Sharing Economy Means Reallocating Risk


Home-sharing service Airbnb got some negative press this week with reports suggesting that a number of users have faced racial discrimination when attempting to use the service.  In one particular incident, a North Carolina homeowner used a racial epithet in denying a rental request he had initially accepted, saying he initially thought the request came from the other person in the user’s profile picture.

The reports prompted CEO Brian Chesky to tweet: “The incident in NC was disturbing and unacceptable. Racism and discrimination have no place on Airbnb. We have permanently banned this host.”

Harvard University researchers also found pervasive racial discrimination among Airbnb users in a study published in January.

Fellow “sharing economy” site Uber has positioned itself as an alternative to discrimination on the part of taxi drivers.  But Uber has faced controversy—and high-profile lawsuits—over its labor practices, avoiding overtime and minimum wage laws by classifying its drivers as independent contractors rather than employees.

Uber and Airbnb have positioned themselves not as service providers but as Internet platforms for connecting service providers with customers. Broad-based legal immunity for Internet platforms acting as publishers is undoubtedly an important consideration in that positioning.

But it’s unclear how longstanding consumer protection doctrines providing heightened protection for users of common carriers or places of public accommodation mesh with that broad-based immunity—just as courts are struggling with how to match older labor and employment law with newer work arrangements in the sharing economy.

Banning individual users from sites is a step, but Airbnb and other sharing economy sites, sooner rather than later, will have to be part of a broader public policy conversation about how longstanding rules concerning risk allocation and corporate accountability apply to companies providing traditional services in innovative ways.