On Thursday, the New York State attorney general said most Airbnb listings in the city violated zoning and other laws. Officials in California and Pennsylvania recently warned car services like Uber and Lyft that they might be unlawful. And workers' rights advocates have questioned whether the people who provide these services should receive benefits, spurred by recent reports that some Homejoy house cleaners are homeless.
Why have these companies run into so many problems? Part of the reason is that they think of themselves as online companies — yet they mostly operate in the offline world.
They subscribe to three core business principles that have become a religion in Silicon Valley: Serve as a middleman, employ as few people as possible and automate everything. Those tenets have worked wonders on the web at companies like Google and Twitter. But as the new, on-demand companies are learning, they are not necessarily compatible with the real world.
