Human Trust: The X-Factor of the Ride-Sharing Economy?

Suhasini Gadam Blog

What will shape the future of transportation? Most people lean toward the ride-sharing economy to determine the answer. The convenience of requesting a ride from your phone, sharing a ride with a co-worker or grabbing a bike outside your home has helped to propel ride-sharing to the forefront of the shared economy. PwC predicts that the five main sharing economy sectors, with transportation being one of the largest, will generate global revenues of $335 billion by 2025. Trust is at the very heart of the sharing economy, yet many of us do not trust the service, the technology or the people behind these ride-sharing platforms. If building human trust was easy, consumers would embrace this shift more readily. The funny thing is that the sharing economy has actually been around for ages before it became a definition of its own, so is it really that difficult to build trust in the ride-sharing economy?

The Sharing Economy Brings Trust Concerns

The response from consumers on ride-sharing platforms has been vastly positive, as demonstrated by their tremendous global growth. They appreciate the convenience, variety and cost-effectiveness of sharing. However, there has been some pushback on important issues like trust and safety for both riders and drivers. On one end of the spectrum, there have been cases of sexual assault and racial discrimination while the other end of the spectrum has shown that most people are just not comfortable with the driver or the other passenger(s) in the car. But isn’t the sharing economy built on the assumption that people trust each other? In reality, how many people actually trust strangers? Pew Research says that 19% of Millennials believe that most people can be trusted, while 31% of GenXers felt the same; interestingly, Boomers were the most trusting at 40%. Almost anyone with a driver’s license, registered vehicle and insurance can be an Uber driver or a Lyft driver if they pass the background check. Is that really enough to trust a driver? Not many cautious drivers would be comfortable with a situation where the driver does not have both hands on the wheel while driving on the freeway at a high speed? Some people might feel physically intimidated by the other passenger(s) in the car or not feel the need to make conversation, would that disrupt the experience of the ride? As long as people are getting to their destinations safely and at a low cost, does the experience of the ride really matter? Well, it does.

Building Human Trust in the Ride-Sharing Economy

The internet has become a tool for sharing information and social media has helped people connect across geographic barriers. Although Uber, Lyft and other companies like Airbnb, TaskRabbit and Outdoorsy, all part of the sharing economy, have already started helping people generate trust in strangers, the sharing economy is still a relatively young business model and has a long way to go. So how do we build human trust in these ride-sharing platforms? Let us look at the aviation industry. We do not know the pilots who fly the plane, but we trust them to get us to our destination safely. We have been flying for years now, do we all have private planes and do we always travel in groups? The bottom line is we cannot afford it. Every day millions of people are traveling through flights operating at every hour of the day and night. Except a few who can pay for a business class ticket, most others are seated in aisles of at least 2 or 3 adjoining seats per row. Some make conversation, some put on their headphones and watch a movie, others read a book or simply work on their laptops. Do we feel uncomfortable on a plane sitting next to strangers? Most of the time, we do not. Yet, when we are taking an Uber Pool or Lyft Line ride, we are unsettled with the people sitting next to us. With the experience of sitting in flights, especially long ones, the close proximity of strangers should not feel like a new and uncomfortable experience.

What makes the aviation industry so trustworthy? We know that the pilots and cabin crew are trained before they are allowed to handle commercial flights making us feel that we are in safe hands. In rare circumstances, plane crashes do occur, but for such situations, emergency protocols have been clearly defined for the pilots, cabin crew and the passengers. We have been habituated to be polite and respectful of the other passengers in the flight, some even seeing this as an opportunity to make new friends. As flights have started becoming cheaper and faster, more seats are being added to planes to accommodate more people. Although instances of passenger misbehavior have been reported, it is not a common occurrence and those that have happened are taken seriously, which generates trust in the passengers. These same models can be applied to ride-sharing cars too. If drivers are trained properly, people will be more trustful of the service. If emergency protocols are defined clearly, everyone knows exactly what they need to do in a critical situation. If passengers can relate their experience of flying to their ride-sharing experience, they will be more tolerant of other passengers in the vehicle.

Regulation plays a major role and has not caught up with the sharing economy yet. Falling transaction costs, Everything-as-a-Software (XaaS) business models and changing consumer preferences about ownership will alter strategy and business models. McKinsey predicts that vehicle ownership will move from being the dominant form of mobility to becoming a smaller piece of the transportation pie. This shift will force governments to regulate ride-sharing platforms, such as Uber and Lyft so that they can operate fairly in an industry previously monopolized by taxi companies. Cities must accept that ride-sharing is here to stay. Rather than fight ride-sharing, cities should look for ways to integrate new travel options into the current transit system and create a multimodal system.

As the auto industry is changed by technological and economic currents, OEMs and Tier-1 manufacturers will need to partner with technological specialists to thrive in the era of the software defined car. Movimento’s expertise is rooted in our background as an automotive company. This has allowed us to create the technological platform that underpins the future of the software driven and self-driven car. Connect with us today to learn more about how we can work together.

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