Airbnb doesn’t have to be a scorched-earth part of the Peer Economy à la Uber. With hotel rooms often in short supply in many cities, especially in peak-travel seasons, the company could be a nice complement. That hasn’t been the case so far, however, in New York, a city in which the majority of the rentals are reportedly illegal, large-scale landlords keeping their properties off the rental market, going with Airbnb instead, artificially inflating the cost of available apartments. Such practices serve landlords and travelers at the expense of actual New Yorkers. Time will tell if the service can grow beyond these infractions. From an interview with Brian Chesky, the company’s chief, by Tim Bradshaw of the Financial Times:

“Part of Airbnb’s appeal is that each property is different; a backlash against mass production is core to its appeal when compared to that of traditional identikit chain hotels. It can also be considerably cheaper: typically half as much for a private room on Airbnb as one in a hotel, according to one study last year by Priceonomics. Yet it is not just price-sensitive travellers who are switching from hotels to Airbnb: luxury properties are also available, including a Las Vegas penthouse for $1,900 a night, a $1,669 18th-century Umbrian hilltop villa and a 1,000-acre farm in Brazil, with six bedrooms, costing $3,778 a night. With about one million properties to choose from, Airbnb now far exceeds the biggest hotel groups; InterContinental Hotels (IHG), the world’s largest by volume, has close to 700,000 rooms.

Along with Uber, the driver-hailing app, Airbnb is at the forefront of the so-called ‘sharing economy’ — a catch-all term for the growing collection of businesses that are providing additional liquidity to traditional markets by making use of underused assets (Uber for cars, Airbnb for homes).

Airbnb hosts can face problems, such as damages to their property, which led to the company introducing a $1m insurance policy per home after a particularly notorious incident in 2011. Other hosts have returned to find their homes used for sex parties. The company has, though, persuaded millions of consumers that — thanks to its community rating system and identity verification — they can trust Airbnb and each other. However, convincing lawmakers that its short-term leasing service is entirely legal has been a tougher challenge.

The most high-profile case involving regulation has been in New York, one of Airbnb’s biggest markets, where a campaign by Eric Schneiderman, the city’s attorney-general, against short-term letting websites led to a deal when the company handed over details of thousands of listings that the authorities claimed were operating illegally and failing to pay appropriate taxes.”