Airbnb Vows to Fight Racism, but Its Users Can’t Sue to Prompt Fairness

Brian Chesky, chief executive of Airbnb, made a vow this month to root out bigotry from his business.

His online room-sharing company has recently been grappling with claims of discrimination, with several Airbnb users sharing stories on social media about how they were supposedly denied a booking because of their race. The issue came into the open in December, when a working paper by Harvard University researchers found it was harder for guests with African-American-sounding names to rent rooms through the site.

“This is a huge issue for us,” Mr. Chesky said at a company event in San Francisco in early June. “We will be revisiting the design of our site from end to end to see how we can create a more inclusive platform.”

But even as Mr. Chesky promised to stamp out racism from Airbnb, the company’s class-action litigation policy makes it tough–if not impossible–for customers to push the start-up to make any substantive changes on the issue. Airbnb requires that people agree to waive their right to sue, or to join in any class-action lawsuit or class-action arbitration, to use the service.

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The waiver clause can be broadly applied to many issues, not just accusations of discrimination. But class-action lawsuits have been particularly effective legal tools to press companies on their discrimination policies over the years, civil rights lawyers said, which would give Airbnb more cause to wield it as it grapples with the issue. In the past, such suits against Merrill Lynch, Morgan Stanley and Coca-Cola pushed those companies to change hiring and workplace practices.

“Class-action cases have been the only effective way to prove and remedy systemic discrimination because you can’t prove a pattern of behavior with individually filed cases,” said Joanne Doroshow, executive director of New York Law School’s Center for Justice and Democracy, who specializes in civil justice issues.

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For Airbnb, an effective response to discrimination claims is needed to blunt any fallout on its business. The company, valued at about $25 billion, has hosts in more than 34,000 cities and 191 countries and is positioning itself as an alternative to hotels. {snip}

Airbnb’s expansion depends partly on whether people of different nationalities and ethnicities feel welcomed to the platform in the same nondiscriminatory way that they are welcomed at international hotel chains. Two rival room-sharing services, Innclusive and Noirbnb, are now marketing themselves as services that provide inclusive and safe short-term rentals for people of any race or ethnicity.

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