Read the Airbnb ChapterCase and answer the following three questions associated with the case:

Airbnb ChapterCase:

Even though Airbnb is at $31 billion one of the most valuable private startups in the world and offers more accommodations than the three largest hotel chains (Marriott, Hilton, and Intercontinental) combined, not all is smooth sailing. In particular, PESTEL factors discussed in this chapter are creating major headwinds for Airbnb. Take regulation, for example. In late 2016, New York state strengthened legislation first passed in 2010. In particular, it is illegal in New York to rent out entire apartments in residential blocks for less than 30 days. (It still remains legal if the renter is living in the apartment at the same time, so "true space sharing" is still possible.) Fines increased to $1,000 for the first offense, rising to $7,500 for repeat offenders. This creates major problems for Airbnb because New York City is by far the largest market for the internet venture, with some 35,000 accommodations available for rent.

The issue for Airbnb is that about one-third of those listings are from hosts with multiple offerings in the same city. In particular, commercial landlords found out that it is more profitable to convert some apartments into short-term rentals and to offer them via Airbnb than to sign long-term rentals with just one tenant, which often fall under some sort of rent control in New York City. Although this tactic increases the landlord's return on investment and profits, it creates all kinds of negative externalities. Neighbors complain about noisy tourists partying all night. Some apartments get ransacked or are used for illegal activities such as drug deals and prostitution. New Yorkers expressed their frustration by scrawling on Airbnb posters: "The dumbest person in your building is passing out keys to your front door!" On a more macro level, some argue that Airbnb drives out affordable rental space in many metropolitan cities where apartments are already scarce. Other cities such as Paris, Berlin, and Barcelona face similar problems and passed laws with stiff penalties, fining offenders over $100,000!

Questions:

1. How was an internet startup able to disrupt the hotel industry, long dominated by giants such as Marriott and Hilton, which took decades to become successful worldwide hospitality chains? Explain.

2. Why is it that PESTEL factors can have such a strong impact on the future of a business? Do you support legislation such as that passed in New York (and elsewhere), or do you think it has more to do with protecting vested interests such as the hotel industry?

3. Are you concerned that the concept of the sharing economy could be abused by unscrupulous "entrepreneurs" and thus give the entire novel concept a bad reputation? Why or why not? Explain.