A good sociology Ph.D. thesis will be written about the rise of the sharing economy (where people share with strangers in return for payment). On both the supply and demand side of the transaction, the reduction in urban crime shifts perceptions about safety. Are you willing to allow a stranger into your car? Are you willing to enter a stranger’s car in return for a lift? Of course, the macro economy is driving this new market but I think that the reduction in crime is another big piece of the story that hasn’t gotten enough attention.
A Quote from the LA Times;
The “catalyst” for growth, Sundararajan says, has been the lousy economy, which has provided an incentive for people to exploit their most valuable assets, their homes and cars, for extra income. That poses the question of whether the expansion of sharing networks will slow as the economy recovers and owners no longer feel the need to give up their privacy for cash.
In the past, it wasn’t unusual for families facing hardship to take in boarders to help make ends meet, but the practice fell out of favor during more prosperous times. Will that happen again? “We won’t know until economic conditions change,” says Paul, though he claims that many Sidecar drivers appreciate not only the money but also the experience of meeting new people.
And of course these services can fill needs unmet by traditional providers of short-term goods like cars and rooms by expanding the available inventory, sometimes at lower prices.
The downside of these peer-to-peer arrangements is that there’s no guarantee that either the driver or the passenger will be sane, that the car will be street-worthy, that the accommodations will be livable. The sharing firms typically say that their services are “self-policed.” By this they mean that users are encouraged to give public ratings to their counterparties at the conclusion of each ride or stay, which weeds out bad actors.