Companies in the sharing economy, like Airbnb, have long argued that they can’t control how homeowners conduct their business, Brentin Mock wrote in a CityLab report.
Turns out they can — when it comes to racist lodging owners, that is, according to a recent discrimination case. And if they don’t, someone else will try and build a better Airbnb.
Allegations of discrimination on Airbnb have been documented for years. Social media blasted the site using the hashtag #AirbnbWhileBlack, where people shared stories of racial bias and discrimination.
Tampa-based startup Innclusive is taking on Airbnb by promoting inclusion and diversity on a new home-sharing platform, according to TampaBay.com.
Entrepreneur Rohan Gilkes, 41, was inspired to start the new lodgings website in June, 2016 after he tried twice without success to book an Airbnb property in Idaho. Gilkes asked a white friend to try, and she was “instantly” approved for the same property and dates.
Gilkes, 41, believed the incident happened because he is black. He complained to Airbnb but got a response that he thought lacked “empathy.” So he turned to social media, TampaBay.com reported:
The next day, he said, he received over 2,000 emails from people with similar experiences using Airbnb, leading him to believe there was a chronic problem of guests being denied access based on race, gender identity, sexual orientation or religion.
The episode spurred Gilkes and fellow entrepreneur Zakiyyah Myers to co-found Innclusive. It is similar to Airbnb but devoted to eliminating discrimination and promoting diversity and inclusion.
In a 2017 study Harvard Business School associate professor Ben Edelman found that a “request from guests with distinctively African-American names is roughly 16 percent less likely to be accepted than identical guests with distinctively white names.”
When UCLA law student Dyne Suh had her Airbnb reservation canceled because the host found out she was Asian, she reported the host to Airbnb.
The host, Tami Barker, claimed it was because Suh wanted to bring extra guests, but her text messages to Suh revealed another motive: “I wouldn’t rent it to u if u were the last person on earth,” she texted. “One word says it all. Asian.”
Barker was penalized by both Airbnb and the California Department of Fair Employment and Housing, which investigates civil rights claims. Airbnb and the state agency made Barker apologize to Suh, pay $5,000 in damages, attend racial bias training, commit to volunteering for a civil rights organization, and take a Asian-American Studies course. Barker was banned as a host on Airbnb — “a signal to other Airbnb hosts that it will no longer be so easy to discriminate against guests based on race,” CityLab reported.
This Airbnb civil rights settlement presents a foundation for how to remedy racial discrimination in the sharing economy, according to CityLab:
This is an important chapter in U.S. race relations because it demonstrates that at least one tech titan is prepared to atone, amend, and correct its practices before racially discriminatory behavior becomes calcified in its currency and business culture. Once Airbnb accepted that the sharing economy was not impervious to racism, they began troubleshooting in a relatively quick fashion. Compare this to several of America’s many other industries and institutions, which historically have waited decades, sometimes centuries, before owning up to racist practices.
Gilkes, a Barbados native, said he is creating technology with Innclusive that will decrease discrimination and recognize a host’s approval patterns. Hosts must commit to treat people fairly. The platform has been working mostly with professionally managed vacation homes or properties — operations run more like a hotel than a person renting a room out of their home.
“We want people that understand we attract a very diverse collection of people from a range of backgrounds,” Gilkes said.
Starting a new tech business is never easy, especially when you’re competing with a tech giant.
Airbnb is expected to exceed 100 million guest arrivals in 2017, up from about 80 million in 2016, Recode reported. In less than 10 years, Airbnb transformed how people travel around the world.
About 25 percent of leisure travelers and 23 percent of business travelers are expected to book a stay on Airbnb at least once, up from 19 percent and 18 percent in 2016, according to Morgan Stanley Research. About 70 percent of room nights for the U.S. lodgings are business travelers.
When it comes to Google searches, Airbnb is approaching the same frequency as hotel and travel-booking brands such as Expedia and Marriott.
Still, Airbnb, valued at $31 billion, is just a fraction of the size of the hotel market — about 6 percent of the hotel industry’s room supply, 4 percent of demand and 7 percent of its revenue, according to commercial real estate services company CBRE. That’s up several points compared to a year ago. But there still seems to be plenty of room to grow.
Increased regulation could stifle Airbnb’s growth, especially in major cities where Airbnb hosts must register with the government. Airbnb is now seeing its biggest growth outside main cities in places like Fort Lauderdale and Sacramento, according to CBRE, Recode reported.
Ben Breit, spokesman for Airbnb Florida, said the company is implementing new practices to decrease discrimination:
Instant Book allows for “immediate booking” without approval for each guest, and the Open Doors policy lets guests notify Airbnb about discrimination. A representative will step in and help them find housing.
Airbnb hosts must commit to “treat everyone in the community with respect and without judgment or bias, regardless of race, religion, national origin, ethnicity, disability, sex, gender identity, sexual orientation or age.” Violators will be banned.
Innclusive isn’t the only home-sharing site trying to reduce inequality, TampaBay.com reported. French startup Misterbnb provides travel options for the LGBTQI community, and raised $8.5 million in June from investors Project A and Ventech. Accomable helps find options for the disabled.
Innclusive has 100,000-plus subscribers and 200,0000 properties, mostly in the U.S. and Europe. It is uploading 12,000 new properties a day, said Kevin Pereira, the company’s chief product officer.
Since it started accepting bookings in May, the company earned $250,000-plus in revenues from rental stays and group travel trips.
This isn’t the first business for Innclusive team. Specializing in subscription-based businesses and tech software, the team has built six other businesses and sold two. Gilkes also owns the D.C.-based house cleaning service, Maids in Black, which earns $2.5 million a year.
Innclusive is looking for venture capital investors to help it compete in the global home-sharing community.