think no company will ever be able to ensure P2P trust (as taxi companies can never insure you your driver will be polite and take the fastest route to your destination), but I think a set of legal regulations have to be created in order to enhance the intermediary’s reliability and thus even more reinforce the P2P services’ trust.
Sources :
http://www.cnet.com/news/study-ebay-sellers-gaming-the-reputation-system/
http://pages.ebay.com/help/feedback/scores-reputation.html
http://www.djump.be
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Have complete confidence in e-commerce or in any Internet-based platforms meets almost the impossible. People give hardly confidence to something or someone especially on Internet. Then, designers have to find mechanisms to put in place in order to establish a trustful atmosphere between “sellers” and “buyers” To achieve this goal, Internet-based platforms devise more and more ideas that could prove their good faith to users and thus, increase their circle of trust. That’s what Uber try to implement with its two-side platforms.
Let’s take another similar application called “Djump”. This app recently launched on the market is a ride-sharing app available (up to now) only from Thursday to Sunday. Everyone who need a ride, no matter what time it is, goes to this app. Once you’re connected, you express your intention to take a lift; no matter where you are. At this time, you’ll do nothing else! Djump will search drivers available nearest you and ask both driver and user if you’re agree to pick up. When there is an agreement, Djump send you a notification and indicates in real time where is your driver. They are easily recognizable thanks to their large pink hat hanging on the roof of their car. Here are the basics: each driver is rewarded by Djump application. So, each “hitchhiker” doesn’t have to pay if they don’t want to. However, Djump set up a system where each driver can rate their customers depending for instance on their generosity in tips, their behavior, their social skills… In the same way, each user have the possibility to rate their drivers depending on their driving, kindness, hospitality,… It’s seems obvious that if, on a ten grade scale, you get only 2 or 3, the agreement between a driver and a customer will be difficult. On the contrary, if your rating is high, the user will be willing to pay more tips and the agreement will be done easily.
So here is another exemple of a platform that needs to know how to measure the reliance upon. As far as I am concerned, we can’t speak of true confidence but more a logical interest. Indeed, like I said earlier, people (no matter they’re Djump Driver or User) act in the interest of others in order to obtain the best service quality. Drivers will be friendly and welcoming for a generous tip and a good rating while Users will be kind and respectful to get a higher grade; so each one promotes his personal interest in supporting the common interest. So, blind trust and confidence by interest are very close to each other but It’s seems they have reached an equilibrium…
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This comment will be divided in two sections. Firstly, I’ll describe what Uber has put in place as an intermediary between the drivers and the passengers to enhance trust. Secondly, I’ll present the reputation system in the peer-to-peer market.
In order to establish trust between both parties, drivers and passengers, Uber has to invest on reputation and high quality platform service. On one side, the company only accept drivers above 21, insured and in possession of a driving since three years. On the other side, the customer has to give his credit card details to register and start using the platform. Furthermore, Uber asks during the registration to upload a photo so that the driver can verify the identity of the client. Also, if he wants to, he can rate the drivers. These measures are essential to provide quality in the service and keep their reputation.
Reputation systems allows one group of customers to rate or comment another group of customers and by doing that, it allows other customers to get a better insight of the service’s quality. This helps the customers to take a decision based on the reputation. But the main question is: can we really rely our decision on previous comments and ratings? As mentioned during the last course, most of the time, this system attracts very positive comments (that’s equal to 4 on a scale of 5 stars on most websites) or oppositely, it entices disappointed customers that don’t hesitate to paint a black picture of the company and service related.
Personally, depending on the product or service that I want to buy, I tend to look at previous comment. For example, IMDB is full of pertinent comments on films that help me in my decision to go and see a film at cinema or not. Booking.com such as many website of the same kind is a perfect example of distorted reputation because unhappy clients will “spit on” the hotel while a very satisfied client will give a ridiculous high rate. For us clients, it is important to verify the trustworthiness of the reputation system before relying on it.
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I’d like to take the case of eBay, the famous internet C2C commerce platform, which is a great example of “collaborative sharing economy” that is “stimulating new consumption, raising productivity and catalyzing individual innovation and entrepreneurship”. If eBay started as an online auction website, it soon evolved into a more sophisticated system where users can set up online shops and make businesses out of it. Many deals concern second hand items, but of course, the sales of new items and services are regulated, and the seller has to conform to the local legislation of his country in order to perform such commercial activities. However, unlike Uber’s very activity that is threatened by taxis monopoly legislation, eBay’s policy is mostly in line with local commercial rules.
The interesting point here is how trust is built between buyers and sellers, and how the two parties are protected from each other. eBay has a rather efficient reputation management system that has been in place for years (http://pages.ebay.com/help/feedback/allaboutfeedback.html). When a transaction is concluded, the buyer is asked to give positive, negative or neutral feedback about the seller and write a very short comment, which are displayed publicly on the seller’s page. But more importantly, the seller’s name is always and on every page associated with his number of positive evaluations, and the percentage, in a way that if the seller has a bad reputation, you cannot miss it. On the other hand, eBay’s policy is that a seller can only give positive feedback about a buyer, in order to avoid revenge from a negative feedback received. Other tools are provided in the resolution center (http://resolutioncenter.ebay.com/) where it is possible to open a case in order to get refund, etc.
Thus, on eBay and probably Uber as well, a seller/driver should always offer the best possible service in order to maintain a good reputation or face the risk of naturally losing the chance to attract any future customer. eBay’s efficient self-regulation system can in my opinion serve as a model for nascent P2P ride-sharing industry.
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Trust is the biggest issue when it comes to P2P markets. Therefore, consumers have to be able to rely on efficient reputation systems before entering such a market. But that is hard to achieve when there is information asymmetry. Uber has managed to gain their user’s trust by enabling them to pay the service directly via the app and by making a rating system available where users can rate their drivers. But are reputation systems such as a rating system truly efficient?
I wouldn’t personally fully trust ratings as they are personal and subjective. When I take the example of eBay, which is a P2P service as well, you can have a review that correctly reflects the reliability of the user as you can have one that doesn’t. It is indeed very easy to bribe a fellow user on eBay. One example would be: “If you write me a negative review, I will write you a negative one too”. To avoid such behaviour and to make sure rating systems are utterly subjective, a third party needs to be involved. This third party shouldn’t be a user of the P2P service but has to work for it to defend its best interest. His job is to ensure the validity of a rating or a comment.
Sonja Buchegger and Jean-Yves Le Boudec suggest yet another solution to the subjectivity of the ratings in their study about Reputation System for P2P and Mobile Ad-hoc Networks(1). Their idea is the following: “From time to time first-hand reputation information is exchanged with others; using a modified Bayesian approach we designed and present in this paper, only second-hand reputation information that is not incompatible with the current reputation rating is accepted. Thus, reputation ratings are slightly modified by accepted information.” This means that a rating will only be validated by its congruity with next ratings.
Reference:
Show less(1) http://www.eecs.harvard.edu/p2pecon/confman/papers/s2p2.pdf
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The main problem with an app like Uber, is indeed the trust that the customers have into the app. This is also the case for all e-commerces on the Internet.
The trust is something difficult to create but there are some factors that enhance customer trust in your e-business like Uber.
According to Vaidyan J. en Koshy V., the factors are organized in 4 categories : functional factors, organizational factors, security factors, and infrastructure factors.
In my opinion, I think that the security factors and organizational factors are the most important to trust an app like Uber because you have to travel with a stranger.
The system of evaluation is a good way to give a feedback to all the users and so, a bad driver (or passenger) is quickly identified and black-listed. This is, for me, an important security factor and this is the same for an e-commerce.
« You don’t need cash when you ride with Uber. Once you arrive at your destination, your fare is automatically charged to your credit card on file – no need to tip. We’ll also e-mail you a receipt. »
Source : https://www.uber.com
This is for me, a second security factor and it is really important for the customer to have a proces of protected paiement.
In a nutshell, you can enhance the trust in your app by developing a good security system and to inform your customers about bad drivers.
References:
Vaidyan, J., & Koshy ,V. (2008). Factors that enhance customer trust in e-commerce Web sites: An examination of e-commerce success metrics using Internet audience rating. Capella University, ProQuest, UMI Dissertations Publishing.
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Apps like Uber for example are becoming more and more popular nowadays, but it is a challenge to gain and to keep the trust of their consumers. There are three methods where, in my opinion, Uber did a great job to ensure there reliability.
First of all they launched their idea while complaints about professional taxi drivers are increasing. According to Techsportation the most common complaints are ‘drivers not picking them up because of their appearance’, ‘being overcharged’ and ‘drivers not taking credit cards’. Through the app the payment problems can be resolved. Indeed, paying for your ride happens on your smartphone, so there shouldn’t be any overcharging problems anymore. As for the credit card acceptance it won’t bother anyone anymore because everything goes through the app.
The second one, and also a solution for the number one complaints, is the rating of the drivers. Because drivers can easily be reported and thus easily get black listed on the Uber app, they will be more carefull on every level. Refusing a lift could have huge consequences for the driver. The same goes for his behavior on the road and with his customers.
Last but not least is the topic about the insurance when an Uber driver gets into an accident. They recently introduced a new system to insure their users. If the Uber app is off it’s the personal auto insurance that kicks in. If the app is on but the driver is not on a trip it’s also the personal insurance that will pay. If they refuse, Uber will cover for the damages to a certain point. In the last case, if the driver is on a trip the cover up can go to a million dollar. This so called Peer-to-Peer Rideshare Insurance Coalition makes is much safer to travel with a stranger using the app.
To be honest I’m not found of those kinds of ideas because I would be way too uncomfortable to share a ride with total strangers. But thanks to these three attempts to make the peer-to-peer ridesharing more trustful, I could one day reconsider peer-to-peer ridesharing with Uber.
References:
Show lesshttp://techsportation.com/tag/peer-to-peer-ridesharing/
http://www.engadget.com/2014/03/14/uberx-insurance/
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Peer-to-peer markets present difficulties to ensure quality and reliability of peers as they often face ease of access for providing their services to online community. Therefore, reputation system were introduced to address two main issues: moral hazard and adverse selection [1]. However, reputation systems provided by websites may easily be manipulated via dishonest feedbacks, various contexts to assess people are not always well integrated or even, do not always provide users with incentives to rate agents and thus, be penalized of negative rating [2].
eBay’s reputation system, for instance, presents limitations as it employs only one type of factor. Agents record either neutral, positive or negative rating and a peer’s reputation is made on the sum of rates they get. Thus, a peer who concludes many deals and decides to cheat once in a while, will see its reputation improve faster than the one who make deals less frequently even though he does not cheat.
Another existing type of reputation system is Digg’s. The latter is a social news website delivering “the most interesting and talked about stories on the internet right now” [3]. It consists of a pool of articles from diverse news websites that are marked by agent based on their content. Articles’ order of appearance is decided according to some specific algorithm that takes into account “the number of digs (i.e. likes) and buries (i.e. dislikes) an article has, and the prior rating activity of the users who provided the feedback” [3]. The latter is interesting as users’ past experience will impact their votes’ weight.
In order to cope with such issue of reliability, Xiong and Liu (2004) proposed the PeerTrust model which is a “reputation-based trust supporting framework, which include a coherent adaptive trust model for quantifying and comparing the trustworthiness of peers based on a transaction-based feedback system, and a decentralized implementation of such model over a structured P2P network”. They based their model on 5 different factors that should enable online platforms to assess trustworthiness of peers. Those are peers’ feedbacks got from users, the amount of transactions made, the credibility such as the feedback source, the transaction context and the community context (characteristics and vulnerabilities). As made understood based on previous examples, it is essential to diversify factors computing peer’s reliability to gain in objectivity and reduce the risk of incorrect evaluation.
[1] http://scenic.princeton.edu/network20q/wiki/index.php?title=Overview_of_Reputation_Systems#Example_1:_eBay.com_Reputation_System, consulted on the 19th of March 2014.
Show less[2] Xiong, L., & Liu, L. (2004). PeerTrust: supporting reputation-based trust for peer-to-peer electronic communities. Knowledge and Data Engineering, Vol. 16 (7), pp. 843-857.
[3] http://scenic.princeton.edu/network20q/wiki/index.php?title=Overview_of_Reputation_Systems#Example_1:_eBay.com_Reputation_System, consulted on the 19th of March 2014.
[4] http://digg.com/about, consulted on the 19th of March
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The most important feature about two-sided markets is the network effects and since these markets are two-sided, it’s important to match the need of both groups. To solve the “chicken-and-egg problem”, or to get both sides on board need to build a certain price structure and to choose an appropriate investment strategy. On the other hand, antitrust issues, raised by two-sided markets, especially in P2P business, need to be highlight.
Show lessSo far, some cities have limited the use of rideshare firms. As far as I’m concerned, to limit is not the best solution since those kind of ‘sharing economy’ will become more and more important to our economy.
First of all, there exists a spontaneous market mechanism to establish trust among users. In order to get both sides on board, those P2P firms will design a trust control system in order to get trust from their customers. Take “airbnb” as an example, many p2p require or recommend customers on both sides to get identity verification. Moreover, many p2p service providers build rating system so that low-service providers or rude customers are limited from the p2p platform.
Secondly, despite self-regulatory mechanism ensures, most of the time, the credibility of both sides, it is still not a panacea for all. Market failure happens in some cases, especially in imperfect market (like monopoly…). So the second mechanism should be regulating the market and legislating against illegitimate trading or unqualified participators. California gave the green light to ridesharing enterprises last year, which became the first to take the move. Policy lagging behind innovation, governors should be more open-minded. Instead of limiting p2p platforms, they should start to establish rules and laws to regulate the newly emerging market.
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