Racial Discrimination in the Online Marketplace

When we mention cases of racial discrimination, we typically think about situations where a victim is racially profiled by another person after they have had a face-to-face encounter. Everyday examples include an employee being denied of a job position or a suspect being unfairly treated by police officers solely because of his/her race. However, racial discrimination can occur in the online community as well even though direct, physical interaction is not involved . In particular, there have been a growing number of racial discrimination incidences that have occurred in the online marketplaces. 

Airbnb, the popular online marketplace to book accommodations, has previously faced several racial discrimination cases, In June 2015, an Airbnb host in North Carolina cancelled a booking made by a renter and made hurtful racial slurs after finding out that the renter was black. In the same year, Gregory Selden from Virginia was denied a booking by the host allegedly due to his African American origin. Gregory Selden later sued Airbnb in a class action lawsuit for facilitating racial discrimination on its platform. In 2017, Dyne Suh, an Asian American, had her reservation in Big Bear, California cancelled right before she was about to check in to the accommodation. In the text messages with Dyne, the host stated that she did not want to rent the place to her because she was Asian. A study by the Harvard Business School, titled “Digital Discrimination: The Case of Airbnb.com”, provides further proof that racial discrimination does exist on Airbnb. One of the conclusions that was drawn from the study is that renters with black-sounding names were less likely to receive bookings on Airbnb than other renters. 

 

Airbnb is not the only online marketplace that has faced racial discrimination cases. A recent study by researchers at MIT, Stanford and University of Washington, found that Uber drivers in Boston cancelled more trips for customers with black-sounding names and black customers in Seattle faced longer wait times than white customers. A joint study by Northeastern University, University of Koblenz-Landau (Germany) and ETH Zurich (Switzerland) found that black users have lower ratings than white users on Taskrabbit, the online marketplace that matches freelance providers with customers  of everyday tasks. Similarly, a study found that black and Asian users received lower ratings than white users on Fiverr, an online marketplace offering freelance services,    

 

Although some online marketplace companies have pledged to curb racial discrimination on their websites, many have chosen to avoid the issue of racial discrimination altogether. The online marketplace companies have this leverage because their civil rights liabilities are in a legal gray area. The online marketplaces do not offer the goods and services; rather they simply offer the platform for providers of goods and services to connect with customers. There are clear civil rights laws for providers of goods and services but not for platform hosts. Thus, the online marketplace companies tend to push the civil rights liabilities onto the users.  

Despite the lack of specific laws that make companies liable, all online marketplace companies should take measures to discourage racial discrimination. Doing so is not only being socially responsible but it will benefit the companies in the long run. A marketplace that is fair and indiscriminate will entice new users and retain existing ones.  

 

There are various ways that racial discrimination can be discouraged in an online marketplace. One way to reduce the possibility of racial profiling in an online platform is to not disclose the names and/or pictures of the users. There are various reasons why platform designers would want to make the user’s name and/or picture public, such as filtering out scammers and making users feel comfortable in making transactions on the platform. However, unless the users’ names and/or pictures are logistically necessary for the platform, platform designers should eliminate sharing them. Another method for platform designers to reduce racial discrimination is to internally monitor its users for possible discrimination. For instance, algorithms can be developed to identify behaviors that suggest possible discrimination by a user. The company can take appropriate actions once they identify possible cases of racial discrimination. In addition, the online platform should emphasize to its users that racial discrimination are being monitored and severe consequences will result if discriminating behaviors are found on the platform. Ways to penalize users include permanent banning of users from the platform and impose fees. Lastly, racial discrimination in online marketplaces can be discouraged by having mandatory industry checks for unfair treatment.  

 

Some companies have taken these steps to encourage racial equality in their platforms. Airbnb has an anti-discriminatory product team to develop solutions that will curb discrimination. Proposed solutions by Airbnb, some which have been implemented already, include permanent banning of users that are found to be discriminating, not allowing hosts to cancel bookings that are listed as vacant, reducing the opportunities to reject a user’s booking based on pictures and names (i.e. Airbnb’s ‘Instant Book’ feature where host approval is not necessary for bookings) and regulator tests to determine the existence of discrimination (the state of California’s Department of Fair Employment and Housing (DFEH) has an agreement with Airbnb to conduct fair housing testing). eBay also have addressed discrimination concerns on their website by conducting investigations with an internal team of social psychologists. 

 

Racial discrimination is prevalent in the online marketplaces and needs to be addressed. Many companies have failed to take any actions to reduce opportunities of racial discrimination in their platforms. Platform designers should take on the responsibility to implement features that curb discrimination and create a fair environment for the users.  

 

Note: Although this posting focusses on racial discrimination, the discussion similarly applies to other types of discrimination such as age and gender.