October 15, 2021 | by Steven Shepherd and Ted Matherly

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Depending on the particular definition used, the peer-to-peer (P2P) economy – where consumers directly exchange goods or services – is worth billions, if not trillions annually, and includes platforms such as Uber, Lyft, Airbnb, Ebay, Etsy, Craigslist, and TaskRabbit, among others. Uber and Airbnb in particular have become synonymous with the “sharing economy” and the mainstream adoption of P2P transactions.

However, are all P2P activities equal in the eyes of the public and law? Many have argued they are not, with systemic racism playing an important factor in determining which “disruptive” and often legally questionable platforms, businesses, and activities are allowed to thrive. Consider the deaths of Alton Sterling and Eric Garner. These men were participants in the P2P economy (selling CDs and loose cigarettes, respectively), and were ultimately killed by police while engaging in these activities.

Are these P2P activities appreciably different than Uber drivers illegally making airport runs, or Uber itself ignoring various laws?

We (Steven Shepherd and Ted Matherly) considered this question, and our recently published research in the Journal of Consumer Affairs finds that identical P2P activities are seen differently by consumers, depending on the race of the actors participating in it.

In a representative study, we presented participants with one of two scenarios. In one, University of Chicago students were described as selling bootleg sports team t-shirts outside of a game. In the other condition, the sellers were described as being residents of the South Side of Chicago. We reasoned (and found) that this subtle wording difference brought to mind White and Black sellers, respectively.

When the sellers were thought to be Black, this activity was rated as less trustworthy, ingenious, innovative, less reflective of entrepreneurial spirit, and as something not to be encouraged, as compared to when the sellers were thought to be White. In other words, the same attributes that are often ascribed to various “disruptive” P2P activities such as Uber and Airbnb were relatively less likely to be used to describe P2P activities by Black sellers.

This is important, because having legitimacy in the eyes of the public is critical to the adoption and normalization of any behavior. We found that various other P2P activities, such as reselling items and providing services without proper permits or storefronts, were seen as less legitimate (i.e., less normatively acceptable and less approved by others) when they were said to occur in a predominately Black community as opposed to a White community.

We also varied whether or not these P2P activities were described as either adhering or not adhering to laws and regulation. Notably, the activities were seen relatively favorably when carried out in a predominately White community, regardless of whether or not they were legal. When the exact same P2P activities were said to be conducted in a predominately Black community, they were seen as having less legitimacy. In fact, it was necessary to say that the P2P activities in a predominately Black community followed the law in order to simply be seen as having the same social approval as illegal P2P activities in a predominately White community. 

We further reasoned that the different and often interchangeable terms to describe a P2P activity might, given their history, have different associations with race and influence people’s perceptions. Specifically, we found that describing P2P money lending as a “side hustle” led people to think that more Black people participated in it, and rated it as less legitimate, compared to when it was described as part of the “sharing economy.”

Finally, we analyzed newspaper articles on the topic of side hustles and the sharing economy. In this popular usage, we found that the term “side hustles” had higher association with Black people and weaker associations with legitimacy. However, Uber’s use of “side hustle” in a recent marketing campaign appears to have given the term “side hustle” more legitimacy. 

Through this research, we provide empirical evidence for the kinds of psychological processes that may help explain biases in how different P2P activities are treated depending on other associations with them, such as race. They also illustrate the various challenges and barriers to legitimacy faced by Black P2P activities and transactions, which might be called “innovative,” “ingenious,” and “entrepreneurial” if they instead originated from Silicon Valley, a university campus, or some other place more often associated with White people. 

Read the full article: link

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