[pauloday]

I think he means they're good at regulating problems that affect them directly but they're bad at/don't care about regulating externalities. There are laws in place to protect people who stay in hotels and AirBNB does a good job of emulating those, but there are also laws to prevent hotels from messing up society as a whole (e.g. zoning laws) that AirBNB doesn't emulate well or at all.

[apendleton]

Right, the regulations are meant to protect both the parties to the economic activity and people who aren't parties. The Uber equivalent, I guess, would be that their system can eliminate drivers passengers don't like, and passengers drivers don't like, but they have no incentive (except bad PR) to make sure, for example, that drivers not carrying customers are properly insured should they hit pedestrians. The self-regulatory mechanisms don't give the pedestrians or other non-parties a lever to advocate on their own behalf.

[DennisP]

It looks like the insurance issue is already being solved: https://www.policygenius.com/blog/uber-lyft-and-other-ridesh...

[DennisP]

Does it mess up society when people rent out rooms in their houses?

[ectoplasm]

It's helpful if there are default rights granted by the state that apply to all landlord-tenant arrangements.

[DennisP]

Why wouldn't those apply anyway? Anyone can rent out a room, condo, or a house, just by posting a classified ad, and landlord-tenant law applies. Nobody has to share information with the state under normal circumstances, but if there's a dispute, the courts apply the appropriate law. The same sort of framework could apply to Airbnb rentals.

[ectoplasm]

I agree, it could work. The problem people have is that AirBnB is unregulated. Normally you do have to share rental income. There may also be local regulations prohibiting rental, sublets, short-term rentals, etc.