4 ms·

How is that different from any company using profits from one product to build another one?

by aey 8y ago

chii 8y ago
Using the profits is OK (not considered monopolistic). Using a large marketshare in one area to gain an unfair advantage in another area is monopolistic.
- aey 8y ago
  They using profits from one area to reduce their prices and grow their driver fleet in another.
  - hopler 8y ago
    That's dumping and the source of funding is irrelevant.
    - aey 8y ago
      So a startup shouldn’t try to gain market share with a free product? Is Linux dumping on Windows?
      - femto113 8y ago
        Dumping is about selling at a marginal loss. For example if it cost you $7 to make a widget but you sell it at a loss for $5 because you’re trying to drive a competitor who can make a widget for $6 out of the market. Linux (like most software) has no marginal cost so unless you pay someone to use it dumping doesn’t really apply (Google did do that with Android). For Uber and Lyft I think a reasonable case could be made that they are dumping if they take a marginal loss on each ride to force a lower cost provider out of a market, but companies get a lot of leeway for money spent on “marketing”, eg the losses can be structured as “new driver bonuses” and “new customer discounts” rather than a cost per ride.
        aey 8y ago
        Microsoft is spending X per year on engineering. So Windows has a marginal cost. Because I am overcompensated and have spare engineering time I can dump it into a free Linux product to force Windows out of a market. Redhat is actually taking my free engineering time and monetizing it! The villains!!!
freyir 8y ago
Local markets aren’t different products, to start.
- aey 8y ago
  But different products are often different markets. An author of science fiction could write a romance novel with 0 overlapping readers.
  - jrochkind1 8y ago
    With that particular analogy example, you'd be surprised. Not really relevant to the real discussion, but I find the romance novel market pretty fascinating. https://www.goodreads.com/genres/science-fiction-romance https://www.goodreads.com/genres/science-fiction-romance
    - aey 8y ago
      I think we are getting close to machine generated pulp fiction :).
      - jrochkind1 8y ago
        Eh, they're written by real humans, trying their best to write something that an audience will enjoy, same as most "pulp" (ie commercial) fiction, same as much SF (much commercial SF is pretty bad of course). I find the romance sub-genres delightful; not so much to read them (although maybe I should), but just that they exist makes me smile and appreciative of humanity. I think that romance gets so little respect even from people who appreciate other "pulp" genres like SF or horror, has a lot to do with assumptions about genders of readers. SF has a very "unsavory" past too, but has been "recuperated" somehow. Romance stuff is just books too. I like books, and I'm glad that people still read them!

How is that different from any company using profits from one product to build another one?

by aey 8y ago

How is that different from any company using profits from one product to build another one?

chii 8y ago

Using the profits is OK (not considered monopolistic). Using a large marketshare in one area to gain an unfair advantage in another area is monopolistic.

aey 8y ago
They using profits from one area to reduce their prices and grow their driver fleet in another.
- hopler 8y ago
  That's dumping and the source of funding is irrelevant.
  - aey 8y ago
    So a startup shouldn’t try to gain market share with a free product? Is Linux dumping on Windows?
    - femto113 8y ago
      Dumping is about selling at a marginal loss. For example if it cost you $7 to make a widget but you sell it at a loss for $5 because you’re trying to drive a competitor who can make a widget for $6 out of the market. Linux (like most software) has no marginal cost so unless you pay someone to use it dumping doesn’t really apply (Google did do that with Android). For Uber and Lyft I think a reasonable case could be made that they are dumping if they take a marginal loss on each ride to force a lower cost provider out of a market, but companies get a lot of leeway for money spent on “marketing”, eg the losses can be structured as “new driver bonuses” and “new customer discounts” rather than a cost per ride.
      - aey 8y ago
        Microsoft is spending X per year on engineering. So Windows has a marginal cost. Because I am overcompensated and have spare engineering time I can dump it into a free Linux product to force Windows out of a market. Redhat is actually taking my free engineering time and monetizing it! The villains!!!

freyir 8y ago

Local markets aren’t different products, to start.

aey 8y ago
But different products are often different markets. An author of science fiction could write a romance novel with 0 overlapping readers.
- jrochkind1 8y ago
  With that particular analogy example, you'd be surprised. Not really relevant to the real discussion, but I find the romance novel market pretty fascinating. https://www.goodreads.com/genres/science-fiction-romance https://www.goodreads.com/genres/science-fiction-romance
  - aey 8y ago
    I think we are getting close to machine generated pulp fiction :).
    - jrochkind1 8y ago
      Eh, they're written by real humans, trying their best to write something that an audience will enjoy, same as most "pulp" (ie commercial) fiction, same as much SF (much commercial SF is pretty bad of course). I find the romance sub-genres delightful; not so much to read them (although maybe I should), but just that they exist makes me smile and appreciative of humanity. I think that romance gets so little respect even from people who appreciate other "pulp" genres like SF or horror, has a lot to do with assumptions about genders of readers. SF has a very "unsavory" past too, but has been "recuperated" somehow. Romance stuff is just books too. I like books, and I'm glad that people still read them!