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Aug 19, 2020 2020-08 Business Administration Faculty Research in Education

More of the Same? Is the Sharing Economy as Different as we Think?

While home-sharing and ride-sharing companies strive to make the world smaller, more friendly, and more trusting, their customers still view hosts and drivers much more as strangers than friends, according to new research co-authored by Gies College of Business professor Aric Rindfleisch and Gies PhD student Jie (Doreen) Shen. Airbnb, for example, declares that it “promotes people-to-people connection, community and trust around the world,” and while that may be true, this research shows society at large is still slow to truly trust those they’re transacting with.Aric_Rindfleisch_news480x300

“For many years, the sharing economy has been heralded as way of doing business that is dramatically different than our traditional firm-based economy,” said Rindfleisch. “In brief, our research challenges this accepted wisdom.”

Collectively known as the sharing economy, companies like Uber, Lyft, Airbnb, and others allow customers to stay at the home of or hitch a ride with a stranger. The long-term success of these companies may hinge on how comfortable customers feel with their host or driver: are they viewed more as strangers or friends?

Aric Rindfleisch, John M. Jones Professor of Marketing at Gies College of Business, and his co-authors studied this by surveying more than 1,100 participants from all 50 states. In their paper “Transacting with Strangers in a Digital World,” participants were randomly assigned to one of three conditions in which they received a ride from a person named Pat. Knowing participants would feel differently depending on how well they know their driver, Pat was either a colleague, a taxi driver, or an Uber driver. Participants were then asked to rate their degree of closeness to the driver, safety perceptions, helping behavior, level of trust, information sharing, and privacy concern.

The results overwhelmingly show that participants were much more likely to view “colleague” Pat as a friend and “Uber driver” Pat as a stranger. Participants in the colleague condition gave Pat better satisfaction ratings, viewed themselves as more similar to Pat, were more likely to offer help, and share information. Conversely, the participants in the Uber-drive condition rated Pat similarly to those in the taxi-driver condition. The one stark difference between the Uber-driver condition and the taxi-driver condition is that if they left their phone in the car, participants felt much more likely that they could retrieve it from the Uber driver than from the taxi driver.

“Our findings suggest that despite their promise of increased communal connections, sharing economy transactions appear to largely resemble traditional economic transactions,” said Rindfleisch. “Sharing platforms need to reconsider the effectiveness of their original community-like positioning and decide whether they would like to evolve into more traditional enterprises or continue to try to position themselves as communal entities. Our research suggests that this latter strategy may be rather difficult.”

“Transacting with Strangers in a Digital World” by Jie (Doreen) Shen, Alan J. Malter, and Aric Rindfleisch was recently accepted for publication in Journal of Macromarketing.