The trust transformation behind the Airbnb business model

Absrtact: Some people have felt that Airbnb mode will never work, I am one of them. At the time, I thought, no one would let their rooms be rented out to almost strangers. But obviously I was wrong. The company provided data showing that so far there have been 11 million travellers at Airbnb destinations

I was one of those people who thought Airbnb mode would never work. At the time, I thought, no one would let their rooms be rented out to almost strangers. But obviously I was wrong. The company's data show that so far 11 million passengers have stopped at Airbnb destinations. The landlords took out a share of the household housing currently about 550,000. Airbnb is even more popular in Europe than in America. Paris is the largest destination city on the Airbnb.

Airbnb is only one example of a peer-to-peer economy (peer-to-peer economy). People have started renting their private cars to strangers, putting their pets in strangers, and renting their electric tools to strangers.

In retrospect, I underestimated the power of several trends that made it possible for a peer-to-peer economy. First, I underestimated the impact of the middle class dilemma. Stagnant wages and a tight family economy have made many people return to the old boarding-house model. They had to rent some rooms to pay the mortgage or rent.

Second, I underestimated the impact of liberal arts students on the economy. Millions of college graduates do not have much money in their hands, but are eager to travel and be taken care of there. They prefer to stay in a spare room in a residential area, rather than a hotel in a downtown area, especially if they have breakfast with the landlord.

I also underestimated one big thing, the transformation of social trust. In the primitive economy, most people are traded with members of the same village or community. The trust was face-to-face. Later, in the mass economy, we have become accustomed to people to buy stable big brand products, the behavior of these enterprises are regulated by the government, so more reliable.

But now a new type of trust has emerged, driven by social and economic forces. Socially, many people lead a loose, unstructured life, mainly within 10 years of leaving college and 10 years after retirement.

These people tend to live alone or with short-term roommates, and they are exposed to large institutions such as universities, businesses and stable family life. They have been very fast and fluent in building social relationships. They are accustomed to creating intimate relationships immediately, or at least quickly pretending to be intimate. On the one hand, people are more eager to touch others, on the one hand, easy to come, easy to flow relations more tolerant.

From an economic standpoint, people who work like freelancers have increased. These people are more individualistic in their ways of making money. They usually don't go to the office. Their reliance on organizational systems has diminished, and their reliance has increased for those who can communicate directly with them and negotiate arrangements. They have been accustomed to flexible temporary arrangements.

This creates a personalized culture in which people spontaneously lose faith in large institutions. Strangers, by contrast, do not seem particularly dangerous. This provides fertile ground for peer-to-peer commerce.

Companies like Airbnb build trust through scoring mechanisms. Their users are already pretty good at evaluating each other through their Facebook pages. For Airbnb economic participants, the choice of "trusting each other according to institutional affiliation" does not exist, so they trust each other based on online signaling and the assessment of their users. Online ratings will always follow you, so you have a motivation to improve your online reputation.

As companies such as Airbnb, Lyft and Sidecar are maturing, they are also putting more money into policing the trade fairs. They hired people to prevent fraud and screened suppliers to try to identify the black sheep that could harm the service experience.

So far, the peer-to-peer economy has been less reliant on government regulation. Most of the users of these services are politically progressive, but they operate in a less regulated economic space. They vote on the left, while surfing the right.

As the field matures, governments are increasingly involved. City officials have clashed with Airbnb and Uber on a range of issues. But most city governments do not seem inclined to introduce stringent regulatory and regulatory measures. Centralized organizations do not understand what is going on with distributed trust networks. In addition, most urban people seem to understand that this is a relatively informal economy, more to follow the "buyer self-caution" (caveat emptor) principles.

At the same time, companies like Airbnb and even Uber seem willing to compromise with the city government and to make a good relationship with them. These companies are trying to gain a reputation as a "good citizen", trying to get on well with the bureaucracy and the Cooperative Condominium Commission, which they cannot do if they take a provocative, destructive approach.

We are likely to be entering a world where, for example, energy is still in the Top-down regulatory system, and areas like the homemade bake sale are not regulated; but more areas, such as Peer-to-peer, will be in the grey zone between the two.

As the mechanism for building private trust becomes more efficient, the role of government will be reduced.