Introduction

The emergence of platform-based sharing economy has significantly transformed the way people live. Business models like Uber and Airbnb play pivotal roles in reshaping the business landscape (Gerwe & Silva，2020). The sharing economy can be defined as “an economic activity model that facilitates peer-to-peer (P2P) interactions through digital platforms” (Schor, 2015). By increasing trust in sharing economy platforms, individuals’ decisions to use such platforms could be strengthen (Arteaga-Sánchez et al., 2018), allowing them to rent their own property or property under their management to individual users for their everyday needs. However, existing sharing economy platforms often lack effective online management, results in rely heavily on user conscientiousness and mutual trust for economic transactions (Wu & Neill, 2021), leading to economic disputes with limited targeted remedies (van Doorn, 2019). Therefore, platforms should establish clear and transparent policies to mitigate potential threats to both parties during the process. This article will illustrate the need for such policies by presenting several aspects to ensure the security of property and privacy needs to provide an additional protective barrier to trust.

New economy model built on trust

The sharing economy in the 21st century is considered to be facilitated through digital platforms, and the more prevalent mode of participation in the social media and online society is sharing (John, 2016). In 2012, Botsman put forth a new perspective, suggesting that trust is the currency of our times. In her TED talk, she stated, and I quote: ‘The real magic and the secret source behind collaborative consumption marketplaces like Airbnb is not the inventory or the money. It’s using the power of technology to build trust between strangers.’ (TED, 2012). In other words, the currency of transactions between people is no longer tangible assets or money as it once was. In the new economic model, the sharing economy, trust established between strangers has become a crucial factor in facilitating successful transactions and forms the foundation of all such exchanges.

The sharing economy is a business model that connects consumers through technology (Hou, 2018), and one of the earliest sharing economy platforms built on technology was eBay. eBay offered people around the world an opportunity to sell their unused assets and purchase items they needed at a lower cost. This marked the first step in bypassing intermediaries or retailers and enabling direct contact between individual buyers and sellers. eBay also operated as a platform built on trust, relying on its feedback system to self-regulate the trading community. Buyers used this rating system to assess whether sellers provided accurate item descriptions and conditions, influencing their decision to purchase from a particular seller. The early sharing economy was built on such a trust-based system, where buyers not only had to trust the seller but also had to have confidence in the platform’s policies to ensure the security of their transaction process. Therefore, it is essential for platforms to establish policies or measures that instill confidence in users to engage in platform transactions securely.

How to enhance user trust in the platform?

Trust is a complex social proposition, challenging to be defined by a single word when determining whether to trust a platform. Therefore, trust becomes a standard that relies on external factor to maintain.  In the early days of sharing economy platforms, when they were promoted as opportunities to meet new people and make friends, these platforms lacked clear regulations or policies to restrict user behavior and ensure safety measures. They relied solely on trust between strangers for economic transactions, which led to serious abuses of both buyers and sellers in the sharing economy. One well-known case in this regard is the accusation of two teenagers in Queensland, who were charged with the murder of an Uber driver. It is evident that the absence of relevant safety measures can lead to a lack of trust in the platform, as both buyers and sellers are concerned about the safety of their personal well-being.

In 2019, Wagner et al. conducted a study to measure consumers’ trust levels in platforms within the sharing economy model, and the results showed that platforms require more active engagement and the establishment of a trust network among participants (Wagner, Strulak-Wójcikiewicz, & Landowska, 2019). This research suggests that platforms should focus on and enhance the following aspects: platform service usage regulations, accessible customer service to quickly resolve conflicts, and transparency of the sharing platform. Consumers in the sharing economy model tend to place more trust in the platform rather than strangers. Thus, platforms need to implement a series of protective measures to enhance user trust, ultimately aiming for longer business sustainability. For instance, the Chinese rideshare platform DiDi, after experiencing incidents related to personal safety, introduced features such as in-car audio and video recording, as well as trip-sharing and one-touch emergency reporting functions on the passenger’s mobile app. These measures have been put in place to ensure the safety of both drivers and passengers, as well as to provide evidential support in case of any potential incidents.

External regulation affecting platform trustworthiness

The government should also participate in regulating sharing platforms to provide an additional layer of protection for consumers. The risks associated with using sharing economy platforms often stem from the uncertainty of government oversight. In most countries, there is no clear legal regulation regarding the sources, authenticity, and safety of rental services offered on sharing economy platforms. External governance is an important factor in building trust within the sharing economy and can be established through the following aspects: Regulating mechanisms and Relational governance mechanisms. Firstly, regulating mechanisms can enhance the safety of sharing economy platforms and increase the security of trust among strangers by drafting legislation that protects both buyers and sellers (Voytenko Palgan, Mont, & Sulkakoski, 2021). Secondly, the government should compel all individuals or groups participating in economic transactions to comply with contracts or legal agreements (Moorhouse et al., 2020), for example, by appropriately increasing penalties to encourage better adherence to legal regulations by all parties.

Conclusion

Digital platforms are seen to have facilitated the sharing economy in the twenty-first century, and sharing is now the most common form of engagement in online communities and social media. Since the establishment of sharing economy platforms, this new economic model has significantly altered people’s perceptions. When traveling, more people are willing to consider cost-effective accommodations or homestays that offer a local experience rather than traditional hotels. The early sharing economy model relied on trust between strangers to facilitate transactions, but as more people use these platforms, uncontrollable factors can arise. This is where platform intervention becomes necessary to mediate disputes between buyers and sellers. However, platform regulations may not always have clear solutions and safeguards, which is where external government regulation comes into play to add an extra layer of security. I believe that platforms should clarify transaction rules and improve customer service accessibility issues, while governments should establish external regulatory mechanisms through the enhancement of regulating mechanisms and relational governance mechanisms.

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Belief or disbelief is a high-stakes gamble: The trust issues faced by sharing economy © 2023 by Zhanjun YE is licensed under CC BY-NC 4.0