By Callista Ryan
Looking for a place to eat out tonight? Well, if you’re like most people you probably started your hunt with a web search of “top 10 restaurants in (insert your location here)”. Dozens of lists from search engines to local bloggers accompanied with a ranking and sometimes hundreds of reviews appear. In committing this mechanical act, you have just sourced your search out to the peer network. We heavily rely on these peer moderated systems, reviewing and ranking businesses, transportation services, and even people. It has streamlined our decision-making processes and takes the worry out of trying something new. But are there consequences to outsourcing your decision making to a crowd network?
This is the second in a three-part series that will talk about the “peer to peer network”. How it has affected getting hired, choosing services (from where to eat to transportation), and how they have influenced how businesses build trust with their clients.
In Peer, I trust: Outsourcing Our Minds to the Web
We all want to trust our peers. Life would be filled with a lot more paranoia if we didn’t. With a decline in trust in institutions, now more than ever we rely on the people we know for advice and decision-making assistance. When our immediate circle of friends aren’t around us we look to “people like us” for their trusted opinions. This is no different when we go online. If we wanted to go to a new restaurant we would usually check with our foodie friends for recommendations, read the reviews, peruse the menu, and even take a virtual tour of the place before deciding whether or not we should go there. But above all these factors, ratings are king. They influence our expectations and even deter us from visiting. But maybe these peer reviews and ratings should be taken with a grain of salt
Here are three cases that showcase how trust in the peer network is built, and broken.
These ratings can be useful when looking for a good restaurant to eat at, but that does not mean it’s always accurate, let alone real. Take, for example, the story of how a nonexistent restaurant managed to become the #1 rated restaurant in London (UK) on TripAdvisor. This “restaurant” was able to rise above more than 18,000 other restaurants in the rankings due to a coordinated campaign of fake comments, planted ratings, and counterfeit photos. This is a classic case study of the false reality that can be created and hosted by these peer generated networks. This is just one illustration of how an unmoderated peer network can be hijacked by at best a deceptive prankster and at worst a malicious grifter.
In contrast, Airbnb, the service that facilitates “hosts” renting out their homes or rooms to people online. This has disrupted the traditional hotel and hostel markets. As opposed to TripAdvisor’s completely open platform, Airbnb adds a layer of moderation. “Renters” are asked to submit a review of their accommodations within 14 days after their stay. This system prevents outsider (or fictional) users from leaving a review. It also annuls the risk of paid reviews, a problem open platforms like TripAdvisor and Google reviews have to cope with. Airbnb added another trust layer to their service with Airbnb Plus. This service sends certified inspectors to the host’s accommodations to verify the quality. This service tier is restricted to more luxurious rental options. By adding this additional trust layer companies like Airbnb ensure that you never end up in a not-as-advertised London loft (or restaurant) again.
Uber, the popular ride-sharing service that has threatened the global taxi industry, has used the peer network to rapidly scale their business in a stagnating and poorly reputed market. After every ride, the rider has the opportunity to rate their experience on a scale of 1 to 5 stars. Uber has often boasted that they only allow drivers to continue with their service if they have a 4.6 star rating or higher. Users of Uber enjoy the certainty of getting into a car that had been reviewed by possibly hundreds of riders before them. Above this, users could also watch the diver approach the pick-up location and the final trip cost.
By having hundreds other people telling you that a driver is the bee’s knees and with a guarantee from Uber that they only partner with bee’s knees drivers, Uber has been able to capture a market share greater than any global taxi company. Peer networks bring with them attribution value. As more peers join the network and they rate the assets on the network (i.e care, house, restaurant) the more people attribute value of those assets and reinforce the network. Simply put, as in the case of Uber, the peer network can accelerate the growth of companies.
So, what is the point of all this? Trust sells. Especially for millennials.
When we asked Canadians to rank a number of global brands Uber and Airbnb came out strong. Of those aware of the brand, 37% of millennials had a positive impression of Airbnb as compared to only 24% of those aged 45-59. Uber had a similar spread with 35% of millennials having a positive impression of them and only 22% of 45-59-year old’s saying the same.
TripAdvisor is an open and free service whose business model is designed to make leaving a review as seamless as possible. Airbnb and Uber are similar to TripAdvisor in that they leave the rating and reviewing of most of their assets to their respective peer network. However, the difference between the two groups is the trust layer. With the goal of ensuring its users against fraud, Airbnb reduced the number of peers in its network by making profiles obligatory to access the platform and limiting interactions to a 14-day window after staying at a host property. Uber reduces uncertainty by allowing users to rate drivers immediately after rides and dropping drivers that get too low of a peer networked score. This added layer of moderation comes with a price seen in the fees attached to renting a property or hiring a car and the time taken to build a profile.
These are just three examples of peer networks but in a world where trusting strangers can get you to show up to a make-believe restaurant, it sometimes pays to pay for trust, but it always pays to think critically and make informed decisions.