Airbnb Smart Pricing algorithm racial bias

Occurred: May 2021

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The Financial Times reports that a Carnegie Mellon University study has found that Airbnb's 'Smart Pricing' algorithm is exacerbating racial inequality. 

Launched in 2015, the algorithm dynamically adjusts the cost of a night’s stay based on demand and allows hosts to set a minimum price.

However, Carnegie Mellon professor Param Vir Singh and his team of researchers discovered that White hosts appeared to prefer using the algorithm more than Black ones, thereby unintentionally widening existing real-world racial discrepancies. 

Research studies have also discovered that Airbnb secretly collects and feeds users’ personal data into an algorithm that assess whether they are trustworthy enough to make a booking.

Operator: Airbnb
Developer: Airbnb
Country: USA
Sector: Travel/hospitality
Purpose: Determine price
Technology: Pricing algorithm
Issue: Bias/discrimination - race
Opacity: Governance; Black box

Page info
Type: Incident
Published: March 2022