Editor’s Note: In June 2016, the Stanford Center on Philanthropy and Civil Society hosted its third Junior Scholars Forum. The following article covers a not-yet-published research paper presented there. To learn more about the research, readers can contact the paper’s author, Yotala Oszkay Febres-Cordero ([email protected]).
(Illustration by Adam McCauley)
Since its founding in 2008, the online home-rental platform Airbnb has become an exemplar of the so-called sharing economy. Like other companies in that category, Airbnb claims to offer a variety of benefits to local communities. “On the one hand, it’s promoting entrepreneurship,” says Yotala Oszkay Febres-Cordero, a doctoral candidate in sociology at the University of California, Los Angeles. “On the other hand, it’s promoting social solidarity, equality, diversity, worldliness.”
Oszkay investigated whether these stated benefits align with patterns of Airbnb participation in local communities. She created a dataset that merges demographic information from the US Census Bureau, data on nonprofit organizations from the National Center for Charitable Statistics, and rental listings from the Airbnb website. The dataset, which covers nearly 50,000 census tracts, allowed Oszkay to study participation in Airbnb at what amounts to a neighborhood level. Using the dataset, Oszkay developed measures for several benefits associated with using Airbnb. To measure diversity, she created a Blau diversity index (which tracks ethnic and racial heterogeneity). To measure civic engagement, she examined levels of nonprofit revenue and educational attainment. (Other scholars, she notes, have treated those variables as proxies for civic involvement.) Oszkay also looked at median family income and at regional variations in Airbnb participation.
Oszkay’s analysis of these data shows that participation in Airbnb is highest in communities where the levels of diversity and civic engagement are also high. But participation is notably low in communities with high median family incomes and in communities that are homogeneously white or homogeneously African- American. These findings “suggest that there’s some inequality in how [Airbnb] participation is spread,” Oszkay says. Overall, she adds, they present “a conundrum” that reflects Airbnb’s “dual identity, involving both profit-making and social goals.” (In addition, Oszkay discovered that Airbnb participation is unequal across US regions—a finding, she notes, that casts doubt on the company’s claim to promote a “worldly” culture.)
Work by other researchers indicates that racial discrimination, in particular, is a persistent problem for Airbnb. Two scholars at Harvard Business School, Benjamin G. Edelman and Michael Luca, conducted an online experiment that included more than 6,000 hosts. They found that requests from guests with African-American-sounding names were 16 percent less likely to be accepted than requests from otherwise identical guests with white-sounding names. Oszkay also points to #AirbnbWhileBlack, a social media movement in which African-Americans chronicle bad experiences that they have had while trying to use the platform.
Oszkay attributes part of this problem to “guest-host interactions” but observes that Airbnb bears some responsibility for it as well. “There’s discrimination happening, probably, as part of the [company’s] marketing scheme,” she says. “Its outreach is not necessarily aimed at [African-American] communities, because those communities are often not in the most desired travel locations.”
Not all sharing economy platforms exhibit the same kind of tension between economic interest and social aspiration. “There are other forms of ‘shared economy,’ such as CouchSurfing and Etsy, that operate in a way that is more focused on social benefits than on monetary benefits,” says Tawanna Dillahunt, assistant professor of information at the University of Michigan School of Information.
Sharing economy companies, Dillahunt suggests, should take steps to make their services more inclusive. She has done research on whether people from economically disadvantaged groups can benefit from the use of sharing economy platforms. People in that category, she found, are reluctant to provide online systems with credit card information, and they mistrust the user rating tools that are a central feature of many platforms. Dillahunt urges sharing economy providers to develop alternative payment mechanisms and to design rating systems that minimize the potential for discrimination. “As technologies continue to rely on monetary [transactions] and social transactions such as ranking, trust will continue to be a core concern,” she says.
According to Oszkay, the challenge posed by companies like Airbnb—companies that have two potentially conflicting goals—may be more than a matter of trust. “On the housing issue, we see nonprofit organizations and advocacy groups working to ensure that there are certain protections for renters and for hosts,” she says. “[These groups] are working to counteract negative effects that might arise from a company that is, at times, serving private interests more than social goals.”
Yotala Oszkay Febres-Cordero, “Shared Goods Without Shared Identities? The Organizational Authenticity of the Sharing Economy Model in Local Communities,” 2016.
Read more stories by Corey Binns.