They're also cheaper than hotels because they allow people to exploit inventory that was otherwise sitting vacant. I agree that it's basically a form of regulatory arbitrage, but I'd argue that adding protections (as they already do for the property owners) is part of their competitive moat.

Also, like all new unicorn companies, they are doing business in an unregulated market. The wild west won’t last thats why they’re in the make as much money as fast as you can mode.

But a lot of people are ok with slightly increased risk for lower prices overall. When you need a sure thing, book a hotel.