Nancy Leong (Denver) and Aaron Belzer on “The New Public Accommodations: Race Discrimination in the Platform Economy”…

Nancy Leong (Denver)

Nancy Leong (Denver)

Nancy Leong, Aaron Belzer, THE NEW PUBLIC ACCOMMODATIONS: RACE DISCRIMINATION IN THE PLATFORM ECONOMY, 105 Georgetown Law Journal 1271 (2017).

“Research suggests that the Internet has not solved the problem of race discrimination. In a study of eBay auctions of baseball cards, researchers found that otherwise identical cards held by a black hand in a photograph sold for 20% less than cards held by a white hand.  Similarly, prospective buyers are less likely to respond to Craigslist postings showing an iPod held by a black hand compared to an identical ad with a white hand.”

The economic impact and redistributive effect of racism in the platform economy, like ratings systems employed by services companies like Uber or AirBnB that reflect the conscious and subconscious racial biases of their users, can be described in terms of asymmetrical market competition, in that goods and services, such as taxi services or hotel accommodations, are delivered in an asymmetrical manner.  Black consumers do not receive the same benefit for their bargains. 

In addition, the economic impact and redistributive effect of racially biased rating systems can also be categorized as asymmetrical market information about people of color, in that the ‘feedback loop’ caused by biased rankings reinforces the myth of black inferiority.  And racial micro-aggressions like being refused an important service at an important time can cause people of color to withdraw from the economic marketplace, which can be described economically as asymmetrical market rationality.

The question Professors Leong and Belzer ask is whether existing civil rights laws can be deployed not only against racially discriminatory service providers in the platform economy—they can—but also against the larger corporation hosting the platform itself—maybe?

The authors explore civil rights laws designed to protect black people and other protected classes from exclusion and other discrimination in the commercial marketplace.  As far as interest convergence is concerned, removing barriers to consumer competition serves the interest of people of color as well as producers and their investors.  Asymmetrical Market Competition.  White social supremacy, i.e., Jim Crow, apartheid, has been forced to yield to the economic interest of elite whites since long before the Civil Rights Act of 1866 (Sections 1981 and 1982)--which protects the ‘right to contract’ as whites do. 

Using broad interpretations of the Federal Housing Authority Act, the authors argue that the federal courts should consider platform economy corporations to be ‘public accommodations’ and therefore subject also to Title II of the Civil Rights Act of 1965.  The authors acknowledge the difficulty in proving intentional discrimination against platform economy corporations, and also a federal statute courts may rely on to distinguish platform hosts from the individuals who actually provide the service. – DreSmith

From the Article:

Race discrimination by public establishments is nothing new. Indeed, for much of American history, non-white people could not make use of public facilities on an equal basis. Long after the end of legal slavery, many businesses refused to serve black customers or offered inferior services to anyone who was not white. Such exclusion limited economic opportunities for non-white people. They could not travel, transact business, obtain loans, socialize with friends, or participate in public life to the same degree and in the same ways as white people. Moreover, exclusion from establishments otherwise open to the public served as a constant public reminder to people of color that others could, with impunity, treat them as less than equal because of their race.

Federal antidiscrimination law seeks to remedy this problem. Title II of the Civil Rights Act of 1964, for example, prohibits race discrimination by “public accommodations,” defined as entities used by the public, including hotels, restaurants, entertainment facilities, and similar venues. Other federal civil rights laws also function to prohibit discrimination by various public establishments, as do a wide range of state and local laws. Public accommodation laws are critical to the equal participation of people of color in society because they require nondiscriminatory treatment by private parties as well as by the government. Without such laws, trains, airlines, and taxi companies could refuse to transport passengers who are not white. Hotels could refuse to shelter them, restaurants could refuse to serve them, movie theaters and concert halls could refuse to admit them, and health clubs could refuse to enroll them.

But how do public accommodation laws apply to the experience of people like Jamal with businesses like Uber? Uber is one of many businesses that operate within the so-called “new economy” or “platform economy.” There is no authoritative definition of the platform economy…

First, platform economy businesses make money not by providing goods or services per se, but rather by connecting people who have particular goods with people who wish to use or obtain them or people who need particular services performed with people who want to provide them. Second, to facilitate this connection efficiently, platform economy businesses rely on online platforms. We refer to businesses that meet this criteria as “platform economy businesses” (PEBs) throughout the Article…

One such issue, and the subject of this Article, is how existing public accommodation laws apply to race discrimination in the platform economy. Despite many reports of such discrimination, no previous research has considered this question across the platform economy, and it does not lend itself to a simple answer. Although PEBs provide access to facilities that fulfill needs squarely within the concern of public accommodation laws, the laws themselves are sometimes a poor fit for the platform economy business model. Moreover, the online platform used by each business creates additional complexities: laws governing activities in the physical world do not always apply identically to activities initiated in cyberspace.

As the platform economy increasingly displaces traditional businesses, public accommodation law must evolve to provide meaningful protection against race discrimination.

Finally, we note that, although the focus of this Article is race, the scope of public accommodation law also applies to discrimination on the basis of other characteristics. Much of our analysis applies to other categories of identity such as sex, gender, color, religion, and national origin that are commonly protected by public accommodation laws, and we hope that future research will examine discrimination on the basis of these characteristics more closely.

Andre Smith