Ashton Kutcher is interrupted by am Airbnb protester at a panel in Los Angeles.
Ashton Kutcher is interrupted by an Airbnb protester at a panel in Los Angeles. Willy Sanjuan/Invision/AP

We now have a foundation to work from on how to remedy racial discrimination in the sharing economy.

This past February, Dyne Suh, an Asian-American law student, fought through a snowstorm to get to her already-booked Airbnb unit in the mountains of Big Bear, California, she was disappointed to find that the Airbnb host had cancelled her reservation. 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.”

Turns out the word that said it all was “racism,” and Barker was duly penalized last week by both Airbnb and California’s Department of Fair Employment and Housing, which investigates civil rights claims. Airbnb and the state agency negotiated an agreement with Barker not only to issue an apology to Suh, but also to pay $5,000 in damages, attend racial bias training, commit to volunteering for a civil rights organization, and take a Asian-American Studies course.

After months of reports about racial discrimination in the sharing economy—particularly (but not exclusively) among the home-sharers of Airbnb—the solution that emerged from this case is a significant milestone. The remedy package is a comprehensive blend of reparations plus education to ensure not only that Suh was justly compensated for her troubles, but also that Barker, who Airbnb also banned as a host, will cease troubling other people of color in the future. It was also a signal to other Airbnb hosts that it will no longer be so easy to discriminate against guests based on race—at least not in California.

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.

What makes The Suh Moment unique is that Airbnb achieved a feat of racial atonement in a much more complicated setting. Sharing-economy companies like Airbnb, Uber, and their ilk have long argued that they can’t control how homeowners and drivers conduct their business. The companies claim they are only a platform that connects users to independent contractors, not their direct employers, and there is a bit of truth there. Airbnb is limited in what it can tell a property owner to do with their personal property, and there is little historical precedent for this business model to inform them otherwise. But that’s certainly not the whole story, and it’s for these reasons that it’s important to acknowledge how Airbnb arrived at  this moment.

The negotiations that produced this unique brand of disciplining were the result of an agreement inked on April 19, 2017 between Airbnb and California’s Department of Fair Employment and Housing. That agreement was more or less a settlement to have the state’s fair housing department drop a complaint it filed against Airbnb in June 2016, based upon a pattern of racial discrimination cited by non-white Airbnb guest users.

Such discrimination complaints were well documented not only in California, but across the country, such that the company got hashtagged #AirbnbWhileBlack last year. Researchers from Harvard University and Boston University confirmed as much in their study on Airbnb host behavior. And then Airbnb’s own commissioned audit last September revealed the same discriminatory practices, causing the company to release a slew of new anti-discrimination policies.

Every state has its own set of rules for governing civil rights disputes, but in California, the Fair Employment and Housing Act states that a company can face liability for a “failure to act” to prevent a customer from being denied housing services on racial grounds, whether that discrimination was intentional or merely an outcome of the circumstances. California also has the Unruh Civil Rights Act, which states that all state residents, regardless of race, are “entitled to the full and equal accommodations ... in all business establishments of any kind whatsoever.”

Both the FEHA and the Unruh Acts make it illegal for anyone not just to deny, but even aid the denial of someone’s rights based on race. The 1997 case Nicole M. v. Martinez Unified School District holds that a company can be held liable for failing to respond to complaints of discrimination or harassment, and the state alleged that’s what Airbnb was doing until the company conducted its internal audit last September.  

Airbnb disagreed with the allegations and the state’s interpretation of California’s civil rights laws and fair housing laws. Its lawyers argued that any penalty should be on the hosts renting out their homes, not the company. This could have been a legal impasse that played out for years between Airbnb and the state, but the two entities found a third way.

For the agreement reached in April, Airbnb agreed to work with the state by committing its employees to anti-discrimination training and additional trainings on how to handle and investigate racial discrimination complaints. The trainings are for Airbnb staff, but the company is extending the opportunity to Airbnb housing hosts to participate as well, free of charge. Airbnb also agreed to have its department that’s in charge of investigating complaints report to California’s fair housing department with data on the outcomes of those investigations and other associated revelations. That’s the structural racism part.   

As for the individual racism—that committed by the hosts themselves—Airbnb agreed to develop “a progressive system of counseling, warning, and disciplines” for addressing rental discrimination. The company is also currently considering creating galleries for each host’s user profile that will provide data on all of the guests that host has rejected, to determine if there is a pattern in the kind of guests he or she denies. The company has also authorized the state to conduct fair housing testing on hosts—like secret shoppers who will attempt to rent units and report back on how they were treated by hosts. The state will be able to conduct fair housing investigations into hosts based off those testers’ reports.

As part of this agreement, Airbnb admits no wrongdoing, not even that it violated civil rights and fair housing rules. And the state agreed not to pursue the legal complaint it filed against Airbnb last June. Instead, the two agreed in principle to cooperate on finding a path forward on combating discrimination. This means allowing Airbnb some flexibility under civil rights laws given that this whole house-sharing economy thing is new terrain that did not exist when the state’s and country’s civil rights laws were first created.

This unique suite of remedies provided the framework for the remedy afforded Suh when she was denied Airbnb services by Barker—the fine, the trainings, the Asian-American Studies course—and by all accounts, Barker was amenable with all of this.

“We are heartened by the Host’s willingness to embrace corrective measures that are forward-looking and restorative,” said Kevin Kish, director of California’s Department of Fair Employment and Housing in a press statement. “The real story is how a charged and painful encounter led to an opportunity for reconciliation between the people involved, and to an opportunity for them to enhance the
public’s understanding of discrimination and civil rights in California.”

Kish also credited Suh for filing the complaint in the first place—an act made possible by the improved complaint processing system forged in the agreement between Airbnb and the state. It not only encourages other aggrieved parties to step forward, but it gives them some indication that their complaint will be taken seriously and justice is possible. This example should open up opportunities not only for other web-based companies struggling with racial discrimination claims (hopefully Uber is paying attention) but also for non-web-based companies and institutions.

Imagine if police officers were subject to the same accountability for their racial misbehavior—not only having to come out of their own pockets to pay damages, but also being committed to Africana and Latinx Studies courses. That should be the minimum.  

As Suh wrote in a Facebook post about the ordeal: “If we want racism and discrimination to end, we cannot keep suffering in silence, and we cannot stand idly by when it is happening to other people of color and other oppressed minority groups. We are in this together.”

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