How are quality practices being adopted into sharing economy services and what risks do consumers face by participating in industries that aren’t regulated?
We live in an age where the ideas of an individual can be rapidly shared, supported, and funded by an insatiable audience. I’m talking specifically about off-beat, nontraditional service provisions.
Here lies sharing economy—a hybrid market model that refers to peer-to-peer-based sharing of access to goods and services. Basically, people rent out something that they aren’t using, such as a car or house.
Let’s investigate further by focusing on what are arguably the most well-known sharing economy services: Uber, a consumer driven (no pun intended) transport service, and AirBNB, a consumer-based alternative to the accommodation industry.
Services such as these have seemingly grown overnight and are experiencing considerable success despite operating outside quality systems.
This isn’t to say that they don’t use some form of quality management process. But from the perspective of a quality practitioner, there are no visible signs of quality compliance. By this, I mean certification marks, accredited processes, referencing to standards, and the like.
What I do see, however, are statements that aim to reassure the user that a commitment to consumer safety is in play. For example, here is a statement from the Uber website:
“We require partners to keep documents up-to-date to remain active. Riders, likewise, must maintain active payment information.
“Riders are responsible for guests traveling with them or anyone they request a ride for. It is your responsibility to ensure everyone adheres to Uber’s Code of Conduct.
“Violations of this Code of Conduct could result in loss of your Uber Account. Please report any violations to Uber, we want to hear your feedback! Alert us, and we’ll take action!”
Statements such as these are common among economy sharing services and are the only measures in place to protect consumers and provide assurance that they will receive what they have paid for and that their expectations will be met.
Why are these statements deemed satisfactory in the service industry when they wouldn’t meet any condition of the manufacturing sector, let alone the finance industry?
If recent events are anything to go by, these statements do little to protect the consumer.
The most recent story that comes to mind is that of an U.S. Uber driver who carried out a number of murders in between picking up passengers. In Kalamazoo, Michigan, Jason Dalton has been arrested for the murder of six people after he allegedly opened fire at innocent people during a five-hour rampage in his car.
Reports suggest that Dalton dropped off Uber clients in between shootings. According to Wood TV8, Dalton dropped off a group of people at a Fairfield Inn in Texas Township, then went next door to the Cracker Barrel and allegedly opened fire at two cars.
Dalton cleared a background check and was approved to be a driver on January 25. He had given about 100 rides and had a rating of 4.73 stars out of a possible five.
It comes as no surprise that following the incident, Uber faced criticism about its screening policies. In response, Uber said that it couldn’t have predicted that Dalton would engage in the events that occurred and that its safety procedures are robust and don’t need to change.
There are also numerous accounts of Uber drivers who have sexually assaulted passengers. In a recent incident, an East Boston Uber driver Abderrahim Dakiri was found guilty of a single count of assault and battery of a female passenger.
Then there’s the story of the man who died after a swing accident in the backyard of his AirBNB accommodation. In this incident, a man lost his life during his stay at an AirBNB property in Austin, Texas, in 2013. The freak accident saw a tree branch snap above a rope swing and strike him on the head. In an article written by the deceased’s son entitled “Living and Dying on AirBNB” and published on Matter, he wrote: “Nothing is currently done to make sure hosts actually comply with safety guidelines (or even read them), which is a problem particularly for newer properties on the platform, which AirBNB’s customers, as opposed to employees, are left to vet for safety.”
How do these examples demonstrate to customers that the service has an ongoing commitment to keep them safe?
According to the terms and conditions listed for these services, the ramifications of failing to provide the advertised service only go as far as account cancellation or a public message that they are no longer verified.
In my world of working at international levels to provide regulatory frameworks, this seems untenable.
From my perspective, basic quality practice considerations include:
- Considering customer expectations
- How to source materials and services that eliminate further risks to the end state
- Implementing a design process that considers risk and works to prevent, control, and eliminate risk
- Constantly measuring processes to ensure consistent outcomes are delivered
- Ensuring that corrective practices are available to immediately correct issues. These must also deliver analysis to ensure that future risks are prevented.
I’m not aware of any evidence of this in economy sharing. I’ve heard a great deal around how it is a cheaper alternative to regulated practice, provides greater access to service and career opportunities, and ultimately “sticks it to the man.”
This modern approach definitely catches the attention of the younger generations. But from a wiser, more experienced perspective, this way of thinking is concerning.
I’m sure that many people share my fears, yet there seems to be no slow-down in the economy-sharing market. This is despite the fact that the concept borrows from the assurances of traditional industries that rely on quality principles.
It’s prudent to think of the relative age of these services and how fast we have seen worst-case scenarios appear in these models.
Again, I reference the driver turned murderer, the host turned accidental killer, etc.
I wonder how these risks were modeled by economy sharing providers and how they expected to control this—given that they will never meet their human capital, are unlikely to ever visit their service locations, or to sample the products and services that their providers offer.
The Uber driver I referenced earlier also raises the question of how Uber could allow such an individual to operate in its fleet.
Uber has a policy that encourages users to complain about a driver who may be under the influence of drugs or alcohol, but it doesn’t have any recommendations for drivers who threaten lives.
We live in a world where anyone can hang a shingle in the name of a global provider and receive minimal, if any, ongoing validation or verification of practice.
The main regulators for these services are social media and public sentiment. Facebook is a key method of regulation, and people should be vigilant by referencing a social media profile before engaging.
We all know of countless times where social media has been used as judge, jury, and executioner for an individual and, to a certain extent, the organization.
More often than not, the size of the organization protects it from ruin. Sadly, those at the small-to-medium end of the spectrum have tumbled.
What my examples demonstrate is that convenience and control of choice often seems to override the need for quality controls. Traditional institutions don’t enjoy this level of flexibility or forgiveness by the markets they serve. However, they do offer one massive benefit—consistency.
Using finance as an example, consumers understand that granting of a loan comes after complying with a known process. The process ensures that anyone can “win,” provided that they play within the rules.
The rules are long-established and, in large, ensure that the lender and borrower are protected from risks.
On the other hand, economy sharing offers the ability to procure funds from the widest of sources against a speculative business model with an outcome that could be devoid of any risk planning or management. Yet, consumers line up for the opportunity to participate.
By now, you would have gathered that I struggle to grasp the economy sharing model, yet I marvel at its successes.
I am concerned for the future sustainability of these services and applaud the disruptiveness of these innovations.
I can see where traditional quality processes can play a part in guaranteeing the sustainability of economy sharing and protecting consumers from undesired outcomes.
However, I am uncertain of the uptake of quality processes given the speed at which these services operate. I can also understand how quality processes could be seen as a limitation to quantum gains in market share and the limitless demand by its consumers.
There also seems to be more forgiveness in the realm of economy sharing—mostly because the service is a reflection of their own investment.
After all, who would want to prosecute their brother, aunt, or neighbor for breaching the rules of a social service that they helped to create? They were just being entrepreneurial and taking a shot at “sticking to the man” to get ahead.