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Technology

How can sharing economy apps use identity verification to drive trust and engagement

March 31, 2022

Earlier this month we were in Barcelona to show off our solutions at MWC, one of the biggest tech conferences in the world.

The event was packed with phone manufacturers, telcos and other large enterprises, but not everyone was in the business of selling directly to consumers. Dotted around the venue were quite a few peer-to-peer platforms offering access to — rather than ownership of — goods and services.

In the city itself, startups that operate within the sharing economy are popping up on every corner. Visitors and locals can find a flat to share on Badi, explore the city on a moped rented through Cooltra or subscribe to virtually any product or service with Simplr, a startup that’s been dubbed the Amazon of the sharing economy.

A model compatible with global aims

Worldwide, people are becoming increasingly reliant on peer-to-peer transactions and for a good cause: the shift from ownership to access is creating additional sources of revenue for entrepreneurs and small businesses, reduces environmental impact and strengthens communities.

Low cost and convenience are pushing this new economic force forward, but what really keeps it going is trust. It’s what makes people comfortable spending a night in somebody’s home or hitching a ride from someone they’ve never met.

Trust as an economic utility

Sharing economy platforms build trust in a number of ways, with user-generated reviews and profile descriptions serving as good examples of how key players in the space reduce uncertainty and encourage users to transact with each other.

Then there is identity verification. The idea of knowing users are who they say they are is crucial in any business model resting on the idea that strangers can trust one another. For others, it’s purely a matter of regulatory compliance. A carsharing app needs to know its users are old enough to drive. Similarly, an app that facilitates alcohol delivery needs to verify that couriers are not handing it to minors.

Who’s going to come out on top?

As the industry continues to grow, those apps that are able to implement identity verification right are likely to set themselves apart from the rest, as increased engagement and a sense of trust fuels their growth.

But even the best can get it wrong. Last year, Uber Eats came under fire as its drivers had faced trouble getting past facial biometrics due to their skin color. (1)

Other sharing economy apps are keeping the barrier to entry too low for their own good. More than two-thirds of respondents in a PYMNTS report said they only had to verify their email address and phone number to begin using a sharing economy service. (2) This is simply not enough to establish a person’s identity.

And then there are some apps that manually verify their users, giving them no other option but to wait on the outcome of their verification — sometimes for hours on end. If they’re rejected, they have to go through the verification process all over again, hoping that this time around, they’ll get through.

We’ve found ourselves in this very loop trying to sign up on a popular vehicle-sharing platform. It took us three hours to get the verification result by email, only to find out the uploaded ID images aren’t clear enough.

Otherwise, the app is incredibly easy to use and offers a fun way to move around the city. In fact, the only thing it’s missing is smoother verification, which is unfortunate, as this would’ve rounded off a positive user experience.

Streamlining the access to the sharing economy

The focus on the verification experience itself — often embedded in user onboarding — is becoming ever more important as users who struggle to confirm their identity leave the sign up flow in flocks.

Sharing economy apps can do a number of things to improve their verification experience (and bottom line) by impressing users at the beginning of their relationship. This includes:

  • Using AI to detect the document’s type and country of issue without user’s input
  • Reading the data on the ID to cross-check it with relevant registries
  • Verifying the document is genuine by analyzing the user’s scanning environment and matching its security features
  • Comparing the selfie image with the image on the ID document to ensure the person applying is its rightful owner.

Historically, producing a government-issued ID document and showing your face to an office or branch employee has been the primary way of verifying your identity. The technology today is at the point where the same process can be carried out online — oftentimes with more speed and accuracy, and customers are learning to prefer it.

At Microblink, our Identity solutions are already a part of some of the biggest sharing economy companies out there, including Drizly, GoPuff, SoLo Funds and Veo. If you’d like to learn more about the role identity verification plays in the sharing economy as well as tips for implementing it right, we put together a free eBook for you. This is a must read for business leaders seeking to improve their brand’s customer experience in today’s connected — and shared — economy.

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