Studies have shown that racial bias is a significant issue on sites like Airbnb (NASDAQ: ABNB), with hosts discriminating against potential renters based on their profile pictures and names which they associate with African Americans.
This discrimination has lead to some legal trouble for the company. In 2019, Airbnb reached a settlement agreement with three African American women in Oregon who alleged that Black users were being discriminated against on the platform due to the accessibility of users' full names and profile pictures.
In an effort to combat this issue, Airbnb will be experimenting with using initials only for the profiles of potential renters, with full names being given after the reservation is complete. The policy will be tested for "at least two years" in Oregon starting on Jan. 31.
"This update is consistent with the voluntary settlement agreement we reached in 2019 with individuals in Oregon who raised concerns regarding the way guests' names are displayed when they seek to book a listing," the vacation rental company said in a statement. "As part of our ongoing work, we will take any learnings from this process and use them to inform future efforts to fight bias."
A similar system was introduced for user profile photos in 2018, but hosts could still require photos from guests if they so choose.
"Airbnb has no tolerance for discrimination, and we have taken a number of steps to help fight bias," the statement continues. "While we have made progress, we have much more to do and continue working with our Hosts and guests, and with civil rights leaders to make our community more inclusive."
A 2016 Harvard Business School study on Airbnb behavioral patterns, determined that "distinctly African-American names are roughly 16% less likely to be accepted than identical guests with distinctively White names."
In response to the study, Airbnb implemented a handful of changes, including requiring users to agree to a nondiscrimination pledge. Airbnb co-founder Brian Chesky also issued an apology related to the rental bias.
"Bias and discrimination have no place on Airbnb, and we have zero tolerance for them," Chesky said.
Airbnb has faced legal pushback on a wide range of allegedly questionable practices, including failing to properly register rental properties. The company has also faced a number of sexual assault and harassment claims from guests and hosts, and allegedly settled a 2016 rape case in New York for $7 million. Bloomberg has alleged that Airbnb company documents show $50 million paid to settle legal disputes, annually.