Diversity in the Gig Economy

In most workplaces, employees work for organizations directly. If they don’t follow the company’s rules, they are penalized. If they continue to defy company policies, they are fired. It’s that simple. In the gig economy, things are a bit more complex.

Take Airbnb as an example of one company struggling to police the actions of its users. Technically, Airbnb is a technology company and not a hospitality company. This many sound crazy, but it’s precisely the argument that other gig economy companies have made in recent years. When Uber didn’t want to pay for their drivers’ car repairs or insurance, they said they are a tech company and not a transportation company, so it’s not their responsibility. Airbnb could do the same in order to distance themselves from the hosts who use their platform, but early on, it decided to take a different approach and more closely align with the hotel industry.

Now, a well-established player in both the tech and hospitality industries, Airbnb is facing a dilemma over allegations of racism (not in the workplace but on its platform). Their situation raises a critical question: If you’re running a gig-economy platform, are you responsible for policing the actions of the people who are using your platform? If you do, do you risk treating platform users like employees and at what cost?

Allegations of Racism on the Airbnb Platform

Over the past year, two things raised alarm bells at Airbnb. First, there was an online forum where African American Airbnb users started to post about their experiences using the platform. Two Harvard University researchers released a study that found widespread discrimination on the platform:

In an experiment on Airbnb, we find that applications from guests with distinctively African-American names are 16% less likely to be accepted relative to identical guests with distinctively White names. Discrimination occurs among landlords of all sizes, including small landlords sharing the property and larger landlords with multiple properties. It is most pronounced among hosts who have never had an African-American guest, suggesting only a subset of hosts discriminate. While rental markets have achieved significant reductions in discrimination in recent decades, our results suggest that Airbnb’s current design choices facilitate discrimination and raise the possibility of erasing some of these civil rights gains.

The study further found that, “Online platforms such as Airbnb create new markets by eliminating search frictions, building trust, and facilitating transactions. With the rise of the sharing economy, however, comes a level of discrimination that is impossible in the online hotel reservations process. Clearly, the manager of a Holiday Inn cannot examine names of potential guests and reject them based on race or socioeconomic status or some combination of the two. Yet, this is commonplace on Airbnb, which now accounts for a growing share of the short-term rental market.”

Airbnb’s Response

In response, Airbnb is rolling out a new and lengthy policy. The first clause is the most relevant to the current problem cited on the platform and explicitly addresses the platform’s U.S. hosts. It reads that Airbnb hosts may not:

  • Decline a guest based on race, colour, ethnicity, national origin, religion, sexual orientation, gender identity, or marital status.
  • Impose any different terms or conditions based on race, colour, ethnicity, national origin, religion, sexual orientation, gender identity, or marital status.
  • Post any listing or make any statement that discourages or indicates a preference for or against any guest on account of race, colour, ethnicity, national origin, religion, sexual orientation, gender identity, or marital status.

The platform also notes that if a listing contains discriminatory language, it will be taken down and that “Hosts who demonstrate a pattern of rejecting guests from a protected class (even while articulating legitimate reasons), undermine the strength of our community by making potential guests feel unwelcome, and Airbnb may suspend hosts who have demonstrated such a pattern from the Airbnb platform.”

What’s at Stake in Airbnb’s New Policy

Airbnb’s policy goes into effect on November 1. Like Uber’s ongoing disputes over whether or not its drivers are platform users or actual employees, Airbnb’s new policy and heightened policing of its hosts’ selection of guests is bound to raise big questions of gig economy attorneys and other gig economy tech platforms. At the very least, the policy appears to suggest that the wild west days of the gig economy are now over, since in this case, Airbnb is definitely becoming to manage its users in a manner that more closely aligns with the way traditional companies manage their employees. While it seems likely that Airbnb’s new policy will be good for promoting diversity, the long-term consequences of the policy on Airbnb and the gig economy in general are yet to be seen.

October 29, 2016   Updated :November 16, 2016   Airbnb, gig economy   

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