Role of technology in building trust in the sharing economy platforms

Abstract

There has been a rise in sharing economy-based business models, which led to the success of the startups such as Airbnb, Uber(pool) among others. To create a comprehensive understanding of the success of these businesses, key operating principles and success metrics are studied. While the success of these business models depends on various factors, the centerpiece in these businesses spanning across industries is building trust. Building trust takes the front seat as the transactions are occurring between strangers on a common digital platform. In this context, the trust-building mechanisms are studied to understand the major business functions. With this background, these economies, which are majorly digital native have a strong dependence on the technology adopted. Combining the socia l parameter of the trust with the technology parameter, the role of blockchain technology in building trust is assessed. This study outlines that blockchain also has limitations along with the benefits it can offer in creating an incremental value to the business in sharing economy. With the gathered inputs, the blockchain applicability matrix in three business functions across five popular sharing economy-based industries is developed. There has been separate research work on blockchain and sharing economies in literature, but the work on blockchain in sharing economies is picking up.