Companies like Uber and Airbnb, the top dogs in the new “sharing economy,” have faced their share of legal troubles. In many ways, this reflects how their business models break the traditional mold, creating challenges for laws that were drafted before such companies even existed and to which legal precedent is rarely a perfect fit. Today’s post looks at how a more traditional legal claim, racial discrimination, gets tied up in the sharing economy’s complexities.

Airbnb (shortened from “air bed and breakfast”) is a website that allows users to list, search and rent lodging from private individuals.  For example, a homeowner may rent out a guest bedroom, or a house while away on vacation. Users also must create profiles with their real names and an appropriate profile picture, both as a way of building “trust” and for security purpose, thus allowing renters to recognize the expected lodger. The problem is it has also been linked to racial discrimination.

On May 17, 2016, Gregory Selden, age 25, sued Airbnb alleging it had turned a blind eye to racial discrimination by its users. Selden, who is African-American, alleges he was told a rental he had inquired about was no longer available, only to see the posting for the room replaced a short time later, again listing it as available. Selden then created two fake profiles for white renters, complete with pictures, and inquired about the room. Both fake profiles were informed the room was available. After Airbnb failed to respond to his complaints, he brought suit in the United States District Court for the District of Columbia. He also started the hashtag #airbnbwhileblack, while quickly went viral.

While this behavior by a hotel or landlord would clearly violate well-established anti-discrimination laws, the nature of the sharing economy raises unique questions. The most basic of these is whether Airbnb should be considered a “public accommodation.”  Under Title II of the Civil Rights Act of 1964, a public accommodation such as a hotel, restaurant, movie theater, etc. may not discriminate on the basis of race. However, sharing economy companies like Airbnb have historically argued they are merely third party accommodators that match individuals who are offering and seeking a similar service, in this case lodging. In addition, Airbnb claims it regularly removes users from its service who have been reported as discriminating on the basis of race, sexual orientation, and other factors.

The case is Gregory Selden v. Airbnb, 16-cv-00933, U.S. District Court, District of Columbia.