AI

How Airbnb failed its own anti-discrimination team

Airbnb’s 2015 Smart Pricing algorithm was supposed to be an all-inclusive moneymaker. A win-win. A tide to lift all hosts.

With Smart Pricing, hosts could set a minimum nightly rate and let machine learning do the rest. Though a host may get booked at a lower rate on a given night, the algorithm increased bookings overall. 

Airbnb also created the Smart Pricing tool to address earnings disparities between white and Black hosts, according to Laura Rillos, a senior corporate and policy communications manager at Airbnb. But due to low adoption rates among Black hosts, Smart Pricing did the exact opposite: It made the gap worse than it was before.

• Between July 2015 and August 2017, Smart Pricing widened the earnings gap between Black and white Airbnb hosts in the US by 20%, according to a forthcoming study in the peer-reviewed journal Marketing Science. 

Although the algorithm itself wasn’t biased, its deployment still deepened the racial disparities that Airbnb says it was built, in part, to address. And the company failed to track whether the tool was helping or hurting Black hosts. 

Airbnb now plans to look into the Smart Pricing issue—but for nearly a year, it has owned the tools to do the same kind of analysis the researchers did, if it had wanted to. 

So how did this issue slip through the cracks?

Interviews with current Airbnb employees, academic researchers, and representatives at external organizations point to a company that prioritizes anti-discrimination in its talking points, but not in its spending. 

• Airbnb has a well-respected anti-discrimination team, but it has failed to adequately fund it—even though the company spends billions on marketing and product development and generated $3.4 billion in revenue last year. 
• The team has no Black members and just five full-time workers—compared to an average 10- to 15-person product team at Airbnb. 

An anti-discrimination team member who spoke on the condition of anonymity said the group can barely tackle the items on its to-do list, let alone proactively search for disparities like those presented by Smart Pricing. 

“We’re very much in reactive mode right now—we have no bandwidth to think proactively,” the employee said. “If we had more people, we could do such amazing work, but we don’t. We’re barely above water. We’ve been treading water for years. We’re close to sinking. It’s exhausting.” 

Big picture: Over the last six years, researchers estimate, the average Black Airbnb host could have missed out on an additional $5,196 in earnings due to Smart Pricing—equivalent to over one-fifth of the median net worth for Black Americans, per the Brookings Institution.

Click here to read the full story.—HF

CRYPTO

Borderless bitcoin

Last week, El Salvador made history as the first country to name bitcoin legal tender. This week, Reuters revealed just how much of the digital currency is flowing into the country via cross-border remittances. 

• Compared with traditional methods, blockchain-based remittances are typically faster and cheaper. 

Zoom in: For El Salvador, cross-border bitcoin transfers accounted for $1.7 million in May 2021, up 300% from $424,000 last May. Transfers reached a high-water mark of $2.5 million in March. 

• That’s tremendous growth, but still a small share of total remittances for El Salvador—one of the most remittance-reliant countries in the world. It saw $6 billion in total remittance payments cross its borders in 2019. 
• For comparison, Mexico-based crypto exchange Bitso handles 2.5% of US-Mexico remittances, equal to more than $1 billion per year. 

One potential drawback to using bitcoin for such transfers? Volatility. As of exactly two months ago (April 16), bitcoin’s price was $61,966. Today, it’s hovering around $40,000. Despite that, bitcoin is actually more stable than certain Latin American countries’ fiat currencies, as Rest of World points out. 

Looking ahead: Insider Intelligence Research Analyst Grace Broadbent told us she expects remittances to become blockchain’s most mature payments application over the next five years.—DM

SPONSORED BY LEDGER

Avoid Cryptofomo

“Cryptofomo.” Perhaps you haven’t heard of it. But if you follow tech and finance, you’ve probably felt it. Cryptofomo is the awful feeling you get when you realize that everyone else is getting in on a technological revolution, and you’re missing out.

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VC

Funding recap: Warm weather edition

May 2021 was the third-highest month for global venture funding in the last decade, per Crunchbase, with VCs spending $43.7 billion...behind only March and April of 2021. 

Here are some fundraising rounds that caught our attention over the last six weeks.

Augmented reality: Finnish eyewear startup Pixieray secured $4.4 million in seed funding to develop its adaptive eyeglasses, which zoom in and out. The company only has a prototype at the moment, but expects to ship its first pair in 2023. 

• Pixieray CEO Niko Eiden told VentureBeat that the eyeglasses apply the right correction and focal point, reducing user eye strain and increasing comfort.

Wearables: Apple Watch accessory-maker Wristcam, which makes band cameras capable of shooting 4K images and 1080p, announced it raised $25 million. The funds raised will be used to double its headcount and improve updates and production. 

• The Verge reported that Facebook is developing its own line of camera-equipped smartwatches to compete with Apple.

Space: 3D-printed rocket startup Relativity Space raised $650 million in Series E funding. Relativity is now worth $4.2 billion—without ever having launched a .

• The funds will go toward production of Relativity’s fully reusable, two-stage Terran R rocket, which it hopes to launch in 2024. 

Digital health: Veri, a food intelligence company based in Helsinki, Finland, raised $4 million in funding for its blood glucose tracker. The tracker, in concert with Veri’s app, provides users with real-time feedback on their food choices, giving insight on exercise, sleep, and eating habits.—JM

BITS & BYTES

Stat: Cruise got the green light for a $5 billion line of credit from GM, earmarked for its autonomous shuttle. 

Quote: “The idea is somebody might like a digitally signed version of the code, a bit like plenty of people have asked for physically autographed copies of the book.”—World Wide Web inventor Tim Berners-Lee, in reference to a forthcoming NFT auction of the web’s initial code

Read: A deep dive on lip-reading AI. 

Protect: Ransomware attacks are on the rise against companies of all sizes—even small & medium sized companies aren’t safe from being targeted by cybercriminals. Learn how to protect your biz in CrowdStrike’s ransomware report.*

SPONSORED BY BARRON'S

Go long on a shortage. Leave it to Barron’s—the finance expert’s finance experts—to explain how. If you’re an ETB reader, you know there’s a chip shortage wreaking havoc on industries from automobiles to smartphones. But that same shortage could earn windfalls for your portfolio. How? Barron’s explains it for you here. 

WEIB

• Lina Khan, a staunch critic of Big tech, will be named chair of the Federal Trade Commission, less than one week after the House introduced sweeping antitrust regulation. 
• The UK’s competition authority is investigating Apple and Google’s dominance of the mobile device ecosystem. 
• Amazon has expanded its “Just Walk Out” cashierless tech to a full-sized grocery store for the first time. 
• Sens. Markey and Merkley reintroduced a federal law to ban government use of facial recognition technology, as we reported would happen a few weeks ago. 

FROM YOU

There’s been a lot of tech regulation news recently, which led us to present the Emerging Tech Brew Twitterati with the following prompt yesterday:

@etechbrew

A resounding victory for “Bro, none of the above.”

FROM THE CREW

There’s a lot of talk about what automation will be able to achieve in the future, but what are the robots up to right now?

On June 24, Hayden will sit down with two roboticists to find out. She’ll chat with...

• Ayanna Howard, the current Dean of Ohio State University’s College of Engineering, founder of assistive robotics company Zyrobotics, and former NASA roboticist
• Clara Vu, cofounder and CTO of VEO Robotics, which builds products that enable humans and robots to work alongside one another in a safe way.

Click here to RSVP.

TECH THROWBACK

Kids these days may be asking for mini robots and drones to fly, but in 1997, the high-tech toy on everyone’s mind was none other than the Tamagotchi. The virtual pet, tethered to kids’ bags and backpacks via keychain, was first popular in Japan. Its name translates roughly to “cute little egg.” 

ICYMI

Catch up on the top Emerging Tech Brew stories from the past few editions: 

• Facebook’s smart watch opens up potential “gold mine”
• The Senate and White House plan to supercharge US technology
• A world tour of new crypto rules and regs