Whether it’s having a driver at the ready when you are out on the town, sharing your commute, or accessing vacation spaces on a dime, a number of benefits have emerged from the sharing economy: decreased costs, more convenient and accessible services, and new entrepreneurial opportunities. But, along with those benefits comes the need for greater safety and regulation to protect participants – both the service providers and users. And it’s not just service providers and/or users, local and federal governments are still grappling with how to establish and enforce regulations that ensure these services are trustworthy. Because, without trust, the sharing economy collapses.
So what’s the best way to maintain trust and security into these services?
The key is in instilling efficiency while having just the right amount of friction in the appropriate places. At Jumio, we’ve worked with a number of collaborative consumption companies such as AirBnB, SideCar, and, most recently, Shuddle, on multi-layered security processes, including the use of ID verification. Creating friction for drivers in the sign-up process is actually a good thing as it acts as a deterrent for illicit activity from the very people in which you are placing your trust. It’s also essential to have thorough security measures and verification processes in place to anticipate and combat fraud, and also to authenticate identity from your users, ensuring that both sides can participate in the sharing economy with as little fear as possible.
The companies mentioned above leverage Jumio’s Netverify technology as one layer in their extensive user verification process. This includes an ID document authentication capability that ensures companies operating sharing economy platforms know who their customers and service providers are, and helps them keep their image as a trusted and safe business platform. Particularly in light of ongoing safety and regulatory concerns, such as Congress calling for stricter background checks for drivers from various services, it’s important that companies have comprehensive processes in place to address people’s fears around knowing who is on the other end of a transaction.
Identity verification is also important in this industry given the frequency of security breaches. A surge in related trends like identity theft has increased awareness of more effective methods of online authentication and identity management. This helps in both background checks and the checkout process to avoid fraudulent transactions. Companies won’t have to sacrifice efficiency if they’re using real-time validation and authentication that is seamless, quick, and intuitive for the end-user.
It’s not rocket science to predict that the sharing economy will only continue to grow, and a report from Price Waterhouse Coopers anticipates that the potential value of the five main sharing economy sectors will reach $335 billion by 2025. Some regulations have been created on a regional level, and many states are following suit — but widespread regulation is still an issue that governments are still examining as the collaborative economy evolves. It’s up to the larger players in the space to establish a strong infrastructure of security that protects both individual providers and individual consumers, which will not only help their businesses expand, but also ensure trust and safety for the future of the economy. Simple measures, such as adding ID verification to current security measures like username and password authentication, are key in making sharing economy transactions safer.