Couldn't those cities move to tax the vacation rental industry, though? In developed markets like Paris, a majority vacation rentals are done through agencies

Couldn't those cities move to tax the vacation rental industry, though? In developed markets like Paris, a majority vacation rentals are done through agencies (who manage cleanings, checkins checkouts, quality control, etc.). It would be fairly straightforward for the cities to pass laws to force agencies to get licenses and pay a tourism tax, much like hotels do. Most vacation rental agencies I've dealt with wish they were taxed as opposed to being de jure illegal but de facto tolerated. That uncertainty has made acquiring new properties and investing capital in the business quite risky. That's not to say that the deck isn't somewhat stacked against vacation rentals. There is a hotel lobbie that's dead-set to kill the industry. Unlike the agencies, the hotel people are quite organized (although that's changing in my experience). And there's an even greater threat from the fact that most vacation-rental properties are owned by foreigners who are seen as driving the price up of longer-term rentals because of the new emphasis on the short-term market. I do think that rising rental prices in many urban centers is the biggest short-term danger -- PR and real. At the same time, vacation rentals are becoming more and more necessary to tourism in big cities. E.g., Paris has more than 75+k apartments rented by the week, with occupation rates above 50%. If you made it illegal, there wouldn't be nearly enough hotels to cover those millions of travelers. And enforcing a ban on a per-property basis would be extremely expensive in terms of man-power. My prognosis is that the market matures, the cities find a way to benefit through taxation, vacation rentals become a bit less price-competitive versus hotels because of that taxation, and it grows from an $80b a year market to a $200b a year market [see http://software.homeaway.com/Media/Files/pdf/RezFest2012-BrentBellm.pdf http://software.homeaway.com/Media/Files/pdf/RezFest2012-Bre...]. I know next to nothing about Uber and that business, and I am sure the taxi lobby will do its best to kill it, but in the end one should never underestimate gov't ability to be clever when it comes to finding new revenue through taxation, especially during these times. [I have invested in a couple of companies in Europe in the vacation rental market]