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Response to Airbnb's Report on Discrimination

September 19, 2016


This month Airbnb released a report investigating discrimination by its hosts against guests (including racial minorities and others), assessing the evidence of the problem and evaluating proposed solutions. The accompanying announcement offers lofty principles—"creating a world where anyone can belong anywhere."

In contrast to the company's prior denials, Airbnb now admits the problem is urgent: "discrimination must be addressed"; "minorities struggle more than others to book a listing"; "some members of the community did not receive the timely, compassionate response they expected and deserved when they reported instances of discrimination"; Airbnb's nondiscrimination policy was not widely known, within or outside company. This much is beyond dispute.

While Airbnb's report is a step in the right direction, it does little to address the crucial subject of how to actually fix the problem of discrimination. Indeed, the report proposes actions of uncertain or unproven effectiveness.  At the same time, the report quickly dismisses a simpler alternative response—removing guest photos and names from booking requests—which would be far more likely to succeed. Meanwhile, the report completely fails to defend the legal gamesmanship by which Airbnb avoids litigation on the merits when consumers complain about Airbnb, and the report equally fails to defend Airbnb's continued prohibition on users conducting research to uncover and measure discrimination for themselves.

This article offers my critique.

Airbnb's bottom line

What exactly did Airbnb commit to change?

  1. Airbnb plans to increase the number of "Instant Book" properties, with a stated goal of one million by January 2017. Instant Book offers a potential mechanism to reduce discrimination: When hosts pre-promise to accept any interested guest who agrees to pay, they do not have the ability to screen each individual guest's request, therefore leaving much less opportunity to discriminate.

    Nonetheless, Instant Book addresses only a portion of the problem. If disfavored guests are limited to Instant Book properties, they are left with a reduced set of properties, typically meaning an inferior match with their preferences as well as higher price and less flexibility. Furthermore, hosts can use cancellations—permitted, in certain quantities, under Airbnb's rules—to undo the anti-discrimination benefits of Instant Book.

    Moreover, Airbnb's million-property goal is at best ambiguous. Airbnb doesn't say how many Instant Book properties are already available, so it's hard to assess how big an increase that would be or how realistic it is. Nor does Airbnb indicate the methods to be used to achieve the increase. If January comes and the objective has not been reached, what then?

  2. Airbnb says it will "experiment with reducing the prominence of guest photos in the booking process." Certainly photos have been prominent, and to its credit Airbnb now agrees excessively so, in light of the limited information they actually convey and the superiority of other information (like objective verifications).

    Notably, Airbnb's plan to experiment with reduced photo size has been misreported in the press. For example, the Wall Street Journal reported that Airbnb "is planning to reduce the prominence of guests' photos," and Diversity Inc. reported that Airbnb's changes "include displaying photos … less prominently." But Airbnb's actual promise wasn't to reduce photo prominence. Rather, the company promised only to run an experiment, of unspecified duration and scope, with no commitment whatsoever as to subsequent changes. With so many caveats, it's hard to put much weight on this response.

  3. Effective November 1, Airbnb will require users to accept a stronger and more detailed nondiscrimination policy: "By joining this community, you commit to treat all fellow members of this community, regardless of race, religion, national origin, disability, sex, gender identity, sexual orientation or age, with respect, and without judgment or bias."

    Airbnb's policy offers commendable principles. But the company's existing policy already included the same substance as the new wording. Will a compulsory screen or checkbox actually prevent hosts from continuing to discriminate? Airbnb offers no evidence that a restated policy will make a difference.  Indeed, experience from other types of discrimination suggests that those who seek to discriminate will change only slowly and under significant pressure.

  4. Sometime during the first half of 2017, Airbnb promises to modify its site to prevent a host from telling one guest that a property is unavailable, then later accepting another guest's request for the same nights. This change seeks to penalize hosts who falsely claim a property is unavailable: If a host rejects a guest due to a false claim of unavailability, the host won't be able to keep the property listed for others, making the pretextual rejection more costly.

    Unfortunately, there's little reason to think this approach will operate as claimed.  Instead, strategic hosts will switch to other reasons for rejecting guests—reasons guests can less readily prove to be pretextual.  An "unavailable" response would prevent the host from booking the property to someone else, but the host can instead specify some other reason for declining the request.  So there's little reason to think this change will stop those who want to discriminate.

    This change will also hinder guests' efforts to demonstrate discrimination. After rejection, a concerned guest may ask a friend to inquire (or creates a test account to do so), thereby proving that the rejection was due to guest identity and not genuine unavailability. This second inquiry provides a valuable verification, checking whether the host can keep his story straight. Substituting automatic software logic for fallible hosts, Airbnb makes it more difficult to catch a host in a lie.

    Finally, Airbnb offers no explanation why the company needs four to ten months to build this feature. Airbnb's site already offers multiple categorizations for each night including available, unavailable, and booked. By all indications, this architecture could easily be extended to offer the promised feature—for example, a new status called "booked-locked" that a host cannot change back to available. If this feature is important and useful, why wait?

The proposed changes share common weaknesses.  They all rely on unproven and indeed unstated assumptions about how hosts will respond.  And each change leaves ample room to question whether it will help at all.  One might hope the combination would be more than the sum of its parts. But when each change falls so far short, it's hard to be optimistic. These are not the "powerful systemic changes" Airbnb promises.

The better policy: remove guest names and photos

In sharp contrast to the indirect changes Airbnb proposes, a much simpler adjustment would more directly prevent discrimination: remove guest photos and names from the information a host sees when evaluating a guest's request.  If a host could not see a guest's photo and name before accepting a booking, the host would have no way to determine the guest's race, age, gender or other characteristics. Even a host who wanted to discriminate would not have the information to make a decision based on the improper factor.

Removing photos and names is particularly compelling in light of best practice developed over decades in other contexts. In 1952, the Boston Symphony Orchestra began to audition musicians behind a screen. The result was a sharp rise in the number of female musicians—widely interpreted to be a decrease in arbitrary and improper discrimination. Similarly, Massachusetts landlords cannot ask about race, national origin, sexual orientation, age, religion, and myriad other factors—for there is little proper reason to make such inquiries, and if landlords have this information, many will struggle not to use it improperly.

Airbnb admits that "some have asked Airbnb to remove profile photos from the platform."  But oddly Airbnb offers zero discussion of the benefits that approach might offer. If Airbnb thinks removing photos would not reduce discrimination, the company offers no statement of its reasoning.  And Airbnb similarly says nothing of the other contexts where similar landlords, employers, and others have similarly elected to conceal information to reduce discrimination. Meanwhile, Airbnb says absolutely nothing of my proposal that hosts see guests' pseudonyms, not actual names, when considering a request.  Instead, Airbnb focuses on three supposed benefits of continuing to show photos before booking.

Some might counter that Airbnb hosts are informal and ought to have more information than hotels or ordinary landlords. Indeed, one might imagine a policy that distinguished between classes of hosts. If a host occasionally offers a shared room or a portion of a property with the host on site, the relationship feels informal, and some might argue that anti-discrimination rules are overkill in such situations. Conversely, if the host is off-site and the guest uses the property exclusively, the arms-length relationship looks more like a hotel. By all indications, the latter is vastly more common than the former (whether measured in nights booked or, especially, revenue). Airbnb's report could have considered policies that vary based on the property type—perhaps retaining photos and names for the most informal hosts, where personal interaction between guests and hosts is a realistic possibility, while removing them for hosts offering arms-length rental of entire properties. But Airbnb devoted not a single sentence to this possibility.

Airbnb report's silence on compulsory arbitration—and the prior positions of Airbnb's distinguished consultant-advisors

Airbnb's report is completely silent on the company's requirement that users arbitrate their disputes. Nowhere mentioned in the report, despite criticism in media discussions of discrimination at Airbnb, the company's Terms of Service make arbitration compulsory for all complaints users may have about any aspect of Airbnb's service. Airbnb drafted the arbitration requirement and does not allow users to negotiate its provisions (or anything else). The arbitration policy requires that any concerned user bring a claim on an individual basis, not in any kind of group with others who have similar concerns. The predictable—and by all indications, intended—effect of Airbnb's arbitration requirement is that users cannot obtain meaningful relief for a broad set of complaints they may have against Airbnb.

Distinguished consumer organizations have widely criticized arbitration as improper for consumers' disputes with companies. But for Airbnb, arbitration offers both procedural and substantive benefits.  No individual consumer could bring a compelling arbitration case against Airbnb: There would be no economic rationale for an attorney to accept such a case, as even the most favorable resolution of the dispute would bring a small recovery and correspondingly limited funds to pay for the attorney's time. Only representing hundreds or thousands of consumers, en masse, would justify the time and talent of top attorneys. But Airbnb's arbitration clause specifically disallows class actions and other group suits.

Moreover, arbitrators are chosen through processes that bias them against consumers' claims.  One lawyer recently explained why arbitration tends to favor companies over consumers: "I use the same arbitrators over and over, and they get paid when I pick them. They know where their bread and butter comes from."

In the context of discrimination at Airbnb, new and novel questions make arbitration particularly inappropriate. Arbitration lacks an appeal process where different judges evaluate an initial decision—the proper way to develop policy in new areas of law. And with arbitration results secret, even if one consumer prevailed in arbitration, others would not learn about it. Nor would other arbitrators be bound by a prior dispute's conclusions even in identical circumstances.

Tellingly, Airbnb is at this moment invoking its arbitration requirement to attempt to dispose of class action litigation alleging discrimination. In May 2016, Virginia resident Gregory Selden filed a class action complaint, alleging that discrimination on Airbnb violated the Civil Rights Act of 1964, 42 USC 1981, and the Fair Housing Act. In response, Airbnb did not dispute that Selden had faced discrimination, nor did Airbnb explore the question of whether the host, Airbnb, or both should be responsible. Rather, Airbnb merely invoked the arbitration provision, arguing that the court could not hear the dispute because Airbnb required all users to agree to arbitrate, and thereby required all users to promise not to sue. As of September 2016, the court has yet to rule. (Case docket.)

Throughout its report, Airbnb cloaks itself in the names and resumes of distinguished advisors (including a seven-page personal introduction from the author and additional listing of experts consulted). But Airbnb's advisors have taken tough positions against compulsory arbitration—positions which undercut Airbnb's attempt to invoke arbitration to avoid judicial scrutiny of its practices.

Consider the position of the ACLU during the time when Airbnb consultant Laura Murphy, the report's sole author, was ACLU's Legislative Director. In a 2013 letter to senators considering the Arbitration Fairness Act of 2013, the ACLU explained the importance of "end[ing] the growing predatory practice of forcing … consumers to sign away their Constitutional rights to legal protections and access to federal and state courts by making pre-dispute binding mandatory arbitration … clauses unenforceable in civil rights, employment, antitrust, and consumer disputes." The letter continued: "Forced arbitration erodes traditional legal safeguards as well as substantive civil and employment rights and antitrust and consumer protection laws." Similarly, the ACLU's 2010 letter also noted that "[f]orced arbitration particularly disadvantages the most vulnerable consumers." Murphy's position at the ACLU entailed overseeing and communicating ACLU's positions on proposed federal legislation including this very issue.  Murphy's failure to object to Airbnb's ongoing use of arbitration clauses, which similarly eliminate both procedural safeguards and substantive rights for historically-disadvantaged groups, is particularly striking in the context of the ACLU positions she previously led.

Airbnb's other consultant-advisors have similarly taken positions against compulsory arbitration. Consider Eric Holder, former US Attorney General, now a partner at the prestigious law firm Covington & Burling. Under Holder's leadership, the US Department of Justice repeatedly opposed compulsory arbitration, including filing a Supreme Court amicus brief critiquing American Express's attempt to impose arbitration on merchants. DOJ there argued that "the practical effect of [the arbitration agreement] would be to foreclose [merchants] from effectively vindicating their Sherman Act [antitrust] claims." DOJ went on to explain that the arbitration agreement makes an "impermissible prospective waiver" of unknown claims, and DOJ noted that private enforcement of federal statutes is important to the overall regulatory scheme—an objective that would be undermined if parties could be forced to effectively waive their claims through compulsory arbitration. Holder's failure to object to Airbnb's ongoing use of arbitration clauses, similarly designed to escape federal claims that cannot otherwise be pursued, is a sharp change from the DOJ positions he previously oversaw. I credit that Murphy is the sole author, and Holder and Airbnb's other consult-advisors have taken no public position to endorse the report or Airbnb's approach. But when Airbnb's consultant-advisors allow Airbnb to use their names and credentials, both in the report body and in repeated statements to the press, they necesarily lend their reputations to the company's approach.

Facing scrutiny of its arbitration provisions in June 2016, Airbnb told the New York Times that "these [arbitration] provisions are common." Certainly many companies require that customers arbitrate their disputes. But Airbnb's service raises persistent and widespread concerns about discrimination (among other issues). Even if arbitration were appropriate for credit cards and cell phone plans (which, to be sure, many consumer advocates dispute), it may not be appropriate for questions of race, equality, and justice. Moreover, as Airbnb seeks public approval for its anti-discrimination efforts, it ought not reject the standard dispute resolution procedures provided by law. It is particularly galling to see Airbnb's report totally silent on dispute resolution despite prior discussion in public discussions and the press. Airbnb should remove its arbitration clause, if not for all disputes, then at least for claims of discrimination.

Airbnb's insistence that consumers arbitrate, without the benefit of courts or court procedures, is a stark contrast to Airbnb's approach to protect its own interests. Airbnb does not hesitate to file lawsuits when lawsuits are in the company's interest. Most notably, Airbnb recently sued San Francisco, Santa Monica, and Anaheim over laws it disliked. Whatever the merits of Airbnb's claims (and on that point, see my July critique with Nancy Leong), Airbnb is happy to take its preferred disputes to court—while specifically prohibiting consumers from doing so.

Testing and data

Airbnb says fixing discrimination is a "top priority," and this month's report repeatedly echoes that claim. In that context, one might expect the company to welcome academic research to help investigate. Instead, Airbnb specifically bans it.

Consider the limits of research to date. My 2015 paper (with Mike Luca and Dan Svirsky) analyzes experiences of rookie Airbnb guests in five cities. Much is left to be studied. How about outcomes in other cities? What happens when a guest gets a favorable review from a prior host? Do hosts tend to prefer a white rookie guest with no reviews, or a black guest with a single five-star review? How about guests who have verified their Airbnb credentials by linking Facebook and LinkedIn accounts or completing other profile verifications? Do outcomes change after Airbnb's September email to users and (planned) November policy change? Via the same methodology demonstrated in our paper, other researchers could test these questions and more. But Airbnb specifically prohibits such research via Terms of Service provisions. For one, Airbnb disallows the use of software to study its site (TOS section 14.2) looking for patterns that indicate discrimination. Moreover, Airbnb specifically prohibits creating multiple accounts (14.14), an approach widely used (by us and others) to compare the way hosts respond to guests of varying race.

These problems have a particularly clear solution. Airbnb should revise its Terms of Service to allow bona fide testing.

Airbnb's report also offers a series of claims grounded in data ("The company's analysis has found…", "Airbnb's research and data show…") as well as promises to collect additional data and run additional analyses. But Airbnb asks the public to accept its analyses and conclusions without access to the data supporting its conclusions. Airbnb should offer more to counter skepticism, particularly after widely-discussed allegations of misleading or incomplete data. Certainly Airbnb could provide the interested public with aggregate data measuring discrimination and showing the differential outcomes experienced by white versus black users. If Airbnb now has mechanisms to measure discrimination internally, as the report suggests, it's all the more important that the company explain its approach and detail its methodology and numerical findings—so past outcomes can be compared with future measurements.

Airbnb's response in context

In my June article proposing methods to prevent discrimination at Airbnb, I called for concealing guest photos when guests apply to hosts, similarly concealing guest names, normalizing dispute resolution, and allowing testing. I didn't expect Airbnb to do all of this. But I was disappointed that Airbnb's response discusses only the first of these four changes, and even that only superficially. Based on Airbnb's promise of a "comprehensive review," I hoped for more.

Airbnb argues that "there is no single solution" to discrimination and that "no one product change, policy or modification … can eliminate bias and discrimination." Certainly one might imagine multiple policies that would help make a difference, and the combination of multiple policies might be more effective than a single policy alone. But temporarily concealing photos and names, as guests apply to hosts, is the simplest and most promising solution by far. The bar is high for Airbnb to reject this natural and well-established approach; Airbnb's report offers little to convince a skeptical reader that appropriate concealment, so widely used in other contexts, would not work at Airbnb. Nor does Airbnb's report make any serious effort to establish that Airbnb's alternatives will be effective. In both these respects, the concerned public should demand more.