U.S. Markets close in 3 hrs 14 mins

Airbnb Will Let California Screen Some Hosts For Racial Bias

David Z. Morris

The California Department of Fair Employment and Housing announced Thursday that it had reached a voluntary agreement with Airbnb to monitor whether some hosts on the platform act with racial or other forms of bias when choosing guests. Under the agreement, according to DFEH, the office will create fake Airbnb profiles to "pose as prospective renters in order to gather information about whether a host is complying with fair housing laws."

The screening will be limited, though, to hosts with three or more listings. According to The Guardian, that amounts to only 6,000 hosts out of 76,000 in Airbnb's home state.

Get Data Sheet, Fortune's technology newsletter.

The agreement resolves a ten-month investigation by the state, and follows a series of incidents and studies pointing to bias on the platform. Earlier this month, an Asian-American renter chronicled her harrowing last-minute rejection on racial grounds by a host in a remote area.

There have also been anecdotal reports and lawsuits based on discrimination experienced by black renters. A recent study, using methods similar to those outlined in the new California agreement, found empirical evidence to support those claims.

The agreement can be interpreted in at least two ways. On the one hand, Airbnb is getting public help combatting a problem that could turn into an even bigger blotch on its public image. But the deal also marks yet another small but significant step towards greater regulation of Airbnb, Uber, and other companies in the so-called sharing economy, whose competitive advantage arguably hinges on its ability to operate with little oversight.

See original article on Fortune.com

More from Fortune.com