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What lesson from the P2P/B2C sharing economy's early days should B2B sharing economy companies learn?

What lesson from the P2P/B2C sharing economy's early days should B2B sharing economy companies learn?

As B2B companies adopt more sharing economy tactics, the Braintrust advises translating trust, data and privacy strategies learned to new markets.

Ann Miura-Ko

Co-founding Partner at Floodgate

As an early investor in companies like TaskRabbit (2009) and Lyft/Zimride (2010), the most important lesson I learned was that horizontal platforms are tough and can't compete with companies designed for a specific experience. I believe this will be mirrored in the B2B space. TaskRabbit started as a horizontal and very flexible platform. In many ways it had to because it was literally inventing the sharing economy in 2009. We tried to match people with handymen, cleaners, drivers and more. We allowed nearly anyone to participate in the sharing economy from a demand-and-supply perspective. This made the UI very complex, and thus liquidity in the marketplace was more challenged. TaskRabbit ultimately pivoted to a model that was more directed and focused on services like home cleaning to simplify its marketplace.

Notably, in the early days of TaskRabbit, we had riders seeking drivers but given the data we saw in the platform, it was nearly impossible to predict how large a market ride-sharing would ultimately be. This is because in the TaskRabbit model, we couldn't provide you with a cost-effective ride within 3 minutes like Lyft ultimately would. You could find a driver, but you needed to find someone at least a couple of days in advance. The user experience was not that differentiated from other experiences be it SuperShuttle or taxis. It turns out that when you transform that experience into one that delivers a ride in less than 3 minutes at the push of a button, that market is pretty darn huge. That specificity of design and focus on service is a huge adoption lever for the sharing economy whether it is in B2B or B2C.

Karen Jaw-Madson

Principal at Co.-Design of Work Experience

Some of the biggest lessons that the B2B sharing economy can learn from P2P and B2C are:

(1) Think and act differently. These are new business models. Therefore, actions need to be driven by new mindsets, different thinking and more flexibility, not established best practices.

(2) Innovation outpaces legislation, so anticipate regulatory and privacy challenges. Uber and Airbnb learned this the hard way. Backlash could've at least been mitigated with a little more foresight and a lot more collaboration with local governments.

(3) Manage people and culture. P2P and B2C forged new social contracts with individuals, from gig workers, affiliate partners, to customers, mostly around opting in and out "at will." It's a bit more complicated with B2B where you have to worry about an entire organization's willingness to share, ability to collaborate and compete at the same time, and capacity to act ethically. The current B2B sharing economy is largely around creating efficiencies or sharing materials and equipment. I am interested in seeing if and how it evolves toward sharing knowledge and talent. That will have huge implications on the future of work.

Jason Oxman

President and CEO at Information Technology Industry Council

The key to success is trust. For P2P sharing, consumers are not going to book a shared ride or accommodation if they do not trust that their health and safety are secure. Headlines of safety issues regarding scooters prompted numerous cities to ban or limit these transportation-sharing services because of trust concerns.

For businesses, a sharing economy can be enormously beneficial. But a shared office or storage space that is not trustworthy is not viable. For example, companies seeking collocated storage space for servers and other infrastructure will seek out a trusted provider (a company like Equinix is a great example of trust-focused sharing) that has years of experience in managing safe and protected shared space. Only by maintaining trust can a shared economy for business succeed.

Vikrum Aiyer

Vice President of Global Public Policy & Strategic Communications at Postmates

One of the biggest lessons that new and existing platforms should focus on is that no matter the business model, it's people who power these companies and drive the success of the sharing economy.

As on-demand services have evolved and scaled over time, they fueled an unprecedented type of work. A TaskRabbit mounts a TV in your home in the morning, a Lyft driver takes you to your afternoon business meeting, a Postmates courier delivers a late-night burrito while a Rover walks your dog. The people who support these services work flexible hours, and enjoy the freedom that comes with it — something that has never been available on such a massive scale. And so just as on-demand platforms have changed the economy and how people work, we need to change the way we protect workers, too.

Postmates has been clear that we believe there needs to be a comprehensive approach to empowering gig workers without taking away their flexibility and autonomy. We believe flexible workers should be able to continue to enjoy the unparalleled autonomy that platforms like ours have afforded them, along with the strong benefits and protections they deserve. This year and beyond, we're going to see a sustained effort to try to bring the old 20th century conception of work into the 21st century — with an upcoming ballot initiative in California, legislative discussions in New York, and even Congressional talks to explore what a modern safety net for the sharing economy will look like on the federal level.

The enactment of an emergency Postmates Fleet Fund to cover preventative medical costs for workers as COVID-19 takes root is a prime example of ensuring that we don't let politics get in the way — but instead actively engage in charting a path forward for defining a new safety net to reflect and address our modern times and challenges.

Learn more here.

Dr. Jennifer Doleac

Associate Professor of Economics at Texas A&M University

Our offline social problems — such as discrimination — don't disappear when we move online. In fact, problems like race and gender discrimination can be more visible on online-sharing platforms, and firms may feel intense public pressure to address them.

Often the "obvious" solutions — removing photos or other information about participants — are not as effective as providing more information would be. In many cases, the discrimination is what economists would call "statistical discrimination": using some observable characteristics of the person or business as a proxy for some underlying characteristic they are worried about but can't see. In these cases, more information, not less, is the answer.

Think about why market participants are discriminating, and try to directly address those concerns. Are buyers worried about being scammed? Provide insurance or similar protections. Are they worried about the uncertainty of buying from someone new, who is outside their network? Offer to replace the service immediately, for free if they're not satisfied. The more you can directly address underlying concerns, the less people will consider proxies like gender, race and ethnicity to guess about the potential risks associated with a transaction.

B2B sharing economies will surely face similar challenges, even if those challenges present themselves in different ways. Remembering that more information can reduce discrimination will help buyers and sellers alike maximize the value of these new markets.

Lourdes M. Turrecha

CEO & Founder at PIX LLC

B2B sharing economy companies, or any data-driven startup for that matter, would do well to recognize early on that their data privacy practices directly affect their brand reputation. This has been clear in the P2P/B2C sharing economy context, where privacy has increasingly become one of the main reasons why consumers don't trust a particular brand.

It's time to treat privacy as a strategic competitive advantage, instead of a mere compliance matter. With the right strategies, privacy can be (and has been) used as a significant competitive advantage, akin to how Uber prioritized privacy in reforming its brand. Many startups fall into the outdated and incorrect notion that privacy is a mere compliance checkbox that doesn't have to be prioritized in the early stages.

But in order for the privacy-as-a-competitive-advantage strategy to work, startups need to walk the talk. It's not sufficient to merely use privacy as a selling point. To gain and maintain customer trust, practices must match promises, especially when it comes to having transparent, fair and privacy-respecting data practices. This is a clear lesson from the P2P/B2C sharing space, where we are all too familiar with the regulatory and consumer privacy backlash due to lack of transparency when it comes to the collection, use and sharing of personal data.

See who's who in Protocol's Braintrust (Updated March 11, 2020).

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