A Lesson in Corporate Citizenship from the Peer-to-Peer Economy

Everyone does business with strangers. The last time you bought a burrito or watched a movie, you probably gave money to a stranger. Did you stop and think about how trusting you are to hand hard cash to someone you’ve never met? How do you know they will actually deliver the product or service you paid for? How do you know they don’t have chainsaws hanging in their garage and an ice-cooler full of bodies?

That’s crazy right? What burrito vendor is secretly a serial killer? But it’s not so far-fetched in the peer-to-peer economy. In 2009, a Craigslist user went on a killing spree, after luring victims through the “erotic services” section. Just last month, a man was charged with rape on seven counts after allegedly posing as an Uber/Lyft driver to capture trusting victims outside of bars and clubs. Late last year, three Airbnb hosts were charged with murdering their guest.

Something is different about buying products and services from individual strangers online rather than from a big company. The burrito employee at Chipotle is a faceless corporate drone. Sure, they’re technically human, but our interaction with them is so mechanical, it’s easy to forget that fact. In contrast, when we buy something on Craigslist, Airbnb, or Uber, we see the seller for who they really are – actual humans.

The difference is easy to explain. The employee is “written-up” anytime they deviate from corporate procedures. Job security is held to their neck like a knife, ready to end their livelihood if they act out. Deep corporate pockets attract litigation, and hence a methodical effort to create consistent, predictable, safe human behavior. Most employees are subject to background checks, drug tests, and are a part of a highly efficient process. In contrast, the Craigslist user has nothing to lose, other than how fast they can get rid of that old couch.

From a legal standpoint, the peer-to-peer economy raises interesting liability questions. Can and should a peer-to-peer website be liable for serial killers and other crimes committed through their platform? So far peer-to-peer websites have been protected by section 230 of the Communications Decency Act. The Act says that dynamic are not responsible for what users do on the site.

The Communications Decency Act has been interpreted broadly, offering wide immunity to websites like Uber, Craigslist, and Airbnb. In the process, the peer to peer economy has gained substantial advantages over traditional businesses. The platform is immune to liability and the individual users lack the deep pockets to be targets for litigation. They are essentially free from concerns spanning product liability, discrimination claims, torts, and more.

Perhaps the reason these websites have not become the target of regulation is because of the responsible way they’ve addressed irresponsible use of their websites. After the Craigslist Killer, Craigslist removed the “erotic services” section and started monitoring the website for things like illicit drug trafficking. Tinder recently announced a ban against teenage users, eliminating seven percent of their user-base for the sake of child-safety. After an Airbnb host discriminated against an Asian guest, they were forced to pay a $5,000 fine and banned from Airbnb.

What motivates peer-to-peer platforms to engage in these precautions? Their immunity from liability is so broad as to infer other motives. Perhaps they want to avoid public criticism or avoid future regulation. Some commentators have argued for a narrower reading of section 230 that would expose peer-to-peer platforms to more liability. Highly publicized incidences like the Craigslist killer would give their arguments the ammunition they need. Perhaps, dare I say, they merely do not want their services to be used for criminal undertakings when reasonable costs can spare the public of such a harm.  

Whatever the reason, it’s one of few areas of business where a product or service is instrumental to so many horrible crimes, but the corporation so completely escapes liability. The care Uber takes in screening its drivers; the removal of teenagers from Tinder; the efforts by Craigslist to remove prostitution and drug traffic; these are all pro-active efforts to be responsible corporate citizens that surely have a role in avoiding liability, litigation, and regulation through voluntary acts. They set an example worth following.