5 ms·

We often moan about the taxi industry, the hotel industry, or the dealer associations but, in doing so, we miss something very important. The players in that i

by venning 11y ago

We often moan about the taxi industry, the hotel industry, or the dealer associations but, in doing so, we miss something very important. The players in that industry often existed for years or decades in a state of government-backed protection without realizing it. Taxi drivers didn't necessarily lobby for market restrictions; they took advantage of the oligopoly, sure, but not necessarily consciously. If you live in a state of believing that the market is actually fair and others have an equal shot at participating in it, then someone else entering the market in defiance of the existing protections appears to be unfair. It's hard to believe that you didn't enter into a job market and win a wage fairly. That, instead, you were unfairly advantaged by artificial pressures in that market much bigger and more entrenched than you. Essentially, the incumbents have been lied to for years and, now that new logistical realities are changing the status quo, it is very hard for them to understand why this is happening. They think someone must be cheating. --- To expand on joosters' analogy of taking a fence down elsewhere in this thread [1], it's not necessarily bad if we take the fence down, we just need to realize that doing so may have serious consequences in the near-term. Having such a strong, deep-rooted artificial pressure in a market so abruptly removed may result in a painful readjustment of the market that hurts a lot of people. (My other comments weren't meant as a defense of dealers, only intended to elucidate their operations.) [1] https://news.ycombinator.com/item?id=10463745 https://news.ycombinator.com/item?id=10463745

grandalf 11y ago
Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread. I mention this b/c I don't think it's a gradual accident... The dealers forced Ford to shut down factory stores in Oklahoma not too long ago. This is a turf battle.
- venning 11y ago
  Absolutely. Regulatory capture is a real thing and a really bad thing. I'm certainly not defending the franchise protections. I would just like to be clear: people get hurt when we uproot the status quo quickly. That isn't to say we shouldn't do it. There aren't easy answers here, particularly for the legislators who have to make those decisions.
  - maratd 11y ago
    > There aren't easy answers here I don't think the circumstances are as grim. Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. They may need to apply for a job at the new factory store, but that's really the extent of the displacement. You're not eliminating an entire industry. You're re-organizing it to reduce friction.
    - venning 11y ago
      Agreed. And I didn't mean to sound grim. Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or unemployable for a while. It's important to innovate and to do so boldly, but to also not be cavalier with how that innovation affects a world that was spinning long before that innovation was conceived of. Not to say that you or anyone else on this thread is doing so, I just wish to point it out.
      - newjersey 11y ago
        It is one thing to provide short-term support for carriage drivers and ship cargo loaders when mechanization renders their jobs useless. It is a different matter when existing big businesses stand in the way of progress. Would you support laws that would slow down the growth of digital cameras in the late nineties and early noughties so Kodak could continue to sell celluloid? I bet a lot of people were affected by that change. Where is the smooth transition for them?
        venning 11y ago
        The interesting thing about the particular examples in this thread--local taxi companies, hotel franchises, dealer franchises--is that none of them are in fact "big businesses". If Uber and AirBnB and Tesla succeed, they will all be considerably larger than any other player in those spaces. They will be the big businesses. Personally, I have no interest in protecting businesses. I have an interest in protecting competition. I like the disruption and I like the creating of new value that they bring. I just also feel for the individuals who often are so vigorously disrupted.
- JoshTriplett 11y ago
  > Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread. Which makes me wonder how much it would change the US political landscape to eliminate the massive protections granted to car dealerships.
  - grandalf 11y ago
    > eliminate the massive protections It would certainly change things a lot, but it would have to happen through the same democratic process that put the protections there in the first place.
    - fineman 11y ago
      That never works. You'd need those who benefit from the protectionism to stop lobbying. The issue is that it never was democratic, it was graft that made these regulations and it's graft that keeps them going. The way to get rid of regulatory capture is to make it impossible to enforce and let the leeches die. Uber may not win, but Taxi companies will die.
drzaiusapelord 11y ago
>. Taxi drivers didn't necessarily lobby for market restrictions Drivers are out in the street protesting anything that allows ride sharing and demanding further restrictions. The idea that employees are innocents is riduculous. This ignores 100+ years of unions, associations, legislation, etc. Its the rank and file demanding these laws, not shadowy men cutting backroom deals. If these deals get made its because the rank and file have a enough political capital to make them happen. >Essentially, the incumbents have been lied to for years This seems to be politically biased. These people know exactly what they're doing. When the Chicago Teacher's Union marches and claims low pay (instead they are some of the highest paid teachers in the nation), they know exactly what they are doing. When cab drivers block streets to protest Uber, they know exactly what they are doing.
- venning 11y ago
  There is a difference between the creation of the status quo and the defense of it. > ...out in the street protesting... > ...Chicago Teacher's Union marches... > ...cab drivers block streets... Your examples are all of its defense which, while understandable, is largely ignorant of the protections' unintended consequences. My earlier comments addressed the creation of those protections and the effects of their inevitable repeal. > The idea that employees are innocents is riduculous. I in no way implied innocence of any party. > This seems to be politically biased. Not that it matters, but I am contractually obligated to not display political bias in public. Even without that, as a matter of course and as a non-political resident of Capitol Hill, I avoid politically-biased discussion.
AnimalMuppet 11y ago
Some fences need to remain. Take barbers/hairdressers, for instance. It turns out that a barbershop can be a great place for spreading head lice. You want your barber/hairdresser to be trained to prevent that. That's part of what their licensing is about. So, are there any aspects of being a car dealer that are worthwhile fences? Offhand, I can't think of any, but that doesn't mean there are none.
- venning 11y ago
  I agree. As an avid "car guy" and a student of regulation, I cannot think of any reason for car dealers, as a whole, to be protected in the long-term. I am, however, perplexed with how we should address the possibility of established manufacturers attempting to cannibalize the sales of their most profitable franchises by building neighboring dealerships with their considerable capital. I believe the California model actually offers a lot of hope: manufacturers can compete, but they must observe a 10 mile radius from existing franchises.
  - AnimalMuppet 11y ago
    Pick a model - say, Chevrolet. Is there anywhere within the LA basin that isn't already within 10 miles of a Chevy dealership? Does this rule leave the manufacturer any place to be in a place like LA?
    - venning 11y ago
      This is why I am perplexed.
- fineman 11y ago
  How many hours does that take? Why does it take so long and yet being a waiter requires no (government) training at all?
  - jacobr1 11y ago
    Right, a waiter could do all sorts of things to contaminate food but doesn't require licensing. Regulations and investigation are sufficient. The same could easily been done for barber shops. Enforcement can also be done via torts. Insurance also requires certain base level of employee training. There are many ways to try and prevent and remediate problems other than requiring a license.

by venning 11y ago

grandalf 11y ago

Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread. I mention this b/c I don't think it's a gradual accident... The dealers forced Ford to shut down factory stores in Oklahoma not too long ago. This is a turf battle.

venning 11y ago
Absolutely. Regulatory capture is a real thing and a really bad thing. I'm certainly not defending the franchise protections. I would just like to be clear: people get hurt when we uproot the status quo quickly. That isn't to say we shouldn't do it. There aren't easy answers here, particularly for the legislators who have to make those decisions.
- maratd 11y ago
  > There aren't easy answers here I don't think the circumstances are as grim. Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. They may need to apply for a job at the new factory store, but that's really the extent of the displacement. You're not eliminating an entire industry. You're re-organizing it to reduce friction.
  - venning 11y ago
    Agreed. And I didn't mean to sound grim. Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or unemployable for a while. It's important to innovate and to do so boldly, but to also not be cavalier with how that innovation affects a world that was spinning long before that innovation was conceived of. Not to say that you or anyone else on this thread is doing so, I just wish to point it out.
    - newjersey 11y ago
      It is one thing to provide short-term support for carriage drivers and ship cargo loaders when mechanization renders their jobs useless. It is a different matter when existing big businesses stand in the way of progress. Would you support laws that would slow down the growth of digital cameras in the late nineties and early noughties so Kodak could continue to sell celluloid? I bet a lot of people were affected by that change. Where is the smooth transition for them?
      - venning 11y ago
        The interesting thing about the particular examples in this thread--local taxi companies, hotel franchises, dealer franchises--is that none of them are in fact "big businesses". If Uber and AirBnB and Tesla succeed, they will all be considerably larger than any other player in those spaces. They will be the big businesses. Personally, I have no interest in protecting businesses. I have an interest in protecting competition. I like the disruption and I like the creating of new value that they bring. I just also feel for the individuals who often are so vigorously disrupted.
JoshTriplett 11y ago
> Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread. Which makes me wonder how much it would change the US political landscape to eliminate the massive protections granted to car dealerships.
- grandalf 11y ago
  > eliminate the massive protections It would certainly change things a lot, but it would have to happen through the same democratic process that put the protections there in the first place.
  - fineman 11y ago
    That never works. You'd need those who benefit from the protectionism to stop lobbying. The issue is that it never was democratic, it was graft that made these regulations and it's graft that keeps them going. The way to get rid of regulatory capture is to make it impossible to enforce and let the leeches die. Uber may not win, but Taxi companies will die.

drzaiusapelord 11y ago

>. Taxi drivers didn't necessarily lobby for market restrictions Drivers are out in the street protesting anything that allows ride sharing and demanding further restrictions. The idea that employees are innocents is riduculous. This ignores 100+ years of unions, associations, legislation, etc. Its the rank and file demanding these laws, not shadowy men cutting backroom deals. If these deals get made its because the rank and file have a enough political capital to make them happen. >Essentially, the incumbents have been lied to for years This seems to be politically biased. These people know exactly what they're doing. When the Chicago Teacher's Union marches and claims low pay (instead they are some of the highest paid teachers in the nation), they know exactly what they are doing. When cab drivers block streets to protest Uber, they know exactly what they are doing.

venning 11y ago
There is a difference between the creation of the status quo and the defense of it. > ...out in the street protesting... > ...Chicago Teacher's Union marches... > ...cab drivers block streets... Your examples are all of its defense which, while understandable, is largely ignorant of the protections' unintended consequences. My earlier comments addressed the creation of those protections and the effects of their inevitable repeal. > The idea that employees are innocents is riduculous. I in no way implied innocence of any party. > This seems to be politically biased. Not that it matters, but I am contractually obligated to not display political bias in public. Even without that, as a matter of course and as a non-political resident of Capitol Hill, I avoid politically-biased discussion.

AnimalMuppet 11y ago

Some fences need to remain. Take barbers/hairdressers, for instance. It turns out that a barbershop can be a great place for spreading head lice. You want your barber/hairdresser to be trained to prevent that. That's part of what their licensing is about. So, are there any aspects of being a car dealer that are worthwhile fences? Offhand, I can't think of any, but that doesn't mean there are none.

venning 11y ago
I agree. As an avid "car guy" and a student of regulation, I cannot think of any reason for car dealers, as a whole, to be protected in the long-term. I am, however, perplexed with how we should address the possibility of established manufacturers attempting to cannibalize the sales of their most profitable franchises by building neighboring dealerships with their considerable capital. I believe the California model actually offers a lot of hope: manufacturers can compete, but they must observe a 10 mile radius from existing franchises.
- AnimalMuppet 11y ago
  Pick a model - say, Chevrolet. Is there anywhere within the LA basin that isn't already within 10 miles of a Chevy dealership? Does this rule leave the manufacturer any place to be in a place like LA?
  - venning 11y ago
    This is why I am perplexed.
fineman 11y ago
How many hours does that take? Why does it take so long and yet being a waiter requires no (government) training at all?
- jacobr1 11y ago
  Right, a waiter could do all sorts of things to contaminate food but doesn't require licensing. Regulations and investigation are sufficient. The same could easily been done for barber shops. Enforcement can also be done via torts. Insurance also requires certain base level of employee training. There are many ways to try and prevent and remediate problems other than requiring a license.