As if growing up with a countercultural name wasn’t hard enough every time a teacher called roll in school, findings have affirmed that these “difficult to pronounce” names have monetary repercussions as well. In 2003, the National Bureau of Economic Research found that white-sounding names received 50% more callbacks than black names on job applications (“Are Emily and Jamal more employable than Lakisha and Jamal? A field experiment on labor market discrimination”). Emily and Greg were more employable than Lakisha and Jamal then and today, they’re also less hospitable according to research on the discriminatory nature of social platforms like AirBnb.com–the third highest-valued startup in the world.
In 2014, the report “Digital Discrimination: The Case of AirBnb.com” published by Harvard Business School revealed that the rental service facilitated discriminatory behavior through its social platform. The company uses images and personal profiles to promote feelings of security and trust among users; however, this information disproportionately impacted the amount of money earned by black hosts. Non-black hosts were able to charge up to 12% higher rental fees than their black counterparts when controlling for quality, location and rental characteristics.
Just last week, the same authors announced findings that indicate black renters are also susceptible to discrimination through AirBnB’s reservation process. Unlike transactions on Amazon or Expedia where sellers do not void sales to customers who are able to pay based on personal information, the personal information provided on AirBnB restricts those with stereotypically black names from renting. Black guests received a positive response only 42% of the time whereas white guests were successful in 50% of their booking requests.
Black and non-black hosts, female and male, were more prone to rejecting black guests than white guests of both genders. Despite the fact that hosts lose $65-100 in revenue per racialized rejection, experienced and inexperienced hosts across all groups demonstrated similar patterns of discrimination.
In the face of their newest campaign, “Belong Anywhere,” AirBnB has received lots of criticism questioning the inclusivity of the short-term rental business. An AirBnB spokesperson responded to the findings in a statement to Business Insider that reads, “We are committed to making Airbnb one of the most open, trusted, diverse, transparent communities in the world. We recognize that bias and discrimination are significant challenges, and we welcome the opportunity to work with anyone that can help us reduce potential discrimination in the Airbnb community.”
The study aims to expose how the suggested shift to “social transactions” within the “sharing” economy facilitate racial discrimination. With many projecting the sharing economy as the future of business, this fatal flaw of personalized platforms threatens the sustainability of these markets. How can you operate within a dimension that requires transparency and trust-building without playing into people’s prejudices?