Emerging Concerns in the Sharing Economy

One of the first lessons we all learn or make our next generations learn is how to share. As a result, we quickly discover how to differentiate between trustworthy people from others that are less so. The same thing applies when it comes to the sharing economy. How can someone trust a driver, caregiver, and renter or vice versa? Enterprises need to make sure that a trust level exists among all the parties who use their platform.

With the rise in the sharing economy, a few emerging concerns in the industry are illegal ownership of accommodations, the potential buying, and selling of fraudulent products, robbery, and violence. Based on the type of the sharing economy industry, there are particular identity verification and Customer Due Diligence (CDD) solutions that organizations must comply with when enrolling new customers.

A prompt increase in the use of digital rental applications has been observed since the onset of the coronavirus pandemic. This resulted in red flags for fraud in the industry. TransUnion associated fraud surge to the failed authentication of customer applications. The fraud cases are largely about stealing the identity of the occupant. It involves deploying someone else’s Social Security number, their driver’s license from the dark web, and creating an entirely new identity known as synthetic fraud. TransUnion observed a 15.2% increased scam rate in 2020 and predicted that it would keep on increasing unless the merchants follow swift identity verification protocols.

The ride-hailing service provider company, Uber, has been deprived of its license after the regulatory authorities found out that more than 14,000 trips were completed by drivers with forged identities on the company’s app. Post the probation period of two months, TfL declared that it will not review the drivers’ license. The ride-hailing service provider was advised to address concerns with checks on drivers, safety, and insurance but the company failed to satisfy the TfL’s requirements. Later the Transport for London issued a statement including major security breaches that caused a threat to the rider’s security.

It is a fraudulent activity that involves developing a thread of forged profiles to develop a fake persona. Such an artificially created personality can then be deployed for financial gains.

These act as software to perform automation activities on the internet. Malicious bots can be deployed as a tool to distort forums, grow website traffic, and can pose a real person. The last one carries the biggest risk to customer security.

Identity verification also assists merchants in growing their businesses. Using advanced IDV solutions can validate customers which naturally enhances the efficiency and speed of an automated onboarding.

The concept of P2P can only be made successful if the business and the consumer both share a trust level. Identity verification is one of the most talked-about problems as a lot of businesses are incorporating faster onboarding and cloud computing. As ease of use is crucial, safety must be one of the major concerns for the sharing economy. Businesses that take no heed in safe onboarding possess the risk of losing their customers.

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