stay with us because making money with charles payne is coming up next. have a great night and a very great weekend. ♪ you. ♪ ♪ john: don't you need to mop the floor? elta cao buy groceries? so you can rest assured that they are reliable and trustworthy -- what? why would i believe them? political individuals want us to trust government. but didn't margaret thatcher pop that bubble years ago? >> and this actor says privatize everything. privatize the fire department and the police department. >> but that upsets the left.

but the private sector does things better. that is our show coming up tonight. ♪ ♪ no. >> now it is time for john stossel. john: trusts. a lot depends on it and families often succeed because we trust families more than strangers. government works and people trust the government rules are fair. commerce works when customers trust that it will work. these are delicate relationships developed sometimes over a million years, but sometimes the internet is changing things for the better. i would argue that here is one example. >> do you need to mop the floor, by the groceries and milk the cow? task rabbit helps you get stuff done, first you post your task and then include all of the

relevant details like location and price and other important information. it will blast out an sos to those in your neighborhood letting you know that your task is underway. and you are done. >> really? a stranger coming into your house mopping the floor and buying groceries? why would i trust the stranger? the owners say that their rabbits are professionals who go through a rigorous application process. >> you can rest assured that they are reliable and trustworthy. john: really? why would i believe that max wyman people trust total strangers herriot the book argues that the internet has given more of us reasons to trust total strangers. julian smith runs a business that is based on trust. before we talk about your business, let's just talk about task rabbit. tasks are personal.

why would people trust some kid to come in and do that. >> is a really good question. the reality is i think when we see people on the internet now i'm alesia phase and their reputation. john: what you mean by reputation? >> people before you doing tasks, mopping the floor and so we have an impression that is from looking at their reputation. john: this is what we used to learn from family and friends and neighbors. >> we used to live in small villages and we trusted everyone. recently over 50% we are surrounded by strangers and we ended up with the systems in place that progressively get billed and those systems say should i trust this person for this thing because it's impossible for us to be constantly making that decision over and over again.

john: your business is based on that and you share office space. >> i run a company called reader that provides temporary office space for people at a moments notice. so that means all customers are going to places they've never been. you're walking up and there are strangers. so in our case we ask where the real menace and they point to the back and that is it. we trust each other even though we have never met. john: if you can set it up so people can share offices, why not cars? most of our cars suck up our car payment money. they don't go anywhere. why can't i share my car the way that this lets people share office space? companies like get around allow people to earn money by sharing their car. >> we are enabling people to

make money off an asset that cost them a lot of money. john: that is just one of the companies doing it. >> there are a a lot of companies doing it and essentially this is even more implement because of some of these car. so first of all you're walking into a stranger's car, it should be clean and nice and a better run while, otherwise you could end up in a bad situation. >> what if i run my car to someone who cracks it up? if the driver kills somebody, you could be held responsible. >> we have $5 million in insurance on every space that we have. and it depends on the company but that kind of stuff matters. because at the end of the day you're trying to build a respectable business and that means treating people well on both sides of the equation. >> protecting people through readings and reputations, this is new.

otherwise we see government regulation with huber and lift and all of these other companies. so how i know that this guy is save? i don't know that this taxi driver is safe just because he passed a test from a bureaucrat. >> that is a great example. drivers may not be perfect, but they get raided every 20 minutes on uber. john: every time someone takes a car and you get to read it right there. >> people are reading each other the whole way. john: let's expand this discussion to the rest of the world. one reason people stay poor is because it's hard to establish trust. many people say africa or south america or russia are free to build a business because they don't trust that once it's built they will get to keep it. maybe the dictator of the country will just take it from them or maybe a mob of thugs will steal what they make.

people want to trust that contracts will be enforced and honored and that is why we are lucky to live in america where we have a pretty trustworthy system. but michael strachan has spent the last decade in places that don't have a trustworthy rule of awe. what do you do there? >> i have two projects. one is working to develop legal systems that actually provide the trust where you have and you know that the government will not take your money and the other is helping entrepreneurs and talented individuals develop the skills and get online so they can engage in contracts. it's an online world where they can build the trust right now and then we also want to help them on the ground have a legal system where trust is possible. but you are exactly right. the people in developing countries can be trusted and they could remain poor. john: they can't trust that if

they expand their house that someone will come in and say that you don't really own that house. so why add the floor or renovate reign. >> most developing governments one way or another offer regulation and/or rule block. most countries it is a little or a lot risky to invest capital for those reasons. john: you train the workers in the third world and many find the work in faraway places. here is a commercial promoting the idea that people can work without going to any office. >> my commute to work was an hour and a half of my day in my car. >> are used to have to fly a million miles per year. john: it is very exciting that these global online labor markets allow people anywhere bright and talented people anywhere to actually engage in international commerce and in addition we are going to a smart

contract level where more sophisticated arrangements can be automated using lock and chain technology so that entrepreneurs and investors in the west can hire people in countries without rule of law and use this technology to put funds in escrow and pay them wants the job has been completed and reliable way. john: these people feel more assured that they will be willing to do the work? >> exactly. that sort of technology allows for international trust at a scale where it's never been possible before. john: on the flipside, some work for minimum wage in america to establish trust in hopes that they will get paid more later. >> we are working with people in rural uganda were a college graduate makes a hundred dollars per month. and so if we can help a college graduate aramaic $180 per month

or $200 per month, doubling your income, we need to ignore developed wages and focusing on doubling or tripling the incomes of developing world people quickly and easily by means of giving them access to the global labor market. john: the internet gives entrepreneurs and ways to raise money. people used asked to go to the local bank and the bank would ask if this person was trustworthy. and maybe you would have enough of a reputation and they would loan you some money. but now a company called funding circle says that you can do better. they're from commercial features small businesses doing well. >> so well that he wants to open a second location. to help make that possible he wants a loan. the problem is that banks are not making loans to small businesses like rubber. they are stuck in her old ways and are bogged down by regulation. john: that is often true. increased regulation before dodd-frank has made it tougher

for entrepreneurs to get money from banks and banks are not the only option. >> other specialty finance firms are willing to make loans, but it is harsh terms. now small business entrepreneurs have a new option. funding circle. funds come from other successful entrepreneurs and organizations that want to invest in small businesses. john: it sounds like a scam to me. >> most financial regulations prevent startup entrepreneurs from accessing capital and it makes it easier for the big guys to get capitals. the web-based approaches will allow for startups to have more diverse sources of capital at lower rates and as a consequence we will see a lot more small startup entrepreneurs obtain the financing that they need. john: how can the investor trust that the money will not be squandered or stolen? >> there's a company that actually provides three times

the rates from friends and family. if her friends and family trust you, then they will put three times as much in because they figured that those people havarti video. there's another online source that will provide revenue-based financing. what we fear is that there are lots of people finding diverse ways to identify trustworthy entrepreneurs and putting money into their companies so that they no longer are dependent upon the banks, which are the last place anyone goes to for money anymore. john: you told me about internet celebrities who i have never heard of, they just appeared on facebook and they somehow were so appealing and trustworthy to their fans that companies pay them thousands of dollars for short videos to plug in products and one woman talks about makeup. she has millions of you as. >> a lot of people are happy with that new mechanism. john: the kids that watch or trust or because they like her

and they will buy the product? >> it's interesting that in the blogging world there is this thing about disclosure and making sure that we know that it really is something that's being paid for or that it was a free something, we don't know what it is. i don't know what the rules are for this particular person, but generally the more transparent they are, the more that person ends up being trusted and the more opiate or secretive it is. the last trust occurs over time. john: to join this discussion join me at stossel were like my facebook page and you can post on my wall. we want to know what you think. coming up next, what if your coffee shop had no one to behind the counter if no one was watching, would they pay? you would be these ally bank ira

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john: privatize everything privatize the fire department and the police department, privatize everything and make them responsible. >> go get them. i love it when a hollywood or get something right. americans just assume government must be in charge of things like road maintenance and garbage collection and ambulance services.

murdered bacher raised people's consciousness about that. two the government has a duty to get the best deal. >> margaret thatcher deftly said herpes. we have plenty of politicians in america who want to run everything. more cities have woken up to the benefits of an alternative. private management. this individual of the reason foundation talks about the reason privatization report that tracks what is working and what is not. what is working? >> we have lots of routine services where citizens interact everyday, wastewater, pothole repair, that sort of thing things in the backend of government i.t. payroll where those sorts of functions, we have other things in the private

sector. john: how does it work to why does the private sector do it better or cheaper? >> they are in a system where they have to compete and that creates lower cost and higher quality compared to government which tends to be a monopoly where there is no competition with lower quality and higher cost. >> one person says that everything government buys big pay above market for and deliver below-market service. >> often there is very little incentive to be efficient in that system where there is no tension in the system rocklike competitions. >> the privatization cites this. >> yes, it is a great story, it's one of those states that was financially distressed and went into a emergency manager control because of the high debt and chronic budget deficit. the manager stepped in and took over the decision-making from the politicians and they ended up contracting out the private sector with 20 different

services including trash collection and public works and if they cut the budget in half and city stopping by 90% they cut the debt load by 70%. john: private ambulance service. how does that work? >> across the country they can contract out their inulin services. john: who pays? if you go in the inulin, they hand you a bill. >> it's different in her jurisdictions when 911 says you have to pick someone up, you do. john: they send you a bill afterward and maybe medicaid will pay for it amax. >> insurance, medicaid and medicaid, other subsidies we want. >> that includes private sector financed rebuilding and

maintaining over a long time 558 bridges veteran faster and cheaper than the traditional way of procuring things and they will save 20% on the cost of delivering and maintaining each bridge. john: in chicago they may privatize the park -- parking meters. >> yes, they were the first to privatize the parking meters they got some things right and other things wrong. one thing they were criticized on if they got a billion dollars of fun, for 75 years. the politicians spent eight. so that falls more to the privatization and other cities and jurisdictions have followed since then. john: in indianapolis a privatized parking meters that were making $519,000 before privatization. almost 3 million after because the government meters usually were broken and it took days or weeks to fix them.

>> that is right. they would sit on meters that were broken for weeks. they have to keep those things up and running and they get calls to go and 6 meters. the utilization is much higher. john: despite these successes lots of people hate the idea of turning government services over to for-profit companies. >> they want to privatize everything. >> they don't want to pay for the roads in the and the dams and the rivers and the protection of our environment. john: it is just stupid because we do want to pay for it and we need to get our money's worth. >> that's what you can do through competition and privatization. john: one thing people think has to be done by government is airline security. the two cities don't use the government for that. >> it's actually 20 cities today. most of them small, but san francisco and kansas city have never gone to a tsa lead screening operation.

john: the we went to san francisco who went for the private screening and people said that these screenings are different. >> i think that they are more into spending. john: even though the private screeners were friendlier and quicker, tsa tested them private screeners found many more items than the government screeners. why is that? >> here they are gracing this together and then this screener passes over $2000, there is even dramatic effect. the tsa also screened people and trains them. searching bags and identifying for bidden items.

john: the government doesn't do this, the private company knows that they have a good reputation and they might it -- they might get it. >> they have a natural built-in incentive versus the tsa where there is no incentive because they are the monopoly. john: thank you mr. gilroy. next, would you trust a group of strangers to be your doctor? i would not. i researched a new company to let strangers do that. 3rd and 3. 58 seconds on the clock, what am i thinking about? foreign markets. asian debt that recognizes the shift in the global economy. you know, the kind that capitalizes on diversity

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stossel: my knee hurts. not sure why. i could go to more doctors, but they're expensive, and they always make me wait, and often, they don't know what's wrong. will the internet help? i could go to google. put in "knee pain if it."

this gets me all kinds of advice. here's a doctor that concluded that there's a better way. the better way is not going to his office. >> physicians think all health care decisions should be made only in the hospital. and clearly that's not the case. stossel: he's a medical detective, they call him, for a company called crowdmed which advertises heavier medical problems solved by the crowd. you submit your case, which means listing your medical problems. here dixie from new hampshire says she has pain, muscle cramping fatigue. she sounds like a hypochondriac. how would anyone sort out these symptoms via the internet? she offers a 200-dollar reward to anyone who does. i wouldn't trust the internet diagnosis. would you? jared says we should. he's the founder of crowdmed. why? >> we put a lot of work

into creating the right mechanism to harness the wisdom of crowds to find the wisdom of the world. to bring the right answer to the patients while suppressing the bad answers. stossel: and the crowd is usually wiser on any one expert. studies have been done on that. but you have these people on the site with these myriad symptoms are they helped? >> our average patient has been sick for eight years and incurred $50,000 in medical expenses. despite the difficulty in these cases, more than 60% of the time our crowd brings them closer to a correct diagnosis or a cure. neil: and you started this because your little sister had trouble with this. >> my little sister spent three years with a difficult, chronic undiagnosed medical condition. she saw almost two dozen different doctors. my family and our