Can Airbnb and Lyft Finally Get Americans to Trust Each Other?

But can we trust them?

One student is investigating racial bias in Airbnb.  Here is a Dec., 2016 HBR paper by Ray Firman and Michael Luca, both of Harvard University, on Fixing Discrimination in Online Marketplaces


It begins:

The first generation of online marketplaces, including eBay, Amazon, and Priceline, made it hard for sellers to discriminate. Transactions were conducted with relative anonymity. A user could negotiate a purchase without providing any identifying information until the seller had agreed to the deal. As a New Yorker cartoon famously put it, “On the Internet, nobody knows you’re a dog.” 

Except that platforms—and now their users—do know whether you’re black or white, male or female, human or canine [my emphasis]. And the internet has recently been revealed as a source of discrimination, not an end to it: With their identities uncovered, disadvantaged groups face many of the same challenges they have long confronted in the off-line world, sometimes made worse by a lack of regulation, the salience photos give to race and gender, and the fact that would-be discriminators can act without ever personally confronting their victims.

What happened, and what can we do about it?  Read the article to find out about smarter market design principles to consider.

---

Another article written two years earlier exclaims, How Airbnb and Lyft Finally Got Americans to Trust Each Other.  It argues that he sharing economy has come on so quickly and powerfully that regulators and economists are still grappling to understand its impact (see article above). But one consequence is already clear: Many of these companies have us engaging in behaviors that would have seemed unthinkably foolhardy as recently as five years ago.

We are hopping into strangers’ cars (Lyft, Sidecar, Uber), welcoming them into our spare rooms (Airbnb), dropping our dogs off at their houses (DogVacay, Rover), and eating food in their dining rooms (Feastly). We are letting them rent our cars (RelayRides, Getaround), our boats (Boatbound), our houses (HomeAway), and our power tools (Zilok). We are entrusting complete strangers with our most valuable possessions, our personal experiences—and our very lives. In the process, we are entering a new era of Internet-enabled intimacy.

Do you agree or is this unregulated market only useful for those who are allowed in?