Rent your bike or car to a stranger, online

One aspect of e-commerce covered in the ITGS syllabus is Customer-to-Customer (C2C) technology (also known as Consumer-to-Consumer technology). Widespread Internet access and social media use has made it easier than ever for individuals to locate items they want online and buy them directly from the seller without a "middle-man".

eBay is probably the best known example of this Customer-to-Customer business model: although eBay operates its web site, buyers and sellers deal with each other directly, with eBay merely taking a cut of transactions. Craigslist is another example - a virtual "classified ads" site where users can buy or sell anything from superman action figures to apartments rentals.

Now similar technology has recently been adopted by startups in San Francisco, hoping to help users find bicycles and cars to rent. Liquid offers bike rentals (although it seems to be closed for winter right now), while Relay Rides and Get Around both hook up drivers with car owners. This excellent BBC Click video explains how these new systems work.

A key benefit of such schemes is cost - the lack of a middleman can reduce the cost of renting a car or bike by up to 30%. Likewise, car sharing reduces fuel expenses and has environmental benefits. To imagine how many cars could be taken off the road, just look around you at the number of cars with empty seats.

Of course, such systems are not without their challenges - perhaps the most obvious and significant of which is authentication of buyers and sellers (or renters). Few people would be willing to send money to somebody without a guarantee that their purchase will arrive as promised, and even fewer would be happy to see a stranger drive away in their car without being sure of their identity.

To get around these problems, most C2C sites require buyers and sellers to register accounts, often a Facebook or Twitter account that establishes some credentials. Typically users can rate their experience with each other, forming an online reputation (for better or worse). To guarantee payment, PayPal is a popular option, and is extensively used on eBay. PayPal acts as a third party, taking payment from the buyer and withholding it from the seller until the buyer confirms they received their product. An added advantage of this approach is that PayPal specialise in this business, giving users greater peace of mind regarding the security of their credit card details.

Safety may also be a concern - especially when renting bikes or cars. Unlike regulated vehicle rental or taxi industries, nobody performs maintenance checks on the vehicles you rent.

Legality is another issue which has plagued some C2C sites). Customer-to-customer transactions are naturally less exposed to legal and regulatory spotlights, making them a less risky forum for illicit transactions. Indeed, earlier in its life Craiglist had numerous problems with customers offering illicit services, including adverts for prostitution. Such behaviour also raises the question of responsibility - if a customer on a C2C offers illegal services, is the hosting site (in this case Craigslist) responsible for their actions?

In the case of car hire, taxi services are typically heavily regulated and licensed by city authorities. Like many new technologies, customer-to-customer schemes like this represent a legal grey area that will likely be fiercely debated in the near future.

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