Online marketplaces have come under fire recently for enabling discriminatory actions by users.
Last month, the National Bureau for Economic Research released the results of a study of ride-hailing apps Uber and Lyft and how drivers were less likely to pick up passengers whose names sounded too black. A 2015 study by researchers at the Harvard Business School found that hosts were more likely to agree to reservations made under stereotypically white names, and an earlier study found that Airbnb hosts who were not black could charge guests an average of 12% more.
In June, rivals of Airbnb ran a six-figure ad campaign exposing the discrimination that exists on the short-term rental website. In September, the company responded with a series of initiatives that will help fight race and gender discrimination on the platform.
These initiatives included new tools for reporting discrimination, a stronger nondiscrimination policy, a reduction in the prominence of guest photos during the booking process, and anti-bias training for staff and hosts.
Airbnb, however, is just one of the many online marketplaces that unintentionally enabled discrimination on its platform, and while the company has taken proactive steps to fighting bias, the controversy represents a wider problem with online peer-to-peer transactions.
"With their identities uncovered, disadvantaged groups face many of the same challenges they have long confronted in the offline world, sometimes made worse by a lack of regulation, the salience photos give to race and gender, and the fact that would-be discriminators can act without ever personally confronting their victims," wrote authors Ray Fisman and Michael Luca in the Harvard Business Review.
Fisman and Luca suggest that the Airbnb case study exemplifies how developers and designers of new platforms can avoid issues of discrimination. "Our goal is to help designers fully consider the implications and tradeoffs of their design choices," they wrote. Here is how they believe equality can be better built into these platforms.
One simple solution is to acknowledge the potential for discrimination by measuring discrepancies between race and gender and the particular rate of success for various groups. "Making this information public would help raise user and regulator awareness and keep pressure on companies to deal earnestly with discrimination problems that arise as their platforms evolve," they wrote.
Another strategy is to test design choices that may influence discrimination. The authors point to the example of Airbnb, which experimented with withholding host photos from the main search results page to measure the effects on booking outcomes, though it did not make those results public.
The less information revealed about a buyer or seller before the transaction is confirmed, the less opportunity both parties have for discrimination. "We believe that increased automation and standard economic incentives, carefully implemented, could both reduce discrimination and—by eliminating some of the back-and-forth needed to complete a transaction—increase profits on a variety of platforms," the authors wrote. In other words, features like Instant Book on Airbnb automatically completes transactions before revealing any personal information about hosts and renters.
Most online marketplaces have some anti-discrimination language in their fine print, but Fisman and Luca believe it should be brought back to the user’s attention before completing a transaction.
"Marketplaces could present anti-discrimination policies at a more relevant moment—and have the host’s agreement not to discriminate occur during the actual transaction process," they wrote. "Some people would still violate the policies, of course, but that would require a much more conscious choice."
While platform designers can help reduce bias and discrimination in online marketplaces, Fisman and Luca still believe it’s up to the individual to take a stand. "As important as market design features might be, it’s probably more important that we—consumers, platforms, the private sector, more broadly—collectively take a vocal stand against the tides that are pushing in the opposite direction," Fisman tells Fast Company.
Luca adds that in spite of the progress made in reducing discrimination in traditional housing rental markets in recent years, online platforms are erasing some of those gains, and regulators are still figuring out to what extent online marketplaces themselves can be held responsible. "Even with well-intentioned regulators, policy in this domain is lagging behind the technology," Luca says.
Unfortunately, Luca has little confidence in seeing progress in this area under the new president-elect’s administration. "Agencies such as HUD, which involve presidential appointments, are interested in reducing discrimination in housing markets," he points out. "In this case and more generally, we may be less likely to see increased regulation or enforcement in a Trump Administration," Luca predicts. "This makes the choices of platforms even more important."