Would you let a stranger into your house?

 The sharing economy depends on our irrational trust in people we've never met. [The Hustle]( Issue #2 Sunday, April 15, 2018 Brought to you by [Havenly](... ... Find your home’s style whisperer. How the sharing economy makes us trust complete strangers The sharing economy relies on the moral righteousness of strangers. And we deeply trust it — even when everything goes to hell. BY [Zachary Crockett]( Last July, an idealistic young entrepreneur by the name of Zhao Shuping had an epiphany: "Everything on the street,” he [proclaimed]( “can now be shared." Capitalizing on China’s sharing economy fetish, Shuping raised 10m yuan (~$1.6m USD) from a cadre of drooling investors, purchased 300k umbrellas, and rented them out at train stations across 11 Chinese cities for a fee of $0.80 per half-hour. Within 2 weeks, all 300k umbrellas had been stolen. The sharing economy is poised to grow to $335B worldwide by 2025 -- and, as these platforms become more common, so too do the stories of their utter failure. Yet, our trust in collaborative consumption remains astronomically high. Why? The deprogramming of ‘stranger danger’ In its purest form, the “sharing economy” leverages technology to facilitate transactions between people with idle goods and resources, and people willing to pay for them. This system is highly dependent on us trusting complete strangers. We get into their cars, sleep in their beds, invite them into our homes to assemble IKEA furniture, and message them to watch our pets. On paper, there's a glaring problem with that: trust at an all-time low. Back in the ‘70s, nearly 50% of Americans thought [most people could be trusted]( today, that figure sits at 31% Other [polls]( show that we have abysmally low trust not just in the pillars of our democracy -- the press (12%), banks (14%), and government officials (16%) -- but even our own neighbors (42%) and co-workers (58%). These rates are even worse among millennials. The weird thing is, despite this, our trust in the strangers of the sharing economy -- like rideshare drivers -- is sky-high, at [88%](. What’s going on here? According to [Rachel Botsman]( one of the world’s leading experts on the sharing economy, companies use technology to establish an almost instantaneous “virtual trust” among users. But sometimes, the sharing economy scales faster than user trust can be gained -- and that’s when people start stealing umbrellas. When the sharing economy goes rogue In any system that requires collaborative trust, there are going to be people who act according to their own self-interest, at the expense of everyone else. No kid, for instance, ever takes just one piece of candy from the unattended bowl on Halloween. It’s a phenomenon known as the [tragedy of the commons](. We’ve seen it play out many times in the sharing economy -- especially in China, where a rapidly-expanding sharing economy has prioritized growth and profit over building trust with users. Last year, more than 70 dockless bike sharing companies sprouted up in China, raised $1B in capital, and dumped millions of cycles on city streets all over the country. This oversupply came with consequences: thieves stole bikes by the tens of thousands and ripped them into parts to sell; lazy riders discarded them in alleys and rivers; vandals circumvented the security system by smashing the locks and lighting the bikes on fire. In the southern city of Hangzhou, authorities rounded up more than 20k bikes and dumped them in 16 enormous “graveyards,” where they currently rot in mangled piles. “There’s no sense of decency anymore,” [said]( one resident. “We treat each other like enemies.” An actual image of a bike “graveyard” in China (photo via The Guardian; animation/illustration by The Hustle) This behavior isn’t exclusive to bicycles: shared [nap pods]( basketballs, cell-phone chargers, clothing, luxury handbags, and -- of course -- umbrellas, have all experienced high rates of vandalism and theft. Yet, we still seem to trust even an imperfect or inadequate sharing economy system more than certain traditional forms of commerce. That’s because tech has changed our mechanisms for trust Way back in pre-industrial times, when we wanted to trade a goat for 50 pounds of wheat, we based our trust in close-knit personal relationships. After the Industrial Revolution, we got most of our goods from large corporations. Transactions became less personal, our trust eroded, and companies gained it back by creating strong brands and submitting to federal regulations. Today, companies gain trust through technologies like digital ranking systems, which aim to recreate a model of capitalism that is highly (and, by certain measures, artificially) personal. TOP: A modified tweet from Airbnb CEO Brian Chesky, expounding on the importance of trust; BOTTOM: A Canadian Airbnb host’s house after a guest rented it with a fake credit card and threw a “drug-induced orgy” (via Twitter). This “engineered trust” is baked into our daily interactions with the sharing economy. When you call a Lyft, you can see your driver’s face, name, and sometimes even his or her music preferences. You can follow this person’s journey in real-time, as they zig-zag toward you like a fare-munching Pac-Man. And most importantly, you can see the person’s star rating, validated by the collective trust of other users. These digital systems are often coupled with large teams of (human) surveillers. Airbnb, for instance, hired a team of 600 people to scour the site for bad actors after a host had her house [raided by a guest]( in 2011. Arun Sundararajan, author of "The Sharing Economy," tells us these technologies have essentially "expedited" the process of gaining trust. “If you meet a stranger and know nothing about him or her, trust takes time to develop," he says. "But if you have a digital system that gives you a bunch of info about the authenticity of that stranger, trust can be gained instantly.” Platforms are starting to figure out how far our trust can go -- and for now, the limits are lofty. Just ask Jessica*, an Uber driver in San Francisco. “I’ve had the sketchiest rides you could imagine,” she tells us. “I once had a dude jack off in my backseat. But do I trust my rides? Do I trust the [platform]? Sure. Who ever let a few bad apples ruin the fun?” * Note: Ironically, the driver did not entrust us with her real name; it has been changed, at her request.  Share and discuss this story [ON OUR WEBSITE →]( [ON FACEBOOK →]( This edition of The Hustle was brought to you by Create the perfect living space without leaving the couch Unless you’re Brad Pitt’s hairline, perfect is subjective. And, when it comes to designing the interior of your abode, all you gotta do is make sure it’s perfect for you. That’s where [Havenly]( comes in. Havenly is an online interior design firm that pairs you with the perfect designer based on your style -- oh, wait, you don’t know your ‘style’? They have your back. It’s Bumble for home decor -- sans the mindless swiping For as low as $79, you can personalize, collaborate, and visualize your new space [with real professionals]( that have more to add to the convo than repeating “mid-century modern” over and over. Take [Havenly’s style survey]( to find out which of their 200+ highly-trained Feng Shui whisperers is right for you. Then, they’ll work with you to ensure you’re living your best life, style, and budget. Design the inside of your home with [Havenly]( where your happiness is guaranteed [(literally)](.  0 [SHARE THE HUSTLE]( REFERRALS [ YOUR UNIQUE URL Zack Crockett NEWS WRITER Kolby Hatch AD WRITER [Lindsey “Stranger Danger” Quinn]( MANAGING EDITOR Sharon & Karen Communal Resource Managers [SUBSCRIBE]( [JOBS]( [ADVERTISE]( [EVENTS]( [SHOP]( [Join our Facebook community →]( You opted in by signing up, attending an event, or through divine intervention. [771 CLEMENTINA STREET, SAN FRANCISCO, CA 94103, UNITED STATES]( • [415.506.7210](tel:+1-415-506-7210) Never wanna hear from us again? Break our hearts and [unsubscribe](