Stop The JerkTech(techcrunch.com)
techcrunch.com
Stop The JerkTech
http://techcrunch.com/2014/07/03/go-disrupt-yourself/
22 comments
Just to be clear: I agree with your point on focusing on creating value. And after I read your comment, I agree that none of the startups in the articles are truly creating that much value.
However, is it that simple to qualify when you're creating value? If I had read the article before HN's comments, I'd have thought the startup is cool (admittedly trivial and silly, but we have a lot of those nowadays), rather than parasitic. I'd have thought it's just a clever hack in helping more efficient distribution - in the true spirit of capitalism. Yes, while it would shift the value to rich people, it also free up the rich people's time, so they (rich people) can create more value. Assuming that rich people is richer because society decides that their time is more valuable, they can create more value in the same amount of times of some other poorer people.
Of course, that might be not morally justifiable. But creating value and being morally correct is orthogonal.
I'm not living in SF the SV area, but I've a few friends there. Every time they talked to me about startup ideas, I've always felt off about those ideas. I kept telling myself that trivial value is still value, and potentially if it can help many people, the net gain would still be large. How do I know where to draw the line?
Edit: it seems like quite a few people have problem with my post, so let me rephrase the middle paragraph a bit:
Ignoring the mentioning of rich/ poor, parking spot is a commodity. And just like other commodity in life, everyone values it differently. What's wrong in letting people paying for what they think it's worth for? The rich will always have advantage in buying commodity, and that's a fundamental issue in our society, but that's an entirely separate problem to fix, and the solution isn't telling people to stop producing commodity, or distributing them. In this specific case of parking lot, it's bad either way because a private company is skimming profit from public space.
However, is it that simple to qualify when you're creating value? If I had read the article before HN's comments, I'd have thought the startup is cool (admittedly trivial and silly, but we have a lot of those nowadays), rather than parasitic. I'd have thought it's just a clever hack in helping more efficient distribution - in the true spirit of capitalism. Yes, while it would shift the value to rich people, it also free up the rich people's time, so they (rich people) can create more value. Assuming that rich people is richer because society decides that their time is more valuable, they can create more value in the same amount of times of some other poorer people.
Of course, that might be not morally justifiable. But creating value and being morally correct is orthogonal.
I'm not living in SF the SV area, but I've a few friends there. Every time they talked to me about startup ideas, I've always felt off about those ideas. I kept telling myself that trivial value is still value, and potentially if it can help many people, the net gain would still be large. How do I know where to draw the line?
Edit: it seems like quite a few people have problem with my post, so let me rephrase the middle paragraph a bit:
Ignoring the mentioning of rich/ poor, parking spot is a commodity. And just like other commodity in life, everyone values it differently. What's wrong in letting people paying for what they think it's worth for? The rich will always have advantage in buying commodity, and that's a fundamental issue in our society, but that's an entirely separate problem to fix, and the solution isn't telling people to stop producing commodity, or distributing them. In this specific case of parking lot, it's bad either way because a private company is skimming profit from public space.
Not sure why you were downvoted; I think it's a great question.
I don't think it's that hard if you look at it systemically. If the problem is parking, none of the JerkTech startups are solving the problem, they're just shifting the burden. And they're probably making the problem worse, as now they've created a financial incentive for people to occupy hot parking spaces so they can get paid to leave.
On the other hand, if the problem is "rich people don't have enough time", then there are plenty of ways to solve that. Indeed, Uber basically set out to solve the problem of "rich people don't have enough time and/or feel important enough". Thus the fleet of fancy cars. That created value.
I think solving small problems across a large number of people is fine. Look at entertainment. There are plenty of video games that created value one quarter at a time. Or today, $0.99 per. It's not like it cures cancer, but as long as people end up having fun and are happier, that seems fine to me. However, in my view that excludes operations like Las Vegas and Zynga, which create very little fun and a lot of compulsion, which they then use to extract cash.
I think the hypothesis that rich people generate more value given more time is... unproven. There are plenty of people who are rich because of their cash-extraction skills, not their value-generation skills. Many of them do it in ways that are negative sum. For those people, the best thing you could do for the world is to waste their time.
I don't think it's that hard if you look at it systemically. If the problem is parking, none of the JerkTech startups are solving the problem, they're just shifting the burden. And they're probably making the problem worse, as now they've created a financial incentive for people to occupy hot parking spaces so they can get paid to leave.
On the other hand, if the problem is "rich people don't have enough time", then there are plenty of ways to solve that. Indeed, Uber basically set out to solve the problem of "rich people don't have enough time and/or feel important enough". Thus the fleet of fancy cars. That created value.
I think solving small problems across a large number of people is fine. Look at entertainment. There are plenty of video games that created value one quarter at a time. Or today, $0.99 per. It's not like it cures cancer, but as long as people end up having fun and are happier, that seems fine to me. However, in my view that excludes operations like Las Vegas and Zynga, which create very little fun and a lot of compulsion, which they then use to extract cash.
I think the hypothesis that rich people generate more value given more time is... unproven. There are plenty of people who are rich because of their cash-extraction skills, not their value-generation skills. Many of them do it in ways that are negative sum. For those people, the best thing you could do for the world is to waste their time.
> How do I know where to draw the line?
Considering legality is a good start.
Sweetch and Money Parking induce their users to violate San Francisco's Police Code, which forbids the buying and selling of public on-street parking. The city says it will pursue Sweetch and Money Parking under California's Unfair Competition Law for facilitating these violations.
In the case of ReservationHop, I'm not an attorney but I'd venture a guess that there are a number of potential causes of action that a restaurant might be able to claim, including violations of unfair competition law.
Now, a lot of folks will complain that many of these laws and regulations are counterproductive and stifle innovation. They may be right, but a point that is often overlooked in discussions about startups that are intentionally violating the law is that you can be against foolish laws and regulations without being for the willful violation of them.
Considering legality is a good start.
Sweetch and Money Parking induce their users to violate San Francisco's Police Code, which forbids the buying and selling of public on-street parking. The city says it will pursue Sweetch and Money Parking under California's Unfair Competition Law for facilitating these violations.
In the case of ReservationHop, I'm not an attorney but I'd venture a guess that there are a number of potential causes of action that a restaurant might be able to claim, including violations of unfair competition law.
Now, a lot of folks will complain that many of these laws and regulations are counterproductive and stifle innovation. They may be right, but a point that is often overlooked in discussions about startups that are intentionally violating the law is that you can be against foolish laws and regulations without being for the willful violation of them.
Yes, while it would shift the value to rich people, it also free up the rich people's time, so they (rich people) can create more value.
Have trickle down economics ever been proven to actually work?
Either way, my problem is this: millionaires don't care about running one-off, unique restaurants. They'd want to set up a chain, or something similarly profitable. So if we go with this "redirecting money to rich people" idea, all the restaurants that struggle to get by close and get replaced with McDonalds. Great.
Have trickle down economics ever been proven to actually work?
Either way, my problem is this: millionaires don't care about running one-off, unique restaurants. They'd want to set up a chain, or something similarly profitable. So if we go with this "redirecting money to rich people" idea, all the restaurants that struggle to get by close and get replaced with McDonalds. Great.
McDonalds doesn't require reservation and nobody would pay for a reservation to McDonalds. In order for the scheme to work, you need to have restaurant that is so popular that people would pay premium just to get a reservation there. That's not McDonalds, that's usually the same one-off, unique restaurant, and rich people would seem to care well enough for it if they agree to pay just to get into the door. So there's no threat to such restaurants in it, and it mere existence denies such threat.
Now, I think it's a very dick move for other reasons - because if it succeeds it would actually make the world a worse place - restaurants just start charging for reservations or stop taking ones remotely. They make a couple of bucks but everybody else suffers a lot. It's despicable.
Now, I think it's a very dick move for other reasons - because if it succeeds it would actually make the world a worse place - restaurants just start charging for reservations or stop taking ones remotely. They make a couple of bucks but everybody else suffers a lot. It's despicable.
I don't mean that as anything to do with reservations. Just that because there are savings to be made in an industry doesn't mean they should be. The result for the restaurant industry would be endless identical restaurants with the same ingredients.
That conclusion appears to be wrong, as there is a very large and consistent demand for non-identical restaurants with varied ingredients. Of course, investing in McDonalds or even Subway would probably be safer than in an unique restaurant, but that did not lead to the extinction of varied unique restaurants and probably never will.
"in the true spirit of capitalism. Yes, while it would shift the value to rich people, it also free up the rich people's time, so they (rich people) can create more value."
this is embarrassing.
this is embarrassing.
"Stones were made to be hewn and to construct castles; therefore my lord has a magnificent castle; for the greatest baron in the province ought to be the best lodged."
http://en.wikipedia.org/wiki/Candide
http://en.wikipedia.org/wiki/Candide
"Assuming that rich people is richer because society decides that their time is more valuable, they can create more value in the same amount of times of some other poorer people."
are you fucking kidding me? why would you assume that?
are you fucking kidding me? why would you assume that?
Economic theory. A rich person earns more money per hour than a poor person (by definition). Money is a representation of value (by definition). In Economics, value earned is at least proportional (if not equal) to value created. So a rich person creates more value in the same amount of time than a poor person. Their time is literally more valuable.
In theory there's no difference between theory and practice. In practice, there is.
In theory there's no difference between theory and practice. In practice, there is.
Naive theory is the worst kind. The behavioural assumptions of NC econ are naive in this dimension. Infinite rationality is easily affordable in theory. In reality, both the approximation of it is expensive, and the hack/exploitation of its failure to materialize are profound.
A rich person earns more money per hour than a poor person (by definition).
No, that's a person with "high hourly earned income".
Making wealth is not the only way to get rich. For most of human history it has not even been the most common. Until a few centuries ago, the main sources of wealth were mines, slaves and serfs, land, and cattle, and the only ways to acquire these rapidly were by inheritance, marriage, conquest, or confiscation. Naturally wealth had a bad reputation. - Paul Graham
No, that's a person with "high hourly earned income".
Making wealth is not the only way to get rich. For most of human history it has not even been the most common. Until a few centuries ago, the main sources of wealth were mines, slaves and serfs, land, and cattle, and the only ways to acquire these rapidly were by inheritance, marriage, conquest, or confiscation. Naturally wealth had a bad reputation. - Paul Graham
We're not living "a few centuries ago", however. And there is also an important qualifying word "rapidly". One doesn't have to become rich overnight to be rich now.
As for the "bad reputation", given that most things that were written and otherwise arrived to us were composed by people of some means at least (excluding monks, etc. which are harder to classify by modern standards) - really poor folks had high illiteracy rates, little spare time to create records that we could read, and not many people that cared for their opinions enough to create permanent record of them. So, given that, how exactly Paul Graham knows what reputation the wealth had amongst folks who weren't wealthy?
As for the "bad reputation", given that most things that were written and otherwise arrived to us were composed by people of some means at least (excluding monks, etc. which are harder to classify by modern standards) - really poor folks had high illiteracy rates, little spare time to create records that we could read, and not many people that cared for their opinions enough to create permanent record of them. So, given that, how exactly Paul Graham knows what reputation the wealth had amongst folks who weren't wealthy?
One study says that only a third of the Forbes 400 started from a middle-class background or lower. [1] A third of them had purely inherited wealth. [2] And when I look around at the rich people I'm familiar with, they aren't enormously more productive than their peers. Often it was a right-place, right-time thing. If Bill Gates had been born 50 years earlier, for example, it's hard to imagine him becoming a zillionaire.
So I think it's an enormous error to confuse wealth with creating lots of value per hour. Wealthy just means you control a lot of capital.
[1] http://www.cnbc.com/id/49167533#
[2] http://www.forbes.com/sites/erincarlyle/2013/09/18/how-self-...
So I think it's an enormous error to confuse wealth with creating lots of value per hour. Wealthy just means you control a lot of capital.
[1] http://www.cnbc.com/id/49167533#
[2] http://www.forbes.com/sites/erincarlyle/2013/09/18/how-self-...
The third is not a majority. The first link says 57% were not born wealthy.
>>> And when I look around at the rich people I'm familiar with
Anecdote is not data. I don't know where you live, but depending on it and your social circle, the minuscule number (compared to the whole nation) of people you can observe personally would be very different.
>>> Often it was a right-place, right-time thing.
It was. So what? Nobody claims billionaires are superhuman. The claim is only they deliver (or delivered) value. Did they come into position of being able to deliver the value by luck? Maybe. So what? If you per chance found a deposit of gold or discovered very valuable technology - they fact chance played role in it does not change the price of gold or the usability of technology.
>>> If Bill Gates had been born 50 years earlier, for example, it's hard to imagine him becoming a zillionaire.
Sure, so that guy everybody mentions would be called "John Walles" instead, it's no different.
>>> And when I look around at the rich people I'm familiar with
Anecdote is not data. I don't know where you live, but depending on it and your social circle, the minuscule number (compared to the whole nation) of people you can observe personally would be very different.
>>> Often it was a right-place, right-time thing.
It was. So what? Nobody claims billionaires are superhuman. The claim is only they deliver (or delivered) value. Did they come into position of being able to deliver the value by luck? Maybe. So what? If you per chance found a deposit of gold or discovered very valuable technology - they fact chance played role in it does not change the price of gold or the usability of technology.
>>> If Bill Gates had been born 50 years earlier, for example, it's hard to imagine him becoming a zillionaire.
Sure, so that guy everybody mentions would be called "John Walles" instead, it's no different.
>> It was. So what?
So maybe you should read all the way to the the last line of my post, which explains my exact point: someone currently being a billionaire doesn't mean that they will make the world much better if they spend an hour on one thing versus another.
Ergo, kourt's point stands: somebody being wealthy is not any sort of proof that they can create more value per hour. Which is the (wrong) notion that NhanN was promoting.
If you're going to jump into a conversation in the middle, please try to pay attention to what's going on. It's frustrating to have to connect the dots for you.
So maybe you should read all the way to the the last line of my post, which explains my exact point: someone currently being a billionaire doesn't mean that they will make the world much better if they spend an hour on one thing versus another.
Ergo, kourt's point stands: somebody being wealthy is not any sort of proof that they can create more value per hour. Which is the (wrong) notion that NhanN was promoting.
If you're going to jump into a conversation in the middle, please try to pay attention to what's going on. It's frustrating to have to connect the dots for you.
>>> somebody being wealthy is not any sort of proof
It's not a proof, but it's higher probability, by the virtue that in majority of cases being reach means producing value (at least in the past, as your own links prove) - and if the person produced a lot of value in the past, there's a big chance he'll continue doing that. As for the question if it makes the world better - it's a very subjective matter, everybody has their own "better". I think it'd be better if Uber would disrupt taxi cartels, but taxi cartels and medallion investors think it'd be worse.
>>> It's frustrating to have to connect the dots for you.
That may be because the dots are connected by non-sequiturs. E.g., the question if somebody was lucky or not bears no relation to the question if he produces or ever produced value. A quote of how one could rapidly become rich three hundred years ago has little connection to how the majority of rich people slowly become rich now. Etc, etc.
It's not a proof, but it's higher probability, by the virtue that in majority of cases being reach means producing value (at least in the past, as your own links prove) - and if the person produced a lot of value in the past, there's a big chance he'll continue doing that. As for the question if it makes the world better - it's a very subjective matter, everybody has their own "better". I think it'd be better if Uber would disrupt taxi cartels, but taxi cartels and medallion investors think it'd be worse.
>>> It's frustrating to have to connect the dots for you.
That may be because the dots are connected by non-sequiturs. E.g., the question if somebody was lucky or not bears no relation to the question if he produces or ever produced value. A quote of how one could rapidly become rich three hundred years ago has little connection to how the majority of rich people slowly become rich now. Etc, etc.
You have demonstrated no such probability. You're just assuming your conclusion.
> That may be because the dots are connected by non-sequiturs.
That you don't understand something doesn't mean it doesn't make sense.
You seem to be going out of your way here to be an argumentative dick, so unless you've got some actual contribution to make, I think you've passed my tolerance for JGGIFT discussion.
> That may be because the dots are connected by non-sequiturs.
That you don't understand something doesn't mean it doesn't make sense.
You seem to be going out of your way here to be an argumentative dick, so unless you've got some actual contribution to make, I think you've passed my tolerance for JGGIFT discussion.
Economic theory. A rich person earns more money per hour than a poor person (by definition). Money is a representation of value (by definition). In Economics, value earned is at least proportional (if not equal) to value created. So a rich person creates more value in the same amount of time than a poor person. Their time is literally more valuable.
The assumption of a rich person being rich because of the value created may sound plausible, but is empirically falsified for at least the USA and Germany. Statistically, a rich person is rich because she inherited.
The assumption of a rich person being rich because of the value created may sound plausible, but is empirically falsified for at least the USA and Germany. Statistically, a rich person is rich because she inherited.
I don't know about Germany, but for USA it is does not appear to be true. Which data your based your claim on?
Here: http://www.forbes.com/sites/moneybuilder/2012/04/20/most-wea... it says only 6% of wealthy people are wealthy by inheritance.
Here: http://blogs.wsj.com/wealth/2008/01/14/the-decline-of-inheri... they arrive at the same conclusion (minority got wealthy by inheritance).
Here: http://www.forbes.com/sites/moneybuilder/2012/04/20/most-wea... it says only 6% of wealthy people are wealthy by inheritance.
Here: http://blogs.wsj.com/wealth/2008/01/14/the-decline-of-inheri... they arrive at the same conclusion (minority got wealthy by inheritance).
Sorry for the late reply, I didn't recognize your answer earlier. Is there some comment notification option on hn that I missed?
The forbes article you quoted is a bit problematic because the data given are voluntary answers. In studies like these there always is the problem of a potentially skewed return rate: Given a return rate of 30%, what is the wealth inheritance quota of the other 70%? My speculation would be that someone who is proud of the fruit of his own hard work (the quoted local business owner) is more likely to answer such a survey. On the other hand some rich person who found a clever way to unofficially inherit parts of the own wealth while avoiding the correlating taxes won't answer such a survey.
At least the second of the blogs.wsj.com studies is self-selected, too. I couldn't find the papers for the two other quotes because the sources were too vague.
It's better to use data sources like tax income of states. IMHO even better is the concept of social mobility (the wikipedia article is quite good: http://en.wikipedia.org/wiki/Social_mobility), as it also encompasses factors like the parents' social contacts and educational chances. The studies cited there all use official, non-self-selected data and sometimes even proper longitudinal studies. In the results presented there the USA has the the lowest intergenerational vertical social mobility of all researched OECD countries (i.v.s.m. means the probability of a child to get into a higher (or lower) class than its parents live in).
An example for Germany: The probability of a child of workers to get a degree from a university is 17 times lower than that of a child with academic parents (source: http://www.deutschlandfunk.de/geschlossene-gesellschaft-uber...).
Yes, social mobility is not the same as inherited wealth, because it's a result of a combination of inheritance and other factors. On the plus side, the empirical data it's based on is of comparibly high quality. The problem is that monetary (as opposed to social etc.) wealth is pretty hard to measure even given government data. In Germany for example the data for people having income is more or less 100% available. But the richer you are, the less probable it is for you to have income: The money then comes from capital gains, rent etc. These are way harder to measure, e.g. the capital gains could get collected by a corporation and not an individual. The corporations money only gets tapped on demand (=saved inside the corporation hull until retirement). And the child of the owner has a counsulting contract with that company. Legally, thats not inheritance at all, but practically it pretty much is.
The forbes article you quoted is a bit problematic because the data given are voluntary answers. In studies like these there always is the problem of a potentially skewed return rate: Given a return rate of 30%, what is the wealth inheritance quota of the other 70%? My speculation would be that someone who is proud of the fruit of his own hard work (the quoted local business owner) is more likely to answer such a survey. On the other hand some rich person who found a clever way to unofficially inherit parts of the own wealth while avoiding the correlating taxes won't answer such a survey.
At least the second of the blogs.wsj.com studies is self-selected, too. I couldn't find the papers for the two other quotes because the sources were too vague.
It's better to use data sources like tax income of states. IMHO even better is the concept of social mobility (the wikipedia article is quite good: http://en.wikipedia.org/wiki/Social_mobility), as it also encompasses factors like the parents' social contacts and educational chances. The studies cited there all use official, non-self-selected data and sometimes even proper longitudinal studies. In the results presented there the USA has the the lowest intergenerational vertical social mobility of all researched OECD countries (i.v.s.m. means the probability of a child to get into a higher (or lower) class than its parents live in).
An example for Germany: The probability of a child of workers to get a degree from a university is 17 times lower than that of a child with academic parents (source: http://www.deutschlandfunk.de/geschlossene-gesellschaft-uber...).
Yes, social mobility is not the same as inherited wealth, because it's a result of a combination of inheritance and other factors. On the plus side, the empirical data it's based on is of comparibly high quality. The problem is that monetary (as opposed to social etc.) wealth is pretty hard to measure even given government data. In Germany for example the data for people having income is more or less 100% available. But the richer you are, the less probable it is for you to have income: The money then comes from capital gains, rent etc. These are way harder to measure, e.g. the capital gains could get collected by a corporation and not an individual. The corporations money only gets tapped on demand (=saved inside the corporation hull until retirement). And the child of the owner has a counsulting contract with that company. Legally, thats not inheritance at all, but practically it pretty much is.
Actually it doesn't matter how they became rich. A rich person creates value by investing their wealth in economic activity, which generates interest as a payment back to them "earned" by their investment.
If our example rich person does absolutely nothing except put their money in a bank, and yet earns more per hour in interest payments than our poor person, that rich person is still creating more value in the same amount of time.
Like I said, this is just the theory. One reason why we should never allow ourselves to be governed by economists ;)
If our example rich person does absolutely nothing except put their money in a bank, and yet earns more per hour in interest payments than our poor person, that rich person is still creating more value in the same amount of time.
Like I said, this is just the theory. One reason why we should never allow ourselves to be governed by economists ;)
For the purposes of the question, which is about the economic effects of saving rich people time, I believe that's incorrect. Rich people leaving money in the bank are creating more wealth (for them), but they are not applying their time in a way that creates value. Thus there's no economic benefit in saving the time of the idle rich.
This is true, agreed.
I just wanted to highlight the theory that a sufficiently rich person sitting on their arse picking their nose is (in economic theory) generating more economic value than (for instance) a medical professional saving people's lives all day.
I first bumped into the absurdity of this when working on a coding contract in 1998. The project was doomed and would never complete let alone achieve its goals, we all knew it, but we'd all turn up, write our middle-layer business functions according to the project plan, and got paid a fortune for it because Y2K had pushed prices up. I met a nurse who had spent her day elbow-deep in other people's misfortune and was earning about 1/10th of what I was. The stark comparison made me rethink a lot of economics 101.
I just wanted to highlight the theory that a sufficiently rich person sitting on their arse picking their nose is (in economic theory) generating more economic value than (for instance) a medical professional saving people's lives all day.
I first bumped into the absurdity of this when working on a coding contract in 1998. The project was doomed and would never complete let alone achieve its goals, we all knew it, but we'd all turn up, write our middle-layer business functions according to the project plan, and got paid a fortune for it because Y2K had pushed prices up. I met a nurse who had spent her day elbow-deep in other people's misfortune and was earning about 1/10th of what I was. The stark comparison made me rethink a lot of economics 101.
A rich person usually inherits more money. Abolish inheritance and almost all of the capitalistic problems disappear.
I'm really curious how you think this will solve anything. Children of wealthy parents don't have to inherit anything to have advantages that most poor children could only dream of. That is, unless you somehow abolish parents using their wealth to give their kids access to better healthcare, higher-quality and healthier foods, better educations, opportunities for travel, exposure to culture, and on and on. And if you say that yes, that is what you mean and all those things are to be taken care of by the state, then you've moved beyond even the socialized policies of the Nordic countries. Not that that's a bad thing, but it would be a little disingenuous to call it capitalism.
If you abolished inheritance (that is, taxed it at 100%) you would certainly reduce a number of capitalism's structural problems. That's why even many wealthy people are in favor of large inheritance taxes. [1]
That would also provide you a lot of tax revenue for improving education and social services. Or you could just pay it out as a negative income tax or a basic income.
That wouldn't solve every problem of capitalism, but so what? No improvement makes everything perfect, but that's not a reason to argue against improvements.
[1] e.g.: http://www.forbes.com/sites/ashleaebeling/2012/12/11/buffet-...
That would also provide you a lot of tax revenue for improving education and social services. Or you could just pay it out as a negative income tax or a basic income.
That wouldn't solve every problem of capitalism, but so what? No improvement makes everything perfect, but that's not a reason to argue against improvements.
[1] e.g.: http://www.forbes.com/sites/ashleaebeling/2012/12/11/buffet-...
along with vast swathes of the middle class
Unlikely. Most people are solidly in adulthood before their parents die; at that point, their economic destiny is generally fixed. A high inheritance tax won't harm the kids' middle-class status.
really are you sure a few years ago my parents worked out that in the UK my sister and I would have to immediately find over $130,000 in cash to pay for death duty.
We could just do it but we have far more savings than the majority of the uk population.
We could just do it but we have far more savings than the majority of the uk population.
I don't know how death duty works there, but if it's like here, I presume that means you would be inheriting something asset worth a lot more than $130,000 but didn't want to sell it. Thus you would end up richer than before, just with an illiquid asset. In which case it would not harm your middle-class status.
Often the illiquid assets being inherited have great sentimental value to the inheritor. Also, inheritees would get around the tax by hiding assets, gifting them before death, putting them in holding companies, etc. After all, what's the worst the government can do if they're caught?
I believe that's a reasonable assumption for this discussion (that's not my personal opinion, btw). But trying to justify that statement will start a flame war and distract from the topic, so let me try to say that sentence in another way:
Parking spot is a commodity. And just like other commodity in life, everyone values it differently. What's wrong in letting people paying for what they think it's worth for? The rich will always have advantage in buying commodity, and that's a fundamental issue in our society, but that's an entirely separate problem to fix, and the solution isn't telling people to stop producing commodity.
In this specific case of parking lot, it's bad either way because a private company is skimming profit from public space.
Parking spot is a commodity. And just like other commodity in life, everyone values it differently. What's wrong in letting people paying for what they think it's worth for? The rich will always have advantage in buying commodity, and that's a fundamental issue in our society, but that's an entirely separate problem to fix, and the solution isn't telling people to stop producing commodity.
In this specific case of parking lot, it's bad either way because a private company is skimming profit from public space.
"The rich will always have advantage in buying commodity, and that's a fundamental issue in our society, but that's an entirely separate problem to fix"
its not at all an entirely separate problem to fix. society should not be structured so that rich people are always, fundamentally advantaged in every dimension. we should not commoditize everything.
its not at all an entirely separate problem to fix. society should not be structured so that rich people are always, fundamentally advantaged in every dimension. we should not commoditize everything.
Indeed we should not commoditize everything, but parking spots and restaurant reservations don't seem to me like great examples of things so important or fundamental that we should try hard to decouple them from money.
public parking spaces on city-owned land are part of the commons and are supplied as a public benefit by the city to the whole community. that is very much an example of things that should not be commoditized, or else we end up with yet another tragedy of the commons.
restaurant reservations are not a public benefit, and I think its fine to commoditize them IF AND ONLY IF it can be done in a way that is fair to the restaurants and the customers. we shouldn't tolerate a service that is based on lying to restaurants.
restaurant reservations are not a public benefit, and I think its fine to commoditize them IF AND ONLY IF it can be done in a way that is fair to the restaurants and the customers. we shouldn't tolerate a service that is based on lying to restaurants.
Startups like this don't create value.
This is a very old hypothesis, and you are shadowing Marx in decrying parasitic middlemen. Value is such a indeterminate notion that anyone could be said to be creating it, but so many activities we take for granted (and which render us service) are parasitic in some sense - taking rent, opening a store of any kind, transporting goods, paying interest, manufacturing goods are all based on taking advantage of a gap between buyer/seller or taking advantage of an inherent advantage of scale/capital (ownership of the means of production if you like). I think it's ok not to add any value other than getting a service/product to someone who wants it and doesn't want to spend energy looking for it. That's not what makes these companies regrettable.
Google can earn $60 billion in revenue per year because they create even more value than that for its users and customers.
Google is, strictly speaking, a middleman just like the companies above, it doesn't create significant value for end users with advertising (its primary source of revenue), that might even be a negative for customers. Google lives in the interstices between customers/customer data and advertisers and the value they create is mostly incidental to their main revenue stream (it is in services like gmail, gmaps, android etc), and designed carefully to ring-fence customers or guide them toward being the end product of advertising streams. Again, I don't think that's bad, but it's important to recognise that and its similarity to the activities of these other companies or others like Amazon or Apple which provide useful services at the same time as making money as middlemen. They could easily earn $60 billion a year by being evil, and we might not even notice if they were at first because we're too busy enjoying the nice free presents.
The problem with the companies in this article I think, and any other company gone bad, is that the interests of consumer and customer become misaligned to such an extent that the company no longer serves its customers in the sense of seeing to their needs, but in the sense of serving them up to others.
This is a very old hypothesis, and you are shadowing Marx in decrying parasitic middlemen. Value is such a indeterminate notion that anyone could be said to be creating it, but so many activities we take for granted (and which render us service) are parasitic in some sense - taking rent, opening a store of any kind, transporting goods, paying interest, manufacturing goods are all based on taking advantage of a gap between buyer/seller or taking advantage of an inherent advantage of scale/capital (ownership of the means of production if you like). I think it's ok not to add any value other than getting a service/product to someone who wants it and doesn't want to spend energy looking for it. That's not what makes these companies regrettable.
Google can earn $60 billion in revenue per year because they create even more value than that for its users and customers.
Google is, strictly speaking, a middleman just like the companies above, it doesn't create significant value for end users with advertising (its primary source of revenue), that might even be a negative for customers. Google lives in the interstices between customers/customer data and advertisers and the value they create is mostly incidental to their main revenue stream (it is in services like gmail, gmaps, android etc), and designed carefully to ring-fence customers or guide them toward being the end product of advertising streams. Again, I don't think that's bad, but it's important to recognise that and its similarity to the activities of these other companies or others like Amazon or Apple which provide useful services at the same time as making money as middlemen. They could easily earn $60 billion a year by being evil, and we might not even notice if they were at first because we're too busy enjoying the nice free presents.
The problem with the companies in this article I think, and any other company gone bad, is that the interests of consumer and customer become misaligned to such an extent that the company no longer serves its customers in the sense of seeing to their needs, but in the sense of serving them up to others.
I don't think all middlemen are parasitic. The guy at my corner store, for example, creates value by stocking a carefully chosen set of products very near to my house and having them available at all hours. He's basically an L1 cache. And in being that, he's not making the problem of goods-getting worse for other people.
I think you're wrong about Google. They create enormous value through the services they provide. They then monetize that mainly through advertising. They could monetize it other ways; if advertising were illegal, Google would still be raking in cash.
But their search-related advertising, unlike traditional display advertising, actually creates value for both advertiser and viewer because it's relevant to what people are searching for. In user tests, a former colleague was having people do Google searches related to shopping. One guy, unprompted, said, "Hey, you want to know the secret for Google? ignore the stuff in the middle. The really good links are over here on the right." That is, he found the ads more valuable than the normal web content.
Turning back to the companies mentioned, I think they are serving their customers well. The problem is that they are all creating negative externalities by forcing other parties to become unwitting free suppliers of goods they are selling. For the parking apps, it's the cities providing the public parking. For the reservation app, it's the restaurants.
I think you're wrong about Google. They create enormous value through the services they provide. They then monetize that mainly through advertising. They could monetize it other ways; if advertising were illegal, Google would still be raking in cash.
But their search-related advertising, unlike traditional display advertising, actually creates value for both advertiser and viewer because it's relevant to what people are searching for. In user tests, a former colleague was having people do Google searches related to shopping. One guy, unprompted, said, "Hey, you want to know the secret for Google? ignore the stuff in the middle. The really good links are over here on the right." That is, he found the ads more valuable than the normal web content.
Turning back to the companies mentioned, I think they are serving their customers well. The problem is that they are all creating negative externalities by forcing other parties to become unwitting free suppliers of goods they are selling. For the parking apps, it's the cities providing the public parking. For the reservation app, it's the restaurants.
Thanks for the clarification. Perhaps the operative distinction here is between parasitic and symbiotic corporations. Ideally they are symbiotic with other players in the eocsystem, rather than parasitic, but I think all corporations have a temptation and a tendency to end up as parasitic monopolies.
Re Google, I wasn't saying they don't create value, far from it, I was saying they don't create value for readers with advertising. I concede this is a debatable point though for the reasons you mentioned, and it is really a subjective. Personally I don't find their advertising useful, and if anything think it targets me mostly with sites I've already engaged with and wastes the money of advertisers. There is a tension in their services because they depend on advertising, and the temptation (which thy have increasingly given in to on their search service recently) is to favour advertisers (the real customers) over end users - a classic problem in a two-sided market.
To be clear though, I was not saying google are evil, but that just shifting the value around is what businesses do and what Google does - creating value is a very slippery and subjective concept and I'd argue their services which create value (mail etc) are funded by those that don't (advertising). So I would not use that particular behaviour as a criticism of the companies mentioned in the article - they might be objectionable, immoral or even illegal (I'd say probably all three) but they are not easy to distinguish from normal businesses in terms of how they shift value around.
Re Google, I wasn't saying they don't create value, far from it, I was saying they don't create value for readers with advertising. I concede this is a debatable point though for the reasons you mentioned, and it is really a subjective. Personally I don't find their advertising useful, and if anything think it targets me mostly with sites I've already engaged with and wastes the money of advertisers. There is a tension in their services because they depend on advertising, and the temptation (which thy have increasingly given in to on their search service recently) is to favour advertisers (the real customers) over end users - a classic problem in a two-sided market.
To be clear though, I was not saying google are evil, but that just shifting the value around is what businesses do and what Google does - creating value is a very slippery and subjective concept and I'd argue their services which create value (mail etc) are funded by those that don't (advertising). So I would not use that particular behaviour as a criticism of the companies mentioned in the article - they might be objectionable, immoral or even illegal (I'd say probably all three) but they are not easy to distinguish from normal businesses in terms of how they shift value around.
Thanks for the thoughtful reply.
I believe that value is subjective, in that it's value to humans, but it's not particularly slippery. I also believe that for almost all businesses value creation is separate from cash extraction. My ISP's internet connection, for example, delivers a lot of value to me, but getting a bill from them doesn't. Google Search delivers a lot of value to me, but having ads on the page often doesn't. However, Google Search ads do deliver value to advertisers, and sometimes they deliver value to users when they discover novel products that are helpful to them.
I think the value analysis for Sweetch and Monkey Parking is pretty clear. People want to park quickly and easily near wherever they're going. Monkey Parking makes that easier for some people, which appears to create value on the per-customer level. But it only does that by making parking harder for other people, so the app delivers no net gain in value. Indeed, by in effect paying people hang out in parking spaces until somebody pays them to leave, they are probably making the parking problem worse, resulting in a net destruction of value.
I think the analysis for the restaurant reservation thing is similar. For each person they get in, they are excluding somebody else who would have had a table. Net value gain: zero. Or possibly negative given that squatting on reservations means that some will go unfilled.
So in both cases, they seem to be parasites on the actual creators of value. This can be easier to see if you contrast them with the parking startups that do make parking easier: https://news.ycombinator.com/item?id=7986950
I believe that value is subjective, in that it's value to humans, but it's not particularly slippery. I also believe that for almost all businesses value creation is separate from cash extraction. My ISP's internet connection, for example, delivers a lot of value to me, but getting a bill from them doesn't. Google Search delivers a lot of value to me, but having ads on the page often doesn't. However, Google Search ads do deliver value to advertisers, and sometimes they deliver value to users when they discover novel products that are helpful to them.
I think the value analysis for Sweetch and Monkey Parking is pretty clear. People want to park quickly and easily near wherever they're going. Monkey Parking makes that easier for some people, which appears to create value on the per-customer level. But it only does that by making parking harder for other people, so the app delivers no net gain in value. Indeed, by in effect paying people hang out in parking spaces until somebody pays them to leave, they are probably making the parking problem worse, resulting in a net destruction of value.
I think the analysis for the restaurant reservation thing is similar. For each person they get in, they are excluding somebody else who would have had a table. Net value gain: zero. Or possibly negative given that squatting on reservations means that some will go unfilled.
So in both cases, they seem to be parasites on the actual creators of value. This can be easier to see if you contrast them with the parking startups that do make parking easier: https://news.ycombinator.com/item?id=7986950
This isn't an issue of middlemen, value or the alignment of interests between customer and company. It's an issue of legality.
Google operates a legal business. It sells advertising on a service that it owns. Period.
The parking companies in the article are knowingly inducing their "customers" to violate local laws that forbid the buying and selling of on-street public parking. These companies seek to profit from this and as a result are now in legal hot water themselves. As for ReservationHop, I believe restaurants may have legal recourse. California's unfair competition laws are fairly broad and I think an argument could be made that intentionally booking fake reservations for the purpose of advertising and reselling them would constitute an unfair and perhaps even fraudulent business practice.
Google operates a legal business. It sells advertising on a service that it owns. Period.
The parking companies in the article are knowingly inducing their "customers" to violate local laws that forbid the buying and selling of on-street public parking. These companies seek to profit from this and as a result are now in legal hot water themselves. As for ReservationHop, I believe restaurants may have legal recourse. California's unfair competition laws are fairly broad and I think an argument could be made that intentionally booking fake reservations for the purpose of advertising and reselling them would constitute an unfair and perhaps even fraudulent business practice.
And I'd add that even if it were technically legal to sell public parking spaces, it would still be a good thing to outlaw. The city's offering free public parking for a reason, and that reason isn't enriching a couple of entrepreneurs who moved here six months ago.
> it doesn't create significant value for end users with advertising
It doesn't? Google ads fund YouTube, Gmail, Docs, Chrome, Android, and lots of other hit Google services that are Google produced products/content, not a middle-man service between content producer and advertiser.
It doesn't? Google ads fund YouTube, Gmail, Docs, Chrome, Android, and lots of other hit Google services that are Google produced products/content, not a middle-man service between content producer and advertiser.
That was the grandparent's whole point - the value (at least in this naive conception) Google creates comes from its non-advertising - and non-profitable - parts.
(If some other organization got the profits Google was making as an advertising middleman, who's to say they wouldn't produce equally good products/content?)
(If some other organization got the profits Google was making as an advertising middleman, who's to say they wouldn't produce equally good products/content?)
it doesn't create significant value for end users with advertising
They're just clipping the ticket for bribery. This same thing exists in the underworld, however tech has made this sort of thing a "legitimate" business. I don't see much of a difference between this, and say, high frequency trading. Different areas, but same concept.
You seem to accept the media's sensationalist take on HFT which was provided to them solely by Michael Lewis. While HFT isn't exactly kosher, it's not as bad as you may like to think.
Here's a video explaining some advantages of HFT:
https://www.youtube.com/watch?v=e9aYZYSwCLo
Oops, didn't mean to compare it to crime. Just relative in concept.
Whenever I hear about these I always wonder what the people that found them are thinking. I mean, what type of person would you have to be to decide to try and screw over the restaurant industry (which already has historically low margins) just to make a buck? I can't even imagine how many fake reservations they would need to create to make that idea worthwhile for them. And what investors would give them money to do so?
I mentor at startup events, so I know exactly what kind of people they are.
The good ones are people who just haven't thought it through. They've found some sort of demand, and they're doing the standard hack-the-system thing that the startup culture trains them to do. Once it's rolling, it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."
The bad ones are the sort of entitled douchebags that would have previously gone into investment banking or some other industry where the money's great and ethics aren't emphasized. But now startups are the high-status, high-money thing, so that's what they're after.
The good ones are people who just haven't thought it through. They've found some sort of demand, and they're doing the standard hack-the-system thing that the startup culture trains them to do. Once it's rolling, it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."
The bad ones are the sort of entitled douchebags that would have previously gone into investment banking or some other industry where the money's great and ethics aren't emphasized. But now startups are the high-status, high-money thing, so that's what they're after.
This is exactly right, from the creator of ReservationHop:
"To be honest, I haven’t spent a lot of time thinking through these questions." http://brianmayer.com/2014/07/how-i-became-the-most-hated-pe...
"To be honest, I haven’t spent a lot of time thinking through these questions." http://brianmayer.com/2014/07/how-i-became-the-most-hated-pe...
It's great how he compares himself to two NYC startups: https://www.zurvu.com/info/guests and http://www.killerrezzy.com/pages/about-us
The difference is Zurvu actually partners with the restaurants, helping them move empty tables. They may request a certain number of tables be free per night, but because they partner with the restaurants (that they prominently display), that presumably comes with kickbacks to the restaurant in question.
And Killer Rezzy's goal is to allow restaurants to monetize reservations. While this may suck for those of us who don't want to pay an entrance fee to eat, it's certainly not harming the businesses they depend on.
The difference is Zurvu actually partners with the restaurants, helping them move empty tables. They may request a certain number of tables be free per night, but because they partner with the restaurants (that they prominently display), that presumably comes with kickbacks to the restaurant in question.
And Killer Rezzy's goal is to allow restaurants to monetize reservations. While this may suck for those of us who don't want to pay an entrance fee to eat, it's certainly not harming the businesses they depend on.
This guy seems intensely clueless.
"If somebody is willing to pay for it, is it really unethical?"
There we go - if there's a paying market for something, it's totally ethical. Off I go to found assasins.io - murder for hire disrupted.
"If somebody is willing to pay for it, is it really unethical?"
There we go - if there's a paying market for something, it's totally ethical. Off I go to found assasins.io - murder for hire disrupted.
This seems taken out of context. I don't think he was making a blanket statement, he was asking if people are willing to pay for this particular service, is it unethical? Ie, is it reasonable to say that if people are willing to pay for restaurant reservations, specifically, does that say anything about the ethics of it. Not to say that it is a good point, but I don't think it's some moral statement that paying for something makes it de facto ethical in general.
> it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."
H.L. Mencken?
The Internet appears to ascribe that quote to Upton Sinclair.
H.L. Mencken?
The Internet appears to ascribe that quote to Upton Sinclair.
Sorry! When I searched for the quote, I even typed in "sinclair salary". No idea how Mencken crept in there.
"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
Because nearly every internet business gets it's revenue from advertising, a lot of good people jump through hoops to convince themselves that they have not made a deal with the devil. The downvotes[1] come fast when I point out this moral and cognitive dissonance, usually without any counter argument since they just want me to go away.
When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest.
Besides the social cost of Advertising, there many other costs[2]. The idea that advertising gives us free web content and services is utter bullshit.
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[1] The cowardly downvotes with no counter argument have already started. Upton Sinclair is the actual source of the quote at the top. A wise man who got a bunch of downvotes in his time.
[2] https://news.ycombinator.com/item?id=7767811
Because nearly every internet business gets it's revenue from advertising, a lot of good people jump through hoops to convince themselves that they have not made a deal with the devil. The downvotes[1] come fast when I point out this moral and cognitive dissonance, usually without any counter argument since they just want me to go away.
When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest.
Besides the social cost of Advertising, there many other costs[2]. The idea that advertising gives us free web content and services is utter bullshit.
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[1] The cowardly downvotes with no counter argument have already started. Upton Sinclair is the actual source of the quote at the top. A wise man who got a bunch of downvotes in his time.
[2] https://news.ycombinator.com/item?id=7767811
> "Because nearly every internet business gets it's revenue from advertising"
Citation please? There are many "internet businesses" that don't derive their revenue from advertising, e.g., AWS, Dropbox, Netflix. Spotify derives some revenue from advertising, but their core business is subscriptions. ad nauseum
Citation please? There are many "internet businesses" that don't derive their revenue from advertising, e.g., AWS, Dropbox, Netflix. Spotify derives some revenue from advertising, but their core business is subscriptions. ad nauseum
Count all of the web content you've consumed and all the web services you've used in the past year. Now count all the ones you've paid for.
Also, those paid-for services you mention are of such high quality (to you, not advertisers) because you pay for them. You are the customer not the product, as they say.
Also, those paid-for services you mention are of such high quality (to you, not advertisers) because you pay for them. You are the customer not the product, as they say.
That isn't entirely fair. There are some websites that offer a free tier in the hopes that enough users will buy the paid tier. I suppose one could call this a form of advertising, but Dropbox giving me 2gb free does not seem to the type of manipulative advertising you are referring to (and is not a revenue source for them).
Granted. But it does't change the numbers very much. Keep counting.
You're right, and it's depressing that you're being downvoted. Then again, HN can be a very hostile place if you bring an unpopular perspective to a discussion, even if that perspective is presented with clarity of thought and reason.
Thanks. The vote total on my original comment has swung up and down so many times that I know it's getting lots of downvotes. The same goes for many of my previous comments in this vein. As to vdaniuk's claims of an anti-advertising meme on HN, I say: "show me". I've seen little.
Unpopular? Really? "Advertising is bad" is one of the most supported memes on HN.
Most people don't pay for Wikipedia, how are they the product?
Many people pay for Hulu and many other services, and still get ads, how are they not the product?
That cliché can't die soon enough.
Many people pay for Hulu and many other services, and still get ads, how are they not the product?
That cliché can't die soon enough.
It's quite representative of the problem if you can't identify the difference between Wikipedia - a non-profit which is entirely ad-free and runs exclusively on donations, compared with the majority of other free sites which are funded by subjecting their visitors to advertising. No wonder Wikipedia has so to push so hard with its annual donation drives, if people can't even recognise the benefits of keeping it free from commercialism.
Hulu is an example which mixes both approaches - clearly an $8/mo premium subscription isn't enough to support their business model, so it has to be supplemented with ads. Not sure why this needs explaining. TV is obviously an industry very tightly coupled with ads, making it more difficult to disrupt with a fully ad-free approach.
Hulu is an example which mixes both approaches - clearly an $8/mo premium subscription isn't enough to support their business model, so it has to be supplemented with ads. Not sure why this needs explaining. TV is obviously an industry very tightly coupled with ads, making it more difficult to disrupt with a fully ad-free approach.
I can identify the difference - the cliché can't! That's my whole point! Wikipedia is the proof the paying is not always required to not "be the product", unlike claimed. Hulu proves that it's also not sufficient.
Fair enough - I thought you were claiming the cliché was generally incorrect, not that there are a few exceptions which break it. Obviously I can't argue with that. It's intended as a rule of thumb and applies to the vast majority of the internet. Especially if you count a donation-driven site like shareware software - an encouraged, but optional, request for payment.
Wikipedia is not a business, so that's irrelevant.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
The cliché is an excellent guide to the situation. So many people don't seem to understand why ad-supported businesses work they way they do, and in particular why they don't seem to have the customer's best interests in mind.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
The cliché is an excellent guide to the situation. So many people don't seem to understand why ad-supported businesses work they way they do, and in particular why they don't seem to have the customer's best interests in mind.
Wikipedia is not a business, so that's irrelevant.
So it's not "if you're not paying for it; you're the product", it's "if you're not paying and the provider is a business, you're the product". And then we're just missing a truckload of exceptions, instead of two truckloads.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
People pay a lot to Comcast every month, does that mean they get plenty of respect?
So it's not "if you're not paying for it; you're the product", it's "if you're not paying and the provider is a business, you're the product". And then we're just missing a truckload of exceptions, instead of two truckloads.
Hulu's just funny to me. You're paying to be a product. It means the business decision makers will respect you a little, but how much depends on how much of the revenue you're bringing in and what sort of industry it is.
People pay a lot to Comcast every month, does that mean they get plenty of respect?
Are you just now discovering that simple heuristics don't always contain all the truth in the world? I think the rest of us generally know that, which is why we're comfortable with the notion that broad, pithy statements aren't perfectly accurate across all time and space.
Comcast is a fine example of something where you're the product even if you're paying for it. (Note that "if you're not paying for it you're the product" doesn't have anything to say about the case where you are paying.) Monopolies and oligopolies basically get to treat customers like property, because they know the customers don't have much real choice. Comcast is exactly what I had in mind when I said it depends on the industry.
Comcast is a fine example of something where you're the product even if you're paying for it. (Note that "if you're not paying for it you're the product" doesn't have anything to say about the case where you are paying.) Monopolies and oligopolies basically get to treat customers like property, because they know the customers don't have much real choice. Comcast is exactly what I had in mind when I said it depends on the industry.
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It's the advertising (and selling of your eyeballs) that makes you a product. Wikipedia has no ads. To the degree that Hulu relies on ads, we are their product. Labeling it a cliché doesn't make it less true.
There's nothing wrong with free, as long as it's truly free. Ad-supported services have huge costs that we all pay for as I explain in detail in my linked comment.
There's nothing wrong with free, as long as it's truly free. Ad-supported services have huge costs that we all pay for as I explain in detail in my linked comment.
When I talk to anyone who starts raging about ethics of advertising, I often ask: are you talking about deontological or consequentialist ethics? Because that changes everything.
Also, do you not understand that entities buying and selling advertising are currently in a Nash equilibrium and no amount of internet whining will change that.
Also, do you not understand that entities buying and selling advertising are currently in a Nash equilibrium and no amount of internet whining will change that.
So you start out dismissing my point be labeling it "raging" and "whining". In fact, by labeling it "whining", you've made it a foregone conclusion that it will be ineffectual.
Mostly consequentialist. Such should be evident from what I wrote above and in the linked comment.
Even if I were to grant your point about a Nash equilibrium (you fail to convince, but succeed to condescend), buyers and sellers of advertising are not the only players involved. You also beg the question by assuming everyone is driven purely by self-interest.
Mostly consequentialist. Such should be evident from what I wrote above and in the linked comment.
Even if I were to grant your point about a Nash equilibrium (you fail to convince, but succeed to condescend), buyers and sellers of advertising are not the only players involved. You also beg the question by assuming everyone is driven purely by self-interest.
[deleted]
> When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest.
Besides the social cost of Advertising, there many other costs.
Such as? Keen to hear. :)
Also, what would you propose in lieu of the current advertising supported model that is dominant today?
Such as? Keen to hear. :)
Also, what would you propose in lieu of the current advertising supported model that is dominant today?
For me the biggest problem with it is the enormous waste of talent. If we banned all advertising tomorrow, nothing particularly bad would happen. People would still learn about products; companies would still gain and lose customers. Indeed, that whole process might be more effective. But suddenly the US would have $500 billion or so worth of labor and goods to devote to some purpose that is actually productive.
Actual smart humans waste their entire lives doing something that adds zero net value the system. When I think of my friends in advertising, it always makes me a little sad. What good things could they have done with their lives?
Actual smart humans waste their entire lives doing something that adds zero net value the system. When I think of my friends in advertising, it always makes me a little sad. What good things could they have done with their lives?
Please read the linked comment for an explanation of other costs. It's not exhaustive. I didn't write about other costs, such as the stifling of competition (advertising favors the establishment, the rich get richer) and negative sum arms races[1].
I'm implicitly proposing that people pay directly for the products they use. Be the customer, not the product. Reward businesses that put the user first, with no advertiser conflict of interest. We need to evolve a way to do this efficiently, since people aren't going to pull out their credit card for every different site they use, especially not the one-offs.
The best minds of my generation are thinking about how to make people click ads. That sucks. – Jeff Hammerbacher, fmr. Manager of Facebook Data Team, founder of Cloudera
If we can redirect just a fraction of those best minds at coming up with a micropayment system for the web, it won't take long to solve. Some people make themselves feel better about advertising by saying it helps the poor (who can't, presumably, afford to pay for Gmail or Facebook or whatever online journalism they read). These same people conveniently forget that the poor spend a greater share of their income on goods, thus a greater share goes to advertising costs, which could mean that the ad-supported web model we have today is regressive (as in regressive tax).
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[1] https://news.ycombinator.com/item?id=7927862
I'm implicitly proposing that people pay directly for the products they use. Be the customer, not the product. Reward businesses that put the user first, with no advertiser conflict of interest. We need to evolve a way to do this efficiently, since people aren't going to pull out their credit card for every different site they use, especially not the one-offs.
The best minds of my generation are thinking about how to make people click ads. That sucks. – Jeff Hammerbacher, fmr. Manager of Facebook Data Team, founder of Cloudera
If we can redirect just a fraction of those best minds at coming up with a micropayment system for the web, it won't take long to solve. Some people make themselves feel better about advertising by saying it helps the poor (who can't, presumably, afford to pay for Gmail or Facebook or whatever online journalism they read). These same people conveniently forget that the poor spend a greater share of their income on goods, thus a greater share goes to advertising costs, which could mean that the ad-supported web model we have today is regressive (as in regressive tax).
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[1] https://news.ycombinator.com/item?id=7927862
As someone who worked in an advertising-industry startup for 2 years before questioning what I was doing, I agree with everything you've said (in your linked post too), and sorry to see you're getting downvoted.
The project I subsequently started operates on a very simple $5/mo pausable subscription with a 30-day free trial. I'm _much_ happier with this model than anything I've ever worked on which is ad-based - it feels like a completely fair and fulfilling exchange of value.
I, too, feel like if the web was free from advertising, and instead was home to services supported by paying customers and/or donations, it would be a much better place and have far-reaching benefits. This is something I genuinely want to make a difference on, so feel free to get in touch if you want to see if we can combine our efforts in some way (contact details in profile).
The project I subsequently started operates on a very simple $5/mo pausable subscription with a 30-day free trial. I'm _much_ happier with this model than anything I've ever worked on which is ad-based - it feels like a completely fair and fulfilling exchange of value.
I, too, feel like if the web was free from advertising, and instead was home to services supported by paying customers and/or donations, it would be a much better place and have far-reaching benefits. This is something I genuinely want to make a difference on, so feel free to get in touch if you want to see if we can combine our efforts in some way (contact details in profile).
Thank you! I most certainly will get in touch. I want to both evangelize the problem and spur solutions (I have a few). I'm very serious about this, in much the same way as people are serious about open source, privacy and net neutrality. I am so glad you are too :)
Why is advertising "fundamentally manipulative and dishonest?" People aren't stupid. Give them more credit. Truly effective advertising gives more credit to its viewers than you seem to. Have you ever run an advertising campaign? Do you know anything about marketing a product? Cynically manipulating people may help you in the short run, but good sales and marketing is about informing people of value you can provide in a way that respects their time and intelligence.
I think he's generally right. Look at the informational content of most ads. What is Coca-Cola telling you about their products that you don't already know? Nothing. They changed their product once, 25 years ago, and it was a disaster, so they changed it back. There's nothing new to say.
They spend $4 billion per year not to inform people of the value they provide, but to manipulate people into purchasing more Coca Cola. And it works.
If they stop, then Pepsi will spend more, capture Coca Cola customers, and Coke will shrink. Or people will say, "Hey, maybe I should drink something more healthy," and stop buying sugar-water altogether. Can't have that! So Coke will keep burning money on manipulating people.
They spend $4 billion per year not to inform people of the value they provide, but to manipulate people into purchasing more Coca Cola. And it works.
If they stop, then Pepsi will spend more, capture Coca Cola customers, and Coke will shrink. Or people will say, "Hey, maybe I should drink something more healthy," and stop buying sugar-water altogether. Can't have that! So Coke will keep burning money on manipulating people.
The Co-Founder and CTO of Adtuitive, an ad platform startup, defending advertising! You make Upton Sinclair proud!
Like I said, "When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest."
People can be stupid. People can be manipulated. Propaganda works. Take political ads. Which ones work best, the ones that manipulate your perceptions and emotions and ignorance, or the ones that "respect [your] time and intelligence" with the honest whole truth?
Like I said, "When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest."
People can be stupid. People can be manipulated. Propaganda works. Take political ads. Which ones work best, the ones that manipulate your perceptions and emotions and ignorance, or the ones that "respect [your] time and intelligence" with the honest whole truth?
Nice ad hom, but it turns out my ad tech startup (which was now many years ago) focused on ads that simply delivered product names, images, and prices that were contextually relevant. So pretty much the most non-manipulative form of advertising possible, and it worked well. I think working in this space for a few years at one point in my career (but no longer) lends more credibility to my argument, not less.
I never said there isn't such a thing as manipulative advertising, what I said was that advertising is not inherently manipulative and dishonest. It's a tool for communicating, and in my experience in general people see though manipulation tactics, such like they do when you try to sell them something by bullshitting them. Well written Google ads, well written marketing for websites, etc, all generally flow from a central theme of communicating clearly and honestly to the reader what value you are offering, and giving them reasons to want to pursue your business. It's salesmenship, and I guess only if you think salesmanship is inherently dishonest and manipulative then you'd think advertising is too.
I never said there isn't such a thing as manipulative advertising, what I said was that advertising is not inherently manipulative and dishonest. It's a tool for communicating, and in my experience in general people see though manipulation tactics, such like they do when you try to sell them something by bullshitting them. Well written Google ads, well written marketing for websites, etc, all generally flow from a central theme of communicating clearly and honestly to the reader what value you are offering, and giving them reasons to want to pursue your business. It's salesmenship, and I guess only if you think salesmanship is inherently dishonest and manipulative then you'd think advertising is too.
Maybe your startup is on the 'good' side of advertising, but is it really so unreasonable to state that advertising, in the vast majority of cases, is manipulative and dishonest?
(whether that's by definition a bad thing is another issue, though)
(whether that's by definition a bad thing is another issue, though)
And what kind of customer wants to give a fake name to dine? The feeling of dishonesty aside, I can imagine it going hilariously wrong if automatically generated.
"Yes, my name is Eduardo ArrayIndexOutOfBoundsException, it is a proud family name, we are far better than the scum of House Segmentation Fault".
"Yes, my name is Eduardo ArrayIndexOutOfBoundsException, it is a proud family name, we are far better than the scum of House Segmentation Fault".
Restaurants are not exactly Lilly white they have huge mark-ups of drink and food, deserts especially.
They also take advantage by paying staff less the minimum wage and relying on tips to make a living - a campaign for a living wage for restaurant workers would be a better use of "josh" and those like him time.
If foxcon treated their staff in the way the average restaurants did there would be an outcry
They also take advantage by paying staff less the minimum wage and relying on tips to make a living - a campaign for a living wage for restaurant workers would be a better use of "josh" and those like him time.
If foxcon treated their staff in the way the average restaurants did there would be an outcry
Maybe the restaurants could enjoy higher margins if they made great websites which let you bid for last-minute reservations?
Because talking to a human for 30 seconds is that much of a chore when making a reservation?
And how, exactly, would that do anything to prevent reservation scalping without adversely affecting the user experience of making a reservation or making life even easier for reservation scalpers? Probably it will be easy to use and easy for scalpers to screen scrape, or the UX will be a some kind of CAPTCHA-filled monstrosity.
Now that I think about it, forget about restaurants and reservation scalpers; if you could develop a truly superior CAPTCHA replacement, that would be orders of magnitude more valuable.
And how, exactly, would that do anything to prevent reservation scalping without adversely affecting the user experience of making a reservation or making life even easier for reservation scalpers? Probably it will be easy to use and easy for scalpers to screen scrape, or the UX will be a some kind of CAPTCHA-filled monstrosity.
Now that I think about it, forget about restaurants and reservation scalpers; if you could develop a truly superior CAPTCHA replacement, that would be orders of magnitude more valuable.
OK, how about prepaid meals?
Because talking to a human for 30 seconds is that much of a chore when making a reservation?
In my experience, the problem is not the 30 seconds call, it's the minutes of waiting to get someone free to answer. Most restaurants can't exactly afford a call center.
There was a story recently on HN of a restaurant who did just that successfully: https://news.ycombinator.com/item?id=7853786
In my experience, the problem is not the 30 seconds call, it's the minutes of waiting to get someone free to answer. Most restaurants can't exactly afford a call center.
There was a story recently on HN of a restaurant who did just that successfully: https://news.ycombinator.com/item?id=7853786
Right now they are taking all of the money for themselves, but in the future, if the service becomes popular, you will likely see them work directly with restaurants and share the revenue. The whole point of this service is to make reservations into something that can be bought. This obviously works best with the cooperation of the restaurants.
> "you will likely see them work directly with restaurants and share the revenue"
Why wait for the future?
If some startup thinks that selling reservations at restaurant X is profitable, they should be partnering with restaurant X right now to sell their reservations. They should be sharing in the potential downside with the restaurant -- if they book reservations they don't sell, and the restaurant has to turn down paying customers, the startup should pay some cost for that.
Why wait for the future?
If some startup thinks that selling reservations at restaurant X is profitable, they should be partnering with restaurant X right now to sell their reservations. They should be sharing in the potential downside with the restaurant -- if they book reservations they don't sell, and the restaurant has to turn down paying customers, the startup should pay some cost for that.
Because it's very hard to get small businesses, especially restaurants, to signup for unproven new services. This is why you had companies like Groupon spending millions on hiring local sales people.
That's an excuse, not a reason.
"Because doing the right thing is too hard" is not a valid reason for doing the wrong thing.
"Let me do the wrong thing, I promise (disclaimer: not a real promise) to do the right thing once I've gained sufficient profit" is even less of a reason.
"Because doing the right thing is too hard" is not a valid reason for doing the wrong thing.
"Let me do the wrong thing, I promise (disclaimer: not a real promise) to do the right thing once I've gained sufficient profit" is even less of a reason.
Bullshit. Many, many startups have a chicken and egg problem like this and artificially create demand or supply through 'questionable' tactics in order to prove the business model simultaneously to themselves and to their potential customers. This guy can now go into restaurants and tell them how much people are willing to pay for their reservations. Nobody else can do that, and that just might make the difference to getting those restaurants on board with his product. Once the engine is humming then of course not only will it be unnecessary to keep doing what he's doing but it won't scale anyway.
There's often no other option and the ends in fact do justify the means if the net result is a more efficient market for both parties once it has been bootstrapped up "in the small." Of course, this requires you to not be an evil scumbag and be honest with yourself, but I see no reason to assume a path of execution is inherently evil, the intent and overall strategy greatly matters.
There's often no other option and the ends in fact do justify the means if the net result is a more efficient market for both parties once it has been bootstrapped up "in the small." Of course, this requires you to not be an evil scumbag and be honest with yourself, but I see no reason to assume a path of execution is inherently evil, the intent and overall strategy greatly matters.
according to another comment in this thread, there are startups in New York that are doing it the way I suggested (ie, partnering with restaurants at the beginning).
The restaurant probably gets about the same amount of money on average, if not slightly more. It's easy to say that the jerk that uses this kind of app leaves less of a tip or takes up table space longer without spending more but on closer examination I don't see why this would be the case. They likely just pay more overall, and the app gets the extra.
You missed the part where these reservations are being held with risk of not succeeding in selling the spots: it isn't that the person who is sitting at the table is less profitable for the restaurant, but that a bunch of reservations are made that might in the end not ever succeed in being sold by the website. Assume for a second that the restaurant also charged for reservations and had cancellation fees for no-shows (which arguably they should, but the economics and expectations works out that most normal customers would be turned off by this): then the risk of the no-show transfers from the restaurant to this website, and it is more clear why this business is just a parasite.
Ah yes. I thought about that but forgot to mention it. I think this could be mostly solved by some combination of a) canceling reservations (if the place is busy these would often be replaced by a waiting list or walk-ins), b) avoiding excess inventory, c) using unused reservations themselves or having friends use them
I'm going to disagree some here. When people claim starups aren't creating value, I always push back - just because they aren't creating value to you does not mean that they are't creating value to someone else. In this case, people value reservations; its the same thing with concerts or sporting events with scalpers - the price does not reflect market value - that value is being allocated already to people who may not perceive it as such. Now, artists can choose to counter this in obvious ways (Louis CK had a great approach by requiring ID's to limit scalping potential), but if they choose to ignore it, I think there's a reasonable business opportunity. Now if a restaurant chose to counter this TOS by say , requiring a credit card for each reservation, they are well within their rights.
> just because they aren't creating value to you does not mean that they are't creating value to someone else.
True, but follow that logic, and replace 'create' with 'revoke/destroy'. These apps are proposing a tiering system that favours people willing to trade money for convenience, and _simultaneously depriving those how aren't willing or can't_. So this pay to use system is scalping limited resources at a cost to others, and profiting middle men piggybacking of existing infrastructure. I think the article made a clear argument for why this is not okay.
The proposal that you can require a credit card for each reservation escalates the situation, because now in order to stop scalpers from operating, the bar for entry is raised. If people are independently abusing the system, then this is the logical way to combat the problem. But if it is a parasitic entity then regulation is sensible way to protect the business and its customers (eg. some who might not have credit cards).
Often when these arguments are raised people argue as back and forth as if economics and law are the only considerations. What about considerations towards decency?
How annoyed would you be if you tried going to a restaurant, saw empty car spaces installed by your local council, but people standing in them holding signs saying "Reserved. Yours for $4". Finally, you arrive at the restaurant but get told that is is full. A guy out the front waves you down, 'psst. I have 10 reservations - want one? $5 bucks.' Not only that, the guy is part of an organization that has done it to all the other restaurants in the area.
True, but follow that logic, and replace 'create' with 'revoke/destroy'. These apps are proposing a tiering system that favours people willing to trade money for convenience, and _simultaneously depriving those how aren't willing or can't_. So this pay to use system is scalping limited resources at a cost to others, and profiting middle men piggybacking of existing infrastructure. I think the article made a clear argument for why this is not okay.
The proposal that you can require a credit card for each reservation escalates the situation, because now in order to stop scalpers from operating, the bar for entry is raised. If people are independently abusing the system, then this is the logical way to combat the problem. But if it is a parasitic entity then regulation is sensible way to protect the business and its customers (eg. some who might not have credit cards).
Often when these arguments are raised people argue as back and forth as if economics and law are the only considerations. What about considerations towards decency?
How annoyed would you be if you tried going to a restaurant, saw empty car spaces installed by your local council, but people standing in them holding signs saying "Reserved. Yours for $4". Finally, you arrive at the restaurant but get told that is is full. A guy out the front waves you down, 'psst. I have 10 reservations - want one? $5 bucks.' Not only that, the guy is part of an organization that has done it to all the other restaurants in the area.
Scalpers do not create value. At a concert the value is being created by the performers, and it's not like scalpers create seats or make the show longer. They just shift value around to people with more money.
Scalpers do create value. After a complete scalping transaction:
- the original ticket purchaser is happier with the cash received than with the ticket they had before
- the final ticket purchaser is happier with the ticket than with the cash they paid
- the scalper is happy with his/her profit
- the promoter's/venue's revenue is unaffected
So, three people are better off. Value has been created.
- the original ticket purchaser is happier with the cash received than with the ticket they had before
- the final ticket purchaser is happier with the ticket than with the cash they paid
- the scalper is happy with his/her profit
- the promoter's/venue's revenue is unaffected
So, three people are better off. Value has been created.
By shifting the demographics of the audience, it can reduce the value of the show. Quoting Kid Rock, who has been trying to eliminate scalpers:
Kid Rock and his team are reserving the first two rows for die-hard fans
only. No matter how much money you've got, you can't buy your way into them.
"They are not for sale, " Kid Rock says. "I'm tired of seeing the old
rich guy in the front row with the hot girlfriend. And the hot girlfriend,
you know, with her boobs hanging out,with her beer in the air, just screaming
the whole time. The old rich guy is standing there like he could[n't] care
less. It's a very common theme at Kid Rock concerts."
I do not understand this logic.
What original ticket purchaser? Scalpers aren't like eBay. They have bought up the tickets from the venue at certain amount, depriving others of a limited resource at that same value, and now offering it a higher value to people who didn't have the means to buy it as fast as the scalper.
The disruption the scalper is introducing into an existing system benefits nobody but themselves.
What original ticket purchaser? Scalpers aren't like eBay. They have bought up the tickets from the venue at certain amount, depriving others of a limited resource at that same value, and now offering it a higher value to people who didn't have the means to buy it as fast as the scalper.
The disruption the scalper is introducing into an existing system benefits nobody but themselves.
Yesterday I bought a ticket at >2x face value for a concert on Monday. That's value for me - I'd like to be able to go to things without having to plan my life months in advance, and I'm willing to pay for the privilege.
Supply isn't set in stone. If scalpers buy up tickets early on then they take on the risk that a show won't sell out, and that allows the promoters to move to a bigger venue (as happened in this case), add more nights, or even raise prices. So the promoter benefits too.
It's no different from any other middleman: find someone who's selling at price x, find someone who's buying at y > x, connect them together and take your cut. Which is what makes capitalism works.
Supply isn't set in stone. If scalpers buy up tickets early on then they take on the risk that a show won't sell out, and that allows the promoters to move to a bigger venue (as happened in this case), add more nights, or even raise prices. So the promoter benefits too.
It's no different from any other middleman: find someone who's selling at price x, find someone who's buying at y > x, connect them together and take your cut. Which is what makes capitalism works.
You're missing the negative externality: the person who couldn't get in because you're paying some scalping dick. And let's not forget the performers, who are interested in performing for their best fans, and who try to set ticket prices accordingly.
I'm not willing to pay more than face value for tickets so, if scalpers didn't exist, I would be better off. I'd have an x% chance (where x<100) of getting tickets at face value.
There are rich people who are willing to pay up to 4x face value. They are very happy to pay 2x face value and get to go to every show they want. Without scalpers, they would pay less per show, but would totally miss out on some shows.
The scalper benefits those guys, at the expense of guys like me. It's not true that the scalper benefits nobody but themselves.
There are rich people who are willing to pay up to 4x face value. They are very happy to pay 2x face value and get to go to every show they want. Without scalpers, they would pay less per show, but would totally miss out on some shows.
The scalper benefits those guys, at the expense of guys like me. It's not true that the scalper benefits nobody but themselves.
That's a good point I had (subconcisouly refused) to consider as value.
Value is added to the rich. Further offending my socialist dream. ;)
Value is added to the rich. Further offending my socialist dream. ;)
No, because the final ticket purchaser would have been even happier with the ticket plus the extra cash he would have had if he had not needed to buy from the scalper, and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper.
Come on, this is obvious.
Come on, this is obvious.
No, because the final ticket purchaser would have been even happier with the ticket plus the extra cash he would have had if he had not needed to buy from the scalper
But in my example, he wouldn't have gotten the ticket at all. The ticket would have been had by someone like me, who was barely willing to pay the face value, but was lucky enough to get one of the limited supply of tickets when they were released for sale.
and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper
But in my example the venue or promoter has already set the price lower than the market-clearing price. If s/he hadn't done that, then the scalper would not have popped into existence, as the market would already have cleared.
But in my example, he wouldn't have gotten the ticket at all. The ticket would have been had by someone like me, who was barely willing to pay the face value, but was lucky enough to get one of the limited supply of tickets when they were released for sale.
and/or the venue or promoter would have been happier with the extra money that is instead taken by the scalper
But in my example the venue or promoter has already set the price lower than the market-clearing price. If s/he hadn't done that, then the scalper would not have popped into existence, as the market would already have cleared.
Your analysis is slightly off. In a world without scalpers, the original ticket purchaser would not exist, because he bought the ticket for the purpose of selling it. However, your general thought is good.
In a world without scalpers, person A and B both have a 50% of buying the ticket at price $X. However, the ticket is worth more to B than it is to A (in terms of real utility, not monetary value). There is real value created by increasing the chances of B getting the ticket. The most effective mechanism we have found to maximize the chances that B gets the ticket in this situation is market pricing, which is what scalpers enable.
In a world without scalpers, person A and B both have a 50% of buying the ticket at price $X. However, the ticket is worth more to B than it is to A (in terms of real utility, not monetary value). There is real value created by increasing the chances of B getting the ticket. The most effective mechanism we have found to maximize the chances that B gets the ticket in this situation is market pricing, which is what scalpers enable.
What's your evidence that a market mechanism is most useful here?
When I think of the best concerts I've seen, the ones I really loved, they were mostly when I was young and broke. Now that I'm older and have money I can afford to go more concerts, but I generally care less. I could well be pushing out very passionate fans.
I suspect a better mechanism in this case is making people pay in a currency in which we are all more or less equal: time. If the venue just started selling tickets in one spot at a particular time, the people in line first would be the very passionate fans, the ones who dropped everything to get in line early.
When I think of the best concerts I've seen, the ones I really loved, they were mostly when I was young and broke. Now that I'm older and have money I can afford to go more concerts, but I generally care less. I could well be pushing out very passionate fans.
I suspect a better mechanism in this case is making people pay in a currency in which we are all more or less equal: time. If the venue just started selling tickets in one spot at a particular time, the people in line first would be the very passionate fans, the ones who dropped everything to get in line early.
I see your point. However, many times people buy tickets to a show because they intend to go, but then something comes up, or their financial situation changes, or demand outstrips supply to the extent that the open market price exceeds the value to them.
That's the situation I was imagining when I wrote my post.
My original post has as many comments as downvotes, which I take to mean it wasn't a useless post, but that people disagree that scalpers add value. The funny thing is, I would prefer a world without scalpers, and in which I had an equal chance to buy underpriced tickets. If I were rich, I would probably prefer the current situation, or one in which tickets were priced dynamically, like plane tickets are now.
That's the situation I was imagining when I wrote my post.
My original post has as many comments as downvotes, which I take to mean it wasn't a useless post, but that people disagree that scalpers add value. The funny thing is, I would prefer a world without scalpers, and in which I had an equal chance to buy underpriced tickets. If I were rich, I would probably prefer the current situation, or one in which tickets were priced dynamically, like plane tickets are now.
The restaurant issue I'm somewhat conflicted about -- I don't know enough about the business so some of my thoughts maybe impossible for various reasons. If people are willing to buy reservations, why not just charge more for the food until there is no waiting list? Or just charge for reservations (or at least those at preferred times) and keep the money for the restaurant? Whats the inherent reason that reservations have to be free with no charge to cancel?
As for parking, the sooner cities get rid of hidden car subsidies the better. Artificially low priced street parking and building codes mandating garages are some of the more insidious subsidies that make everyone pay for those who drive. If the spots went for market rate, these apps wouldn't exist and the extra money could be used to improve public transit.
As for parking, the sooner cities get rid of hidden car subsidies the better. Artificially low priced street parking and building codes mandating garages are some of the more insidious subsidies that make everyone pay for those who drive. If the spots went for market rate, these apps wouldn't exist and the extra money could be used to improve public transit.
Right - what I get from the parking stuff is just how undervalued parking actually is, and just how poorly cities deal with it.
The restaurant one is dodgy though. I could approve of a system where they've paid the restaurant in order to sell on a reservation (so the restaurant gets something even if there are no takers) but as it stands it's just a con.
The restaurant one is dodgy though. I could approve of a system where they've paid the restaurant in order to sell on a reservation (so the restaurant gets something even if there are no takers) but as it stands it's just a con.
Parking isn't undervalued. People just pay in time, not money. Better to say that it's inefficiently priced. Shoup's "The High Cost of Free Parking" is the bible on that: http://www.amazon.com/High-Cost-Parking-Updated-Edition/dp/1...
It's totally undervalued. Ask the average person if they think the price of parking is right and they'll probably claim it's outrageously high, when the existence and apparently enough-to-be visible success of this app prove the opposite is true.
You're making the same mistake I pointed out above. Ask people how they feel about getting a good parking spot and you'll clearly hear that they value it. Or measure the amount of time they spend driving around looking; it's a clear demonstration that they value parking.
They do, however, expect it to be free. It's not a normal market.
Note that the same is true about love and sex. Most people value those things highly, but you won't discover that by looking at what they pay for it.
They do, however, expect it to be free. It's not a normal market.
Note that the same is true about love and sex. Most people value those things highly, but you won't discover that by looking at what they pay for it.
> Note that the same is true about love and sex. Most people value those things highly, but you won't discover that by looking at what they pay for it.
That's a great analogy in general, thanks!
That's a great analogy in general, thanks!
> If people are willing to buy reservations, why not just charge more for the food until there is no waiting list?
Because a restaurant with a long waiting list for reservations gives the place a cachet of popularity, which can be more important than optimizing available reservations.
Because a restaurant with a long waiting list for reservations gives the place a cachet of popularity, which can be more important than optimizing available reservations.
> If people are willing to buy reservations, why not just charge more for the food until there is no waiting list?
I don't really like the idea that restaurant owners should be forced to raise their prices just to avoid being screwed by clever startups. What if you just want to keep your prices affordable even though you have a lot of success? I guess you can always ask for an ID and check if it matches the reservation, but I'm not a great fan of that either.
I don't really like the idea that restaurant owners should be forced to raise their prices just to avoid being screwed by clever startups. What if you just want to keep your prices affordable even though you have a lot of success? I guess you can always ask for an ID and check if it matches the reservation, but I'm not a great fan of that either.
That restaurants very well might have to start doing this should be an indicator that this startup is making jerkware.
People keep using the phrases "the rich" and "the wealthy" in connection with this parking app (I heard this same phrasing on the NPR story about it last night), as though having a smartphone in the US and using it for parking is a sign of wealth.
Firstly, a Virgin Mobile (no contract) Android phone is $30. Gas is well over $3 a gallon near SF. If you can afford to drive a car (even assuming it was given to you and you therefore have no payments), you can definitely afford a smartphone.
Secondly, the company rep was quoted as saying that the highest price ever paid for a spot was $15. Is this is steep price to pay for a couple hours parking? Sure. Is it only for the wealthy? No, I'm thinking not.
The reservation thing is much more of a "jerktech" startup because of the potential harm to the restaurant[1], but the parking startup seems like a win, all considered: people who care more can purchase certainty, and people who don't care as much couldn't be certain of getting a parking spot even before this, so...
[1] though they could just require showing photo ID in the reserved name to effectively combat this, at least for a while.
Firstly, a Virgin Mobile (no contract) Android phone is $30. Gas is well over $3 a gallon near SF. If you can afford to drive a car (even assuming it was given to you and you therefore have no payments), you can definitely afford a smartphone.
Secondly, the company rep was quoted as saying that the highest price ever paid for a spot was $15. Is this is steep price to pay for a couple hours parking? Sure. Is it only for the wealthy? No, I'm thinking not.
The reservation thing is much more of a "jerktech" startup because of the potential harm to the restaurant[1], but the parking startup seems like a win, all considered: people who care more can purchase certainty, and people who don't care as much couldn't be certain of getting a parking spot even before this, so...
[1] though they could just require showing photo ID in the reserved name to effectively combat this, at least for a while.
I see your distinction between the two, and agree that the restaurant app clearly hurts the restaurants. But the parking app hurts every other driver in the city who doesn't take part. I really don't see how using auctions for every parking space is better for the whole than keeping public parking what it is now (public).
$15 worth of $3/gallon gas can take an efficient car a long way - there's a pretty big gap between paying that to travel 100 miles and paying it just to not drive anywhere for a few hours. It makes little difference to the wealthy, but for those who can barely afford to drive as it is it makes the situation even worse.
But that's not the reason it's jerktech, it's because the parking space was already paid for with taxes. What monkey parking's doing isn't much better than brigands setting up in front of a bridge and demanding a toll from anyone who wants to cross it.
(edited for grammar)
But that's not the reason it's jerktech, it's because the parking space was already paid for with taxes. What monkey parking's doing isn't much better than brigands setting up in front of a bridge and demanding a toll from anyone who wants to cross it.
(edited for grammar)
Just wanted to chime in to say that in SF if you have a parking permit you can park in some spaces for up to a week until street cleaning. When I had a car I would have gladly paid someone $15 to get a spot on my street on a Thursday knowing I could leave it there until Wednesday. Spots open up all the time but are filled quickly. I'm not defending the app, but there's definitely a (small?) market for something like that here.
> Don’t concert ticket re-sale sites like StubHub encourage and take a cut from scalping? Yes, and I’m not a big fan of them for that reason. If the demand for a band’s ticket is high, they’re the ones that should be making the mark-up, not some sleazy guy with 20 computers who bought 40 tickets the second they went on sale to turn around and flip them. But at least that guy has to bet his own money that he can resell a private commodity he bought.
This is a weird opinion. This kind of resale is common in markets where producers would rather guarantee selling their entire product at a certain price as opposed to risking overpricing. Same reason many farmers sell off crops immediately to middlemen instead of trying to maximize price selling directly. They aren't being exploited, they're hedging risk. I would imagine that centralized ticket websites like StubHub also improve the venue's distribution in this case. If venues don't like resellers, they can follow Louis CK's actions[1].
[1] http://thenextweb.com/media/2012/07/03/louis-c-k-sees-ticket...
This is a weird opinion. This kind of resale is common in markets where producers would rather guarantee selling their entire product at a certain price as opposed to risking overpricing. Same reason many farmers sell off crops immediately to middlemen instead of trying to maximize price selling directly. They aren't being exploited, they're hedging risk. I would imagine that centralized ticket websites like StubHub also improve the venue's distribution in this case. If venues don't like resellers, they can follow Louis CK's actions[1].
[1] http://thenextweb.com/media/2012/07/03/louis-c-k-sees-ticket...
Some venues and some acts think this behaviour is scummy too, and go to great lengths to stamp it out.
It's pretty antisocial to snap up as many tickets as possible and then relist them at double the price within seconds. If you can't go, fine, but if you're just profiteering then you're inserting yourself into a transaction where you're not wanted.
It's the shows that sell out in seconds that these guys try to get in on, so there's no risk to the venue or the act anyway, scalpers are just basically extortionists at that point.
It's pretty antisocial to snap up as many tickets as possible and then relist them at double the price within seconds. If you can't go, fine, but if you're just profiteering then you're inserting yourself into a transaction where you're not wanted.
It's the shows that sell out in seconds that these guys try to get in on, so there's no risk to the venue or the act anyway, scalpers are just basically extortionists at that point.
The author isn't linking StubHub to these other startups, rather, they're saying "at least that guy has to bet his own money that he can resell a private commodity he bought."
Yes, I'm glad he isn't dismissing them. I'm just saying that it isn't as simple as returning profits to the producer.
Drivers selling parking spaces in San Francisco are potentially open to fines of $300 according to the city attorney.
It seems very polite that they're going after sites like Monkey Parking instead of simply reserving spots for $5 or $10 and then busting the sellers at $300 a pop.
I suppose that in that case, Monkey Parking would just become a component in an entirely different sort of ecology.
It seems very polite that they're going after sites like Monkey Parking instead of simply reserving spots for $5 or $10 and then busting the sellers at $300 a pop.
I suppose that in that case, Monkey Parking would just become a component in an entirely different sort of ecology.
> Thankfully the city of San Francisco is fighting Sweetch and Monkey Parking with cease-and-desist orders.
The city of San Francisco should be fighting Sweetch and Monkey Parking by cutting out the middleman and drastically raising their parking fees.
The city of San Francisco should be fighting Sweetch and Monkey Parking by cutting out the middleman and drastically raising their parking fees.
They're doing some of that. But there's a problem with that: plenty of people who live here can't afford a sudden major bump in living expenses. In the long term, correct pricing is part of the solution. But in the short term, it'd be unfortunate to solve the problem by screwing poorer people.
And anyway, this could be a temporary spike in demand. Once places like ZipCar and Uber get ahold of self-driving cars, I expect there will be a big decrease in car ownership.
And anyway, this could be a temporary spike in demand. Once places like ZipCar and Uber get ahold of self-driving cars, I expect there will be a big decrease in car ownership.
Politically impossible, but my blanket response to "how will this affect poor people" arguments is "give them money" http://en.wikipedia.org/wiki/Basic_income
Yeah, that's an approach I'd be happy with, although getting the levels right is certainly tricky. Another approach is to spend the revenue raised in ways that help, like improving transit.
If they put connected meters on all the news spots, we could also give people who live nearby income-based discounts.
If they put connected meters on all the news spots, we could also give people who live nearby income-based discounts.
You could do it in a revenue-neutral way by distributing the additional parking fees directly to poorer people. This could make allocation more efficient whilst redistributing money from richer drivers to poorer non-drivers, whilst being neutral for poorer drivers and richer non-drivers.
plenty of people who live here can't afford a sudden major bump in living expenses.
Where I live, residents can get a small sign from the municipality that they can put in their car to avoid parking fees (when parked near their home). Seems like a simple solution.
Where I live, residents can get a small sign from the municipality that they can put in their car to avoid parking fees (when parked near their home). Seems like a simple solution.
Interesting. We have lots of area designated as neighborhood residents only if you're staying longer than 2 hours. But I don't think there's any place where a neighborhood sticker gets out out of the fees. Might be a good approach.
They could also use sensors that detect when a parking spot is free, and upload that information to an app or the web.
They're actually doing both of those things, though not on a spot-by-spot basis: http://sfpark.org/
Actually, they used to do it on a spot-by-spot basis to generate info about demand to change pricing, as the prices are often different depending on which block you park on (!). My original reason for using the sfpark iPhone app was that it could tell you where to go for the nearest currently-open street parking spot. They even had a publicly available data feed for this for other app developers to use: http://sfpark.org/wp-content/uploads/2014/05/SFpark-parking-...
Unfortunately they stopped providing sensor data about half a year ago with the end of the pilot program. But the sensors are still physically around, and SFMTA (hopefully) are looking into improving sensor technology to upgrade, and seeing if it makes sense to release this data again.
Personally between that availability info and that SFMTA has not been afraid to tinker with pricing changes - definitely a big FU to Monkey Parking et al. Not sure why they didn't work with private lots and home garages or something instead - that would make a lot more sense than messing with something that's already in the works.
Unfortunately they stopped providing sensor data about half a year ago with the end of the pilot program. But the sensors are still physically around, and SFMTA (hopefully) are looking into improving sensor technology to upgrade, and seeing if it makes sense to release this data again.
Personally between that availability info and that SFMTA has not been afraid to tinker with pricing changes - definitely a big FU to Monkey Parking et al. Not sure why they didn't work with private lots and home garages or something instead - that would make a lot more sense than messing with something that's already in the works.
That's one reason I use unexploitable public goods, like public tranportion, and go to salad bars not trendy enough for some kid to want to scalp.
That in and of itself is a good reason for great public goods. They are, or should be, by definition 'unexploitable'.
Seems like reservation hop is engaging in deceptive practices. I bought tablesniper.com ~5 years ago with the same idea but didn't proceed after talking to attorneys.
Just wait someone realizes that it costs less for a driverless, electric car to sit in a traffic jam than a car park.
Then they can have a fleet of them which go into traffic at peak hours & allow people to bid to have them removed from traffic. ;)
"What is your business model?"
"Extortion"
"Well, it is a time-proven way of making money; and you may go to jail, so I can see you are not afraid of risk... like a true entrepreneur!"
"Extortion"
"Well, it is a time-proven way of making money; and you may go to jail, so I can see you are not afraid of risk... like a true entrepreneur!"
MafiaJoy?
It's more serious than that. Car owners (or co-ops) can send their cars to loiter in deliberately created traffic jams and have them wait there all day, because it is cheaper than paying for parking. Then you press a button when you want your car, and it turns out of the traffic jam and comes and gets you.
If you actually want to go down the road that has been selected as the most appropriate place to loiter... too bad for you.
If you actually want to go down the road that has been selected as the most appropriate place to loiter... too bad for you.
I dislike all of these companies, but I'd have put it all differently:
The first one, Reservation Hop, is simply indefensible because it relies on fraud. It's deceiving restaurants into thinking the person asking for a reservation is a real person. Not only does it involve lying, but it's fundamentally different from scalping a ticket because if no one "buys" the reservation, the restaurant gets nothing and was perhaps force to turn down legit customers, whereas the scalper actually paid for the ticket (though it may have been inefficiently priced, see below for more on that). It also creates no-value-added intermediary in the process. It's just a dick move all around. I do suspect that a trade group for the restaurants could get Reservation Hop cease-and-desisted, but the general solution here is for restaurants to take a credit card as part of the reservation process.
The parking ones are a bit different, in that they're taking advantage of inefficiently priced parking. Ever notice how it's really hard to find a spot on a street full of first-come-first-serve, inexpensive parking? It's for the same reason there are long lines and empty gas pumps before a storm with anti-gouging rules in effect, or in stories about the Soviet Union. You can park there for long periods of time even though you may not have a pressing need for the spot, whereas people who have such a need can't get one. Normally we manage such supply and demand issues through prices, so if you need a spot badly enough you might be willing to pay for it and one will be available because most people aren't. [1] What happens almost inevitably when you have an inefficiently distributed good is a secondary market or some sort of cultural mos, both of which are usually ethically dubious. In Boston, people "reserve" spots by putting cones or lawn chairs in "their" spots and expect you to respect it less you get your car keyed, thus compounding the inefficiency. There are places where you can pay for people to "hold" your spot, and I've had someone try to sell me theirs once. These companies are filling in exactly there, except with technology. To be clear, I think these companies are pretty crummy. But my point is that they're the almost inevitable consequence of a pretty terrible system for allocating resources. I.e. if we want to fix this, the best way to do it is to fix the underlying problem rather than shaming businesses like this. EDIT: to be clear, I'm not against shaming them if it makes you feel good; I just think it's not the solution to the problem.
Even though that description overlaps in places with the article, I like my framing a lot better. The article is coming from this place where entrepreneurs are expected to be these angels descended to Earth to fix all the "common man's" problem through innovation. Then we immolate ourselves because the community/scene turns out to be full of non-special people who are sometimes kinda shady and take advantage of bad policy and lax enforcement to make money, just like people in all other walks of life. (In an age where so much relies on technology, I don't even think it's reasonable to think of "startup tech stuff" as a scene or a space or a community at all.) Maybe it's fun to wring your hands about it and I can see a publication like TC likes to see things through that lens, but I don't think it's a very helpful way of approaching these problems if your real goal is to solve them.
[1] An important question here, given the context, is doesn't this just help the rich get parking at the expense of poor people? Well, yes, it kind of does. On the other hand, if you can't find a spot, it doesn't help poor people much, except insomuch as poor people may be willing to spend a longer time trying to park (in which case, we're making them pay for it with their time, which doesn't seem good either). But more importantly, if we want to make things easier for poor people, we should give them money so that they can do what they want with it (including parking!). That's way better than making parking artificially cheap, because a) it's a lot more flexible from the poor person's perspective and b) it distorts the allocation of resources way less.
The first one, Reservation Hop, is simply indefensible because it relies on fraud. It's deceiving restaurants into thinking the person asking for a reservation is a real person. Not only does it involve lying, but it's fundamentally different from scalping a ticket because if no one "buys" the reservation, the restaurant gets nothing and was perhaps force to turn down legit customers, whereas the scalper actually paid for the ticket (though it may have been inefficiently priced, see below for more on that). It also creates no-value-added intermediary in the process. It's just a dick move all around. I do suspect that a trade group for the restaurants could get Reservation Hop cease-and-desisted, but the general solution here is for restaurants to take a credit card as part of the reservation process.
The parking ones are a bit different, in that they're taking advantage of inefficiently priced parking. Ever notice how it's really hard to find a spot on a street full of first-come-first-serve, inexpensive parking? It's for the same reason there are long lines and empty gas pumps before a storm with anti-gouging rules in effect, or in stories about the Soviet Union. You can park there for long periods of time even though you may not have a pressing need for the spot, whereas people who have such a need can't get one. Normally we manage such supply and demand issues through prices, so if you need a spot badly enough you might be willing to pay for it and one will be available because most people aren't. [1] What happens almost inevitably when you have an inefficiently distributed good is a secondary market or some sort of cultural mos, both of which are usually ethically dubious. In Boston, people "reserve" spots by putting cones or lawn chairs in "their" spots and expect you to respect it less you get your car keyed, thus compounding the inefficiency. There are places where you can pay for people to "hold" your spot, and I've had someone try to sell me theirs once. These companies are filling in exactly there, except with technology. To be clear, I think these companies are pretty crummy. But my point is that they're the almost inevitable consequence of a pretty terrible system for allocating resources. I.e. if we want to fix this, the best way to do it is to fix the underlying problem rather than shaming businesses like this. EDIT: to be clear, I'm not against shaming them if it makes you feel good; I just think it's not the solution to the problem.
Even though that description overlaps in places with the article, I like my framing a lot better. The article is coming from this place where entrepreneurs are expected to be these angels descended to Earth to fix all the "common man's" problem through innovation. Then we immolate ourselves because the community/scene turns out to be full of non-special people who are sometimes kinda shady and take advantage of bad policy and lax enforcement to make money, just like people in all other walks of life. (In an age where so much relies on technology, I don't even think it's reasonable to think of "startup tech stuff" as a scene or a space or a community at all.) Maybe it's fun to wring your hands about it and I can see a publication like TC likes to see things through that lens, but I don't think it's a very helpful way of approaching these problems if your real goal is to solve them.
[1] An important question here, given the context, is doesn't this just help the rich get parking at the expense of poor people? Well, yes, it kind of does. On the other hand, if you can't find a spot, it doesn't help poor people much, except insomuch as poor people may be willing to spend a longer time trying to park (in which case, we're making them pay for it with their time, which doesn't seem good either). But more importantly, if we want to make things easier for poor people, we should give them money so that they can do what they want with it (including parking!). That's way better than making parking artificially cheap, because a) it's a lot more flexible from the poor person's perspective and b) it distorts the allocation of resources way less.
>>The parking ones are a bit different, in that they're taking advantage of inefficiently priced parking.
The reason parking is priced the way it is is because it is a public good. The only thing "efficient" pricing would do is give wealthy people a massive advantage over the consumption of that good. You might like to live in a world where only rich people can afford public parking - I don't.
That's exactly why the SF government is taking an issue with these startups: they skew the game in favor of those who have money. For the usage of private property, such as houses, this may not be a huge deal. But public parking by definition belongs to the public: everyone should have an equal chance at consuming it. Fairness trumps inefficiency.
The reason parking is priced the way it is is because it is a public good. The only thing "efficient" pricing would do is give wealthy people a massive advantage over the consumption of that good. You might like to live in a world where only rich people can afford public parking - I don't.
That's exactly why the SF government is taking an issue with these startups: they skew the game in favor of those who have money. For the usage of private property, such as houses, this may not be a huge deal. But public parking by definition belongs to the public: everyone should have an equal chance at consuming it. Fairness trumps inefficiency.
I think the point re rich-vs-poor is that efficient pricing should be decoupled from wealth redistribution initiatives. An inefficient allocation of resources only has the side-effect of kind-of sort-of assisting the poor. The real solution is to efficiently allocate resources, and then separately take action to correct economic injustice.
I wish I'd used those exact words in my clumsy footnote.
Even for public goods, there should be some way of fairly allocating them. The randomness of driving around looking for parking is not a good way in 2014. It would be nice if some subset of spots used an automated system where people paid with their time, where drivers could sit in a queue to be notified when a spot frees up, and the spot becomes reserved for a short period until they park in it. (You snooze, you lose.)
SF had a pilot program to (among other things) install per-spot sensors in around 8k metered spaces in congested areas. There was a companion iOS/Android app that could direct you to the nearest sensor-enabled available street parking spot. I used it a couple times, it was great.
Sadly it doesn't work right now because the program ended, but while it existed, realtime data was even accessible to third party developers. The potential was huge.
http://sfpark.org/how-it-works/the-sensors/
If someone wants to disrupt something, it should be by helping the SFMTA to bring sensors back along with upgrading the rest of the city's meters to the smart, credit card accepting, remote pay enabled, pricing-based-on-demand system that only some of the meters use.
Sadly it doesn't work right now because the program ended, but while it existed, realtime data was even accessible to third party developers. The potential was huge.
http://sfpark.org/how-it-works/the-sensors/
If someone wants to disrupt something, it should be by helping the SFMTA to bring sensors back along with upgrading the rest of the city's meters to the smart, credit card accepting, remote pay enabled, pricing-based-on-demand system that only some of the meters use.
What about us, the people who take public transportation instead - definitively poorer on average than car drivers - and would rather breathe less fumes from cars driving around trying to find parking spots?
> inefficiently priced parking
This is not really relevant in the context of San Francisco. The city has been running a pilot program since 2010 to change meter pricing based on demand. Interested startups could have worked within this program and with SFMTA to help. All Monkey Parking et al. have been doing is screwing with this program which has been actively adjusting prices and rolling out to more areas.
http://sfpark.org/how-it-works/pricing/
This is not really relevant in the context of San Francisco. The city has been running a pilot program since 2010 to change meter pricing based on demand. Interested startups could have worked within this program and with SFMTA to help. All Monkey Parking et al. have been doing is screwing with this program which has been actively adjusting prices and rolling out to more areas.
http://sfpark.org/how-it-works/pricing/
Completely agree. Hats off to the city as SFPark is absolutely brilliant.
Are people actually using these "jerkTech" services though? If you've got the SFPark app, why would you bother with Monkey Parking? I get the feeling that they're all enjoying the free hype/hate which is being doled out right now as it's probably steering more users their way.
Ultimately though there is no way any of these services will be viable. If you face a $300 fine for renting out your parking space (as is the case in SF) and Monkey Parking makes it easy for law enforcement to track you down with their app, not a lot of people are going to want to bother.
It's a similar thing for making restaurant reservations. If restaurants start getting hit with a ton of no shows to the point where they're losing money, it doesn't take long to figure out that it's listed and file a cease-and-desist order.
Are people actually using these "jerkTech" services though? If you've got the SFPark app, why would you bother with Monkey Parking? I get the feeling that they're all enjoying the free hype/hate which is being doled out right now as it's probably steering more users their way.
Ultimately though there is no way any of these services will be viable. If you face a $300 fine for renting out your parking space (as is the case in SF) and Monkey Parking makes it easy for law enforcement to track you down with their app, not a lot of people are going to want to bother.
It's a similar thing for making restaurant reservations. If restaurants start getting hit with a ton of no shows to the point where they're losing money, it doesn't take long to figure out that it's listed and file a cease-and-desist order.
SFPark's most useful feature - the per-spot sensors - was disabled last year ... Kind of a shame, that would have eaten Monkey Parking's lunch, I think. Not sure if people really used it or if people use Monkey Parking at all, but the hate doesn't really help the image problem that tech already has in SF.
> It's a similar thing for making restaurant reservations. If restaurants start getting hit with a ton of no shows to the point where they're losing money, it doesn't take long to figure out that it's listed and file a cease-and-desist order.
Trying so hard not to rage here. I own a restaurant. Reservationhop guy could have spent literally a few more seconds taking his idea to the logical conclusion that he should work with restaurants - just like EVERY OTHER service involved including the ones in his defensive blog post. Nope. It's like all he saw was "oh, something like ticket scalpers for concerts!" and ended there.
Not sure why they jumped to the stupidest option possible instead of taking a look at seriously starting something in the big, generic, terribly done to date foodservice needs area (everything from reservations to POS systems) or becoming the Airbnb of privately owned parking spaces. You'd think they'd see the nonviability of their ideas sooner.
> It's a similar thing for making restaurant reservations. If restaurants start getting hit with a ton of no shows to the point where they're losing money, it doesn't take long to figure out that it's listed and file a cease-and-desist order.
Trying so hard not to rage here. I own a restaurant. Reservationhop guy could have spent literally a few more seconds taking his idea to the logical conclusion that he should work with restaurants - just like EVERY OTHER service involved including the ones in his defensive blog post. Nope. It's like all he saw was "oh, something like ticket scalpers for concerts!" and ended there.
Not sure why they jumped to the stupidest option possible instead of taking a look at seriously starting something in the big, generic, terribly done to date foodservice needs area (everything from reservations to POS systems) or becoming the Airbnb of privately owned parking spaces. You'd think they'd see the nonviability of their ideas sooner.
I'm not a restaurant owner, but very much feel your rage (you don't have to be in a business to violently detest parasitic douche bags).
Here's an idea, slightly based on Alinea's ticket system:
Charge a relatively low deposit. Say if I make a reservation you charge my credit card with 20$ (or whatever). If I cancel (it does happen) up to three hours (or 6, or 24, or whatever) in advance the charge is reversed and the transaction is at no cost to me.
If I show up the 20$ are fully credited and deducted from the bill.
This would certainly only work for restaurants that can generate the necessary demand. Then again those are also the victims of those DoucheScalpers.
As a patron I really wouldn't mind guaranteeing my reservation with a small, up front payment. Especially when I can cancel within a reasonable time frame, no hassle and get fully refunded.
On a off topic side note: I actually cancel reservations if I don't need them. It seems to me just common courtesy and the right thing to do. It may enable somebody else to use the table and I strongly suspect that it doesn't hurt my karma with the restaurant for next time I want to book a table.
Here's an idea, slightly based on Alinea's ticket system:
Charge a relatively low deposit. Say if I make a reservation you charge my credit card with 20$ (or whatever). If I cancel (it does happen) up to three hours (or 6, or 24, or whatever) in advance the charge is reversed and the transaction is at no cost to me.
If I show up the 20$ are fully credited and deducted from the bill.
This would certainly only work for restaurants that can generate the necessary demand. Then again those are also the victims of those DoucheScalpers.
As a patron I really wouldn't mind guaranteeing my reservation with a small, up front payment. Especially when I can cancel within a reasonable time frame, no hassle and get fully refunded.
On a off topic side note: I actually cancel reservations if I don't need them. It seems to me just common courtesy and the right thing to do. It may enable somebody else to use the table and I strongly suspect that it doesn't hurt my karma with the restaurant for next time I want to book a table.
I'll admit it's been a few years since I parked in SF. But I guess I don't understand how that program could be working but still give these guys a market. If the meters are setting the prices at market-clearing levels, then it would be prohibitively expensive to hold onto a spot you didn't need, and there'd be an equally priced spot available nearby anyway. I don't know if it's that the pricing doesn't work that well or the program isn't in enough areas yet or what, but it definitely sounds like the kind of solution that should squash these guys' business. I hope it does.
Honestly, I don't think there is any street parking price that would scare them away, especially since the only limitation is the space constraint and not the contents of car driver wallets. There will always be someone that's willing to pay for a slightly better spot, and even if SF sets meters to $15-20/hr some areas are still going to stay congested. All I can really hope is that the program can expand and adjust prices so it's just a little bit less congested while not being outrageously priced, so people are a little bit less tempted to break the law. [1]
The gross thing about some of these startups was that they were looking for people to hire to squat on parking spaces. Not just the one-off space, but literally, your job was squatting until someone paid for the space. It's unbelievable. I hate parking here but not enough to screw around with other people looking for a parking space or to pay for a service like that. I would not shed a single tear if cops started using the apps in question to write the people selling spaces $300 tickets for breaking local laws.
Really not sure why all these "disruptors" can't just channel their energy into improving public transit and working on better (but slower and still imperfect) approaches to the parking problem just like sfpark. "Let's find you an available space and let's make it frictionless for you to pay for parking" if not just "let's fix the problems you have with taking Muni" is better in the long term than "let's create an app to auction off _public_ parking spaces".
I'm not even going to approach reservationhop because I also own a restaurant. I could write a wall of text about that....
edited in: [1] So I addressed this in other comments, but the sfpark program also involved installing per-spot sensors in over 8k meters in the city (along with credit card-supporting meters and remote pay). There was an official app (and third party dev access!) that showed you which _exact spaces_ were available near you. Imagine the ability to just discover that there's a space open 2 blocks away at half the price of the area you were searching in. Now that's the kind of technology I could get behind that would have a chance of destroying Monkey Parking and the likes on its own. I'm hoping SFMTA brings that back soon.
The gross thing about some of these startups was that they were looking for people to hire to squat on parking spaces. Not just the one-off space, but literally, your job was squatting until someone paid for the space. It's unbelievable. I hate parking here but not enough to screw around with other people looking for a parking space or to pay for a service like that. I would not shed a single tear if cops started using the apps in question to write the people selling spaces $300 tickets for breaking local laws.
Really not sure why all these "disruptors" can't just channel their energy into improving public transit and working on better (but slower and still imperfect) approaches to the parking problem just like sfpark. "Let's find you an available space and let's make it frictionless for you to pay for parking" if not just "let's fix the problems you have with taking Muni" is better in the long term than "let's create an app to auction off _public_ parking spaces".
I'm not even going to approach reservationhop because I also own a restaurant. I could write a wall of text about that....
edited in: [1] So I addressed this in other comments, but the sfpark program also involved installing per-spot sensors in over 8k meters in the city (along with credit card-supporting meters and remote pay). There was an official app (and third party dev access!) that showed you which _exact spaces_ were available near you. Imagine the ability to just discover that there's a space open 2 blocks away at half the price of the area you were searching in. Now that's the kind of technology I could get behind that would have a chance of destroying Monkey Parking and the likes on its own. I'm hoping SFMTA brings that back soon.
The parking ones won't last long if cities follow Santa Monica's lead:
http://latimesblogs.latimes.com/lanow/2012/05/smart-parking-...
edit: tl;dr the extra time gets wiped out when your car leaves the spot.
http://latimesblogs.latimes.com/lanow/2012/05/smart-parking-...
edit: tl;dr the extra time gets wiped out when your car leaves the spot.
As I understand it, the issue isn't the leftover meter money at all; it's just access to the spot. There are no meters (or there's a meter and it's trivially cheap) but there's a chronic shortage of parking spaces. So by occupying one, you claim it. That opens up the market for buying and selling spots, where the only good changing hands is the "right" to put a vehicle in a particular box of space.
Fair enough, I considered that after I left the comment and you're probably right, access to the space is probably more valuable than what's left on the meter.
Sure they will. The whole point is paying for an empty spot. Who cares if there's 20 minutes left on the meter?
reservation bailing, like scalping can be solved through new business models: for reservation fraud, start by taking a creditcard and charge a 5$ reservation fee that is deducted from your bill. For scalping, there are a lot of various approaches that work.
Saying that "It's easy to solve, so if the restaurants haven't yet, it's probably not a problem" is pretty bad as excuses go.
The point isn't that it can't be solved, the point is that if it need solving, it's probably a problem, and companies are supposed to solve problem, not to deport them from their paying customers to non-paying third-party.
The point isn't that it can't be solved, the point is that if it need solving, it's probably a problem, and companies are supposed to solve problem, not to deport them from their paying customers to non-paying third-party.
I wonder if this is conceptually similar to "Tragedy of The Commons." (http://en.wikipedia.org/wiki/Tragedy_of_the_commons)
I can't really see how these services are not just the exploitation of services for the public good. Pretty disgusting behaviour.
I can't really see how these services are not just the exploitation of services for the public good. Pretty disgusting behaviour.
Not really - the tragedy of the commons is the examples of oceans fisheries or trash on the street, where any one person doesn't have enough ownership to care enough to ensure continual sustainability. Ironically, this is if anything, a counter to the tragedy of the commons (albeit an awkward fit) - they're trying to price something that has an assumed value people took for granted. Again, I'm not saying its something great, but its not this concept.
No, unpriced public parking is a GREAT example of a tragedy of the commons situation. Un-owned property is used inefficiently. This is a fundamental economic principle.
I completely agree with this article, but wonder if it's inevitable for someone to jump in and try to make profit off of services for the public good if there are people out there willing to pay for it.
For example, if we had sufficient parking in the city, these startups would never even cause a blip. Someone must have been driving around for half an hour looking for parking and then thought to themselves that, at that point, they would pay someone good money to just be able to find a spot - and suddenly the idea for a business was born...
For example, if we had sufficient parking in the city, these startups would never even cause a blip. Someone must have been driving around for half an hour looking for parking and then thought to themselves that, at that point, they would pay someone good money to just be able to find a spot - and suddenly the idea for a business was born...
I think it's great that people want to solve problems, but this isn't actually solving the problem. It's shifting the problem from rich people to poor people.
In contrast, there are plenty of startups that are actually making the parking problem better. City CarShare and ZipCar are reducing the number of cars in the city by having cars available on demand. GetAround and RelayRides are upping the number of drivers per car. Uber and Lyft (and taxis and transit) let you get somewhere without having to park at all. Parking Panda and Park Circa are turning unused private parking spaces into publicly available inventory. Even Amazon is helping: part of what makes happy to do without a car is the fact that they will make almost anything I want show up in a couple of days.
In contrast, there are plenty of startups that are actually making the parking problem better. City CarShare and ZipCar are reducing the number of cars in the city by having cars available on demand. GetAround and RelayRides are upping the number of drivers per car. Uber and Lyft (and taxis and transit) let you get somewhere without having to park at all. Parking Panda and Park Circa are turning unused private parking spaces into publicly available inventory. Even Amazon is helping: part of what makes happy to do without a car is the fact that they will make almost anything I want show up in a couple of days.
Yeah. The real solution to parking in SF is to have fewer people driving, which would involve improving the public transit options.
Always struck me as off is SF that has a trolly buss system why they didn't extend that with trams for longer distance commutes.
Or did NIBY residents stop any such developments.
Or did NIBY residents stop any such developments.
It seems that the part of young generation is extremely demanding. So demanding that they misunderstand "communal" with "my". I am part of generation that is happy to destroy public property just because they can. Generation that sells what is rightfully owned by all.
Its sad that mentioned startups are more like vultures rather than tigers.
Good that someone finally publicly named those companies.
Good that someone finally publicly named those companies.
Oh, please. Every generation had people selling common goods. The "tragedy of the commons" wasn't exactly coined last year.
The reason these companies are made of young people is because they're tech startups.
The reason these companies are made of young people is because they're tech startups.
There is certainly a high level of jerkiness in making fake reservations, but I think it's overblown in the article. If a restaurant is exclusive and popular enough to require reservations, and people are willing to pay $5-10 for a reservation, why don't they just charge $5-10 for reservations themselves, or require a small membership fee to make reservations, or start rejecting customers who can't prove they are the "Dick Jerkson" who made the reservation, etc? (That last one would only need to be a temporary measure, as most people are going to ditch the app after being turned away once or twice.)
I don't understand your logic. Just because countermeasures could exist, it doesn't mean that the original offenders aren't so bad. Nor does that place any new responsibilities on the restaurant, to piss off their customers who by now might have been going to the same restaurants for decades, with the informal system.
Furthermore, an ID check isn't as painless and easy to implement as you say. Often, other guests arrive before the person who made the reservation. Public figures make reservations under assumed names. And the name on someone's ID may not match the name they typically use (read patio11's brilliant piece http://www.kalzumeus.com/2010/06/17/falsehoods-programmers-b...).
And then there's just the offensiveness of requiring people to carry ID in the first place.
Furthermore, an ID check isn't as painless and easy to implement as you say. Often, other guests arrive before the person who made the reservation. Public figures make reservations under assumed names. And the name on someone's ID may not match the name they typically use (read patio11's brilliant piece http://www.kalzumeus.com/2010/06/17/falsehoods-programmers-b...).
And then there's just the offensiveness of requiring people to carry ID in the first place.
I'm not saying the app is less bad because countermeasures exist, only that the app is not as bad as the article makes it out to be, and countermeasures exist. Restaurants constantly have to adapt to changing conditions, which is how they end up with reservation policies in the first place.
The point of the ID suggestion (which was only one idea) would be to somehow identify users of the app, let them travel all the way to the restaurant with their date or client, and reject their reservation. This will kill the app faster than begging the developer to be less of a jerk.
The point of the ID suggestion (which was only one idea) would be to somehow identify users of the app, let them travel all the way to the restaurant with their date or client, and reject their reservation. This will kill the app faster than begging the developer to be less of a jerk.
The good news is that while markets can be irrational in the short run, eventually things that create no value ARE weeded out.
And the restaurant industry for one, while very competitive, is also a fairly tight-knit community (due to the rigours and stress involved in the business), and word gets around fast. I'm sure cities will also crack down on auctioning public parking spots, to the extent that it will be an unprofitable exercise.
And the restaurant industry for one, while very competitive, is also a fairly tight-knit community (due to the rigours and stress involved in the business), and word gets around fast. I'm sure cities will also crack down on auctioning public parking spots, to the extent that it will be an unprofitable exercise.
Early squatting on parking spots - like when a company is early to offer people social networking or online video, and they can then charge people endlessly based on their proprietary spot for activities that should remain free - public domain video and human interaction? Yeah, the parking guys are the only exploitative, piggybacking guys around on the web.
Regulate or save your breath. Jerks don't care whether people think that they're jerks or not.
The reservation is obvious bullshit, but I just don't see a problem with selling your parking spot.
The problem is it's not your parking spot, but public property.
Right, and you're allowed to occupy it as long as you want. If your friend gives you $5 to let him take it over, I don't see a problem.
This could only be a problem if people start parking cars they would never use in the city, just to profit from these services.
This could only be a problem if people start parking cars they would never use in the city, just to profit from these services.
I dunno about "cars they would never use", but I wonder if anyone who has a driveway/garage for their car has started parking on the street. "I get to work at six and the street is empty, so I park there. When it's eight, I sell my spot and move it into the company garage."
Possession is 9/10 of the law. ;)
EDIT: Probably down voted because of length, but I'm pointing out that this is an opinion lots of people have, and there's a reason it exists as a truism. If you pass a law against apps like this, how could you possibly enforce it? The seller's car is already in the spot, and police can't get a real time notification that he's using the app. By the time they realize what happened (if ever) the spot has been sold.
EDIT: Probably down voted because of length, but I'm pointing out that this is an opinion lots of people have, and there's a reason it exists as a truism. If you pass a law against apps like this, how could you possibly enforce it? The seller's car is already in the spot, and police can't get a real time notification that he's using the app. By the time they realize what happened (if ever) the spot has been sold.
Hence why they go after the "racketeers" - the one facilitating it in an organized way.
And of course you can subpoena the racketeers, follow the money trail, and ticket both buyers and sellers. According to the city attorney, it's a $300 fine: http://www.sfcityattorney.org/index.aspx?page=599
You might look into the concept of a thought-terminating cliché [0].
[0]: https://en.wikipedia.org/wiki/Thought-terminating_clich%C3%A...
[0]: https://en.wikipedia.org/wiki/Thought-terminating_clich%C3%A...
Frankly there is no need to keep beating the drum about these startups. This is at least the 4th article about the parking apps on HN's front page in the last couple weeks. It's also been on TV.
This is not not deeply interesting anymore, and as such I am flagging it. I hope others will do the same.
This is not not deeply interesting anymore, and as such I am flagging it. I hope others will do the same.
I'm going to go out on a limb here and say that the reservation thing, while being a bit sketchy in that the guy uses a fake name, doesn't seem as abhorrent as people seem to be making it out to be. If the guy was printing money hand over fist like an evil villain that'd be one thing, but it sounds like a weekend hack. An experiment. You know, the type of thing we encourage here so as to learn something. He cancels the reservation if nobody buys it. He's focusing on restaurants where demand outstrips supply (by definition.) My guess is the net effect of this experiment is probably increased revenue for the restaurants involved. It would be interesting if he presented numbers.
It's an interesting experiment. Should it be literally turned into a business, as-is? No, because it requires a) lying on the phone and b) leaves the possibility open that restaurants are going to leave money on the table, so beyond being unethical you probably don't want to make enemies of the people who are providing the service your customers are paying for. It's not viable, and it's both dumb and unethical to form a serious venture around as-is. But let's admit it, he's found something interesting that perhaps with some tweaks could be turned into something disruptive. In the startups I've worked stuff we ran small stuff like this all the time: things that we'd never try to scale since we were breaking the rules a bit, but we were trying to learn something and knew the way we were executing on it "in the small" did not cause any real harm.
But if we are going to just hang people out to dry immediately for releasing small experiments to test gaps in the market or test boundaries, then we've lost what it means to be a hacker. I don't like the idea that my entire reputation can be ruined if I launch a weekend hack that ends up on valleywag and starts a hate train fueled by wider hatred around the tech industry. Part of the reason startups work is because you can bend the rules a bit while you are small and under the radar while you look around at the edges for the opportunity for a real business you can stand behind. But with Twitter and the tech press even single individuals no longer seem to be able to stay off the radar if their experiment will drive clicks from angry readers and re-enforce their stereotypes about the tech scene.
It's an interesting experiment. Should it be literally turned into a business, as-is? No, because it requires a) lying on the phone and b) leaves the possibility open that restaurants are going to leave money on the table, so beyond being unethical you probably don't want to make enemies of the people who are providing the service your customers are paying for. It's not viable, and it's both dumb and unethical to form a serious venture around as-is. But let's admit it, he's found something interesting that perhaps with some tweaks could be turned into something disruptive. In the startups I've worked stuff we ran small stuff like this all the time: things that we'd never try to scale since we were breaking the rules a bit, but we were trying to learn something and knew the way we were executing on it "in the small" did not cause any real harm.
But if we are going to just hang people out to dry immediately for releasing small experiments to test gaps in the market or test boundaries, then we've lost what it means to be a hacker. I don't like the idea that my entire reputation can be ruined if I launch a weekend hack that ends up on valleywag and starts a hate train fueled by wider hatred around the tech industry. Part of the reason startups work is because you can bend the rules a bit while you are small and under the radar while you look around at the edges for the opportunity for a real business you can stand behind. But with Twitter and the tech press even single individuals no longer seem to be able to stay off the radar if their experiment will drive clicks from angry readers and re-enforce their stereotypes about the tech scene.
How about stop the circle jerk.
They are parasitic, arguable, but so what if they are? People dislike that, so what?
What is the story here exactly? It seems to me it's just link bait with everyone agreeing they dislike these apps.
It's an article saying being rude is bad. I don't see why people think this article has value other than they get to throw in a me too.
And at the end of the day, I'd imaging most people here are also working for parasitic companies who just hide it a bit better. i.e. Advertising including SEO. This to me is more of a real story.
They are parasitic, arguable, but so what if they are? People dislike that, so what?
What is the story here exactly? It seems to me it's just link bait with everyone agreeing they dislike these apps.
It's an article saying being rude is bad. I don't see why people think this article has value other than they get to throw in a me too.
And at the end of the day, I'd imaging most people here are also working for parasitic companies who just hide it a bit better. i.e. Advertising including SEO. This to me is more of a real story.
Startups like this don't create value. They just shift the value around. In the case of these startups, they shift the value to rich people while pocketing the cash. They are essentially parasitic.
Not only is that a dick move, it's dumb for a startup. Google can earn $60 billion in revenue per year because they create even more value than that for its users and customers. Startups that don't create much value have very limited opportunities for capturing value. As the parking app show, regulators are perfectly happy to ban things that don't create value, especially when they have obvious negative externalities. That's what happened to the entire telemarketing industry for example.
So please, people: focus on creating value, not just on whatever bullshit will bring a few dollars through the door.