How trusting millennials drive the new economy

People may not trust the random person driving them home with share companies like Uber, but they do trust the rating of all the people who've been in the car before. Photo / Dean Purcell

By PricewaterhouseCoopers' projection, the biggest sectors of the "sharing economy" - including transportation and travel companies like Uber, Zipcar and Airbnb - could be pulling in as much as $335 billion in global revenue by 2025.

That's a massive number (PwC puts it today at about $15 billion), and it reflects, according to a market analysis the company published this week, some fundamental shifts in consumer behaviour. "Access is the new ownership," and such.

A lot of the trends PwC explores won't be novel to anyone who's been offering services or spending money in this space. Young adults, 18 to 24, who are more interested in having experiences rather than owning things, are "most excited" about the sharing economy.

And of people PwC surveyed who are familiar with it, large majorities say the sharing economy makes life more affordable (86 per cent) and more convenient (83 per cent). Those qualities likely also have more to do with the growth of companies like Airbnb than the vague allure of "community."

PwC does point out one trend in the report that's a little more revelatory: We're witnessing the rise of companies predicated on trust among strangers at the same time as general trust in society is actually falling. Only 29 per cent of consumers PwC surveyed said they trust people more today than they did in the past. And 62 per cent said they trust brands less today.

The General Social Survey conducted by the National Opinion Research Center at the University of Chicago has been asking a random national sample of adults since 1972 this same question: "Generally speaking, would you say that most people can be trusted or that you can't be too careful in dealing with people?" The data confirm that trust in other people is lower now in America than at any point in the last four decades.

If trust in individuals and institutions is waning or at best holding steady, faith in the aggregate is growing.

PwC

So, what gives? Why are hundreds of thousands of people letting strangers rent their bedrooms or drive their cars if society is growing more cynical? Why would you trust a company that ships you a dress worn by another woman last week if you don't actually trust people all that much? How is the economy suddenly creating billion-dollar businesses around the idea of communal consumption at a time when we're not feeling communitarian at all?

Here is PwC's smart answer: "If trust in individuals and institutions is waning or at best holding steady, faith in the aggregate is growing."

In other words, I don't trust you, Random Guy Giving Me a Ride Home, but I do trust the 4.9-star average rating of all the people who've been in your car before. Maybe I don't have all that much trust in one woman renting her home on Airbnb, but I do trust the aggregated input of the 24 people who've given her high marks.

This is an important distinction: Confidence in the sharing economy is not so much about trust between individual strangers - or even one person and one company - as it is about trust between one person and the crowd. And the Internet has done as much to make that kind of reputation crowdsourcing possible as it has to facilitate the actual logistics of renting a stranger's car.