In our current financial crisis, loaning money to complete “strangers” is an emerging market.

Prosper.com is an online auction website where individuals can buy loans and request to borrow money.  This microlending concept verifies selected borrowers’ identity and personal data before funding loans.  Prosper assigns a “credit grade” for each borrower based on several factors.  Lenders then have the option to bid on requested loans. 

Lending Club is a social lending network that lets borrower members borrow money through personal loans, and lenders fund these loans by investing in Notes. Each Note corresponds to a portion of a borrower loan.

This concept of lending money to strangers may seem scary at first, but all lenders are rated and the loans are guaranteed.  This idea is growing dramatically every year and would seem to confirm that “strangers”  can be trusted when peer review is part of the process.

Craigslist was started when it’s founder observed people helping one another in a friendly, social and trusting community way on the internet and decided to create something similar for local events.  The site has since established itself in approximately 450 cities and 50 countries with over nine billion page views per month and over thirty million unique visitors.  The founder Craig Newmark says that

Craiglist works because it gives people a voice, a sense of community trust and even intimacy.

If you are familiar with Craigslist, then you know that it provides an incredible service mostly for free.  If you are not familiar with it, then get the DVD 24 Hours on Craigslist.  It highlights people from all walks of life working together with complete strangers for common good.

Why couldn’t similar results be found in Passenger Energy?

An excellant example of peer review can be found on commercial vehicles and the “How’s my Driving” sign on the back of many of them.  If you see someone driving erratic, you can call a number and report the offending driver.  The drivers know this, so they police themselves and are much more considerate to the other drivers. 

This could easily be applied to all drivers with a system that uses the same sort of feedback algorithms to establish a reputation tracking system.  Now before you accept a ride with a complete “stranger”, you could first see what others think of this individual.  Now millions of American drivers would be watching their fellow drivers and report anyone who is behaving badly.