6 ms·

cost savings/increased efficiency is the name of the game, and first world regulations are costs SV can ignore. sometimes the quasi employees suffer the burden

cost savings/increased efficiency is the name of the game, and first world regulations are costs SV can ignore. sometimes the quasi employees suffer the burden (but get increased flexibility), sometimes the consumer suffers (lower price but increased variance in quality of goods/service)

TeMPOraL 8y ago
> cost savings/increased efficiency is the name of the game I'd say "socializing losses, privatizing gains" is the name of the game. Those popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally; it's just disrupting the society and hoping money pours through the cracks.
- decebalus1 8y ago
  > "socializing losses, privatizing gains" Never seen this formulated as such but I really like it. I was reading a book which tangentially dealt with that [0]. It changed my perspective on how new businesses are increasingly externalizing their costs to the consumers. [0] https://www.amazon.com/Shadow-Work-Unpaid-Unseen-Jobs/dp/1619027364 https://www.amazon.com/Shadow-Work-Unpaid-Unseen-Jobs/dp/161...
  - SaltyBackendGuy 8y ago
    > "socializing losses, privatizing gains" I also have never head it put quite this way, and realize how true it is. One example is American Football stadiums. Get the people to pay for it and charge them to go there.
  - gizmo686 8y ago
    I don't think "externalizing their costs to the consumers" really makes sense. In an idealized market, costs should be passed onto the consumer. From what I can tell, the book you reference is just complaining that this cost changed from money to labor. It is also worth noting that, in many cases, this results in a net win for the consumer. Eg, whwn I buy from a full service gas station, I am paying someone to pump my gas, and paying the to sit idle waiting for customers, and paying (in time) to wait for them to finish. In contrast, in self service, the only cost from above I have is 1 person pumping gas (which switched from being paid with money, to being paid with labor)
    - infogulch 8y ago
      An idealized market requires full awareness of all of the costs. A key factor in "externalizing" costs is hiding those external costs from the consumer. E.g. a perfect market would notice the increased quality variance of goods and services and would require the price to go down proportionally so the total cost is the same. But consumers don't all see it at the same time, so every company has a chance to hoodwink every consumer by pushing additional costs onto them without their initial knowledge. The key innovation of money is the ability to accurately evaluate the value of goods and services; by pushing all of these extra external costs onto the consumer we're basically going back to bartering. Every additional variable that the consumer is required to consider during a purchase decision is additional cognitive load. That's why people pay so much for free/fixed shipping costs: it reduces the number of variables you have to keep in your head by 1. It's also why I think that adding tax after the listed price (like the US does it) is terrible: it puts more cognitive load on the consumer. Consumers today are attacked with dozens of potential hidden external costs around every corner, it's like a DOS attack on the consumer's brain and inhibits their decision making ability.
    - decebalus1 8y ago
      The book is arguing about using a service which costs X. The business then makes the service more efficient by reducing labor costs for itself and not passing the savings back to the consumer but instead keeping the same price while making the service shittier by having the consumer do more work. So for the same price, you get less service, need to do more work while the business hoards the money.
  - nindalf 8y ago
    I'm not sure why it isn't more common to see that on HN. On reddit, it's reliably one of the top comments in such threads.
    - plankers 8y ago
      "It is difficult to get a man to understand something, when his salary depends on his not understanding it." --Upton Sinclair Welcome to The Jungle, baby.
      - RodericDay 8y ago
        one of the dumbass paid mods on here warned a user for using this "cliche" the other day, fyi https://news.ycombinator.com/item?id=18652541 https://news.ycombinator.com/item?id=18652541
    - barrow-rider 8y ago
      Gonna guess a bias to entrepreneurs who are actively trying to cash in on externalities and opportunities for arbitrage, etc.
  - mrec 8y ago
    I'm surprised you've never seen it before, it's been pretty common for a long, long time. See also: https://en.wikipedia.org/wiki/Lemon_socialism https://en.wikipedia.org/wiki/Lemon_socialism
    - cmrdporcupine 8y ago
      It's not any kind of socialism. I know in American parlance "socialism" somehow means anything to do with government, but this is not how the rest of the world thinks of the word, and the word "socialism" has its correct interpretation right in it. If it's a private entity capturing the state's revenues, that's anything but social. It's the opposite. It should be called what it is: lemon corporatism. And it's sadly nothing new.
- deleted 8y ago
  [deleted]
- roymurdock 8y ago
  nah i wouldn't go that far, banking employees and shareholders of recapitalized companies in 2007/2008 privatized gains and socialized losses when they were mostly bailed out with taxpayer money/federal reserve credibility instead of going under, but uber/airbnb/aws are pure efficiency plays. they increase the utilization of (what used to be) private cars, real estate, and servers respectively. there are trade offs between renting and buying, and we are moving more towards a rental economy mostly because it's more efficient in many cases to just rent what you need when you need it (opex) rather than spending big on a depreciating asset (capex)
  - plankers 8y ago
    If uber/lyft are pure efficiency plays, then why do they have their own programs to finance the purchase of new cars just so people can drive for uber/lyft? By the same token, but much harder to substantiate, why are people buying property just to rent it out with airbnb? The negative externalities are there. You just have to know where to look.
    - roymurdock 8y ago
      neither of those examples are negative externalities the heart and core of each company is just more efficient matching with less regulation and more technology between renters and owners of capital
      - plankers 8y ago
        People buying new cars is bad for the environment. Houses being bought up solely be rented out by the day drives up housing prices for people who actually want to live in those neighborhoods. Come on, dude.
    - thereisnospork 8y ago
      Because the regulatory environment around taxis and hotels are so onorous that doing something a reasonable person might find absurd actually improves the efficiency of car services/boarding.
- seiferteric 8y ago
  That phrase always made sense to me in the context of banks for example who basically expected to be bailed out if they fail a la 2008, but how does it apply here? How is uber socializing losses?
  - reaperducer 8y ago
    By pushing the burden of operating and maintaining a taxi fleet onto its drivers, rather than making it a cost of doing business like a real taxi fleet.
  - 95014_refugee 8y ago
    It might help to use "costs" rather than "losses"? For one, consider that we attempt to constrain the price of labor upward to cover the cost of living. By having a large workforce that is not necessarily subject to these constraints (minimum wage, employer health plan, payroll taxes, etc.) Uber fails to meet the CoL for a large slice of its workforce, which then has to lean on society to make up the balance.
- pathseeker 8y ago
  >hose popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally Pretty lame analysis. There are lots of companies that are in it to do good or actually improve society. I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful.
  - TeMPOraL 8y ago
    > There are lots of companies that are in it to do good or actually improve society. I don't disagree. They rarely get media attention though, and I don't mention them here, because their disruption is a quite different thing from Uber/AirBnB disruption. For that "lame analysis" part, I'll give you a task: given that you wrote there are lots of such companies, name three. ;). > I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful. Taxis were awful in many places, not everywhere. I'm usually taking people's word for it when they describe how Uber service is better than taxi (though I'm increasingly noticing stories about Uber quality declining). But there are cities, including my home town and the current town I live in, where taxis are almost universally good. And yet, Uber came and attacked taxis everywhere, whether good or bad. You can do things like that when you can freely break the law[0] and get away with it[1], and when you can lose money for longer than all your competitors can stay solvent. Honestly, Uber story looks pretty much like a typical story of a corporation entering international market and displacing all little local players, except with more disregard for law, and some weird belief people still have that Uber is a startup. Still, I'll grant Uber that some of the disruption came out for the better, because it allowed more ethical and legal competitors to emerge in this space. And yet: > working there as an employee isn't great Here's a thing: do we consider pushing more and more people into wage slavery to be "improving society"? -- [0] - Not just general "taxi regulations", but also traffic safety (a common story to hear was Uber without valid insurance) and tax laws (in my country, I remember our equivalent of IRS being the most active in hunting down Uber drivers). [1] - Half of the blame here goes to the municipal governments, who should've punished Uber immediately for breaking local laws. AFAIR only Germany behaved correctly, and started issuing service bans quickly.

TeMPOraL 8y ago

> cost savings/increased efficiency is the name of the game I'd say "socializing losses, privatizing gains" is the name of the game. Those popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally; it's just disrupting the society and hoping money pours through the cracks.

decebalus1 8y ago
> "socializing losses, privatizing gains" Never seen this formulated as such but I really like it. I was reading a book which tangentially dealt with that [0]. It changed my perspective on how new businesses are increasingly externalizing their costs to the consumers. [0] https://www.amazon.com/Shadow-Work-Unpaid-Unseen-Jobs/dp/1619027364 https://www.amazon.com/Shadow-Work-Unpaid-Unseen-Jobs/dp/161...
- SaltyBackendGuy 8y ago
  > "socializing losses, privatizing gains" I also have never head it put quite this way, and realize how true it is. One example is American Football stadiums. Get the people to pay for it and charge them to go there.
- gizmo686 8y ago
  I don't think "externalizing their costs to the consumers" really makes sense. In an idealized market, costs should be passed onto the consumer. From what I can tell, the book you reference is just complaining that this cost changed from money to labor. It is also worth noting that, in many cases, this results in a net win for the consumer. Eg, whwn I buy from a full service gas station, I am paying someone to pump my gas, and paying the to sit idle waiting for customers, and paying (in time) to wait for them to finish. In contrast, in self service, the only cost from above I have is 1 person pumping gas (which switched from being paid with money, to being paid with labor)
  - infogulch 8y ago
    An idealized market requires full awareness of all of the costs. A key factor in "externalizing" costs is hiding those external costs from the consumer. E.g. a perfect market would notice the increased quality variance of goods and services and would require the price to go down proportionally so the total cost is the same. But consumers don't all see it at the same time, so every company has a chance to hoodwink every consumer by pushing additional costs onto them without their initial knowledge. The key innovation of money is the ability to accurately evaluate the value of goods and services; by pushing all of these extra external costs onto the consumer we're basically going back to bartering. Every additional variable that the consumer is required to consider during a purchase decision is additional cognitive load. That's why people pay so much for free/fixed shipping costs: it reduces the number of variables you have to keep in your head by 1. It's also why I think that adding tax after the listed price (like the US does it) is terrible: it puts more cognitive load on the consumer. Consumers today are attacked with dozens of potential hidden external costs around every corner, it's like a DOS attack on the consumer's brain and inhibits their decision making ability.
  - decebalus1 8y ago
    The book is arguing about using a service which costs X. The business then makes the service more efficient by reducing labor costs for itself and not passing the savings back to the consumer but instead keeping the same price while making the service shittier by having the consumer do more work. So for the same price, you get less service, need to do more work while the business hoards the money.
- nindalf 8y ago
  I'm not sure why it isn't more common to see that on HN. On reddit, it's reliably one of the top comments in such threads.
  - plankers 8y ago
    "It is difficult to get a man to understand something, when his salary depends on his not understanding it." --Upton Sinclair Welcome to The Jungle, baby.
    - RodericDay 8y ago
      one of the dumbass paid mods on here warned a user for using this "cliche" the other day, fyi https://news.ycombinator.com/item?id=18652541 https://news.ycombinator.com/item?id=18652541
  - barrow-rider 8y ago
    Gonna guess a bias to entrepreneurs who are actively trying to cash in on externalities and opportunities for arbitrage, etc.
- mrec 8y ago
  I'm surprised you've never seen it before, it's been pretty common for a long, long time. See also: https://en.wikipedia.org/wiki/Lemon_socialism https://en.wikipedia.org/wiki/Lemon_socialism
  - cmrdporcupine 8y ago
    It's not any kind of socialism. I know in American parlance "socialism" somehow means anything to do with government, but this is not how the rest of the world thinks of the word, and the word "socialism" has its correct interpretation right in it. If it's a private entity capturing the state's revenues, that's anything but social. It's the opposite. It should be called what it is: lemon corporatism. And it's sadly nothing new.
deleted 8y ago
[deleted]
roymurdock 8y ago
nah i wouldn't go that far, banking employees and shareholders of recapitalized companies in 2007/2008 privatized gains and socialized losses when they were mostly bailed out with taxpayer money/federal reserve credibility instead of going under, but uber/airbnb/aws are pure efficiency plays. they increase the utilization of (what used to be) private cars, real estate, and servers respectively. there are trade offs between renting and buying, and we are moving more towards a rental economy mostly because it's more efficient in many cases to just rent what you need when you need it (opex) rather than spending big on a depreciating asset (capex)
- plankers 8y ago
  If uber/lyft are pure efficiency plays, then why do they have their own programs to finance the purchase of new cars just so people can drive for uber/lyft? By the same token, but much harder to substantiate, why are people buying property just to rent it out with airbnb? The negative externalities are there. You just have to know where to look.
  - roymurdock 8y ago
    neither of those examples are negative externalities the heart and core of each company is just more efficient matching with less regulation and more technology between renters and owners of capital
    - plankers 8y ago
      People buying new cars is bad for the environment. Houses being bought up solely be rented out by the day drives up housing prices for people who actually want to live in those neighborhoods. Come on, dude.
  - thereisnospork 8y ago
    Because the regulatory environment around taxis and hotels are so onorous that doing something a reasonable person might find absurd actually improves the efficiency of car services/boarding.
seiferteric 8y ago
That phrase always made sense to me in the context of banks for example who basically expected to be bailed out if they fail a la 2008, but how does it apply here? How is uber socializing losses?
- reaperducer 8y ago
  By pushing the burden of operating and maintaining a taxi fleet onto its drivers, rather than making it a cost of doing business like a real taxi fleet.
- 95014_refugee 8y ago
  It might help to use "costs" rather than "losses"? For one, consider that we attempt to constrain the price of labor upward to cover the cost of living. By having a large workforce that is not necessarily subject to these constraints (minimum wage, employer health plan, payroll taxes, etc.) Uber fails to meet the CoL for a large slice of its workforce, which then has to lean on society to make up the balance.
pathseeker 8y ago
>hose popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally Pretty lame analysis. There are lots of companies that are in it to do good or actually improve society. I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful.
- TeMPOraL 8y ago
  > There are lots of companies that are in it to do good or actually improve society. I don't disagree. They rarely get media attention though, and I don't mention them here, because their disruption is a quite different thing from Uber/AirBnB disruption. For that "lame analysis" part, I'll give you a task: given that you wrote there are lots of such companies, name three. ;). > I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful. Taxis were awful in many places, not everywhere. I'm usually taking people's word for it when they describe how Uber service is better than taxi (though I'm increasingly noticing stories about Uber quality declining). But there are cities, including my home town and the current town I live in, where taxis are almost universally good. And yet, Uber came and attacked taxis everywhere, whether good or bad. You can do things like that when you can freely break the law[0] and get away with it[1], and when you can lose money for longer than all your competitors can stay solvent. Honestly, Uber story looks pretty much like a typical story of a corporation entering international market and displacing all little local players, except with more disregard for law, and some weird belief people still have that Uber is a startup. Still, I'll grant Uber that some of the disruption came out for the better, because it allowed more ethical and legal competitors to emerge in this space. And yet: > working there as an employee isn't great Here's a thing: do we consider pushing more and more people into wage slavery to be "improving society"? -- [0] - Not just general "taxi regulations", but also traffic safety (a common story to hear was Uber without valid insurance) and tax laws (in my country, I remember our equivalent of IRS being the most active in hunting down Uber drivers). [1] - Half of the blame here goes to the municipal governments, who should've punished Uber immediately for breaking local laws. AFAIR only Germany behaved correctly, and started issuing service bans quickly.