On April 19, following numerous complaints of racial discrimination influencing rental denial for over a year, Airbnb signed an agreement with the California Department of Fair Employment and Housing (DFEH), voluntarily taking actions to address and counter racial bias. Some of these actions include the submission of reports regarding guest acceptance rates based on race and the implementation of fair housing testing. Although receiving public help for its discrimination problem may negatively affect Airbnb’s public image, Airbnb must take in order to remain a reputable hospitality service that fulfills their customer’s needs.

“Airbnb needs regulations to decrease discrimination,” said sophomore Risa Mori. “There is clear prioritization of certain races, which may affect rental decisions.”

Racial discrimination in rental markets has improved over the last few decades, but the recent shift of rental transactions onto the Internet, through platforms such as Airbnb, has allowed smaller landlords to enter the market. This is an issue because most anti-discrimination laws only reach landlords of larger infrastructures, preventing them from discriminating based on race.

Airbnb’s algorithm allows hosts to select or reject a guest solely based on a name and profile picture. This marketing design clearly enables discrimination as people make rental decisions exclusively based on superficial factors, which led to accusations and lawsuits against the company. Benjamin Edelman, Michael Luca and Dan Svirsky from Harvard Business School conducted a field experiment to check the receptivity of over 6000 listings on Airbnb in five metropolitan cities across the U.S.. The guest accounts created to approach hosts were identical except for their either distinctly African American or distinctly white names. Those with African American sounding names were 16 percent less likely to be accepted than those with white sounding names. Likewise, both African American and white hosts discriminated against African American guests. Discrimination was particularly concentrated in hosts that did not have any African American guest reviews. The results of the study indicated that discrimination is growing in Airbnb and other online rental markets.

Similar issues are becoming prevalent in other companies that have customers create online profiles to use their services, such as Uber and Lyft. A study conducted by Yanbo Ge, Christopher R. Knittel, Don MacKenzie and Stephen Zoepf from the University of Washington, MIT and Stanford found that users with names that sounded African American experienced longer wait times for their rides and twice as many cancellations as those with white sounding names on online transportation networks. The shift from offline to online mediums in the hospitality and transportation industries has forced hosts to rely on minimal customer information to make potentially biased decisions.

In the agreement signed by the DFEH and Airbnb, California could test over 76,000 of Airbnb’s hosts for compliance with fair housing laws, through methods that include conducting racial discrimination audits, in which trained individuals create profiles and act as prospective guests to gather information. The hosts that are tested are those with three or more listings and at least one discrimination complaint. For an improved understanding of which demographics are particularly targeted by racial discrimination, Airbnb is required to regularly submit reports of guests’ acceptance rates based on race to the DFEH. To better enforce anti-discrimination policies upon their consumers, the DFEH recommended that Airbnb make their nondiscrimination agreement more visually prominent on the Airbnb website and their mobile app. Additionally, they suggested that the company create a feature where hosts who claim unavailability could be reported. If their rental space is marked as vacant but advertised to a particular customer as unavailable, they will not be able to rent out that space for the days they claimed to be unavailable. Lastly, the DFEH advised Airbnb to create a gallery on each host’s profile that could collect information on the guests rejected by the host. This gallery would be seen by both the host and Airbnb as a means of monitoring and curbing discrimination.

“You cannot have a business the size of Airbnb without regulation,” said business teacher Leslie Robledo. “And it will be good for their public image. It shows that they are trying to do something about the problem, and that they do not condone when people are racially biased.”

Airbnb has also developed actions that the company wishes to take to prevent discrimination. Airbnb has decided to offer bias-awareness and anti-discrimination training for their employees in California, including those in customer support, and to make unconscious bias training available for hosts in California. Airbnb will make the process of submitting discrimination complaints simpler, and provide information to customers regarding how to file a discrimination complaint with the DFEH. Finally, Airbnb plans on developing alternatives to the current method of display for names and profile photos of users to deter bias based on superficial details.

These are progressive strides for Airbnb after the company has been the subject of bad press due to discrimination for over a year. Though the effects of these changes are yet to be seen, Airbnb is prominently engaging in an important discussion about biases on its platforms, paving the way for similar companies to resolve racial discrimination. The company is actively taking steps to halt discriminatory conduct, going beyond simply introducing new changes; it is willing to accept and measure the results of these changes and to implement further actions based on feedback. Unlike many similar companies, such as Uber and Lyft, that attempt to continue plowing through bad publicity and endless allegations of discrimination, Airbnb is thoroughly evaluating their practices and acting responsively to serious customer complaints. Concerns regarding the effect on Airbnb’s public image when accepting government assistance to smoothly facilitate its company procedure are faulty since its public image is already fragile. In order to salvage itself, Airbnb must be willing to commit to resolving customer issues to continue to be respected in the hospitality industry.

“Now that this news is out, people know that Airbnb’s system fed racial discrimination. It might discourage people of minorities against using the service,” said sophomore Risa Mori. “But, because Airbnb is solving this problem, people may now feel safer using it.”

The changes being executed by Airbnb go above the standards for anti-discrimination required by state law, demonstrating the willingness of the company to address user issues. While it will be difficult to eliminate discrimination from a network of hosts characterized by irreversibly internalized biases, Airbnb’s efforts lead the way to more ethical practices and ultimately the expansion of a reputable hospitality resource.