Here's The Real Reason Governments Are Cracking Down On Uber And Airbnb

04-29-2014 • http://www.businessinsider.com, Zachary Karabell

At issue is a broad subpoena issued by the New York AG last fall, demanding that Airbnb turn over information about its “hosts” (those who list their apartments) in the belief that thousands of them are in violation of the law by acting as de facto unregistered hotels.

Airbnb has challenged the subpoena on the grounds that it constitutes an invasion of privacy of the thousands of people who use its service. Then, on Wednesday, the San Francisco city attorney brought suit against two local landlords, alleging that they illegally evicted residents in order to convert residential housing into short-term rentals advertised on Airbnb and similar services.

The San Francisco case in particular appears to have considerable merit. (According to the City Attorney’s Office, two of the evicted residents were disabled, while the Airbnb-ization of the city’s already painfully squeezed housing market is troubling at best.) A larger issue to be considered, however, is that Airbnb is part of a wave of companies whose business model is inherently disruptive both of existing industries and existing laws. Those industries and many regulators are challenging these new business models, and the outcome is critical to the future arc of our entire economy.