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Aren't the usual reasons we buy a service rather than doing something ourselves chosen from a list that goes something like: * X is available more cheaply from

Aren't the usual reasons we buy a service rather than doing something ourselves chosen from a list that goes something like: * X is available more cheaply from a third party supplier (who presumably has achieved some kinds of economies of scale) than our fully-loaded cost to deliver the same * X is a commodity product where we do not feel we can differentiate ourselves by doing it in-house * X is ancillary, but important, to our core business and we lack the expertise to do it well, so we will buy in rather than build that expertise Not many hotels are bothering to drill their own wells these days, bearing in mind that water is available from utility suppliers - why would room cleaning service be immune from the same forces?

enragedcacti 6y ago
I would argue for a fourth point in this case * Purchasing X through a third party allows us to circumvent laws and regulations meant to protect workers and/or consumers
- gridlockd 6y ago
  These "laws and regulations" still apply to the agency that hires those workers. You're simply paying for them to carry the risk. You can argue that such agencies are more likely to disregard laws and regulations, but how would you fix that? With laws and regulations?
  - tekdude 6y ago
    If Big Publicly Listed Company A contracts with Small Fly-by-Night LLC B to provide workers to vacuum and empty wastebaskets, and it turns out that LLC B is illegally withholding wages, then Company A could be partially liable because they should have done due diligence and picked reputable law-abiding suppliers. I can think of a couple different legal metaphors for this: 1. Something similar to banking's Know-Your-Customer could work... maybe call it Know-Your-Suppliers. 2. People are criminally liable for possessing child pornography even if they had no participation in the direct crimes of its creation. In other words: in this case there is no immunity just because the crimes happened somewhere "upstream".
    - jacobush 6y ago
      And in practice, it just doesn't happen much. For instance, how likely are your Fly-by-night employee or sub-sub-contractor to rat out the Fly-by-night? They may get a beating, their checks withheld, the Fly-by-night go under. If it still happens, Big Publicly Listed company pays for it to go away in a settlement. If it goes to court, they Big Company can say "we work very diligently to avoid this situation in the future and what happened is in no way indicative of our values". Etc.
sjy 6y ago
It is as simple as “X is available more cheaply from a third party supplier.” But in the case of services that depend on low-skill labour like room cleaning, there are no presumed economies of scale. These companies don’t get the same work done with less labour, like utility suppliers. Instead, they pay workers less, and use complex business structures and confidentiality agreements to protect the client from the consequences (unions, lawsuits and PR damage). This isn’t capitalism realising positive-sum efficiencies; it’s just taking resources from workers and giving them to business owners.

enragedcacti 6y ago

I would argue for a fourth point in this case * Purchasing X through a third party allows us to circumvent laws and regulations meant to protect workers and/or consumers

gridlockd 6y ago
These "laws and regulations" still apply to the agency that hires those workers. You're simply paying for them to carry the risk. You can argue that such agencies are more likely to disregard laws and regulations, but how would you fix that? With laws and regulations?
- tekdude 6y ago
  If Big Publicly Listed Company A contracts with Small Fly-by-Night LLC B to provide workers to vacuum and empty wastebaskets, and it turns out that LLC B is illegally withholding wages, then Company A could be partially liable because they should have done due diligence and picked reputable law-abiding suppliers. I can think of a couple different legal metaphors for this: 1. Something similar to banking's Know-Your-Customer could work... maybe call it Know-Your-Suppliers. 2. People are criminally liable for possessing child pornography even if they had no participation in the direct crimes of its creation. In other words: in this case there is no immunity just because the crimes happened somewhere "upstream".
  - jacobush 6y ago
    And in practice, it just doesn't happen much. For instance, how likely are your Fly-by-night employee or sub-sub-contractor to rat out the Fly-by-night? They may get a beating, their checks withheld, the Fly-by-night go under. If it still happens, Big Publicly Listed company pays for it to go away in a settlement. If it goes to court, they Big Company can say "we work very diligently to avoid this situation in the future and what happened is in no way indicative of our values". Etc.

sjy 6y ago

It is as simple as “X is available more cheaply from a third party supplier.” But in the case of services that depend on low-skill labour like room cleaning, there are no presumed economies of scale. These companies don’t get the same work done with less labour, like utility suppliers. Instead, they pay workers less, and use complex business structures and confidentiality agreements to protect the client from the consequences (unions, lawsuits and PR damage). This isn’t capitalism realising positive-sum efficiencies; it’s just taking resources from workers and giving them to business owners.