Travel Insights: The Trust Economy & Denmark

Why is the “trust economy” growing while we trust each other less? What accounts for the incredible growth of companies that leverage the peer-to-peer trust model, where two individuals who don’t know each other connect in a marketplace and engage in a transaction? Much has been written about the two biggest trust economy stars – Airbnb for lodging in private residences, and Uber for transportation – but there are legions more that are developing.

I recently visited a number of European countries, and despite having been to most of those countries many times before, I came away with new insights into how the world is changing around us. The only country I visited for the first time was Denmark, which will be the jumping off point for this – the first in what will be a series of posts about what I saw, and how I think we can learn about what tomorrow will look like.

PwC recently completed a market analysis on the trust economy, which they call the sharing economy. For a great overview of the key issues in the analysis, see this insightful post by Emily Badger. The key insight is that while statistically speaking we trust other individuals less than before, we trust social ratings based upon feedback from users like ourselves.

My guess is that people responding to surveys indicating they trust others less than before might be a natural backlash to the rise of identity theft and celebrated data breaches. Regardless of the reason, people are on their guard when engaging with others, particularly in the digital world. Also, while many marvel at the fact that Airbnb and Uber seemed to spring out of nowhere, I think they forget how the path for that growth was paved by eBay years ago, when people first experienced the fact that you can engage with people on the internet and not get burned.

With all this trust and sharing stuff being such a popular story, my visit to small Denmark provided some big examples of what these themes look like. Before I jump in, let me say that Denmark is a lovely country and you should try to pay the Danes a visit if you get the chance. Copenhagen is clean, has a lot of green space, and although tickets are expensive, the trains run on time. They have both Carlsberg beer and a striking flag, which they proudly display almost everywhere you look (both the flag and the beer). Also, Danish children start learning English early in school, so English-speaking visitors are able to travel easily without being able to pronounce – let alone speak – anything from the seemingly-incomprehensible Danish language.

Back to the trust economy: Since PwC predicts that this economy is poised for massive growth ($15B today versus $335B in 2025), here are some things to think about.

An emphasis on trust. To walk around places like Copenhagen and Amsterdam is to see cars, mass transit, bikes and pedestrians work to move together. These cities in particular are interesting in this respect since so many other cities – notably US cities – are oriented largely around the car. The coolest parts of the transportation dance are the bikes, which are eye-popping in their ubiquity. Everywhere you look, there are bikes in motion or at rest, and here’s the key part of the bikes at rest in public areas: most of them are only “minimally” locked.  You won’t see as many of the heavy duty u-bars in Copenhagen common on many bikes in the metro US.

Technology for tracking/identification. Since I work for a company that is a leader in identity document authentication in the digital world, I’m interested in the idea of how people function in marketplaces and societies and properly vet one another. Although bikes are stolen in Denmark, the number is probably less than I would expect in a country filled with minimally-locked bikes. Although I doubt most Danes are using some of the newest technologies available to potentially track a stolen bike – like Spybike, among others – the growth of capabilities to fuse mobile phones and location are bad for thieves.

Of course, the lack of bike theft is largely driven by the fact that most of the bikes are pretty much the same. They are the sorts of bikes you can leave in the rain and not panic. The Danish and Dutch approach to bike ownership is function over form, and those who own an expensive bike for recreational use presumably have it locked at home.

We’re Living In A Society!  Just as George Costanza famously yelled a few times during his Seinfeld life, the Danes are aware that they’re living in a society. As more people become aware of – and use – these peer-to-peer applications, the trust issue will resolve itself. I expect that there will be some isolated bad stories which will be given a huge amount of news coverage, but the message is clear: trust, driven by identity authentication and social ratings, is “in”. And although it’s a nice place to visit, you don’t need to go to Denmark to enjoy it.

Skål!

 

* Update:  I altered the description in the post of how the Danes lock their bikes based upon reader feedback.