We hope you enjoy the latest installment of the MIT Sloan Experts Podcast series!
The third in our series of MIT Sloan Experts podcasts features Chris Knittel, professor of applied economics at MIT Sloan, talking about his latest research on racial bias in the ride-sharing industry.
Knittel’s research focuses on how Uber and Lyft are failing black passengers and what to do about it. Listen to this brief podcast and find out how Knittel came to his conclusions, what his findings say about drivers who cancel on customers with names that generally indicate they are a person of color, and what takeaways Uber and Lyft can garner from these findings to improve.
From hailing taxis that won’t stop for them to being forced to ride at the back of buses, African-Americans have long endured discrimination within the transportation industry.
Many have hoped the emergence of a technology-driven “new economy,” providing greater information and transparency and buoyed by an avowed idealism, would help us break from our history of systemic discrimination against minorities.
Unfortunately, our research shows that the new economy has brought along some old baggage, suggesting that it takes more than just new technologies to transform attitudes and behavior.
Our new paper, “Racial and Gender Discrimination in Transportation Network Companies,” found patterns of discrimination in how some drivers using ride-hailing platforms, such as Uber and Lyft, treat African-American passengers and women. Our results are based on extensive field studies in Seattle and Boston, both considered liberal-minded cities, and provide stark evidence of discrimination.
The holiday period is a great time for reflection and then behavior modification – often referred to as resolutions. While a bit artificial to the logical engineer, this opportunity can be helpful. This year, my favorite insight came from a former student and employee, Elliot Cohen, co-founder of PillPack.
While thinking about the major aspirational goals for the upcoming year that motivate me to get out of bed every morning with high energy and purpose – such as getting my second book out in March, significantly raising the endowment of the Martin Trust Center for MIT Entrepreneurship, developing the concept of “Inclusive Entrepreneurship” to battle the deep societal alienation we have seen in 2016, and, of course, just becoming a better entrepreneurship educator to my students – there is one underlying enabling resolution that can help me achieve all of them more efficiently and effectively.
In 2015, venture capitalists invested $58.8 billion in the United States, topping the figures for the previous two years by a substantial margin. In 2016 investors have been substantially more cautious, and if the current slowdown is a course correction rather than a blip, it will also be an important test for the nascent equity crowdfunding market.
Many equity crowdfunding platforms have sprung up, including AngelList, FundersClub, Wefunder, OurCrowd andSyndicateRoom.
To succeed, these two-sided markets need enough good investors to be attractive for entrepreneurs to post their ventures, and enough high-quality ventures to be worthwhile for investors to spend time and capital on them. If early-stage capital becomes tougher to obtain, only platforms that are surfacing high-quality deals and matching them efficiently will be able to keep growing.
A particularly interesting feature within the equity-crowdfunding world involves syndication between the crowd and a lead investor. Platforms that have introduced syndication, like AngelList and SyndicateRoom, have done it to address the problem of information asymmetry.
In 2005, I was shopping for an acoustic piano. Back then, piano shopping worked like this: Go to a showroom. Play every instrument. Pick one, and negotiate a price. Have it shipped to your house. Everyone understood that a piano store does not maintain much inventory on site.
Apparel shopping was completely different. Shoppers went to the store, tried things on, then paid and left with their purchase in a shopping bag.