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Acting as chauffeurs, watching dogs, picking up dry cleaning, renting our beds to strangers — these are among things that everyday people who don’t know each other will do for each other. And it’s not under the guise of our professional jobs.

Not too long ago, we were uneasy putting our last name on the Internet for perfect strangers to see. Now, we’re hopping into strangers’ cars, no candy required. How did that trust spread so far and wide in such a short period of time? And how has that trust catalyzed an economic model that hadn’t been romanticized since we invented a common currency and left the barter system behind?

Why does the sharing economy work?

The supply-and-demand side of the equation is fairly logical. First, supply. With jobs still scarce and the appeal of working weekends as a cashier looking dim, the negligible risk of setting your own hours and your own rates for services such as driving strangers around town, running their errands or babysitting their kids is far outweighed by the benefits.

Plus, these businesses attract people outside the so-called “traditional” workforce — freelancers, students, stay-at-home parents and retirees can all participate when and how they choose. It’s the true definition of a “flexible work schedule.”

So, what about demand? Not surprisingly, the sharing economy flourishes where there’s great demand for alternatives to the status quo. Industries such as hospitality, transportation, care services and health care have been stuck in the past, with many unhappy customers and no real competition. Consumers were open to taking a small risk for a more efficient, usually more affordable, and overall better experience.

Why would you stay in a hotel when you could stay in a nicer loft for less? Why would you try to wave down an angry cab driver when a Lyft driver would pick you up wherever you are, and get you where you need to be, with a smile (and a fist bump)? Why keep your dog in a cage with 50 other caged dogs when he can stay in a loving home?

After years of shunning strangers, we now find it worthwhile to open ourselves up to them again.

Technology has enabled us to link this demand to its supply in a new way that previously wasn’t possible. The meteoric rise of social media is a key factor in the sharing economy’s … economy.

Facebook set the foundation for making us comfortable with broadcasting our lives and connecting with others online. Twitter took that comfort one step further by defaulting privacy settings to public. We’re trading information about our lives in ways our grandparents, and even our parents, couldn’t have imagined.

These companies built in our new social world benefit from our openness to building trust with strangers online, so we could take those connections offline in a productive way. They brought back the lost idea of going over to your neighbor’s house to ask for a cup of sugar. Only now, you might inadvertently ask the guy in the town over to drive to your neighbor’s house to get the sugar and bring it to your doorstep.

Unlimited supply, demand for alternatives and the ease of technology? Of course consumers were willing to try these new services — once. But turning curiosity into loyalty isn’t so easy. Successful sharing-economy companies turned their offerings into everyday, go-to services by tapping into the common values of their communities — respect, empathy and trust.

We care for someone’s pet or child as we would our own because we know how it would feel with the tables turned. We treat someone’s home as our own because we appreciate the discount and convenience of staying there, and we know that the homeowner would do the same in our residence.

Successful collaborative-consumption companies have worked tirelessly over the past few years to develop and support a trustworthy community, which in turn scales as their brands become more trusted.

From my own experience, DogVacay is growing exponentially not just because of the people within our own walls, but because the brand has taken on a life of its own, powered and evangelized by the people in the community.

Soapbox moment: It’s important to note that while sharing-economy businesses seem to crop up every day, there are no shortcuts to succeeding in this space. Sure, companies can use automated tools to quickly “verify” suppliers, or spend a lot of money to quickly amass a broad customer base, but there’s no substitute for investing in the people who are responsible for creating great experiences, every time.

TaskRabbit conducts multi-step interviews. Lyft uses existing drivers to train other drivers. They, and companies like them, are thriving because they share the same values as their communities.

The sharing-economy companies create competition, encouraging incumbents, slowly but surely, to modernization. That’s a win for everyone, and it’s just the beginning. We let strangers sleep in our spare room without blinking an eye (or keeping one eye open).

What will we let them do next?

Aaron Hirschhorn is founder and CEO of DogVacay. Reach him @aaronwh.



5 comments
name99
name99

 "And how has that trust catalyzed an economic model that hadn’t been romanticized since we invented a common currency and left the barter system behind?"


A piece that claims to be about anthropology and human behavior needs to start by getting its facts right...

The fact that economists tell a story about barter being first and "double coincidence of wants" doesn't make it so. (Economists telling stories that are false!!?? No!!?? Who would have though it?) 


There is a large body of evidence, from many directions, that barter is and always, has been a minor player in human transactions. The NORMAL pattern of human behavior when transactions are required in the absence of currency is to informally establish a common currency equivalent (think cigarettes in POW camps, or cans of sardines in US prisons) and to maintain a system of credit with one's colleagues. 

I personally can attest to this. When I was in boarding school, 9 years old, surrounded by kids of similar age, and with no adult interaction, this was how we did things in terms of trading food at meals. (Both trading food and talking at meals were punishable offenses, but nonetheless an active trading economy existed, with items denominated in a common currency of "slice of bread" and with mental accounts held against what was owing and owed to one's friends.)


This point matters, because for far too long we (ie society) have heard and accepted all manner of bullshit from economists (and economist wannabes and acolytes, like CEOs and MBAs) about how economic life should work, used to work, works without government interference, works best, etc etc etc. Until these people get their facts straight regarding matters that are well known and clearly contrary to their claims, it's not at all clear why we should give a damn about any of their opinions about anything.

Walt French
Walt French

 As a sixth-grader in Iowa, I often hitch-hiked home from school. Nobody had the least thought of any risk. In high school, I hitch-hiked to my brother's place in Arizona; the proposition from one driver was easily (and naïvely) ignored and the much bigger risk was from the several drivers in Oklahoma who were drinking heavily in the car.


This more trusting environment seems a lot more realistic to how people ordinarily behave in ordinary life, than the hyper-sensitive, hyper-vigilant fear of strangers we've had to put up with from the media, from some old biddies, and from some politicians' agendas.

Jake
Jake

I've heard that, in a Japanese public bath house there is one cardinal rule:


"Nakedness if often seen, but never noticed."

Lisa LaMagna
Lisa LaMagna

Aaron, we've taken an old model of renting out spare rooms and watching the neighbor's dog for a few extra buts to a new level. And it seems there's an entire generation of people who now can't make phone calls or talk to their neighbors. BTW, you've saved my gord with my old senior dog Emma -- who was going to watch her but her doggie vacay host.

star jonestown
star jonestown

I knew this post would be stupid (because of the lazy/sloppy use of 'we'), yet I opened it anyway...  Joke's on me!  


Nice PRODUCT ADVERTISEMENT posing as free content.  Dog Vacay sounds a lot like A Bubble to me.