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Is the sharing economy set for a fall?

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Is the sharing economy set for a fall?

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The last few years have seen a huge rise in the fortunes and popularity of peer to peer websites, which allow individuals to buy, or rent, products from one another.  At the head of the queue lauding this new economy was Jeremiah Owyang via his report into what he called the collaborative economy.

A new essay has recently been published however almost as an antidote to the hype surrounding sites such as AirBnB and Lyft.  Penned by Tom Slee it looks in particular at the role reputation plays in the functioning of these sites, and whether the reputations themselves are an adequate barometer of trust to underpin the concept of the sharing economy.

So even in the absence of explicit gaming, peer-to-peer internet reputation systems do not solve the problem of trust.

He argues that the reputation systems used by peer to peer websites do a poor job of communicating trust, and therefore the information required by people using these sites is not sufficient to make the model sustainable.

Whilst the essay focuses primarily on the sharing economy, it also has ramifications for other trust based platforms, such as the plethora of crowdfunding sites flooding the market.

To be successful, the venture-capital-funded “sharing economy” will be forced to lose all those aspects of informal sharing that makes “sharing” attractive, and to keep those aspects that erode neighbourhoods, erode employment rights, and remove basic standards. And if they succeed, they will have used the language of sharing to bring about an unregulated, free-market, neoliberal economy.

It’s well worth a read if you have 30 minutes or so.  Check it out here.

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