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Why Social Media Is Necessary For The Sharing Economy

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Why Social Media is Necessary for the Sharing Economy

The sharing economy or the peer economy as its also known is one that’s grown dramatically in the last few years.

As you may well know there are hundreds of sites looking to succeed based on the model, Airbnb and Uber being among the most notable at the moment?

Sharing has its roots in bartering – the oldest form of human trade. However, it’s take time for it to reach this point in the online world.

With the web well over two decades old, it’s taken a while for social sharing to really develop. One of the main reasons for this is that the infrastructure hasn’t really been there until now for the P2P economy to become a reality.

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Social media has a huge amount to answer for when it comes to the sharing economy and the emergence of Web 2.0 has facilitated such services. Essentially, the sorts of business models that the likes of Airbnb, Zipcar and others offer wouldn’t be possible without social media platforms.

There are Two Reasons for this:

  • Before Facebook and Twitter people didn’t tend to share on the web. These social media platforms ushered in a change in attitude and to some degree a social change. People are more willing to share information, recommendations and opinions with complete strangers and the review and peer based recommendation system these companies require just wouldn’t have worked prior.
  • The fact that these services offer transparency in terms of who is reviewing the product or service creates trust. The trust this transparency creates is central and creates a social validation of the service. Facebook’s efforts to ensure a real name policy is central to this. Particularly as most people tend to log-in via their Facebook account. This policy ensures fake profiles are virtually non-existent nowadays and so the sort of deviousness that goes with fake profiles is eradicated.

This level of accountability makes people feel a lot safer online, encourages people to behave better and creates a community that extends beyond the keyboard.

It also creates a level of trust. Thanks to social media we can not only see the reviews strangers have left but also thanks to the Facebook social graph, the ones friends or friends of friends have. For instance, if your friend, who has a similar taste to you, stays in Airbnb serviced accommodation and leaves a positive review you’ll probably be far more likely to consider it. A huge part of that consideration being based around the trust element.

In a lot of ways it’s going back to an older way of shopping that’s based on recommendation of individuals and smaller businesses to perform services rather than depending on larger brands. Matt Goodwin of eRated put it well in this piece – What is Ecommerce Anyway?

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Of course, even though this highly disruptive state may be true initially, the likelihood is that it’s only going to be further integrated into current online and ecommerce efforts and will become less disruptive with time. Disruption will become evolution. Regulations around the changes will also reflect these changes.

However, social media will remain at the centre of the effort and will be pivotal to our experience when utilising services provided by the sharing economy.

Will social media be pivotal, what do you think? Why not comment below and let me know your thoughts?

 

 




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