The sharing economy connects suppliers of goods and services with people who need them. Some businesses, such as Airbnb, allows individuals list, find, and rent lodging, while others like Lyft and Uber allow people to use their personal cars to transport strangers in their city. Some projections put the sector’s revenues at $335 billion globally by 2025. For example, founded in 2008, Airbnb now has over 1,500,000 listings in 34,000 cities and 190 countries. However, it seems that sharing economy has a racial problem.
A Harvard University study from January of this year found extensive racial discrimination by Airbnb hosts. According to the report, requests from guests with distinctively African-American names are roughly 16% less likely to be accepted than identical guests with distinctively White names. The difference persisted, whether the host was black, white, male or female, or whether the accommodations were shared or not. Researchers also found that that non-black hosts requested about 12 percent more in rent than black hosts for similar rentals.
The paper's authors see a simple solution to reducing discrimination on the platform: anonymity. “For example, it could conceal guest names, or have people use pseudonyms like eBay does. It could also expand its Instant Book option, in which hosts accept guests without screening them first”. While users have begun sharing their experiences of rejection on the short-term rental platform using the hashtag #AirbnbWhileBlack, for its part, Airbnb says it respond quickly to any concerns raised by hosts or guests, and have a zero-tolerance policy for discrimination on its platform.
In a paper for the University of Chicago Law Review, Brishen Rogers argues that discrimination seems to be also a risk of Uber’s rider-feedback model, which requires drivers to maintain a minimum score or be kicked off the service. “Passengers may give bad reviews to racial-minority drivers, drivers in turn may be less likely to pick up riders if they learn that they are racial minorities and may generally prefer to pick up or drop off clients in wealthier, whiter neighbourhoods”. But of course Uber did not invent discrimination against riders. Taxi drivers’ discrimination against black men in particular is notorious. Researchers agree, however, that Uber enables less discrimination than the traditional hailing system. “In fact Uber drivers may in some cases be more likely to drive to or pick up in poor neighbourhoods”. Nevertheless, because each transaction is recorded online, online platforms makes it easier to spot discrimination. “For example Amazon and Expedia offer little scope for discrimination, as sellers effectively pre-commit to accept all buyers regardless of race or ethnicity”, the report says.
In an upcoming paper for the Georgetown Law Journal, “The New Public Accommodations”, Law Professor Nancy Leong has raised serious questions about the fact that most of the online sharing platforms are currently operating in a grey zone as it comes to legislation. While many established regulations for the hotel and taxi industry exist for consumer protection: safety standards, antidiscrimination laws, etc, Airbnb and Uber are platforms that are not directly legally responsible for the same standards a hotel or taxi may be responsible to. As Leong states, talking about her study: “On-line platforms often make race visible to both providers and users by requiring that they create profiles that include names, photographs, and other information. Such profiles may trigger conscious and unconscious bias and result in discrimination even if the parties never meet in person. Moreover, sharing economy businesses encourage or even require providers to rate users. Rating systems aggregate biases, and users who are members of disfavored racial categories may begin to receive worse service, or, eventually, to be denied service altogether”.
Needless to say that we have currently reached a point of no return, but how to deal with race discrimination by participants in the sharing economy, such as Airbnb hosts and Uber drivers? According to Leong to the extent that sharing economy businesses perform the same function as traditional industry, policy makers need to react very quickly to update the existing laws to new challenges. However how to do this without stifling the sharing economy in bureaucracy is far from clear.
Photo Credits: Getty Images/John Macdougall