What they do in term of risk reduction for seller or buyer

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The issue of risk reduction on a platform is a perennial one. History shows that platform owners generally seek to avoid responsibility for the risks faced by platform participants, especially in the early days of the platform. For example,Initially, Airbnb refused to indemnify hosts against bad guest behavior, and Uber refused to insure riders against bad driver behavior.46 Eventually, both companies realized that this refusal was hurting the growth of their platforms. Today, as we've noted, Airbnb offers its host members $1 million in homeowners' protection, and Uber is partnering with insurance firms to create new types of policies to protect its drivers.

Rather than seeking to minimize their own risk, platforms should use market mechanisms such as risk pooling and insurance to reduce risk for their participants and thereby maximize overall value creation. Good governance means looking after the health of one's ecosystem partners.

How about paypal? What they do in term of risk reduction for the seller or buyer.

Reference no: EM133487375

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