The Platform Intermediation Paradox: Simultaneously Building and Eroding Trust in the Sharing Economy through Information Asymmetry

Abstract

Using the Heuristic-Systematic Model (HSM) as a theoretical lens, the current research investigates how platform intermediation shapes user trust in ride-hailing services. Data were collected from 550 users of ride-hailing platforms, inDrive and Yango, in Pakistan using a time-lagged survey design. The collected data were analyzed using Hayes’ PROCESS macro (Model 4). Our results reveal a paradox: while users often use platform intermediation as a quick proxy for safety and security, this same reliance can backfire. When the platform's inner workings remain hidden, it heightens users’ risk perception, forcing them to shift from swift trust to a more skeptical mindset. This means that while platform intermediation facilitates swift trust by serving as a reliable heuristic cue, the black box nature of the intermediation can paradoxically heighten information asymmetry, leading to a trust deficit. Thus, platform managers can strengthen governance by fostering transparent communication and whitening the black box of intermediation. In the end, the study suggests that for platforms to keep users' confidence over time, they must find a better balance between the speed of their signals and the thoroughness of their information sharing.