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One problem I can see in all this is that the trust networks that the sharing economy is built on are all (currently) privately owned and exploited, and network

by mhw 11y ago

One problem I can see in all this is that the trust networks that the sharing economy is built on are all (currently) privately owned and exploited, and network effects mean that it is very difficult for any competitor to get established in the same space because they have to establish their own competitor trust network. As a result the tendency will be for there to be a winner-takes-all outcome creating monopolies around the trust network in any particular vertical. See Facebook (network of trust around friendship), Uber (network of trust around giving/receiving transportation), Ebay (buying/selling goods), AirBnB (giving/receiving accommodation), Twitter (trusted sources of interesting opinions) etc. The only competitive strategy that seems to be working at the moment is having a vertical that is sufficiently different from the incumbent that you can attract existing users of the incumbent's network to use yours in parallel. I doubt this is an outcome that governments and society in general will find acceptable when they start to recognise the pattern. Instead I wouldn't be surprised if the second phase of this economy involves government regulation of the trust networks, with them being extracted into some kind of trust infrastructure on which a number of competitor service providers are allowed to operate, or at least opened up so the trust network data has to be part of the public commons. At the moment the trust networks are (rightly) seen by the companies as being their most important asset - I think we'll eventually realise that, in the sharing economy, trust is so important that it cannot be privately owned.

Lawtonfogle 11y ago
>I think we'll eventually realise that, in the sharing economy, trust is so important that it cannot be privately owned. Looking at what is happening elsewhere with ownership laws, I'm doubting this will be anytime in the near future.
roymurdock 11y ago
>The only competitive strategy that seems to be working at the moment is having a vertical that is sufficiently different from the incumbent that you can attract existing users of the incumbent's network to use yours in parallel. How is this any different than Coke building up a trusted brand over 100 years? If you want to compete in the drinks market, you need to find a different vertical (sports, energy, fruit, health, etc.) and build up your own trusted brand. I think we'll see the government slowly coming around to endorse/oversee/standardize digital trust networks as they always have through the FTC, FDA, FCC, etc. They've already started with Title II of HIPAA in an attempt to regulate how data flows in the healthcare system so that patients can trust healthcare providers. But do we really need to oversee/nationalize a social network/content aggregator such as Linkedin or Facebook?
- CaptainZapp 11y ago
  How is this any different than Coke building up a trusted brand over 100 years? Well, I can always quaff a Pepsi, quite irrespective of what my peers chose to drink. It doesn't work quite as well to use a different, say, social media platform, when all my friends are on Facebook.
  - roymurdock 11y ago
    Pepsi is to Coke as Google + is to Facebook. They both have overlapping networks of drinkers/users that are not mutually exclusive. Facebook was able to get to market first and provide a tastier product. But the free market supports both products/networks. And there is more room for disruption in the Facebook/Google Plus space than the soft drinks market due to much shorter product lifecycles. Myspace lasted 5 years. Facebook will last longer due to strong tie-ins w/ businesses, schools, organizations, etc. but I, like many of my friends, have dropped it and are keeping an eye out for the next thing. The issue w/ Uber and Lyft is one of employment laws rather than regulated trust networks. If we changed the laws/prosecuted the companies they would have to raise prices due to higher employee wages/compensation which would have the ultimate effect of weakening the network as people looked at taxis and public transport as viable alternatives. So ultimately my point is that we should look at how attractive the service and why. In the case of Uber its because they are able to exploit an oversupply of low skill labor to bring prices down. This combined w/ advertising and promotions has created a strong network. Not sure it's the govs job to step in and weaken/nationalize that network. Perhaps regulate the employee/employer relationship, but this is nothing new.
  - kedean 11y ago
    Not necessarily. Pepsi and Coke have both built quite legal relationships with a number of institutions like universities and fast food chains with the agreement that competitor products are not served. My university was a "pepsi campus", you couldn't buy coke products anywhere on campus. This is why people have to ask "do you serve coke or pepsi?" at restaurants. Of course this has far fewer effects that social network tie-ins, but its not a new idea.

by mhw 11y ago

Lawtonfogle 11y ago

>I think we'll eventually realise that, in the sharing economy, trust is so important that it cannot be privately owned. Looking at what is happening elsewhere with ownership laws, I'm doubting this will be anytime in the near future.

roymurdock 11y ago

>The only competitive strategy that seems to be working at the moment is having a vertical that is sufficiently different from the incumbent that you can attract existing users of the incumbent's network to use yours in parallel. How is this any different than Coke building up a trusted brand over 100 years? If you want to compete in the drinks market, you need to find a different vertical (sports, energy, fruit, health, etc.) and build up your own trusted brand. I think we'll see the government slowly coming around to endorse/oversee/standardize digital trust networks as they always have through the FTC, FDA, FCC, etc. They've already started with Title II of HIPAA in an attempt to regulate how data flows in the healthcare system so that patients can trust healthcare providers. But do we really need to oversee/nationalize a social network/content aggregator such as Linkedin or Facebook?

CaptainZapp 11y ago
How is this any different than Coke building up a trusted brand over 100 years? Well, I can always quaff a Pepsi, quite irrespective of what my peers chose to drink. It doesn't work quite as well to use a different, say, social media platform, when all my friends are on Facebook.
- roymurdock 11y ago
  Pepsi is to Coke as Google + is to Facebook. They both have overlapping networks of drinkers/users that are not mutually exclusive. Facebook was able to get to market first and provide a tastier product. But the free market supports both products/networks. And there is more room for disruption in the Facebook/Google Plus space than the soft drinks market due to much shorter product lifecycles. Myspace lasted 5 years. Facebook will last longer due to strong tie-ins w/ businesses, schools, organizations, etc. but I, like many of my friends, have dropped it and are keeping an eye out for the next thing. The issue w/ Uber and Lyft is one of employment laws rather than regulated trust networks. If we changed the laws/prosecuted the companies they would have to raise prices due to higher employee wages/compensation which would have the ultimate effect of weakening the network as people looked at taxis and public transport as viable alternatives. So ultimately my point is that we should look at how attractive the service and why. In the case of Uber its because they are able to exploit an oversupply of low skill labor to bring prices down. This combined w/ advertising and promotions has created a strong network. Not sure it's the govs job to step in and weaken/nationalize that network. Perhaps regulate the employee/employer relationship, but this is nothing new.
- kedean 11y ago
  Not necessarily. Pepsi and Coke have both built quite legal relationships with a number of institutions like universities and fast food chains with the agreement that competitor products are not served. My university was a "pepsi campus", you couldn't buy coke products anywhere on campus. This is why people have to ask "do you serve coke or pepsi?" at restaurants. Of course this has far fewer effects that social network tie-ins, but its not a new idea.