I looked it up. Sending a regular smallish package (2 kg, 35 x 25 x 10 cm, think small laptop) from Germany to NYC is about 25 EUR, now only available for gifts under 100 EUR. Sending it as express, which is what businesses now apparently have to do, is about 80 EUR.
> Since originally writing this blog entry in 2021, we have increased our salary a few times, and it now stands at $207,264. We have also added some sales positions that have variable compensation, consisting of a lower base salary and a commission component.
One exception, for sales. I don't see how they could have done it differently.
We have a "one rate per level" rule. The rates are published, and so are the definitions of the levels, and everyone's level (i.e. indirectly you can know everyone's salary)
Worked great, untill we started to look for sales. Doesn't work. They only know incentive-based schemes.
So now they have an incentive-based scheme just for the sales, which is (essentially) budgetted from their stock-option package (that everyone gets). I.e. they benefit from growth a little bit earlier and directer.
If we hadn't done that, we wouldn't have a sales department.
I argued this in the previous discussion about oxide’s compensation structure: I disagree that sales must be commission based. Yes, finding sales staff that are willing to work for a salary and equity shrinks the pool but the same is true of engineers willing to work for a flat rate across the company.
Sales might seem mystical and magical to engineers but it isn’t. A small company with a small sales team can absolutely work without commission. Yes, it is harder, but it is not impossible. The carve out for sales undermines the ideas behind a flat salary structure. Just because we can measure a sales person’s contributions in dollar amounts does not mean we must measure it in dollar amounts. Sales is as much about the partnerships between sales people and product/engineering, why aren’t all the people who work on a deal getting commission?
I’d go as far as to argue that oxide is in the perfect position as a big-ticket long-cycle business to abandon traditional sales commission structures. They take on all the negatives (sales people overselling to get commission) with no benefits. There are other ideas. Company wide bonus based on sales made during the year?
> Just because we can measure a sales person’s contributions in dollar amounts does not mean we must measure it in dollar amounts.
I don't even know if we can.
Yes, you can measure the number of deals signed they called dibs on. But:
1. You don't know if the salesperson earned it, or the whole product. There's a baseline demand driven by the whole company. This is the whole old argument that nobody can prove that ads work; you just can't pinpoint the purchase decision to exposure to an ad. So yeah I guess you can make your salespeople compete against each other and reward the one who stochastically floats to the top while punishing others. Sounds like such a fun workplace, I thought everyone agreed Microsoft's rank system sucked.
2. Several times I have witnessed salespeople selling non-existent, non-planned, functionality and forcing the rest of the company into crunch mode to not have a major client semi-publicly end the contract early. You're often just rewarding the biggest liar while everyone else has to cover up for their shit. Once again, sounds like such a fun workplace.
It comes down to, competitive sales is a cancer, and you're choosing to have it.
> Just because we can measure a sales person’s contributions in dollar amounts does not mean we must measure it in dollar amounts.
This is the fairest form of compensation. It's unfortunate that engineering contribution cannot be measured the same way. If we could engineers would all be getting a nice pay hike.
It's still just a market. You've got to make offers that people will accept. It's mostly silly to try to come up with some objective theory of value, except in the context of what potential employees will consider to be fair, which is right back at "you've got to make offers that people will accept."
Basing compensation on supposedly objective things like "the dollar amount a sales person brought in" might be important to a given pool of potential employees, but resist the temptation to think of it as objectively determining the value of the employee's work. Remember that all you're doing is making offers that people will accept.
Only if the salesperson also implements & supports the things they sell. Selling false promises of something the rest of the organization has to fulfill is not fair -- but that's the way to the biggest commission!
Companies already do layoffs without commissions. They are always optimising to reduce salaries and increase profit margins. And its not "some number". Its the amount of $ brought in. Thats what companies care about.
Yes, but sales reps have very specific targets and sales managers have no problem routinely letting people go if they miss those targets. It really is a somewhat different situation from engineering--although projects, for example, certainly get canceled and teams let go. There's a more direct correlation to quarterly revenue/margin input in the case of sales.
But its a more transparent system. Right now no-one has any idea if they get laid off or if they are being underpaid. I think the overall compensation would likely go up if you are good at your job.
either you have a rule or you dont. the moment you start to do exceptions this will call for more down the road.
there is tangible reason for sales to be commision based. you could say its just like another regular position. An engineer can also be a sales multiplier if they improve a product yet they dont get a commission. Same thing. Having boots of the field is no justification.
How is this not exactly the same in engineering though? Performance reviews at top tech companies are pretty much designed to identify the super high performers and shove massive bonuses and equity grants their way.
And those equity grants are effectively as good as cash, since they are publicly tradable stock.
It's pretty fundamental to the personality of people in sales to be driven by getting the sale and getting compensated based on the deal size. If you remove that carrot, it just doesn't work. Some sales people will make millions, some will make nothing.
How come it works for basically every other job on this planet? Developers aren't paid per feature implemented/bug fixed, and we still do those things, how come sales people are unable to do things for a fixed monthly salary?
>, how come sales people are unable to do things for a fixed monthly salary?
You have to separate out 2 different ideas of the "theoretical idealized salesperson that works for fixed salary" -vs- "real-world salesperson that works for variable commissions".
The businesses that have attempted to pay fixed salaries for salespeople end up attracting incompetent salespeople who can't sell. They become a negative cost on the company's payroll because they can't bring in any revenue. In contrast, the high-performance salespeople (the "rainmakers") are attracted to the variable high-commission, because they know they have the hard-to-find skills to actually sell and bring in the money. If a salesperson has the skills to get a customer to sign a contract and pay money, they have the leverage to get a percentage of that.
Developers, db sysadmins, tech support staff, etc are not in situations to directly influence and shake the hand of a new potential customer and convince them to write a check.
I do know that (I myself also worked in sales for a short stint, unrelated to software though), what I don't understand how these magical "sales people" apparently can't work for a fixed salary when literally everyone else can. Apparently the rest of us can do high quality work without being paid for each feature/bug fixed, yet these individuals cannot?
> Many top salespeople have a zero base salary.
Hmm, probably true in some places, but here (Spain) that wouldn't even be legal. When I worked in sales we had minimum wage + commission, but I'm sure the salary would be 0 if they were allowed to set it up like that.
> Hmm, probably true in some places, but here (Spain) that wouldn't even be legal. When I worked in sales we had minimum wage + commission, but I'm sure the salary would be 0 if they were allowed to set it up like that.
In the United States having "zero base bay" is hypothetical. If a full-time employee had no commission payouts they'd be compensated minimum wage as necessary to comply with laws.
Sales jobs often come with a warm-up period with either a higher base salary or they get paid part of their commission target for a number of months regardless of how many sales they make.
> what I don't understand how these magical "sales people" apparently can't work for a fixed salary when literally everyone else can
It isn't that "sales people"[0] can't work for a fixed salary. The good ones just won't because they can find another employer that will pay commission, and they know they will make more with commission than without.
Employers will pay commission because that's how you attract the best sales people, and the best sales people are worth orders of magnitude more to their business than average sales people. Despite how much they earn, in general and compared to their average peers, the best sales people don't cost orders of magnitude more (5x is a more typical spread in tech sales.)
The advantage of 100% commission -- where it is legal -- is pretty obvious from the employer's view point. The company only pays for production. These sales people are commonly (but not always) independent contractors. The benefit for the sales person is a little less obvious, but, generally, they have more autonomy, a simpler comp plan without any caps, and earn more per dollar sold than they would on a base + commission plan.
> the rest of us can do high quality work without being paid for each feature/bug fixed, yet these individuals cannot
Yes they can not. It is not high quality work but high quality results for sales guy. Developer work is complete once service deployed. It wouldn't be developer failure if user volume doesn't reach x thousands per day on their web service. It would definitely be salesman failure sales does not reach x dollars in certain duration.
Developer equivalent of sales would be to say "I have distributed x sales brochures and call x number of clients this month. My job is done."
It's not that they're unable to; it's that the field attracts people who are financially motivated and other companies have compensation structures that reward personal performance.
Top salespeople generally won't work for a fixed salary because they want to make as much as they can, and the way they do that is by having as much of their compensation tied to personal performance as possible.
I personally think more engineers/developers should think the same way, but it's also much harder to directly tie job performance to compensation when contributing to a product.
But that's the same no matter if you work in sales, customer support or many other roles, a lot of people just care about the money with little regards to anything else, yet the sales department are the only ones who must have commission?
> But that's the same no matter if you work in sales, customer support or many other roles, a lot of people just care about the money with little regards to anything else,
It's actually not the same for many roles. See the comments from people in this thread alone who scoff at the notion of maximizing compensation. I don't get it personally, but it's not an uncommon thought.
> yet the sales department are the only ones who must have commission?
I think there's a very high likelihood that a salesperson is primarily driven by compensation, and good salespeople will already be working in a commission-driven compensation model elsewhere.
Why would a top salesperson at Dell, HPE, Oracle, or wherever else a hardware salesperson comes from move to Oxide to take less money and completely decouple their compensation from their performance?
Even if your intent is to maximize income in customer support, you often don’t have the market option to do that. I have seen (and even worked at) places where chat support, phone support, and support administrators have a quota of chats, calls, or ticket responses and make bonuses based on how much they exceed their numbers. Unfortunately sometimes that results in people updating tickets several times an hour saying things like “we’re still looking into this and haven’t forgotten you” without actually looking into anything.
One place I worked I tried to move the quota system more towards being the final response on a resolve issue, but upper management didn’t want to ever judge whether an issue was resolved even when the customer said they were happy. They did incorporate an NPS query for every interaction, though, and a multiplier against the volume-based quota. Unfortunately that favored people who were good BS artists when lying to the customer about looking into things.
The fallout from the above paragraph was that quality, caring staff would get punished for actually solving customer problems.
Almost every other role is at least one level removed from putting cash in the company's account, which is what leads to the shenanigans you described with metrics that are a poor proxy for revenue generation (and/or are too easy to game).
Sales is unique because the monetary benefit to the company is mostly objective: If someone closes a $10 million sales contract, that becomes $10 million in revenue.
If a team of developers work together to fix a bug, how would you calculate the revenue value of the bug and how would you distribute that to the team that solved it? Technically the value of a bug is negative because it costs the company, so do you subtract that from the pay of the engineers he worked on it? If 5 people implement a feature that uses a library developed by 5 other people, which was built on the platform team's infrastructure, how do you divide up the commission? It doesn't work.
A $10 million sales contract is objectively $10 million in revenue, sure, but it's silly to attribute that entirely to the sales person just like it would be silly to attribute it entirely to the engineers that built the product or the marketing team that bought billboards.
Because sales are quantifiable and directly mapped to performance.
To get that kind of proportional payback in engineering you'd need very clear financial objectives for a project. I could see that happening in optimization scenarios where consultants are brought in and get paid for whatever they can trim from operational costs.
In fact I’ve seen both tech and manufacturing efficiency consultants whose quotes include $x up front plus monitoring and reporting that shows the efficiency gains. Then rather than taking a closing fixed payment, they get a percentage of the savings to the client over the first six or twelve months.
Freelancers and consultants do absolutely have the option to get paid by the feature. It’s exceedingly rare for internal employees or contract employees though. That means there’s no market competition based on it yet. Some places do have bonuses or even profit sharing. Some senior ICs and many managers across the industry can get equity through either grants or options.
Sales professionals have a lot of different places they can sell things. The market-rate compensation for sales includes commissions. So to get the best sales people, you want something easy and exciting to sell with a good commission structure tied to the sales.
> How come it works for basically every other job on this planet?
In sales it is uniquely easy to identify your contribution since it's literally measured in dollars coming in.
There's no way to quantify that for feature implemented/bug fixed, it would devolve into endless politics.
> how come sales people are unable to do things for a fixed monthly salary?
Sure they are able, but no good sales person is interested. Presumably you'd want to hire the good ones. You can certainly staff a mediocre sales team on a fixed salary, they just won't do much selling.
> In sales it is uniquely easy to identify your contribution since it's literally measured in dollars coming in.
This logic about stops working as soon as you sell something that is not some immediately exchanged mass produced commoditized gadget. Sales people on commission have tons of incentive to saddle the company with demands and imaginary product features they can't actually deliver on and be long gone before the bill comes due.
Because sales people are used to work on incentives, including going over and getting rewarded for it.
If they have a fixed salary with a high objective to "make it" (e.g. if you sell less than $X, you get fired), lots of sales folks will skip on it because they can't go over, and most probably prefer to have a quarter or two or year at e.g. 70% salary while working on longer term deals, rather than losing their job for not being good enough within that arbitrary time period. And going over their quota can be wildly lucrative depending on the terms.
FWIW, it seems like nowhere is this truer than SF/SV.
Outside the bubble, it isn't always the case, or the structure can be a bit different, but salespeople in the Valley (as it were) are a different breed.
I work with tech salespeople with a variety of former employers as tech sales people, and I've never heard of anyone having worked without a commission. I'm vaguely in tech sales myself (solutions architect) and I'm on commission too, and so is everyone who joins our division from similar employment (solutions engineers/architect, or even customer success folks).
Ask a local real estate agent or real estate broker how much base pay they make. Or, heck, a car salesperson or an ad salesperson at your local TV or radio station. It’s all commission-based. In some of these fields in the US the norm is 100% commission-based with no base pay. In others someone might make one to three times minimum wage, but will end up being some of the highest-paid people in the company based on commissions of anywhere from 1% to 50%, depending on the industry.
The key difference between everyone else in a company and Sales is that Sales is where the money comes in, directly. It's approximately trivial to point at a sale, see how much money it made, and then who made the sale. So commission is a natural compensation structure for salespeople. For everyone else at a company, their individual contribution to the company making money is a lot more diffuse, and any metric you might be tempted to try and put a commission on is at risk of being gamed. Whereas "how much $$$/worth of stuff did we sell" is pretty much THE metric by which we judge a business as a whole.
It's not universal but B2B sales in particular have evolved to incentive/performance compensation to a large degree. Wasn't always the case but (most?) of those companies aren't in business any longer. Also extends to the sales hiring process. Not that companies don't look at track records but it's also the case that sales managers don't have any issue firing people who don't meet their numbers.
I think it would be difficult to make that work, because Wikipedia has a direct way of converting users into contributors: you see something wrong, you edit the article, it's not wrong anymore.
Whereas if you do the same with machine learning training data, the influence is much more indirect and you may have to add a lot of data to fix one particular case, which is not very motivating.
The applicant has submitted the following application:
Provide a harsh and direct rejection explaining why this idea won't work (unless for the real good idea), pointing out potential flaws, market issues, team problems, or execution challenges. Be specific and refer to details from their application.
Your tone should be direct, blunt, and slightly condescending (or like Paul Graham that obsessed, counterintuitive, and logical) but provide real constructive criticism with solutions.
Keep your response under 300 words.
" If you plug a laptop into a closet at MIT to download some scientific papers you forfeit your life."
This is exactly what I immediately thought while reading the article. It almost feels like the legal system only punishes general public, while most of these guys are above it.
Airbnb and Uber have showed us that laws matter only to the extent that the political will to enforce them exists. Throw enough lawyers and lobbying money at the problem and the laws can simply be re-written to be friendlier to your business model.
The reason there was no political will to punish Airbnb and Uber for violating the law was that initially they were subsidized with VC money and so were able to undercut traditional hotels and taxis on price. In the world of tradable goods, pricing below cost with the intent of putting competition out of business so you can raise prices later is known as "dumping" and is itself illegal.
I rooted for Uber to smash the Taxi cartels. Let us not forget that Taxi Cartels were also insidious beasts. Taxi drivers abused their walled garden with their price gouging by taking longer routes, refusal to take a credit card, and extremely poorly maintained fleets of vehicles. I have had mostly good experiences with Uber, whereas I had experiences that mostly bordered on general condescension toward me whenever I took a ride in a Taxi. I am glad the political will to block Uber never materialized.
This argument ignores the fact that there were other alternatives to Uber at the time, ones that didn't break the law! Believe it or not, there were multiple ride hailing apps on the iPhone, but none were as great at accumulating capital or breaking the law without recourse.
The laws they allegedly broke were the taxi medallion cartel laws, which were the things keeping taxis terrible by limiting supply and competition. And those laws in general apply to the drivers rather than the ride hailing service. There is also a lot of ambiguity there, e.g. if you have a ride sharing service where people go on the app to find people to carpool with on a trip they'd be making anyway and then contribute gas money, is that a taxi service?
But the taxi services obviously hated the competition and waged a continuing media campaign to paint the renegades as the villains.
The best thing to ever happen to corpo scum was that social media took over most of the news. Now there’s no trusted journalists to write a big article about this kind of stuff, instead folks just defend the corpo scum’s actions and spread lies for them, while the truth is still putting on its shoes.
It would have worked if we didn’t find out the hard way a lot of social media and alternative news outlets weren’t even scummier.
We need good journalism courses with heavy emphasis on ethics and the importance of journalism to democracy.
We also need a way to punish entertainment that passes as journalism (maybe fewer legal protections) and to incentive actual journalism (and find a decent way to distinguish between the two).
Several of those things aren't even necessarily illegal and are the sort of things they shouldn't have had have any reason to do unless they were being targeted by a media campaign or captured government. There is also some dispute about whether some of those even happened or are just mischaracterizations from the media campaign.
It's like saying "well, they weren't only violating the taxi medallion cartel laws, they were also violating laws against evading enforcement of the taxi medallion cartel laws". There is a central cause here.
Move the goalposts any more and they’re going to be outside the stadium. What laws matter to you? I agree there are shit laws but why can uber break them with impunity but individuals are jailed for smoking some fun lettuce?
The question you should be asking is, what do you want to do about it? Throw the people challenging the taxi cartels in prison, or get rid of the laws against fun lettuce?
Something else, I’m not sure what yet. Honestly, I’m not the best guy to ask but I know that I don’t want startups to continue breaking laws with impunity and I don’t want individuals to get imprisoned for stuff they do that isn’t affecting others in a meaningful way.
There isn't really a something else. You have bad laws that are in practice only enforced against the little guy. You could demand they also be enforced against the big guy, but that's hard to do when they're bad laws, isn't really a great outcome because they're bad laws, and its primary benefit would be in service of calling attention to the flaw so the bad laws can be repealed. And then maybe you should just start there to begin with.
Suppose that the status quo is the worst option, the second worst is enforcing the bad laws against the big guys, the best is getting rid of those laws.
Now, that might not be the case. Given the existence of bad laws, having someone who is able to break out of the bad cage might be better than if no one can, but let's consider what happens if we assume that it's worse.
Regardless of how they're ranked relative to each other, you would only pick either of the two worse options over the best if it was easier to do it. But getting bad laws enforced against well-heeled players is actually the hardest thing to do because they're doing something sympathetic and have the resources to fight, which is harder to do than repealing the bad laws.
I don't agree. Getting more comprehensive enforcement of laws in general against well-heeled players is a good thing. We would have a lot less bad law if laws were enforced more evenly, because people would more quickly see their true effects, rather than having to wait until companies exploited the loopholes in enforcement so egregiously.
(I also don't agree that the only problem here is bad laws. Yes, some of the laws that big players break are bad; some are fine. I'm not just talking about Uber here.)
> Getting more comprehensive enforcement of laws in general against well-heeled players is a good thing.
Whether something is good independent of what it takes to achieve it is a separate question from whether that's where you should focus your efforts.
> We would have a lot less bad law if laws were enforced more evenly, because people would more quickly see their true effects, rather than having to wait until companies exploited the loopholes in enforcement so egregiously.
Which is exactly why it's so hard to do it. The status quo is: Pass lots of laws that make everything illegal so that anyone without resources can be brought up on charges if they ruffle the wrong feathers. If you wanted to actually enforce all of those laws, they would immediately have to be repealed or everyone would be in jail. Which isn't in the interests of the people who want to keep them on the books to use for selective enforcement, so they don't enforce them that way in order to keep them on the books.
The consequence is that it takes even more political capital to have those laws rigorously enforced than to have them repealed, because then you have to fight both the big guys who don't want short-term enforcement against themselves and the autocrats who don't want to long-term have the laws repealed, instead of only the latter.
> I also don't agree that the only problem here is bad laws.
When laws are enforced against the little guys but not the big guys, it's usually because they're bad laws, because letting the rich openly get away with literal murder is highly unpopular.
The most significant category of good laws that big companies regularly violate with impunity is antitrust laws, but those also don't often get enforced against the little guy because the little guy isn't even in a position to violate them.
So I get your argument, but by that logic the only bad laws that get repealed will be those that affect big business, and the laws against individuals without resources will still be in place. I think we all agree that it’s unfair there’s a very large difference in enforcement of law between those with resources and those without, but I think to prevent that we need to figure out how to prevent the capture of the government by those with large resources. I could agree in concept that less laws are better for that overall, but also then there’s the question of who benefits from less laws and I bet those with resources will still benefit.
It’s almost like we need to ensure no one has much more resources than anyone else (ya know, workers owning the means of production) so there’s a more level field!
> So I get your argument, but by that logic the only bad laws that get repealed will be those that affect big business, and the laws against individuals without resources will still be in place.
Quite the opposite.
You have a bad law which is only enforced against the little guy. Right now, when it's not enforced against the big guy, stories are written about it to get people riled up, but that's the wrong target.
Right now, when those laws are enforced against the little guy, people say "well they broke the law". Which is true, because everyone is breaking the law all the time, because there are so many bad laws. So what should be happening is, every time they try to enforce a bad law against the little guy, that should be the thing that gets people ruled up -- even if they're guilty. Because everyone is guilty, because the laws are crazy. So get people worked up about that so that the laws can be changed. Don't accept that people guilty of violating bad laws deserve to be punished. Drag the prosecutors through the mud. Flood the legislators with complaints whenever it happens. Use jury nullification and publicize to everyone that it's their right. Get those laws repealed.
> I think to prevent that we need to figure out how to prevent the capture of the government by those with large resources.
This was supposed to be checks and balances and limited government. As soon as you unchain legislators to micromanage the economy, anyone who captures them can shape the law to their advantage and then become rich and use the money to make sure the government stays captured.
The government needs to be constrained from making laws that inhibit competition.
> It’s almost like we need to ensure no one has much more resources than anyone else (ya know, workers owning the means of production) so there’s a more level field!
The words you're looking for are "antitrust enforcement".
> It’s almost like we need to ensure no one has much more resources than anyone else (ya know, workers owning the means of production) so there’s a more level field!
Heh, yeah, I was going to post to add this as well. That is the underlying problem. I don't necessarily think it has to mean "workers owning the means of production" per se, more like "the richest person's wealth cannot be more than X times the poorest" and "the largest participant in a market cannot have more than Y% market share", but the idea is similar. :-)
Why isn't at least one of those things actually addressing (disbanding, regulating, whatever--left to people experienced in policy or with context to have some remediation plan) those taxi cartels' behavior?
The argument is that getting rid of the bad laws is better than enforcing them more rigorously. This can be applied to the laws propping up the taxi medallion cartels as well as the ones prohibiting personal drug use. Then anyone (not just Uber) could compete with them and thereby disband the taxi cartels previously using those laws to constrain competition.
I agree that removing bad laws is good. I think by introducing the second, culturally charged topic (1.) taxi cartels, 2.) recreational drugs) you diminish the possible interpretations of your perspective.
The other downstream conclusions make sense too, but the linkage is more opaque making it difficult to appreciate.
Also hard to acknowledge is--who decides which laws are "bad"? Generally, societal outcomes should test the efficacy (toward some comparably abstract societal good) of laws, which then prompts the legislature to do something between patting themselves on the back and authoring actually effective law.
It's better to ask the question in a different way. We know what bad laws are. They're laws that benefit some interest group at the expense of the general public, e.g. by constraining competition or diverting tax dollars to cronies.
So the question is, how do you eliminate bad laws? This isn't a question of what a hypothetical legislature should do if it was full of good faith actors, it's a question of how to structurally align the incentives of a real legislature with the interests of the general public so that they're inhibited from passing bad laws.
That makes sense but seems like it would only actually be a subset of bad laws. I mainly mean to highlight that it's not a comprehensive way to identify bad law.
> how to structurally align the incentives of a real legislature with the interests of the general public
This seems like a critical nuance that, like you said, needs a structural solution. I have no actual idea, but conceptually this seems like it would eliminate a subset of particularly bad laws and actions (e.g. members of the legislature trading on their insider information) which have outsized, negative outcomes for the public. But we also rely on that very rule making body to essentially self-govern. And such a grass-roots movement of reforms to put the public first seem unlikely given the attitudes and sensationalizing behaviors present in the members of that body.
I avoid politics because of just how disaffecting it is to think about most of these details.
Because more money and special interests are behind fun lettuce smoking enforcement than local taxi companies could put behind protecting their own cartel from interlopers. If the taxi companies had more money to dump on politicians than is poured into drug enforcement, then the priorities would have changed.
Taxi Medallion laws were also a Reputation Engine that was publicly queryable, subject to FOIA laws and generally had easy to search public databases for them, with detailed notes. Sure Uber/Lyft boil that into a "friendly" 5-star UI, but do you have any idea what data contributed to that star rating? Do you always trust the algorithms that compute them from a bucket of metrics you can't directly request?
Sure, Medallion laws had problems, and got Regulatory Captured in some cities to also become terrible Trusts controlling prices that needed busting. But the answer to "fix the Regulation" isn't always "break the Regulation", and the Regulation had a lot of good intent of having public accessible information about drivers and that data not just owned by a single company and locked in their opaque algorithms. It might have been nicer to fix the Regulatory Capture and Bust the Trusts.
> Taxi Medallion laws were also a Reputation Engine that was publicly queryable, subject to FOIA laws and generally had easy to search public databases for them, with detailed notes.
You just landed at the airport and need a cab. You fax your FOIA requests for each of the hundred cab companies in the area, which they're required to provide within 20 business days. Your return flight is in 3 days and it would be nice to leave the airport before then.
> Sure Uber/Lyft boil that into a "friendly" 5-star UI, but do you have any idea what data contributed to that star rating? Do you always trust the algorithms that compute them from a bucket of metrics you can't directly request?
So compete with them instead of banning them. Fund an open source ride hailing app with open data. Don't require anyone to use it. If it's better, they will. If it's not better, why should they be forced to?
> You just landed at the airport and need a cab. You fax your FOIA requests for each of the hundred cab companies in the area, which they're required to provide within 20 business days. Your return flight is in 3 days and it would be nice to leave the airport before then.
If you just landed at the airport, you rely on police enforcement keeping bad actors from having medallions. The medallion itself is the primary "this person is a reputable cab driver". That's also entirely why the Regulatory Capture in some cities was so effective in controlling supply of medallions, because it was city police enforced.
Many cities required taxis to have their medallion number painted on the outside, and there were phone numbers you could quickly call (in the days of payphones even) to get quick information about a medallion or to report a complaint/problem with one.
Today a few cities have updated that external paint requirement (and inside the car medallion papers) to include QR codes for even quicker lookup on modern phones or to even use an app to do nice things like pay for the Taxi without needing to broker/negotiate it. Those kind of technological improvements have kind of gotten lost in the wash of the speed of which Uber/Lyft moved fast and broke things, but were always possible.
> So compete with them instead of banning them. Fund an open source ride hailing app with open data. Don't require anyone to use it. If it's better, they will. If it's not better, why should they be forced to?
The history of taxi companies say that they are only as open as they are forced to be. I never said anything about banning Uber/Lyft. Competition is not the problem; destroying public safety regulations in the name of competition is the problem. I said that Uber/Lyft should have been required to do the same or similar paperwork that medallions represent, that both of their data should be open under the previously existing laws, as a public good. Break the artificial scarcity, sure, give Uber/Lyft a license to "print medallions" if that breaks existing Trusts. But get that data open and available to the public (and enforceable by the public's law enforcement). Neither would want to do that because their rating systems are secret sauce and "competitive advantage", they would need to be coerced by regulations. That's what regulations are for, the public good that competition doesn't care about/can't care about/needs to keep "secret sauce" for advantages.
Let's recap the past: Taxis were borderline unusable in almost all American cities before Uber (except for NYC)
I certainly didn't love their ruthless business practices, but let's not delude ourselves and admit that Uber or Lyft wouldn't exist if they didn't break the laws around taxi medallions.
Sometimes laws do more harm than good (by limiting supply and slowing innovation) and it requires creatively skirting regulations.
Things were always possible to improve the taxi industry. Smartphones had been around a few years. But it would've taken the industry 20 years to implement it correctly. In the same way that rampant music and movie piracy in the early 2000s hastened the development of iTunes and Netflix's subscription model way of doing business.
Uber shows the driver's name, their photo, and has a process for flagging drivers. Public safety is important to their business. As someone who's driven an Uber and Lyft and been through their process, I've seen it firsthand.
It's not like "medallions" worked - I remember driving in multiple taxis in pre 2010 days where the photo DID NOT MATCH UP to the driver. My high school physics teacher who grew up in Brooklyn in the late 1970s told stories about how he learned how to drive by illegally working and driving taxis around as a 15 year old.
Right now, we're just going through the same thing with AI again, and Silicon Valley is applying it's ethos of the past few decades.
There are reasons why in various industries, China is "winning the race", so to speak.
Regulations exist, but sometimes people who creatively ignore the "regulations" can win the tide of the public. It's one of America's best (and incredibly divisive) cultural capabilities.
> Let's recap the past: Taxis were borderline unusable in almost all American cities before Uber (except for NYC)
My experience was very different and "almost all" doesn't feel correct. It's certainly fun hyperbole. NYC the systems worked more than they didn't. In part because of spot lights from famous TV shows and 70s corruption documentaries/news exposes. Most smaller cities the taxis quietly worked with little corruption and a lot of trustworthiness. In the early oughts I had good experiences hailing cabs in cities a lot smaller than NYC that people didn't believe you could even hail cabs in.
Because Taxi regulations were so wildly different from cities, it's hard to generalize what the experience used to be. It varied a lot from city to city and was a massive spectrum, with a few national certainties like some of the big Franchises to help smooth things a bit.
> I certainly didn't love their ruthless business practices, but let's not delude ourselves and admit that Uber or Lyft wouldn't exist if they didn't break the laws around taxi medallions.
In the early oughts, a few cities like Seattle were pressuring the big national Franchise companies like Yellow Cab through a mixture of regulatory body pressure (but not actual laws) and bottom up consumer messaging/volume customer requirements to move to "Computer Dispatch". There was a growing competition in that space, and a bunch of innovation happening between the competitors, including some of the things Uber and Lyft take credit for today because Yellow Cab mostly broke apart in the onslaught of VC subsidization and rule breaking.
I don't think it would have taken "20 years" to implement it "correctly". We don't know because the whole thing got disrupted so sideways by the gig economy. (Which also really didn't care about making the taxi business better, but about making the labor market worse. We should also not forget that breaking the worst parts of taxi medallion laws also broke the good ones that helped build useful labor-side things like taxi driver unions and paid for things like healthcare.)
All I'm saying is that there was a path that this could have all been done under the old regulations, legally. It's a path not taken here, and probably to our detriment. Though I can't prove that just as much as you can't prove that innovations like smarter apps would have taken "20 years" in that other timeline.
> If you just landed at the airport, you rely on police enforcement keeping bad actors from having medallions.
Well that's not going to work. You now have people from outside the jurisdiction having a government they didn't elect cast in the role of their protectors. Instead what happens is the local government protects the incumbents, which is what we've seen in practice.
> Many cities required taxis to have their medallion number painted on the outside, and there were phone numbers you could quickly call (in the days of payphones even) to get quick information about a medallion or to report a complaint/problem with one.
As opposed to the license plates already on all cars?
> The history of taxi companies say that they are only as open as they are forced to be.
People keep trying to regard Uber as a taxi company. They keep claiming to be an app, because... they are. So replace the app with an open source one. Create an independent non-profit to handle payments and maintain a server to hold the driver ratings and take a small cut of the payments to cover its costs. Operate it as a live auction where drivers list how much they'll charge per mile and riders pick a driver based on their rating and price. Publish all the data.
If you do it well, people will use it voluntarily. If you do it poorly, you haven't demonstrated enough competence to be trusted making regulations that people would have to follow even if they're dumb.
> Competition is not the problem; destroying public safety regulations in the name of competition is the problem.
The problem is that incumbents call the things they use to destroy competition "public safety regulations".
> Neither would want to do that because their rating systems are secret sauce and "competitive advantage", they would need to be coerced by regulations.
Not when you can "coerce" them through competition. If people like the ratings system which is more open or the one that extracts lower margins and the app is otherwise fungible with theirs, they don't even exist unless they can be better than the competing system you created to do better, which implies that you failed to actually do better and then they're supposed to win. Which in turn applies pressure on the public system to do better itself, instead of getting captured, because if it gets captured then it becomes uncompetitive and actually has competition.
The only alternative I remember is "black car" services, eg airport limos and the like. But there was very little automation around it; you had to speak on the phone with someone to book, and it was always like 24+ hours out rather than "go to the place now" the way a cab is.
Most taxi services will send a car to your address immediately, no reservation required. Problem is, you have to know the exact address where you want to be picked up, which can sometimes be difficult to determine if you're new in town and/or standing on a street with no obvious sign or address, e.g. on the edge of a large university campus. That's where GPS-driven apps really shine, plus the ability to see the car's location in near real-time, and why I will never be sad at the demise of traditional way of having to call a cab.
Indeed, but I was referring specifically to the charge that taxi alternatives (eg, outside the medallion system) existed pre-Uber. And I think, they did, but only in very limited use cases like airport shuttles, and not with fleets anywhere near large enough to have a car five minutes from anywhere at all times— hence the need to book those things ahead.
Political will shouldn't be required to enforce existing law. If i started a 1 man illegal taxi service it would be shut down even though it has little effect on the community, but saudi vc funded startup wasn't shut down even though it violated laws in every major city. That is a weird asymmetry as a us citizen.
What's really happening here is that the laws are supposed to reflect the political will, i.e. the will of the people, but in many cases they don't, because the lawmakers have been captured by incumbents.
Then if a little guy comes in and tries to challenge them, they don't have the resources to resist the incumbents' pocket government officials and get destroyed. But if a big fish does it, people actually notice if the government tries to enforce stupid laws against them, and then government officials are afraid to do it because the public would not only not like it but actually notice the unreasonableness of the law.
But the problem here isn't that the law isn't being enforced against a well-heeled challenger, it's that those laws exist to be enforced against the little guy, when they should instead be repealed.
So there are two different categories of things here. One is, they ban cannabis and put individuals in prison for it, but then if you pay thousands a year for overpriced health insurance and the insurance pays thousands of dollars for a doctor to ask you some cursory questions and a pharma company to manufacture the drug, you can get a prescription for opioids, which are way more dangerous. But that isn't the big guys violating the law, it's them following a law that they bought and paid for. That's bad in a different way.
The relevant thing here would be that they pass excessive copyright laws, but then Meta violates them and maybe gets away with it because they're doing it in a sympathetic way and the government doesn't want to hamstring emerging industries in their country, whereas if an individual would be sued into oblivion even if the thing they were doing was equally sympathetic.
Because it's not just about the public noticing it, it's about the public noticing it in time to do something about it. If an individual gets sued or arrested, they're immediately screwed and will be under pressure to settle or plea bargain before they're bankrupted by legal fees. But once they do, the case is over. Whereas large companies can fight, or pay lawyers to stall while they wage a media campaign to counter the usual imperious press releases from the prosecution, or use their money to lobby the government while public opinion is in their favor.
I mean there are examples in the same category as well: how many years was it illegally exported from dispensaties between states? New state legalizes? day one the corporate dispensary is stocked which is curious since it takes several months to grow. Also, lots of foriegn capital involved in the industry.
Not just meta, Open AI, spotify, youtube...its become a routine exception and can now be relied upon.
I agree that the legal fees could be a big factor, but it seems cases aren't even filed.
When traveling it’s also so much safer than taxis.
My brother was robbed at gunpoint in a taxi. My wife had to jump from more than one moving taxi to escape. My ex girlfriend too. My Swiss friend had his camera and wallet stolen.
You can have issues with Uber too, but not as frequently because there’s a digital audit trail, you can report them to the platform and the police. The threat of those consequences lead to better behavior.
What's interesting is that in many cities now, Uber and Lyft are in fact more expensive than taxis. And the experience is equally mediocre. The pendulum has swung back the other way. The only thing they have going for them now is the app based convenience, which is eroding as more "yellow cab" type traditional taxis band together and get set up with their own sort of city-specific app.
> What's interesting is that in many cities now, Uber and Lyft are in fact more expensive than taxis.
Sure, agreed.
> And the experience is equally mediocre.
Absolutely not. I regret using a taxi nearly every time I opt for the cheaper option. It's only the "better" choice if you happen to be standing right in front of one. This experience is nearly universal no matter where I travel.
I think people really forget how utterly terrible Taxis were pre-Uber. I have no idea about competing apps these days, maybe they are similar to Uber, but the typical Taxi experience is nearly as awful as it's always been at least in the US.
Uber/Lyft certainly has gotten worse - but at least I can fairly reliably get a car when I need it with reasonable reliability. The rest of the "soft" product or pricing I really care far, far, less about than that simple fact.
> the typical Taxi experience is nearly as awful as it's always been at least in the US
It seems impossible/problematic to generalize the taxi experience to “The US”.
If you’re in a city center, cabs can be far easier. The number of times I’ve ordered an Uber or Lyft and regretted it while watching taxi after taxi drive by has been increasing. But I expect the Chicago loop experience to be quite different from say, the suburbs.
My small rural town of 9000 people had multiple taxi services that poorer people relied on to do even their grocery shopping. We didn't need "disruption"
Tech bros generalizing a negative experience from NYC or SV to the entire US has been so stupid.
> Uber and Lyft are in fact more expensive than taxis.
I doubt that.
I double checked, just to be sure since I paid for taxis for years for a specific trip, each way. Uber is still cheaper TODAY than taxis were when I switched 10 years ago. One way 5 minute trip, Friday 6pm in orange county, ca still under 20$ today.
20$ was a good deal (or ripoff, depending on your attitude) for a taxi in 2015, for the same distance and a variable waiting time. Let's just say it's about equal for sake of discussion. There was no app, but there was a dispatcher you could call. There was no incentive to improve, until then.
Companies have had to adapt and prices have come down. It would no doubt be 30$+ today for taxis, if not for rideshare companies.
I remember calling a taxi 3 hours before my flight to get to SFO. After an hour and four different phone calls to the taxi company, I took BART and barely made it before the counter closed.
The feedback system incentivizes drivers and riders to behave.
This is getting off-topic, but I am curious, why didn't you go with BART in the first place? If you had an hour to call the taxi company and still arrive in time, presumably, you had more than enough time.
I know there are reasons for not going with public transport, but preferring to take a taxi/uber when a train line can get you there in time maybe has more to say about public transport than about taxis. Well functioning rail is typically one of the most effective and reliable way of getting to an airport, and often much cheaper than taxis.
Not OP but many many reasons. If you have the money and you prefer comfort (and/or have kids along) taking a taxi/uber/etc. is much more preferable than dragging several (probably heavy) luggages up and down platforms (elevators may or may not work), walking long paths, etc. especially when you consider the alternative is simply putting luggages in a trunk, sit down and relax, and most likely get there faster. And all of this is before we even talk about any safety issues with BART.
I refuse to take public transit with a checked bag until the NYC subway has 99.9% escalator uptime and escalators at every station, realistically possible with redundant escalators. We will never have nice things as long as we let the trade unions bend us over
It's not really that surprising when the cities are passing laws to try to turn Uber back into the taxi cartel by e.g. making it harder for them to use part-time and on-demand contract drivers. The way you get the price down is by reducing friction, increasing flexibility and supply and taking advantage of efficiencies like people willing to do a dozen rides a week during surge pricing without making it a full-time job. Pass bad laws that make things more rigid and they get more expensive.
Forcing them to have certainty? Yeah, that's a bad law that screws over the workers. There are people who are at home doing chores or making stuff for Etsy or doing some other contract work who would like to leave the app open and then accept a fare whenever there is one, or would like to open the app to see if anyone else would pay them for a trip they were going to make themselves anyway, regardless of whether the app can guarantee back to back fares.
Instead, laws like that cause Uber to set their hours and then they can't switch on and off whenever they please and have to work miserable graveyard shifts or split shifts if that's what they're assigned.
Meanwhile there is nothing stopping anyone from taking a job with contractually guaranteed hours if that's what they want. There are plenty of jobs like that, you don't have to mandate all jobs be like that and screw over anyone who wants something different.
Last time I used curb, the cabbie told me that the curb payment wasn’t working and I had to Zelle him, ended up needing to report the driver to Curb to get my money back. Shoulda taken an uber!
> What's interesting is that in many cities now, Uber and Lyft are in fact more expensive than taxis. And the experience is equally mediocre.
That, of course, was the plan all along.
Such august figures as JP Morgan, Cornelius Vanderbilt, John D. Rockefeller,and Andrew Carnegie all made their fortune by undercutting the competition,
putting them out of business through means legal and otherwise,
and finally monopolizing the markets. https://en.wikipedia.org/wiki/Robber_baron_(industrialist)
You should look at what’s going on in Cancun Mexico with Uber and the taxis right now. Your description in the first sentence is quite accurate.
Your comment also points out the power that regulation has to enforce and protect monopolies. I’m not saying all regulation is bad obviously, but I think we can see exactly what effect it had on the taxi industry, and I’m sure glad that Uber managed to disrupt it.
The problem with Uber is that it's a lose-lose-lose money pit scenario.
Customers pay significantly more, drivers make significantly less, and Uber is still running hundreds of millions in the red. Turns out hiring thousands of devs and dumping absurd capital into... driving people around... doesn't really work.
It really screwed over a lot of regular working-class people. In some European cities getting a taxi license was a serious monetary investment. People took our huge loans for this. This was now suddenly worthless. It's like being told your very expensive university education is no longer accredited, but the student loan still exists. kthxbye.
I'm not saying the existing systems were always good (they weren't), but you need to be willing to overlook a lot of real-world suffering to be "rooting for Uber". Phrases like "taxi cartels" sound nice, but they're hardly neutral phrasings that simplify things to the point of being useless phrases.
And "I'm just going to willingly and knowingly ignore laws I don't like for personal profit" is not a great take-away either. This isn't Aaron Swartz breaking a law as a matter of "civil disobedience" – it's just a plain "how can we make money?"
And where does that leave competitors who are NOT willing to break the law? It's an unlevel playing field; there can be no free market if some people don't need to follow the same set of rules. Uber's actions are fundamentally anti-capitalist and anti-free market.
I always tell the story of this restaurant 18 km from my house. If I order their cheapest 6 euro hamburger they deliver it for free within 30 minutes. If I take a taxi to the restaurant I may have to wait for an hour and it costs about 100 euro and another 100 to get back.
I took a ~20 minute 12km taxi ride just last Monday, and it was about €22. That's in Ireland. Considering fuel, the drive back for the driver, and that taxis have a lot of downtime, that seems like a reasonable price.
You live in Netherlands according to a recent comment; I can't believe taxis are almost 4x more expensive, unless you're stuck in traffic for a long time, but then your burger can't arrive in 30 mins?
And free delivery on €6 food item is almost certainly netting them a loss.
There is no way anybody is making a profit on driving 36 km to deliver a hamburger for 6 euros, and it's a matter of time until whatever faucet of VC money subsidizing this runs dry.
In much of the world the price of food delivery has risen to the level needed to make it profitable, and it's not cheap. I paid around $10 in fees plus Uber's 30-50% markups on the food itself to get a couple of burritos yesterday from a shop a mile down the road.
A 30 min drive would be 7 euro and 3 cent in minimum wage. Then you need a car and you have to fuel or charge it.
The only solution to the riddle I can think of is that (like postal services) they can cleverly combine orders and rarely lose money on delivery. The fast delivery would have to be luck or perhaps the burger preserves poorly?
That the food is absolutely fantastic might also have something to do with it. If they can get food into your mouth repetition is almost guaranteed.
> would you rather go back to that today? really??
I absolutely said said no such thing. There are good ways to change things and bad ways to change things. Allowing a private entity reap huge profits by blatantly breaking rules and screwing people is not a good way to change things.
There was no other way to change things on less than a generational timescale.
If governments don't like it, well, bummer. They were supposed to serve the people, not the incumbent taxi cartels. They failed, so "we the people" routed around them.
Unfortunately now Ubers are exactly the same experience but more expensive/unpredictable. It’s only nicer if you spend more on black and such, which makes it easily double a standard cab fare.
They still haven’t properly digitized, curb sucks ass, I had to report a driver to curb when he made me Zelle him because “curb payment wasn’t working”
Not only was it inevitable, if we were so inclined and willing to use the regulatory pen, we could've simply written into law that for Taxi's to operate, they must be well maintained and must accept all major forms of payment. And yeah, the Taxi industry would've fought it because every company ever has fought every regulation ever no matter how much it stands to benefit both their customers and they them-fucking-selves but companies having a say in how they are regulated is both how a Taxi company would fight this, and how Uber, AirBnb, OpenAI, Meta, etc. blatantly and flagrantly violate the law and instead of consequences, they get fines, and court hearings. So maybe we just shouldn't be allowing that?
It drives me up the goddamn wall how people will say shit like "the Taxi industry needed to be upended" when like... I mean, maybe? But on balance, given all the negative externalities associated with these companies, are they really a gain? Or are they just a different set of overlords, equally disinterested in providing a good service once they reach the scale where they no longer are required to give a shit?
Just... regulate the fuckers. Are you sick of filthy Taxis that break down? Put a regulation down that says if a cab breaks down during a trip, they owe the customer a free ride and five thousand dollars. You bet your ASS those cabs will be serviced as soon as humanly possible. This isn't rocket science y'all. Make whatever consequence the government is going to dispense immeasurably, clearly worse than whatever the business is trying to weasel out of doing, and boom. Solved.
> Not only was it inevitable, if we were so inclined and willing to use the regulatory pen, we could've simply written into law that for Taxi's to operate, they must be well maintained and must accept all major forms of payment.
That was frequently already the case. They were required to accept credit cards but then the card reader would be "broken" and it wasn't worth anybody's time to dispute it instead of just paying in cash.
You also... don't really want laws like that. They're required to accept "all payment methods", which ones? Do they have to take American Express, even though the fees are much higher? Do they have to take PayPal if the customer has funds in a PayPal account? What about niche card networks like store cards accepted at more than one merchant? If not those and just Visa and Mastercard, you now have a law entrenching that duopoly in the law.
> Are you sick of filthy Taxis that break down? Put a regulation down that says if a cab breaks down during a trip, they owe the customer a free ride and five thousand dollars. You bet your ASS those cabs will be serviced as soon as humanly possible. This isn't rocket science y'all.
It's not rocket science, it's trade offs.
Is there a $5000 fine for a breakdown? You just made cab service much more expensive, because they're either going to have to pay the fines as a cost of doing business and then pass them on, or propylactically do excessive maintenance like doing full engine rebuilds every year because it costs less than getting caught out once, and then passing on the cost of that. And even then, there is no such thing as perfect. The cabbie paid to have the whole engine rebuilt by the dealership just yesterday and the dealer under-tightened one of the bolts when putting it back in, so there's a coolant leak? Normally that's just re-tightening the bolt and $20 worth of coolant, but now it's a $5000 fine on top of the $4000 engine rebuild.
The way you actually want to solve this is with competition, not rigid rules and onerous fines. If someone is always having breakdowns then they get bad rating, customers can see that when choosing and then opt for a different driver that costs slightly more -- but only if the cost is worth the difference to them. Maybe it's worth $2 for the difference between two stars and five but it isn't worth $50 for the difference between 4.7 and 4.8. Either way you shouldn't be deciding for people, you should be giving them the choice.
> That was frequently already the case. ...the card reader would be "broken"
I traveled a lot to a smallish town for work before Uber got there and ran into this several times. After the second or third time, I started just saying "well that sucks for you" and starting to leave. Suddenly it would work.
That's true, however we must also keep in mind that Uber (and alikes) happened because regular institutions failed to do this for some reason or another. I won't try to speculate why, because I have no idea (and of course it looks obvious in the hindsight).
There was a demand for safer and more reliable taxis. There was not enough supply for that. Government haven't paid enough attention to the sector. So, naturally, someone came and used that whole situation to provide supply for this demand.
Of course it's not this simple, and there were a lot of other things going on. But if we narrow the scope down to just this, then we can see that the core problem here wasn't Uber, it was that that governments were too slow to react in time.
The solution to that would not have been rabid capitalism just bulldozing over laws because the laws suck and further entrenching that "laws only matter for the poor".
The solution to the pre-Uber state of the taxi industry would be to actually have the regulations authorities enforce the regulation. But it seems across the Western world that having regulations authorities do their job and regulate is like the devil and holy water.
Additionally, in some cases the regulations themselves were crap.
Let's not pretend that the taxi situation was hunkey-dory before big-bad-tech came onto the scene. There's no regulation that says if I call dispatch to request a taxi one has to show up, and "we'll pick you up when we pick you up" was (and is still) a common mode of operation.
In NYC, it was (is?) against the law to hail a black car on the street, even if they were sitting there ready willing and able to drive you, because the taxi cartel got _regulations_ to make it that way.
> In NYC, it was (is?) against the law to hail a black car on the street, even if they were sitting there ready willing and able to drive you, because the taxi cartel got _regulations_ to make it that way.
That's precisely what I meant with "in some cases the regulations themselves were crap". But that doesn't imply the idea of regulation is bad - it is saying that maybe voters should make their voice clear to lawmakers and parties to get stuff changed. Regulation can only be as good or bad as the voters allow it to be.
VC funding allowed them to move quickly enough that they got to a scale where they could afford legal and lobbying protection when challenges eventually happened.
> The reason there was no political will to punish Airbnb and Uber for violating the law was that initially they were subsidized with VC money and so were able to undercut traditional hotels and taxis on price.
That's just a trope. They were initially losing money because they had high fixed costs (developing a platform, spending enough on advertising to get a critical mass of people using it), which are long-term investments. If you only spread the cost of the long-term investment over the short-term sales, they were "losing money" in the early years, but that's how all long-term investments work.
Dumping is when you sell below the unit cost, e.g. paying drivers more than you charge customers, which isn't what they were doing in general. And as long as they weren't doing that, the incumbents could have responded by lowering their own prices (and therefore margins) without themselves losing money on each sale, which is competition working as intended. Unless the competition is too hidebound to accept a reduction in profits in order to stay competitive or otherwise insists on using a less efficient method of operating, in which case they go under.
Part of the reason Airbnb got a pass must be how profitable it was to people who own many properties, despite the harm it does to the communities of people who only own one property.
shouldn't there be a lot of political will from the traditional hotels and taxis, and their lawyers? i can see that the answer is "no", but i don't know why
especially with hotels, i would have expected there to be small enough oligopoly to overcome the freerider problem (taxis are more regional, so i don't expect them to be able to fight an (inter)national company very easily)
> shouldn't there be a lot of political will from the traditional hotels and taxis, and their lawyers?
Yes there is, I am reminded of this every time I take an uber by the yellow cab medallion buyout fee that I’m charged because of the lobbying power of the TLC lobby in NYC
There are a lot more people who own a few properties as investments than there are hotel owners. Even if these people don't plan to rent through Airbnb, the way Airbnb distorts the housing market is still beneficial for their investments. Also, by the time Trump became president Airbnb was already entrenched for years.
The traditional taxi industry was rife with corruption, bad experiences, and poor service in many jurisdictions before uber/lyft. As terrible of a human being that I think Travis Kalanick is, it was only going to take lawbreaking to overcome such a tainted system.
Medallion systems often prevented any competition, sometimes to absurd effect. The number of licenced taxis often didn't keep pace with population growth, sometimes even staying flat. Many drivers didn't own their own medallians then had to rent from owners, often making little money. In my city (Toronto) cabs were often dirty, broken, refused short distance fares (illegal) and smelled of cigarette smoke that was obviously from the driver.
Moreover, I believe Uber fundamentally solved two problems with taxis:
The driver can't scam the passenger. The driver can't set the meter wrong, drive an unnecessarily long route, or just be an outright unlicensed taxi. Instead, the driver maintains a relationship with Uber, and the passenger can preview the fare before committing.
The passenger can't scam the driver. In a traditional taxi, you could theoretically just walk out ("dine and dash" style). The passenger can also make a call to dispatch and not show up for the ride. Instead, the passenger maintains a relationship with Uber, and the driver doesn't need to handle any payments.
> Medallion systems often prevented any competition, sometimes to absurd effect. The number of licenced taxis often didn't keep pace with population growth, sometimes even staying flat.
Meanwhile, in places with sensible rules about taxis and private hire, the only thing that Uber did was make it easier for people to break the rules. And rack up an enormous tax bill that they somehow believed they'd be able to get out of paying.
Then why do people keep using it? It seems like a pretty transactional relationship to me. If drivers aren't getting paid as much as they wanted, they should find another job with a higher price. If passengers are paying more than they wanted, then they should find another way to call a taxi with a lower price.
> they should find another way to call a taxi with a lower price.
like what? Uber's business plan was always about eliminating competition. The company successfully did so by undercutting prices, only to jack them up when they had the market to themselves. There is no Free Market Fairy way to fix that.
It sucked, but not everywhere equally. Meanwhile, Uber rode their one-trick pony (an app), which everyone quickly replicated, all the way to upending taxi businesses worldwide, thanks to their infinite money supply letting them survive long enough in any new market to get the public behind them, which took away support from local regulators trying to keep the market from being gutted by what at this point was a multinational corporation (and technically a criminal enterprise).
Sure, taxi services aren't usually known to be paragons of virtue, but then they weren't that bad everywhere; Uber is just another case of an US org trying to address an US-specific problem and then bludgeoning the entire world with their solution, whether the rest of the planet has such problems or not.
That seems a little dramatic. They never forced anyone to take an uber right? If taxis were so amazing in other countries why would anyone be interested in switching to uber?
The last time I dragged my family into a taxi because of my anti Uber ideology, the driver stank to hell of body odor, asked me to input directions on his phone covered with dried snot from him sneezing with his mouth open, he drove dangerously under the speed limit on the freeway, and it took twice as long to get home as normal.
in my experience, taxi quality varies wildly depending on where you are
in bay area, it absolutely makes sense to invent uber, because the taxis were awful. and in vancouver (canada), they're also awful, and deserve the disruption: they would often tell you it'd be a 40 minute wait, and then just not show up
taxis in new york were and continue to be totally fine. you just stand outside and get in ~20 seconds later, with no hassles or apps. i've been in an uber/lyft a handful of times in nyc, but they're just worse (possibly cheaper, but the subway also gives them stiff competition, and i don't care that much if i'm in enough of a hurry to take a cab)
Vancouver was a great example of the corruption inherent in monopolies. Vancouver had neither Lyft nor Uber until 2020. I heard (internally, when I used to work for Uber) that the reason is that some politicians there had a personal stake in the taxis, so they got a $50 minimum fare passed for all booked rides.
The thing that Uber and Lyft really provided was a surveillance economy to keep both the drivers and riders somewhat in-line. Without it, every ride is an almost anonymous one-shot transaction with almost no recourse on one side, so the game theory suggests that service only has to be good enough that the police aren't called.
Uber is still undercutting taxis in Boston, FWIW. I looked up a ride on Curb (a taxi app) and Uber today, and the prices were $17 and $12, respectively.
Every time we talk about VC money in the last 20 years, we’re really talking about a wealth transfer from workers and the middle class to the rich via the Cantillon Effect. Cheap money enters the system through banks, funds, and corporations, not through wages. The people who get access to it first (asset holders, investors, VCs) deploy it into equities, real estate, and startups before inflation devalues the currency for everyone else.
Post-2008, ZIRP and QE pumped trillions into financial markets, making capital nearly free for those who could borrow at scale. That money didn’t go into raising wages; it went into inflating asset prices. If you owned stocks or real estate, you got richer. If you earned a paycheck, you watched housing and living costs go up while your wages stagnated.
VC was one of the biggest beneficiaries. With bonds yielding nothing, institutional investors had to chase returns, flooding venture funds with capital. That’s how we got an era of insane startup valuations, SoftBank-style mega-funds, and entire sectors built on free money. Growth-at-all-costs became the norm because the cost of capital was effectively zero.
Then COVID hit, and the Fed doubled down—more QE, more stimulus, even lower rates. Another massive wealth transfer. Money printer go brrr, asset prices moon, and suddenly we have SPACs, meme stocks, and a startup funding frenzy. Meanwhile, workers got a couple of stimulus checks, and by the time the dust settled, everything from rent to food to cars was way more expensive.
Now AI companies are running the same playbook that cloud megascalers ran before them—monetizing open-source work while locking out the people who actually built it. Cloud providers took open-source databases, infrastructure, and developer tools, turned them into managed services, and extracted billions in profit without meaningfully compensating the people who did the work. AI companies are now doing the same thing—scraping open-source repositories, academic papers, and public datasets, building models upon it then slapping on proprietary fine-tuning and charging for API access all the while blatantly raising capital by promising to make the same workers they stole from obsolte. All of it built on the backs of researchers, engineers, and artists who never see a dime, but also on the backs of everyone else via the cantillon effect.
Now rates go up, the bubble deflates, and who gets left holding the bag? Not the VCs who cashed out early. Not the bankers who took their fees. It’s the workers, the middle class, the open-source devs, and the late-stage startup employees who thought they had something real. The cycle repeats.
Or is it just "illegal" for an overseas competitor to a domestic industry, in trade disputes?
What is the fine? How many days in jail does the company spend? What portion is its stock diluted by?
We remember the tale of Jeff Bezouis the Wise, who tragically lost his company when he decided he didn't want to buy diapers.com at the offered price, and instead wanted to dump 200 million dollars into selling diapers well below cost until their site folded.
This has always been the case. Laws are only as good as their enforcement. This is why the business class is so aggressive about tearing down regulation until they can wield it as a weapon. Do as I say, not as I do, etc etc
If you as an individual can prevent the enforcement of a law, or be sure that it will not be enforced against you, then it does not apply to you.
Taxis were discriminatory and "uncool" to the point were Uber has saved thousands by preventing drunk driving.
Now if you go out with the boys and get drunk, it's a 30 second casual call to get an Uber and get home.
Live in a neighborhood Taxis are afraid to service，you can either make some extra income working for Uber or use it yourself. When Ubers used as its intended purpose, to basically make a quick buck, it's a lifeline to many low income people .
Say your rents it's going to be late, you can pick up 20 or 30 hours of Uber this month to make it happen. It's not really a career though...
> Say your rents it's going to be late, you can pick up 20 or 30 hours of Uber this month to make it happen.
Maybe... I really don't get how the economics work out here though. If you look at the numbers, it mostly just seems like you're converting car equity into cash via depreciation.
But also, I'd guess that for a big chunk of people who are going to have trouble paying rent with any regularity, they'd have to overpay for their car in the first place to get something that's Uber-appropriate. My car's a couple years too old for Uber now, but is still perfectly functional, and there's just no way the math would work for me to buy a newer car so that I can convert its capital cost into cash via Uber.
It's super dystopian and it creates bad incentives (the harder the underclass is squeezed the better a product it is for the middle class), but I have to agree that gig work is often a lifeline for poor people.
I consider it similar to access to unsecured credit that way - it's easy to feel like "wow this industry is scamming these people it should be illegal" but people without any other backstop will probably need access to unsecured credit sometime and it's better than losing their house/car/job/pet/family etc..
I forgot to mention, Jitney cabs( unlicensed cabs primarily serving minority neighborhoods)came long before Ubers. They're more of less gone now though.
What's better. Taking out a 300% APR payday loan, getting evicted or working an extra 20, 30 hours of Uber.
Maybe to you, but I was broke during and shortly after college. If I could have picked up some gig work when I needed it, that would have been a huge help.
Airbnb and Uber have showed us that laws matter only to the extent that the political will to enforce them exists.
Laws matter to the extent that they don't interfere with actual progress. Laws that would have prevented the LLMs we have today from being developed should be ignored, as should laws requiring us to pay tribute to taxi and hotel cartels.
Respect for the law is going to be an increasingly-hard sell going forward, and that's mostly the lawmakers' own fault. When the law does not respect the people, the people will not respect the law.
The purpose of having an executive branch of government is explicitly to apply the law based on subjective opinions.
There's no purpose of having an executive branch of government separate from the other two branches if not to cushion the inflexible and glacial nature of the other branches of government.
The executive exists to enforce the law the legislature writes primarily to make sure the legislature isn't in charge of enforcing the laws. It's a check on the power of the legislature.
You could still have discretion with the legislature in charge of executing on their own laws. I think countries exist like that, but I don't know enough to say which.
A separate executive is not necessary to have discretion or pardons or flexibility in law. A separate executive is necessary if you want physically different human beings controlling the organizations who enforce the law (DOJ, FBI, etc)
Consider that Judges and the judicial branch of the government ALSO gets to use subjectivity and their own opinion in adjudicating cases. Another check.
The entire point of the Constitution was to put the power of a King in a bunch of different hands, and then tie some of those hands with specific constraints, and then give a couple different options on how to change those constraints over time. Leeway and discretion goes both ways, so Congress does have the ability to further constrain such discretion. A previous president tried to argue he could choose to not spend money congress told him to spend, so they wrote up a bill saying very clearly, Uh, no, if we say spend, you spend. They have that power as a check on the power of the executive. All three branches are ostensibly MEANT to be vying for power. It's an antagonistic system, like the court system. The founders loved that shit. In reality, it probably is a dysfunctional system that modern systems engineers would not like, and other countries get that "system fights and moderates itself" effect by encouraging coalitions between parties in a strong parliament. IMO those have demonstrated better stability. I'm not convinced the US would have survived getting it's whole shit blown up like the UK did.
He left out part of the quote, which is misappropriated as well. Wikipedia:
> This quotation is often incorrectly attributed to Francis M. Wilhoit:
> Conservatism consists of exactly one proposition, to wit: There must be in-groups whom the law protects but does not bind, alongside out-groups whom the law binds but does not protect.
> However, it was actually a 2018 blog response by 59-year-old Ohio composer Frank Wilhoit, years after Francis Wilhoit's death.
I think it’s the other way around. Those large entities break all the same laws and rules as others and then get to the point where they can influence the creation of a regulatory moat around themselves to prevent competitors from taking the same path as them.
True but lets take examples one by one to see what we can learn : Spotify was doing illegal things until they made a deal to become legal and not to be trialed over what they done. Seems like business deals is what saved them, not regulatory capture (the regulations around IP for music pre existed Spotify)
Sure that is what saved them initially, but following that early 2010’s period of hemorrhaging money and eventual recovery, then they started digging that moat.
Very interesting thank you for the links. I'm not knowledgeable in the Music Modernization Act, but maybe some of this lobbying is to avoid being sued rather than building legal long term moat
Same would be the case for YouTube. Google case was different in that AFAIK there wasn't any obvious legal problem with indexing, and, back then, they were actually doing everyone a favor.
Hardly anyone had any issue with Google search until the time when news media screwed themselves over by going all in on ads, overdoing it, then trying to bring back the paywall, only to realize no one is actually browsing their sites but instead relies on Google to find specific articles. All kinds of legal and technical nonsense started happening (and then Google improved the blurbs under search results and added the "answer box", leading publishers big and small to collectively lose their minds...).
And then news media in Canada got even worse a few years ago. They demanded the government make a law so that when Google or Facebook even links to an article, they must pay the news org. Google decided to pay the link tax. Facebook decided to block all news links. From talking to people, most think that Facebook is the villain, in reality it's the news orgs in collusion with state power. https://en.wikipedia.org/wiki/Online_News_Act , https://www.justice.gc.ca/eng/csj-sjc/pl/charter-charte/c18_...
I guess I sort of understand where this idea comes from, and when I was young I was totally into it, but now being in the corporate world for a decade and having my own small business, I just don't really see it anymore.
Big corps tend to be extremely conscientious of the the law. The law may not be ideal, but they tend to be hyper aware of it and have lawyers to ensure it. Small companies on the other hand are the wild fucking west, and tend to be overflowing with "turn a blind eye to that".
What big corps love is regulation that is expensive for small shops to overcome. They can drop $500k on a product cert no problem, be legally in the clear (and graciously compliant!), while making it near impossible for small guys to compete.
If you do something wrong then you, as a person, are held responsible and accountable.
If you do something wrong as "part of your job" then you're typically not held responsible and accountable but the company is (the exceptions being spectacular fraud: Enron, VW diesel).
It's not hard to see how this can go off the rails.
At the risk of wading into politics - consider a legal environment, in any country, where laws become increasingly strict, but where prosecutorial discretion, pardon powers, and a justice system designed to allow well-resourced law firms to delay cases indefinitely, are all transparently used for political purposes. Such an environment could easily exhibit a feedback loop that allows justice to be arbitrary and opposition voices to be silenced.
I'll refrain from value judgments on the above - but for heaven's sake, we're on a site called "Hacker News." We should understand that a machine like this could turn on any one of us in an instant for any reason.
In more general terms, the legal system punishes what can be made a profit or an example when punishing.
Also, I don't think the legal system itself wants to get too much into "big institutions against the work of others", save for the fictional TV representations of smart lawyers and clever arguments, 99.9% of the legal system output is copy/paste.
>This is exactly what I immediately thought while reading the article. It almost feels like the legal system only punishes general public, while most of these guys are above it.
Welcome to the modern day aristocracy. Not only what you mentioned, this world is also divided into a group of insider who can get capital from 0 - 2%, while rest of us has a cost of 17%, 22% or 30%?
It doesn't "seem". The entire system in most countries works, by design, that way because the people in power trade in influence at a different plane.
That's why democracy often feels "failed" in that no change can be achieved because "it's just more of the same". Few Lobbyists representing the interests of a few people have more power than millions voting differently.
What happens in US right now shows that change is achieved through voting. There are other examples as well in Europe where things did change because of how people voted. If the change is good or bad depends on your perspective.
For me the annoying part is that people vote for a guy because of a couple heavily advertised issues, ignoring all the other plans or the fact that he might not keep his word. Then they are unhappy that things "fail" for them.
Yes. US and places where people can elect a democracy have a higher chance of some change than European countries with parliamentary systems where a sudden populist candidate won't make it through that system.
I'd argue that, even if some change does happen in the US. Most change (see healthcare, military spending, etc) won't happen because big money will beat the majority of the populace every time.
I like your optimistic take. My more cynical one is that what’s happening in the US shows that real change is achieved through corruption and lying: honest policy discussions and iterative improvement stand no chance against a charismatic populist who will say anything to entrench an oligarchy.
It's not primarily optimistic. I just think that education of the people can bring the best improvement on the long run, and not adjusting democracy, demonizing rich guys or another "new" system.
While I hope iterative improvement is the way, I think there are people that have it (or feel) so bad (due to various reasons) that they would take a 50% chance to die for the chance to live better.
When individuals are assigned heroic status despite clear evidence of mental illness and crimes, such as “breaking and entering”, it prevents society from having rational discussions about both law enforcement and mental health support. This dynamic repeats across multiple high-profile cases.
People often elevate deeply flawed figures to heroic status when those figures seem to challenge authority or "the system." This happens especially with individuals who present themselves as outsiders fighting the establishment, have a compelling personal struggle narrative, or voice grievances that resonate with public frustrations
Trump fits this pattern - his supporters overlook concerning behaviors and statements because they see him as fighting a system they distrust. Like Manning and Swartz, his mental state and fitness are often ignored in favor of the "hero against the system" narrative.
This dynamic creates a feedback loop where legitimate criticism becomes harder to discuss rationally.
Conscious life in general seems possible to me unless our brain tells us a better story than reality.
A story in which we are the hero, in which we are not mortal, in which we are important, in which people care about us, in which we are intelligent and our perceptions rarely fail us, in which our life has a meaning and also in which the social game we play is determined, or at least influenced, by some just principles. We would despair if we were aware of the full extent of our meaninglessness and powerlessness.
I believe that it is the core reason why we love to believe that God/Nature is good, that the king is legitimate and that the laws are fair.
They are paid, handsomely, by it. Or otherwise brainwashed by it. And pummelled into ignorance by it, as they are told that to understand is stupid or delusional, knowledge ends at STEM, and the world only exists for efficient production of capital products.
The poets write laments about such false ages. Prophecies were written about such ages thousands of years ago.
The cycles are larger than us all.
One stable insight is that the chaos breeds possibility, and thus hope. In the meantime, however…
It is more a money thing. Meta can pay x billion like pocket change. Regular people are run through the ringer to teach the plebs to not get out of line.
It's not a feeling. It's exactly what happens. It's completely blatant.
For some reason, whenever you're a billionaire or company, things suddenly get so difficult that you can claim that it's impossible to be held accountable for anything. Murder, insider trading, laundering, treason, etc.
OpenAI complained about this, as did Google and everyone else. If your company can't exist without stealing data, then it's not a viable company. Companies don't have a constitutional right to exist.
I'm also incredibly grateful --- I was gifted a NeXT Cube by my brother-in-law when I was in college studying graphic design, and I was incredibly put out by the paucity of nice typography features in Quark XPress and Aldus Pagemaker when I came across TeXview.app and remembered checking out the book _TeX and Metafont_ from the local college library when I was a senior in high school --- built that into a career and a series of presentations at TUG conferences where I got to meet him.
From what I understand, TAoCP is building up to that compilers book! When initially tasked with writing about compilers, he realized all the background necessary for building them and planned out these books as an overview of computational techniques that would be helpful to use.
These clearly aren't comparable to the support of browsers. I know this metric isn't really an important signal, but they both have under 500 stars. If I'm a business evaluating whether to build my cross platform experience either on the web using the sandboxing of browsers vs smaller frameworks like this, it's basically not even a choice.
https://www.business-standard.com/immigration/india-post-sus...
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