Category: genres

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Class Action Settlement — Refunds for Certain American Airlines Checked Bag Fees

Bazerman v. American Airlines, Inc. is a consumer class action pending in the District of Massachusetts. The plaintiff alleges that American Airlines has charged passengers to check bags that should have been free under American’s contract with customers. On June 22, 2018, U.S. District Court Judge William Young preliminarily approved a settlement. If granted final approval, eligible American Airlines passengers who submit a valid, timely claim will receive either a 75% refund or a full refund plus interest for incorrectly charged bag fees. Awards will range from $18.75 to $200 plus interest per bag. Class members must submit a claim by November 26, 2018 to receive a refund. The final approval hearing is set for February 21, 2019. (Note that these dates were extended by court order.)

The Court has authorized notice to be sent to class members. Class members should receive an email on Saturday, July 21, 2018, with the subject line: “Notice of Class Action Settlement – Refunds for American Airlines Checked Bag Fees.” If you’ve flown on American in the past six years and get this email, you should read it since you may be eligible for a refund. The email includes a class notice and claim form. The case documents (including Claim Form and Class Notice) are available at the settlement website, aabaggagefeesettlement.com.

If you have any questions, you may contact Class Counsel: Linda M. Dardarian, Byron Goldstein, and Raymond Wendell at AAcheckedbags@gbdhlegal.com or 1-866-762-8575, or Benjamin Edelman.

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Updated Research on Discrimination at Airbnb with Jessica Min

In December 2015, Mike Luca, Dan Svirsky, and I posted the results of an experiment in which we created test Airbnb guest accounts, some with black names and some with white names, finding that the latter got favorable responses from hosts more often than the latter. Black users widely reported similar problems — Twitter #AirbnbWhileBlack — and in September 2016 Airbnb responded with a report discussing the problem and Airbnb’s plans for response.

I promptly posted a critique of Airbnb’s plans, broadly arguing that Airbnb’s commitments were minimal and that the company had ignored a simpler and more effective alternative. But ultimately the proof is in the results. Do minority guests still have trouble booking rooms at Airbnb? Available evidence indicates that they do.

Below is a table based on work of Jessica Min (Harvard College ’18) as part of her undergraduate thesis measuring discrimination against Muslim guests. The table summarizes eight studies, with data collected as early as July 2015 (mine) and as late as November-December 2017 (hers), the latter postdating Airbnb’s report by more than a year. Each study finds minority users at a disadvantage, statistically significantly so.

 

Author/title/place and year of publication Dates of data collection Sample size Summary of findings Noteworthy secondary findings
Edelman, Benjamin, Michael Luca, and Dan Svirsky.

Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment.

American Economic Journal: Applied Economics, 2017.

 July 2015 6,400 listings across five U.S. cities Guests with distinctively black names received positive responses 42% of the time, compared to 50% for white guests.

 

 Results were  persistent across type of hosts (i.e. race, gender, experience level, type and neighborhood of listing).

Discrimination was concentrated among hosts with no African American guests in their review history.

Hosts lost $65 to $100 of revenue for each black guest rejected.
Ameri, Mason, Sean Rogers, Lisa Schur, and Douglas Kruse.

No Room At The Inn? Disability Access in The New Sharing Economy.

Working paper, 2017.

 June to November 2016 3,847 listings across 48 U.S. states Guests with disabilities received positive responses less often. Hosts  preapproved 75% of guests without disabilities, but only 61% of guests with dwarfism, 50% of blind guests, 43% of guests with cerebral palsy, and 25% of guests with spinal cord injury. Airbnb’s  non-discrimination policy, which took effect midway through data collection, did not have a significant effect on host responses to guests with disabilities.
Ahuja, Rishi and Ronan C. Lyons.

The Silent Treatment: LGBT Discrimination in the Sharing Economy.

Working paper, 2017.

 June – July 2016 794 listings in Dublin, Ireland Guests in male same-sex relationships were approximately 25 percentage points less likely to be accepted than identical guests in heterosexual relationships or female same-sex relationships. The difference was driven by non-responses from hosts, not outright rejection.

The difference persisted across a variety of host and location characteristics.  Male hosts and hosts with many listings were less likely to discriminate.
Cui, Ruomeng and Li, Jun and Zhang, Dennis J.

Discrimination with Incomplete Information in the Sharing Economy: Evidence from Field Experiments on Airbnb.

Working paper, 2016.

 Three audit studies.  Summarizing the results as to guests without prior reviews:
September 2016 598 listings in Chicago, Boston, and Seattle Guests with distinctively black names received positive responses 29% of the time, compared to 48% for white guests. The authors assess hosts’ apparent reasons for discrimination, including whether hosts were engaged in statistical discrimination and whether reviews reduce the problem of discrimination.
October – November 2016 250 listings in Boston and Seattle Guests with distinctively black names received positive responses 41% of the time, compared to 63% for white guests.
July – August 2017 660 listings in Boston, Seattle, and Austin Guests with distinctively black names received positive responses 42% of the time, compared to 53% for white guests.
Sveriges Radio’s Kaliber show,  Sweden October 2016 200 listings in Stockholm, Gothenburg, and Malmö For hosts who said no to guests with black-sounding names, a second inquiry was then sent from a guest with a white-sounding name. Of hosts who had previously declined the black guest,  many told the  white guest that the listing was available. Methodology follows longstanding testing for discrimination in US housing markets, sending a white applicant after a landlord declines a black prospective tenant.
Min, Jessica

No Room for Muhammad: Evidence of Discrimination from a Field Experiment over Airbnb in Australia.

Undergraduate honors thesis, 2018.

 November – December 2017 813 listings in Sydney, Australia Guests with distinctively Middle Eastern names received positive responses 13.5 percentage points less often, compared to identical guests with white-sounding names. Results were  persistent across all hosts, including hosts with shared properties and those with expensive listings.

Discrimination was most prominent for hosts with highly sought-after listings, where hosts can reject disfavored guests with  confidence of finding replacements.

My bottom line remains as I remarked in fall 2016: Airbnb’s proposed responses are unlikely to solve the problem and indeed have not done so. Truly fixing discrimination at Airbnb will require more far-reaching efforts, likely including preventing hosts from seeing guests’ faces before a booking is confirmed.  Anything less is just distraction and demonstrably insufficient to solve this important, and long-festering, problem.

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From the Digital to the Physical: Federal Limitations on Regulating Online Marketplaces with Abbey Stemler

Edelman, Benjamin, and Abbey Stemler. “From the Digital to the Physical: Federal Limitations on Regulating Online Marketplaces.” Harvard Journal on Legislation, Volume 56, Number 1, pp. 141-198.

Abstract:

Online marketplaces have transformed how we shop, travel, and interact with the world. Yet, their unique innovations also present a panoply of challenges for communities and states. Surprisingly, federal laws are chief among those challenges despite the fact that online marketplaces facilitate transactions traditionally regulated at the local level. In this paper, we survey the federal laws that frame the situation, especially §230 of the Communications Decency Act (CDA), a 1996 law largely meant to protect online platforms from defamation lawsuits. The CDA has been stretched beyond recognition to prevent all manner of prudent regulation. We offer specific suggestions to correct this misinterpretation to assure that state and local governments can appropriately respond to the digital activities that impact physical realities.

Informal introduction:

Perhaps the most beloved twenty-six words in tech law, §230 of the Communications Decency Act of 1996 has been heralded as a “masterpiece” and the “law that gave us the modern Internet.” It was originally designed to protect online companies from defamation claims for third-party speech (think message boards and AOL chat rooms), but over the years §230 has been used to protect online firms from all kinds of regulation—including civil rights and consumer protection laws. As a result, it is now the first line of defense for online marketplaces seeking to avoid state and local regulation.

In our new working paper, Abbey Stemler and I challenge existing interpretations of §230 and highlight how it and other federal laws interfere with state and local government’s ability to regulate online marketplaces—particularly those that dramatically shape our physical realties, such as Uber and Airbnb. §230 is sacred to many, but as Congress considers revising §230 and Courts continually reassess its interpretation, we hope our paper will encourage a richer discussion about the duties of online marketplaces.

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The Market Design and Policy of Online Review Platforms

Edelman, Benjamin. “The Market Design and Policy of Online Review Platforms.” Oxford Review of Economic Policy 33, no. 4 (Winter 2017): 635-649.

I present the institutions and incentives of online reviews, including attracting initial reviews, assuring truthful reviews of genuine experiences, and avoiding inflated or deceptive reviews. I also explore the competition and consumer protection concerns associated with reviews.

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Uber Can’t Be Fixed — It’s Time for Regulators to Shut It Down

Edelman, Benjamin G. “Uber Can’t Be Fixed — It’s Time for Regulators to Shut It Down.” Harvard Business Review (digital) (June 21, 2017). (Translations: Japanese, Russian.)

From many passengers’ perspective, Uber is a godsend — lower fares than taxis, clean vehicles, courteous drivers, easy electronic payments. Yet the company’s mounting scandals reveal something seriously amiss, culminating in last week’s stern report from former U.S. Attorney General Eric Holder.

Some people attribute the company’s missteps to the personal failings of founder-CEO Travis Kalanick. These have certainly contributed to the company’s problems, and his resignation is probably appropriate. Kalanick and other top executives signal by example what is and is not acceptable behavior, and they are clearly responsible for the company’s ethically and legally questionable decisions and practices.

But I suggest that the problem at Uber goes beyond a culture created by toxic leadership. The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.

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Passenger Right to Record at Airports and on Airplanes? with Mike Borsetti

Passengers have every reason to record airline staff and onboard events–documenting onboard disputes (such as whether a passenger is in fact disruptive or a service animal disobedient), service deficiencies (perhaps a broken seat or inoperational screen), and controversial remarks from airline personnel (like statements of supposed rules, which not match actual contract provisions). For the largest five US airlines, no contract provision–general tariff, conditions of carriage, or fare rules–prohibits such recordings. Yet airline staff widely tell passengers that they may not record–citing “policies” passengers couldn’t reasonably know and certainly didn’t agree to in the usual contract sense. (For example, United’s policy is a web page not mentioned in the online purchase process. American puts its anti-recording policy in its inflight magazine, where passengers only learn it once onboard.) If passengers refuse to comply, airline staff have threatened all manner of sanctions including denial of transport and arrest. In one incident in July 2016, a Delta gate agent even assaulted a 12-year-old passenger who was recording her remarks.

In a Petition for Rulemaking filed this week with the US Department of Transportation, Mike Borsetti and I ask DOT to affirm that passengers have the right to record what they lawfully see and hear on and around aircraft. We explain why such recordings are in the public interest, and we present the troubling experiences of passengers who have tried to record but have been punished for doing so. We conclude with specific proposed provisions to protect passenger rights.

One need not look far to see the impact of passenger recordings. When United summoned security officers who assaulted passenger David Dao, who had done nothing worse than peacefully remain in the seat he had paid for, five passenger recordings provided the crucial proof to rebut the officers’ false claim that Dao was “swinging his arms up and down with a closed fist,” then “started flailing and fighting” as he was removed (not to mention United CEO Oscar Munoz’s false contention that Dao was “disruptive and belligerent”). Dao and the interested public are fortunate that video disproved these allegations. But imagine if United had demanded that other passengers onboard turn off their cameras before security officers boarded, or delete their recordings afterward and prove that they had done so, all consistent with passengers experiences we report in our Petition for Rulemaking. Had United made such demands, the false allegations would have gone unchallenged and justice would not have been done. Hence our insistence that recordings are proper even–indeed, especially–without the permission of the airline staff, security officers, and others who are recorded.

Our filing:

Petition for Rulemaking: Passenger Right to Record

DOT docket with public comment submission form

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David Dao on United Airlines (teaching materials)

Edelman, Benjamin, and Jenny Sanford. “David Dao on United Airlines.” Harvard Business School Case 917-026, May 2017. (educator access at HBP. request a courtesy copy.)

In widely circulated videos, United staff and Chicago security forcibly remove a passenger from his paid seat on an aircraft, injuring him severely. United leadership must decide how to respond to public outcry.

Teaching Materials:

David Dao on United Airlines – Teaching Note (HBP 917027)

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Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment

Edelman, Benjamin, Michael Luca, and Daniel Svirsky. “Racial Discrimination in the Sharing Economy: Evidence from a Field Experiment.” American Economic Journal: Applied Economics 9, no. 2 (April 2017): 1-22.

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.