Discrimination in the Sharing Economy

In a different economy, it’s the same story. Startups within the sharing economy continue to be plagued with reports of racial discrimination. As Airbnb prepares to enact a new Nondiscrimination Policy on Nov. 1, researchers at the MIT Sloan School of Management, Stanford University and the University of Washington have determined the reaches of racial bias also extend to ride-sharing companies including Uber and Lyft.

Based on field data from more than 1,400 individual cases of research assistants ordering, waiting and taking actual rides, primarily with Uber and Lyft, the study found that African Americans wait longer to get rides and suffer more cancellations once drivers determine they are black.

Controlled field experiments took place in Seattle and Boston, with randomly selected times, days, routes and a diverse mix of riders. Performance metrics were used to monitor each stage of the trip, and outlined in the report, titled “Racial and Gender Discrimination in Transportation Network Companies (TNC).”

In Seattle, one experiment found consistently longer waiting times for African American passengers—as much as a 35 percent increase. In Boston, a separate experiment that captured a wider variety of performance metrics found more frequent cancellations against passengers when they used African American-sounding names. Across all trips, the cancellation rate for passengers using African American-sounding names was more than twice as frequent compared to when the same passengers used white-sounding names.

“The patterns of discrimination were quite clear and consistent in both cities – and one can only assume it’s happening all across the country in other markets,” said Christopher R. Knittel, one of the study’s authors and a professor at MIT Sloan School of management. “The study has found major areas of racial discrimination within this new industry. It’s quite concerning.”

Researchers say they were disappointed to find the existence of discrimination within the ride-sharing industry, considering many had hoped the new transportation option would serve as a break from the transportation industry’s past history of racial discrimination. However, they also pointed out that the discrimination documented among transportation network companies is not necessarily worse than the current taxi system.

“In the Seattle experiment, we also document racial discrimination among conventional taxis, so we aren’t taking a stand on which system is better or worse,” said Knittel. “But, our study illustrates that discrimination among TNC drivers is occurring, and we point to ways TNC companies can reduce this discrimination.”

The study offers suggested ways to reduce the impacts of racial bias, such as eliminating the practice of showing the names and photos riders to drivers before orders are confirmed (as is the case at Lyft) or showing the names of riders once a driver accepts a ride order (as in the case of Uber).

Airbnb Responds to Discrimination

Last month, Brian Chesky, CEO and co-founder of Airbnb, sent a message to the Airbnb community, promising that the home-sharing startup would better address widespread complaints of racial discrimination on its platform, which serves approximately 50 million users around the world. It stated:

Discrimination is the opposite of belonging, and its existence on our platform jeopardizes this core mission. Bias and discrimination have no place on Airbnb, and we have zero tolerance for them. Unfortunately, we have been slow to address these problems, and for this I am sorry. I take responsibility for any pain or frustration this has caused members of our community. We will not only make this right; we will work to set an example that other companies can follow.

Some guests have reported instances of racial profiling while renting an Airbnb, such as a couple in Atlanta who were caught off guard by police officers waiting at the property, responding to a report from neighbors that they appeared to be robbers. Cases such as these have spawned social media campaigns including #AirbnbWhileBlack. According to a study from Harvard Business School, African American guests on Airbnb are 16 percent less likely to be accepted by hosts, compared to identical guests with white-sounding names.

Airbnb worked with the Washington D.C. Legislative Office of the American Civil Liberties Union to outline principles hosts and guests must adhere to in order to participate in home-sharing services. In the Community Commitment agreement, participants must comply with treating users with respect and without judgement or bias, regardless of race, religion, national origin, ethnicity, disability, sex, age, sexual orientation and gender identity.