It was the 2015 winter season and Airbnb wished it was doing what it does best: quietly raking in the profits of the most wonderful time of year, when most of us scram to—or ghost away from—our precious families. Instead, Airbnb had a racism scandal on its hands. News media had picked up on a working paper out of Harvard showing that securing a rental on Airbnb was significantly harder for Black travelers. The “trust and safety” mantra at the heart of the company’s culture—which allows hosts to see the names and photographs of potential guests before accepting their request—enabled pervasive digital discrimination.
It’s quite possible that for Airbnb’s Board of Directors, a swatch of mostly white men, the study’s conclusions came as a revelation. But as a dark-skinned, Afro-Franco-American woman and relatively frequent Airbnb guest, an announcement that the sky is blue would have been more surprising. I’ve felt a tight knot in my stomach, right after requesting to book a room, more often than I care to admit. Following my annual pilgrimage to visit my family in the French provinces, for example, I like to decompress with a brief and solitary stay in Paris, preferably in one of the airy Haussmann apartments in the Latin Quarter, close to the metro bouches and the Seine’s sleepy banks—a gift to myself for surviving the trip back to my increasingly desolate hometown. It’s a nice setup if you can get it. But in order to get it, if you look like me, you will also have to put up with being rejected at least twice, without explanation, no matter how stellar your Airbnb ratings from previous hosts.
On the upside, the Harvard team concluded, the source of this discrimination problem was relatively easy to identify and address. To tackle discrimination, Airbnb could simply hide guest names and photographs from hosts at the time of booking. Airbnb already had Instant Book, a feature that automatically accepts requests for vacant dates. This option, the report suggested, could also be used more broadly. In response, Airbnb pointed to an existing zero-tolerance policy for discrimination, and offered the press a generic assurance of its responsiveness to all guest concerns. “Airbnb is one of the most open, trusted, diverse, transparent communities in the world,” a spokesman said. For whom, though, the spokesman did not say.
To Airbnb’s dismay, the public relations crisis was just beginning. A few weeks later, hundreds of Black users took to social media to share their personal discrimination experiences with the hashtag #AirbnbWhileBlack. Dates marked available on host calendars suddenly became busy upon the Black traveler’s request, only to sit unbooked for days after. Other requests were accepted moments later when the same traveler resubmitted using a pseudonym and white profile photo. Others tweeted hosts’ denial messages riddled with racist insults. And this was just on U.S. soil. As the tales poured in from all over the world, Airbnb once more found itself under intense media scrutiny.
It took Airbnb almost a year after the Harvard paper’s publication and the resulting social media firestorm to announce real policy changes. In a solemn email to the Airbnb “community”—the company’s favored term for its hundred million platform users and three million listings across all but five countries worldwide—CEO and co-founder Brian Chesky reiterated the platform’s zero-tolerance policy. The email apologized for Airbnb’s belated response and the harm (racism) its guests had suffered, and laid out four changes it would implement in the future. First, each user would now have to agree to the Airbnb Community Commitment, a promise “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.” Second, with its Open Doors policy, the company pledged to find alternative Airbnb or external accommodations for any guest who reported a booking rejection on the basis of discrimination. Third, in maybe a nod to the Harvard paper’s recommendations, the company promised to make a million of its bookings available for Instant Book by January 2017. And fourth, anti-bias training would be made available to hosts. Hosts who completed the training would get to say so on their profiles.
“We will not only make this right; we will work to set an example that other companies can follow,” Chesky wrote. And, to prove the company’s sincerity this time, Chesky linked to a thirty-two page report that reviewed Airbnb’s existing policies and offered recommendations on decreasing discrimination on the platform.
For this report, Airbnb hired exactly the illustrious and almost certainly over-priced legal heavyweights any halfway decent PR firm would recommend. Start with Eric Holder: former Attorney General of the United States cum equity partner at white shoe firm Covington & Burling. Add Laura Murphy as lead author: accomplished lawyer and former head of the American Civil Liberties Union’s Legislative Division. And don’t forget John Relman: prominent civil rights attorney with expertise in housing and public accommodation discrimination lawsuits. In the report’s opening remarks, the team assured readers that Airbnb and its executives really cared. This reformation, Laura Murphy wrote, was not the corporate lip service variety that would normally trigger her skepticism as a seasoned Black attorney in this field. No, Airbnb was different: it engaged “in frank and sustained conversations about bias on its platform.” What’s more, Murphy went on, “Airbnb is putting in place powerful systemic changes to greatly reduce the opportunity for hosts and guests to engage in conscious or unconscious discriminatory conduct.”
A closer look at the report, however, suggests we ought to take Murphy’s profuse praise with a mountain of salt. For starters, the report is conspicuously mum on the civil rights laws already in place to protect its users from discrimination. Though briefly mentioned in Murphy’s personal opening message, the Civil Rights Act of 1964 and Fair Housing Act of 1968—forbidding discrimination in public accommodations, including inns and hotels—receive no further discussion in any of the substantive policy sections. As for Chesky’s grand apology, it mentions neither statute. Ignoring these existing civil rights laws obfuscates the historical context of Airbnb’s problem. Airbnb’s enabling of discrimination is a continuation of our country’s long history of Jim Crow laws and informal segregation. It took decades of court fights to begin to undo the pernicious effects of these policies. Civil rights laws weren’t created to secure canned platitudes and voluntary assurances from the market: they were created to give folks a day in court, to ensure that they got some measure of material compensation for their harm, to set legal precedents that would protect other people in the same situation.
It’s also highly interesting that the report goes on to reject the most basic recommendation from Harvard’s paper—to conceal guest names and photos during the booking process. Why on earth would the authors fail to suggest that Airbnb implement such an obvious solution? The answer is simple. Airbnb may make a lot of sentimental fanfare about community and belonging, but at the end of the day, profit is king. Today, the company’s highest rumored value hovers around $30 billion, which is the equivalent of the combined GDPs of several countries in which it operates. In order to protect that mind-boggling pile of cash, Airbnb needs to minimize its vulnerability to lawsuits from its customers. One way to prevent your customers from suing you is by actually ensuring that they aren’t harmed by your company’s practices—for example, by putting policies in place that prevent Airbnb hosts from discriminating against guests based on their appearance. But real policy changes entail a certain amount of effort, and they aren’t foolproof assurances against liability. Thankfully, there’s another, much easier way to prevent your customers from suing you: by simply forcing them to sign away their right to take you to court.
It’s for this reason that Airbnb’s Terms of Service include a clause binding its precious community to arbitration. Arbitration is an out-of-court resolution of all disputes, including potential civil rights violations, through a neutral referee. It sounds good in principle: less intimidating, not to mention less expensive and stressful, than a litigation process before a federal judge. Dealing with Chuck, the friendly arbitrator, sounds much gentler than navigating a hostile world of sharklike lawyers and sinister black robes. Sure, Chuck may have been handpicked by Airbnb. And sure, Chuck’s decision-making process may be secretive, and certainly not binding on any future cases. But hey, he wears casual slacks to every meeting! You meet him in an air-conditioned conference room in a swanky building, close to the best food trucks, and he speaks to you in plain English, and everything he suggests is so reasonable. Chuck might be so gentle you won’t even notice your civil rights have been stolen from right under you.
Arbitration in the civil rights realm is troubling for a number of reasons. First of all, it’s not always as cheap as corporations like to pretend. A Public Citizen study, for instance, found a real lack of support for the idea that arbitration is somehow less costly than litigation. Arbitration associations—non-profits that offer a roster of arbitrators—often charge more fees than Spirit Airlines. Not only do you have to pay the arbitrator’s daily fee and the usage fee for the hearing room, you even have to pay for access to the list of biographies from which you choose your arbitrator. The longer the list of arbitrators to select from, the pricier it is. The costs can spiral into the thousands quickly. Who could blame a reasonable person of limited means for bowing out of enforcing their rights because sometimes a lost $200 reservation, and the unquantifiable humiliation of discrimination, just isn’t worth all the trouble and expense?
Handling discrimination outside of the courts also has few upsides. It’s certainly true that federal courts have their limits when it comes to resolving entrenched social ills. Still, courts remain incredibly important, especially in the age of the sharing economy. Civil rights laws were drafted half a century ago, when the economic landscape was very different: as businesses change the way they operate, they also change the way they discriminate. It will take a certain amount of creative reasoning by civil rights lawyers to figure out how these laws can be used to protect minorities—be they people of color, of different genders, of different physical abilities—who are disadvantaged by novel business practices. Silicon Valley’s habit of making mini-capitalists out of all of us raises important legal questions. For example, Airbnb is not quite a landlord, though it takes a cut from the temporary landlords it creates. Nor is it quite comparable to hotels and inns, though it effectively gives its hosts the tools to create mini-hotels all over the world, takes a booking fee, collects hospitality taxes on the hosts’ behalf, and is more involved in ensuring its guests’ safety than most other booking platforms. How, then, should such a platform be treated under the law?
These are complex questions with no easy answers. To guide consumers, advocates, and the courts, while holding companies like Airbnb accountable, it is even more important that these decisions be parsed in public. Instead, arbitration clauses force all to eschew the courts and submit to privately-held arbitration associations that traditionally tread in corporate law. Through the American Arbitration Association (AAA), for instance, Airbnb forces its community to entrust complex civil rights questions to a roster of ill-prepared arbitrators, none of whom even pretends to hold a specialty in civil rights. Their decisions are largely secret: you can access decisions in the labor and employment field with a paid subscription to an online database, but decisions in civil rights cases are not published anywhere. Where transparency is concerned, Airbnb seems squarely in the camp of “do as I say, not as I do.”
To add insult to injury, arbitration robs us of our greatest accountability tool: the class action lawsuit. Civil rights laws contain provisions through which people can team up to bring suits. Faced with an army of Ivy League lawyers at the service of a Silicon Valley giant, the class action allows plaintiffs to draw strength from numbers. This can make it much harder for companies to dismiss accounts of discrimination as one-offs. And because class actions often promise larger money settlements, consumers can actually target companies where it hurts: the bank. There is no greater deterrent on earth than a threat to profits.
Take the case of Denny’s, the chain of diners that is similar to, but clearly superior to, Waffle House. In 1994, the company faced a barrage of lawsuits from a class of over 4,000 consumers, ready to prove that, as Black customers, Denny’s expected them to pay before being seated, while White customers were trusted to pay after their meals. To make up for its misdeeds, Denny’s paid the equivalent of over $87 million in 2017 dollars. John Relman, listed among the contributors to Airbnb’s report, was one of the plaintiff-side attorneys in the Denny’s case. He’s protected consumers’ civil rights from vicious discriminatory practices, to the tune of a “$17.725 million class settlement for racial discrimination against customers” against Denny’s, and a “$2.1 million class settlement for racial discrimination against guests” against Adam’s Mark Hotels. Ironically, however, Airbnb customers can never avail themselves of Relman’s lawyerly skills in court, precisely because of its pesky arbitration clause.
And unfortunately for the rest of us, there is not much lower courts can do about it. The Supreme Court has made clear, through a handful of corporate-friendly decisions, that federal courts must enforce arbitration clauses in almost every context. Just recently, former Airbnb guest Gregory Selden filed a class-action lawsuit against Airbnb for discrimination, the federal district court for the District of Columbia kicked the case out of court and sent it to be arbitrated individually. This development is depressing, albeit unsurprising, given that Chief Justice John Roberts was one of arbitration’s earliest defenders as a private attorney. Nor will Congress save us by forbidding arbitration in civil rights cases—not so long as the coffers of our representatives are brimming with donations from arbitration-happy corporations.
Naturally, companies like Airbnb don’t subject themselves to the same arbitration provisions as their customers. Airbnb’s arbitration clause, for example—the same clause keeps the “community” out of court if they want to enforce their civil rights—contains an exception that allows Airbnb to bring its own copyright and trademark cases to court. Airbnb self-exempts from civil rights suits because arbitration is good enough for its customers, but heavens forbid it can’t access a real judge to enforce its intellectual property. Here, Airbnb’s logic is plain to see: when the company stands to gain money, it drags people to court. When it stands to lose money, it opts for the cuddlier option of arbitration.
Perhaps we ought to save our praise until Airbnb affords us the same access to justice it reserves for itself. No matter the name-dropping reports, electronic mea culpas, and pinky-swear promises to think about discrimination really hard, Airbnb is at its core a capitalist enterprise. And like its corporate peers in and out of Silicon Valley, its pledge is to profit first. In this instance, profit dictates that submitting to civil rights law is too great a financial liability for too little PR return. As such, Airbnb can never be entrusted to take responsibility for our civil rights.