The Regulation of Discrimination by Individuals in the Market
26 Pages Posted: 22 Feb 2018
Date Written: February 11, 2018
In an October 2016 working paper, researchers looking at taxi-services Uber and Lyft showed that the cancellation rate for passengers with black-sounding names was more than twice as high as for those with white-sounding names. In response, Senator Al Franken wrote to both companies' CEOs to ask why it was necessary to include passenger names and photos, and what Uber and Lyft would do to end discrimination and better enforce their self-imposed antidiscrimination policies. While both CEOs defended the use of names and photos, they agreed to experiment with other ways to prevent discrimination.
What we have here is a public quick to condemn and demand fixes for discrimination perpetuated by individuals against other individuals, though facilitated and arguably encouraged by the companies synonymous with the on-demand economy. We also see companies looking to mollify public outcry outside of litigation. But eventually the question arises: what does the law say about these objected-to forms of discrimination? Are the types of discrimination the public objects to illegal, for the individuals discriminating or for the companies facilitating it? And if our current antidiscrimination laws fail to cover these objected-to forms of discrimination, should they? Can they?
There are at least two ways the law might go about doing this. First, by directly prohibiting the relevant forms of discrimination. Alternatively, the government might use indirect means, through the enactment of laws that prohibit these on-demand companies from facilitating it. (We see similar indirect methods in the housing market) Indirect means can shape consumers' decision architecture along a spectrum, from providing a nudge toward nondiscrimination to making the ability to discrimination altogether impossible.
There are likely pragmatic reasons to favor an indirect strategy. But there is a qualitatively different concern scholars and courts have intimated about direct prohibitions -- namely, that individuals have a constitutional right to discriminate generally, which covers when they act in the market as consumers. For those who posit such a right, direct regulation is simply off the table. But interestingly, these same scholars seem to think that indirect regulation avoids these issues. I worry about this position.
If individuals have a right to discriminate in the market, there is at least a prima facie case to be made that third-parties (like Uber) will be able to challenge antidiscrimination laws targeted at them by invoking those individuals' rights. The Ninth Circuit's ruling in Fair Housing Council v. Roommates.com highlights this (there-successful) strategy. And more generally, there are many cases where the Court has struck down restrictions on actor A on the grounds that those restrictions infringe on the constitutional rights of actor B.
Given all this, my interest is in whether individuals qua market actors do or ought to have a right to discriminate on the basis of race of gender. I take it that the future of antidiscrimination law hinges on how we answer these questions. Thus, my goal here is to lay the groundwork for thinking through whether, normatively or descriptively, there is such an individual right. Part I sketches high-level considerations that those who want to assert or deny such a right need to grapple with. Part II looks at how the law currently treats discrimination by individuals in the market and how that treatment speaks to whether there actually is such an individual right.
Keywords: legal theory, discrimination, antidiscrimination, on-demand economy, Uber, Airbnb, race, gender, constitutional law, philosophy of law
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