Startup founder shares how companies can build trust in the sharing economy

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With a number of transactions happening on various digital platforms, there is a need to trust the strangers we interact with. Many ecommerce marketplaces have pioneered the use of different verification systems to create more conducive conditions for sharing. But this can be very costly.

One Copenhagen-based startup called Deemly has created a tool to solve this particular problem. The startup provides a SaaS that enables platforms to install user scores. The scores combine users’ personal ratings from a variety of platforms into one reputation score, allowing users to take their scores with them across platforms. By aggregating ratings, the company hopes to create safer platforms for the sharing economy. To stay ahead, they are also collaborating with the IT University of Copenhagen to create safer profiles across different platforms by using blockchain technology.

Arcadier spoke to Sara Green Brodersen, founder and CEO of Deemly and co-founder and board member of Sharing Economy DK, who discussed how the growth of the sharing economy on the whole impacts trust and how to master the art (and science) of building trust in a marketplace.

Sara Green Brodersen.

Which of your entrepreneurial experiences were most critical in helping you develop an idea for your company?

Looking back, the idea for Deemly and my interest in the sharing economy probably date back to when I did my internship in San Francisco in 2012. What was interesting was, at the time, Airbnb was really growing, and that was sort of the birth of the sharing economy, and it all happened there. That year in SF, my interest in the sharing economy was fostered.

Before that, I had started two companies and I was working as a management consultant for two years—that’s all a good mix of valuable experiences. I also met my co-founder and CPO at an internship with a digital agency.

What factors were considered in creating your startup’s algorithm?

When we were developing Deemly’s software and algorithm, there was so much interest from all around the world, so we intended it to be international, not taking into account specific industries. Our consideration was basely mathematical and statistical, but now we’re looking into augmenting it based on how intimate the sharing experience is. For example, if you share your home with someone, it would be a more intimate experience than selling something on a marketplace.

What are your tips for developing a framework to foster trust in a marketplace?

There are three levels of trust that’s specific to the sharing economy. When the user takes place in a sharing transaction, they first need to accept the premise that it’s viable for them to, say, use Airbnb instead of a hotel. There are a lot of factors that go into that decision. It could be: Is it even legal? Or do all my friends do this?

In some European cities, Airbnb is not legal. That’s why the sharing economy entrepreneurs that we work with also try to engage in growing the sharing economy as an industry and they get involved in lobbying to try and change the legislation that prevent these businesses from growing. To grow the entire industry means that your piece of the pie gets bigger.

You also need to be a trustworthy business. If you’re providing an alternative to hotel-stays, then you need to be better than your competitors. The first way to do that is to provide insurance, 24-hour support or other guarantees, and terms and conditions. Be active in and acknowledge that review or comparison sites are a factor. And ultimately create a good (or bad) experience for these peer-to-peer transactions and interactions.

All research suggests that what builds the most trust is the people or the community. How can we trust the person we are sharing something with? We look for cues such as reviews and ratings to find the answer. A reviews and ratings system is one of the low hanging fruits—something easy and affordable to incorporate, along with the verification of users that Deemly offers. This can be the strongest factor for trust, but there are others that can’t be ignored.

How does Deemly address trust issues in the real-time fulfillment of goods and services?

In situations where the user doesn’t have the ability to choose who they will be receiving the service from, they’re usually given the option to cancel if the provider is not trustworthy. With Uber, drivers have to have a certain average to be allowed to drive. We see more and more marketplaces being interested in filtering out untrustworthy users on the platform. That’s usually a very small percentage of the users, but they’re the ones who create problems and cause harm to other users while you’re trying to grow your marketplace.

From your experience, which online sharing economy startups or marketplaces have the best trust and safety programs? What can we learn from them?

How do you build trust without running the risk of racial bias due to information transparency?

What are some challenges that Denamrk still faces with regard to the sharing economy? What measures are being taken to foster its growth?