We’ve all been there, running late on the first day of your vacation, you just miss the bus and your plane is leaving soon. You need to get to the airport so you pull out your phone and use a car-sharing app to save the day. After you arrive it turns out there was a mixup with your reservation and they have you booked for next month. You need a place to stay so you search the web for house sharing websites and find the perfect place for your stay.
Whether it is car-sharing or house-sharing or buying and selling on C2C marketplaces, these services are part of what is known as the “sharing economy.”
According to Investopedia, the sharing economy is “an economic model often defined as a peer-to-peer (P2P) based activity of acquiring, providing or sharing access to goods and services that are facilitated by a community based online platform.”
Over the past few years we have witnessed a tremendous growth in the number of users of ride-sharing, apartment-sharing, and C2C marketplace services online. PWC has estimated that the combined revenue of the global sharing economy would grow from a total of $15 billion in 2014 to $335 billion by 2025. And among many other media outlets, Inc.com declared the sharing economy is a revolution rather than just a trend.
While the sharing economy solutions around the world have gained tremendous popularity, significant challenges remain that plague existing users as well as prevent the services from attracting even more new users.
1. Privacy/Security Concerns
The sharing economy, by its nature, requires peers on both sides of the transaction to compromise some on privacy and security. For instance, when you rent out a part of your house using a house-sharing app, you are inviting strangers into your home. You can never be 100% sure whether the renters will be respectful and law-abiding during their stay. This becomes even riskier when the renter doesn’t have any review history on the house-sharing app. This is also the case for ride-sharing–you can never really completely trust your driver.
Mitigating these issues is one of the critical challenges in the world of the sharing economy. One possible solution is a blockchain based system that can securely decentralize peer review data so that it’s available to everyone. Then we will no longer have to rely on the data of just one house-sharing or ride-sharing app like we do today. If you want to know more about this area, the Harvard Business Review looked into how the sharing economy can benefit from using blockchain technology.
2. Fairness in Transactions
Ever received a counterfeit item after buying something online or felt like you were overpaying for the seaside place you booked online? Of course you can write a review about it on the platform or file a formal complaint, but could it have been prevented?
As more and more people are using sharing economy services, it gets increasingly harder to assess the fairness of each transaction manually. Machine learning and image analysis techniques could be utilized to differentiate between genuine and fake items as well as to estimate the accurate cost of almost anything listed online. If you are interested in this area, Forbes recently discussed ways in which we can use AI technology to make online marketplace transactions fairer.
3. Quality of Service
Quality of service is another big challenge with sharing economy systems today. Whether it’s the time taken to successfully post an item/service on a C2C platform or the effort needed to search for the desired item/service, the present systems need to evolve to reduce the manual effort required as much as possible.
At the same time, the effort and time needed to deliver and receive items must be reduced. Further, there is a need for payment systems to reduce the time and effort involved in each C2C transaction.
For it’s part, Mercari, the largest C2C marketplace app in Japan, makes use of various image classification techniques to make it easier for sellers to post their item and the buyer to search for what they want to buy.
Be it booking a ride, sharing a flat while on vacation, or ordering a new pair of shoes on a C2C marketplace app, we open our arms to more convenient, creative, and secure solutions. It’s part of our nature to always innovate and evolve, and the technological breakthroughs of today push us to create more and more.
Do you want to be a part of this future? Mercari Euro Hack 2018 aims to celebrate innovative ideas for improving safety, fairness, delivery, and other aspects related to sharing economy challenges. It doesn’t matter if you develop for Android or iOS, or if you’re interested in machine learning or blockchain technology implementing new ideas is important.
Register today and change the world with us!
Travel and accommodation cost reimbursement of up to €400 is guaranteed. Along with the prize pool of €22.500, the finalists will be invited to Japan on an all-expenses paid trip. See you there!