4 ms·

I think you assume too much about which type of fridge represents the lowest cost. Countless enterprises have already embraced "cheap to buy, cheap to replace"

by gascan 8y ago

I think you assume too much about which type of fridge represents the lowest cost. Countless enterprises have already embraced "cheap to buy, cheap to replace" products in favor of long lasting reliable products. Now, the one place a company with a fleet of fridges could really do the world good would be maintenance & repair. When you've got all your own repair crew on the payroll and you operate one kind of fridge, those costs plummet. They will happily externalize as many costs as possible as well. Your electric bill is high? Oops, guess you should have negotiated that in the contract. Five hundred dollars of fresh groceries went bad because we gave you a shoddy refurb? We'll have a new unit out to you tomorrow, good luck with the rest.

amelius 8y ago
> The one place a company with a fleet of fridges could really do the world good would be maintenance & repair. When you've got all your own repair crew on the payroll and you operate one kind of fridge, those costs plummet. Yes, so the market will ensure that this kind of company will prevail.
- gascan 8y ago
  Sure, but then that kind of company starts to look more like a fridge repair business than a "RaaS".
- dv_dt 8y ago
  Not necessarily, depending on all kinds of market factors, e.g. like stickyness of the transaction: how lazy would consumers be about changing out a fridge provider with poor service, or locking in the consumers with time boxed commitments. The slower and more inconvenient the transaction, the more the provider can wedge in rentier profits, and the poorer the market will respond.
- chipotle_coyote 8y ago
  There are a lot of assumptions hidden in "the market always works" statements like that. In this case, there's the assumption that the line you're quoting represents a business model that's cheaper than "buy the cheapest fridge possible and replace it with another cheap-as-possible fridge when it breaks," especially when you factor in that you no longer need a repair crew on the payroll (because you don't repair things). Here's another, more complicated problem: even if the math proves that, say, over a long enough horizon, you'll make more money with the longer-lived, repairable version of the product, that isn't necessarily the best way to maximize returns for shareholders/owners. If that concern overrides all others, then you may well be better off maximizing profits short-term, through any (hopefully legal!) means possible regardless of the effect on the long-term viability of the business, and investing them in other markets with higher returns.

by gascan 8y ago

amelius 8y ago

> The one place a company with a fleet of fridges could really do the world good would be maintenance & repair. When you've got all your own repair crew on the payroll and you operate one kind of fridge, those costs plummet. Yes, so the market will ensure that this kind of company will prevail.

gascan 8y ago
Sure, but then that kind of company starts to look more like a fridge repair business than a "RaaS".
dv_dt 8y ago
Not necessarily, depending on all kinds of market factors, e.g. like stickyness of the transaction: how lazy would consumers be about changing out a fridge provider with poor service, or locking in the consumers with time boxed commitments. The slower and more inconvenient the transaction, the more the provider can wedge in rentier profits, and the poorer the market will respond.
chipotle_coyote 8y ago
There are a lot of assumptions hidden in "the market always works" statements like that. In this case, there's the assumption that the line you're quoting represents a business model that's cheaper than "buy the cheapest fridge possible and replace it with another cheap-as-possible fridge when it breaks," especially when you factor in that you no longer need a repair crew on the payroll (because you don't repair things). Here's another, more complicated problem: even if the math proves that, say, over a long enough horizon, you'll make more money with the longer-lived, repairable version of the product, that isn't necessarily the best way to maximize returns for shareholders/owners. If that concern overrides all others, then you may well be better off maximizing profits short-term, through any (hopefully legal!) means possible regardless of the effect on the long-term viability of the business, and investing them in other markets with higher returns.