In a service economy, the idea that the customer is always right seemingly should be even more prevalent. Instead, the reviews available through on-demand services such as Uber and Airbnb seem to be moving in the opposite direction, such that nasty—or even maybe just tired—customers can’t purchase what they want anymore.

On the Uber site, drivers have a means to rate riders, just as riders can rate drivers. When a driver’s rating falls below a certain level, the service contacts that driver, to ensure a sufficient level of service. But when a rider earns a low rating, he or she may just find that no drivers respond to requests for a pick up, leaving the passenger stranded. Similar trends appear to be emerging on Airbnb, such that guests staying at a location earn ratings from renters. If their reviews are poor, they are unlikely to be invited to stay in other residences in the future.

Such reviews have obvious benefits. Airbnb participants don’t want to open their homes to a guest who breaks items or leaves the room a terrible mess. However, they also might have some unintended consequences, especially if they get aggregated with other sorts of data.

First, because there are few rules for how to establish review of customers, drivers and renters can issue negative reviews for virtually any reason. One Uber driver noted that he gave bad reviews to riders who entered the vehicle with “negative energy,” for example. Nor are there any protections in place to avoid negative reviews based on race, gender, or physical disability. Thus consumers might be unfairly discriminated against in the reviews, creating a powerful ethical concern.

Second, the two-sided review system might lead to rating inflation. That is, guests and riders want to earn positive reviews from the providers, so that they can continue using the service in the future. To encourage such positive reviews, they might provide positive ratings of the providers, to avoid any negative retaliation. Accordingly, ratings for the same hotel on the Airbnb site were significantly more positive than those on TripAdvisor, which does not feature any reviews of customers.

Third, customers do not have any control over, or in some cases knowledge of, how their reviews get used. If some entity can combine customer ratings on Airbnb with Uber ratings as well as performance through OpenTable reservations, it would have substantial insights into how and when that customer makes purchases. Whether the customer agrees to such data aggregation or the use of these ratings remains an unanswered question.

Discussion Questions:

1. How are retailers and service providers evaluating their customers?
2. How do you feel about having the tables turned, with them evaluating you rather than vice versa?

 

Source: David Streitfeld, The New York Times, January 30, 2015