4 ms·

And if you think about it, most of these disruptive companies are not offering real growth. Both Über and Air BNB, for instance are diverting dollars from the

by smoyer 10y ago

And if you think about it, most of these disruptive companies are not offering real growth. Both Über and Air BNB, for instance are diverting dollars from the legacy provider. And they're doing this by offering better service and/or lower prices. There is no value creation to see here.

patrickk 10y ago
Well they are funding very ambitious stuff like nuclear power startups and AI initiatives, which most others usually shy away from. This is potentially extremely disruptive and a massive boon to the economy. And your assessment of Airbnb of just "diverting dollars from the legacy provider" is wrong in my opinion, it turns an unused space into cash (creating a new market/enabling an underserved market), just like early-eBay turned unwanted stuff in your house into cash. I'm not fully sure where I stand on Uber, but they're certainly offering a much better customer experience than traditional taxis.
- smoyer 10y ago
  AirBNB turns my unused space into cash but also keeps me from staying at a hotel. These businesses are certainly adding value for their shareholders and customers. They are not generally expanding the economy. I should also admit that many existing business models should be disrupted.
  - patrickk 10y ago
    It doesn't keep you from staying at a hotel, that's a choice you make. Also, I've stayed at AirBnb locations where there was no other accommodations options, so it's difficult to argue it's taking business from a hotel in these scenarios. Additionally, I wouldn't be surprised if bigger hotel chains legally evade loads of tax like virtually all large multinational companies do, which isn't an option for most AirBnb hosts, who must pay full tax on everything (or face the consequences, e.g. the situation in New York).
    - smoyer 10y ago
      "keeps" was a poor word choice. I've never stayed at an AirBNB (or VRBO, etc) on the same night I also stayed at a hotel, so if I choose one, then the other (in general) isn't getting my business. Reading the rest of your comment, I don't really think we disagree except that you seem to think AirBNB is driving additional revenue into the economy ("Also, I've stayed at AirBnb locations where there was no other accommodations options") - before AirBNB was there, what would you have done? You would have either stayed at a hotel that was further away than you'd like, or stayed home. The consumer is definitely winning though.
hyko 10y ago
Lowering prices and improving goods and services are the only ways of creating value?
sulam 10y ago
Think what you will about Uber and AirBnb (I happen to dislike Uber as a tech employer) -- they are certainly offering real growth. I have used Uber (and Lyft) and Airbnb (and VRBO/HomeAway) to do things that I otherwise wouldn't have done. In other words, rides I wouldn't have called a taxi for, and trips I wouldn't have taken because I find the typical hotel experience to be more trouble than it's worth with two small children. I think you should also consider the utilization side of things -- people are getting value out of a depreciating asset that would otherwise be unutilized. Simply from an account perspective this is valuable (and probably more economically valuable than helping support rent-seeking medallion owners). The Freakonomics podcast had a really good economic justification for Uber specifically that goes beyond what I've described here. It's worth listening to (and I can't seem to link to it directly: http://www.npr.org/podcasts/452538045/freakonomics-radio http://www.npr.org/podcasts/452538045/freakonomics-radio -- September 7th).

by smoyer 10y ago

patrickk 10y ago

Well they are funding very ambitious stuff like nuclear power startups and AI initiatives, which most others usually shy away from. This is potentially extremely disruptive and a massive boon to the economy. And your assessment of Airbnb of just "diverting dollars from the legacy provider" is wrong in my opinion, it turns an unused space into cash (creating a new market/enabling an underserved market), just like early-eBay turned unwanted stuff in your house into cash. I'm not fully sure where I stand on Uber, but they're certainly offering a much better customer experience than traditional taxis.

smoyer 10y ago
AirBNB turns my unused space into cash but also keeps me from staying at a hotel. These businesses are certainly adding value for their shareholders and customers. They are not generally expanding the economy. I should also admit that many existing business models should be disrupted.
- patrickk 10y ago
  It doesn't keep you from staying at a hotel, that's a choice you make. Also, I've stayed at AirBnb locations where there was no other accommodations options, so it's difficult to argue it's taking business from a hotel in these scenarios. Additionally, I wouldn't be surprised if bigger hotel chains legally evade loads of tax like virtually all large multinational companies do, which isn't an option for most AirBnb hosts, who must pay full tax on everything (or face the consequences, e.g. the situation in New York).
  - smoyer 10y ago
    "keeps" was a poor word choice. I've never stayed at an AirBNB (or VRBO, etc) on the same night I also stayed at a hotel, so if I choose one, then the other (in general) isn't getting my business. Reading the rest of your comment, I don't really think we disagree except that you seem to think AirBNB is driving additional revenue into the economy ("Also, I've stayed at AirBnb locations where there was no other accommodations options") - before AirBNB was there, what would you have done? You would have either stayed at a hotel that was further away than you'd like, or stayed home. The consumer is definitely winning though.

hyko 10y ago

Lowering prices and improving goods and services are the only ways of creating value?

sulam 10y ago

Think what you will about Uber and AirBnb (I happen to dislike Uber as a tech employer) -- they are certainly offering real growth. I have used Uber (and Lyft) and Airbnb (and VRBO/HomeAway) to do things that I otherwise wouldn't have done. In other words, rides I wouldn't have called a taxi for, and trips I wouldn't have taken because I find the typical hotel experience to be more trouble than it's worth with two small children. I think you should also consider the utilization side of things -- people are getting value out of a depreciating asset that would otherwise be unutilized. Simply from an account perspective this is valuable (and probably more economically valuable than helping support rent-seeking medallion owners). The Freakonomics podcast had a really good economic justification for Uber specifically that goes beyond what I've described here. It's worth listening to (and I can't seem to link to it directly: http://www.npr.org/podcasts/452538045/freakonomics-radio http://www.npr.org/podcasts/452538045/freakonomics-radio -- September 7th).