Two professors at Harvard Business School have found evidence of racial discrimination on Airbnb, the site that lets people rent their extra space to guests for short term stays. The study, which was based on 3,500 listings in New York City, concludes that black hosts are earning 12 percent less than white hosts for similar properties. The authors say that suggests that white hosts are able to charge more simply because they're white.
Airbnb puts an emphasis on the people behind the properties in order to build trust, including large profile pictures, biographical information, and connections from Facebook and Twitter. A thumbnail of the host’s photo shows up next to the main photo of the property in the search results page. The study’s authors believe that emphasis exacerbates the problem of racial discrimination in online marketplaces.
Discriminatory effects have been found in online marketplaces including Craigslist, where names commonly used by black people resulted in lower response rates, and the dating site OKCupid, where the site’s statistician writes that "although race shouldn’t matter in messaging, it does. A lot."
"Although race shouldn’t matter in messaging, it does. A lot."
Michael Luca and Benjamin Edelman decided to look at race dynamics on Airbnb out of a broader interest in discovering the best way to design online marketplaces. eBay and Amazon do not focus on the pictures of the sellers, for example, while staffing sites like TaskRabbit do.
"We became interested in this issue when we noticed that online marketplaces are becoming more and more social, with extensive seller and buyer profiles and pictures alongside more standard information about products and services," Michael Luca, one of the study’s authors, tells The Verge in an email. "We understand the benefits of this, but are uncomfortable with the notion that more pictures/profiles/information are unambiguously better."
Airbnb declined to provide the professors with data for the study, which had to rely on data harvested from public listings. The company also denies that it has a discrimination problem, saying the study is flawed.
Airbnb says the study is flawed
"We are committed to making Airbnb the most open, trusted, diverse, transparent community in the world and our Terms of Service prohibit content that discriminates," the company says in a statement. "The data in this report is nearly two years old and is from only one of the more than 35,000 cities where Airbnb hosts welcome guests into their homes. Additionally, the authors made a number of subjective or inaccurate determinations when compiling their findings."
Airbnb says the study, which is still under review for publication, did not control for factors such as how often a property is booked and the number of reviews a host has. The company declined to offer its own data that would counter the study’s conclusions, however.
The idea that profile pictures lead to discrimination shouldn’t surprise anybody. It’s a tricky problem, but not a new one. Discrimination based on race, gender, and other factors is alive in the real world; when orchestras began holding "blind" auditions in which a candidate played from behind a curtain, the number of women hired went from 5 percent to 25 percent.
The rise of the "sharing economy" in which people buy and sell their extra time, skills, and property directly to one another depends on the ability of the internet to facilitate trust. Everything from ride-sharing services to sites like Kickstarter try to highlight the people on the other side of the app, and that’s actually one of the reasons some users prefer to dip into the sharing economy rather than give their dollars to some corporate conglomerate: it feels more personal. It’s hailed as a progressive revolution in the country’s economy.
It’s a tricky problem, but not a new one
Airbnb has no legal obligation to change its interface in order to de-emphasize profiles and personal photos, even if the site’s design is inadvertently encouraging discrimination. But while profile pictures may lead some users to feel better about trusting strangers on the internet, it’s not in Airbnb or anyone’s interest to inadvertently penalize a group of its users. That’s the opposite of progress.
New York City has strict fair housing laws — although bias there usually goes the opposite way, with landlords excluding non-white tenants — and there is a streamlined legal process for those who feel they’ve been discriminated against. Airbnb and similar marketplaces are so new that in the process of disrupting the traditional economy they sometimes can also lose established consumer protections.
"Our point is that when deciding what information to prominently display, online market designers should think both about how to build trust and facilitate transactions but also how to minimize unintended consequences," Dr. Luca says.