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> was put at an artificial advantage as compared to That makes up most of the "disruption" lately. Companies discover that they can exploit some legal loophole

> was put at an artificial advantage as compared to That makes up most of the "disruption" lately. Companies discover that they can exploit some legal loophole by claiming "but technology" and get an upper hand over classic competitors. By the time they're forced to follow the same rules, or (less likely) the law is relaxed for everyone else, they already have a healthy head start and can either claim that they're being treated unfairly, or that they're better than everyone else.

AmericanChopper 6y ago
My reading of that article was that tax liability hasn’t changed at all. The Airbnb hosts were always liable for paying all of their taxes, including whatever sales taxes they were liable for. This change means that Airbnb are now responsible for collecting that sales tax and paying it to the government on behalf of their hosts. Whatever opinion you have about that, it doesn’t seem to be addressing any sort of loophole. It’s not a new tax, it’s just a new regulation for collecting it.
throwaway201103 6y ago
The biggest and most common "loophole" being "we don't need all the physical infrastructure" Amazon: we don't need to own retail stores or inventory Airbnb: we don't need to own hotel properties and employ managers and housekeepers Uber: we don't need to own cars and employ drivers Are there any examples of tech disruptors that are really displacing classic competitors only on the basis of tax loopholes?
- rob74 6y ago
  Can't think of any, but it's still fair to say that tax loopholes (and lack of other regulations that the established competitors are subject to, e.g. Taxi licenses) provide an additional advantage...
- TheOtherHobbes 6y ago
  Amazon: We don't need to pay sales tax or look after our warehouse employees AirBnB: We don't need to pay sales tax or look after our hosts Uber: We don't need to pay sales tax or look after our drivers The sales tax problem is only a loophole in some territories. The "look after" part is a problem in all of them.
- buran77 6y ago
  I never said (or meant only) "tax loopholes", Uber may even end up paying more tax than taxi companies. But taxi companies have a far, far higher bar in the eyes of the law. In most countries you can't just decide to climb in your private car and provide commercial transportation service. You have to spend a lot of time and money to get there, authorizations, commercial insurance, driver certifications, etc. Uber bypassed it by saying "we're a tech company" and left it to the drivers, making the enforcement of the law a lot harder. Hotels also have higher requirements than an AirBnB host but the company says "we're just the tech platform". Just look at conflict resolution and what kind of leverage and protections a client has when dealing with a hotel vs. dealing with a private renter to see the massive gap that comes attached to that "disruption". Because that's the thing, you could have short-term renting in the past but that wasn't an alternative to hotels. AirBnB made it a hotel alternative so that's the benchmark. Same with Uber, you could (legally) hitchhike in the past but Uber made the service a taxi alternative. Imagine Google "disrupting" the state/national/federal identity registry, as in become the equivalent of the passport or identity card issuer while offering Google-style support and SLAs. Some services are important enough to be regulated, this is what today's disruptors are bypassing. The solution to an industry being crap isn't to allow someone to bypass existing regulation, it's to create a set of effective regulations that can be applied equally to everyone.
  - kd5bjo 6y ago
    > Uber bypassed it by saying "we're a tech company" and left it to the drivers, making the enforcement of the law a lot harder. The original loophole that Uber used was San Francisco’s different regulations between taxis and limo companies: The latter are less regulated but are allowed to accept prebooking, and not street hails. Uber realized that ordering a ride via a phone app is more convenient than trying to hail a passing taxi in many cases and can be served by a limo company instead.
    - emteycz 6y ago
      What's the difference from calling by phone, also served by many limo companies?
    - 6y ago
- mellavora 6y ago
  uber: we don't need to demand/provide commercial insurance even though the vehicles are used commercially, private insurance can pick up the risk.
- qwerty456127 6y ago
  Nevertheless, all these are legitimate things if viewed from a different perspective. As a driver I like to have a platform to list my own services an independent way at instead of applying for a job at a transportation company. And as a passenger I like to be able to hire an individual driver. I don't want a taxi company nor the Uber company, just a private individual + a convenience website where I can find one. As a traveler I don't want a fancy hotel, let alone a shitty one - I prefer a decent room or a bed in an ordinary private home. If only Uber and AirBnB were just doing their job connecting individuals rather than trying to conquer the markets for themselves I would certainly be on their side.
  - ghaff 6y ago
    >As a traveler I don't want a fancy hotel, let alone a shitty one - I prefer a decent room or a bed in an ordinary private home. I think that's a generally minority position though. For the most part, people prefer their own room, bathroom, and possibly kitchenette/sitting space. Along with flexibility about checking in and out. Not always of course. Sometimes you need to adapt if you're off the beaten path. But I'm pretty sure that if you surveyed most people, especially business travelers, they're not really looking for a speare room or bed in a private home.
    - qwerty456127 6y ago
      Obviously. But I believe there is enough no-hotel people to consider this an option worth existing. Same thing with transportation: a significant portion (if not the majority) of people would prefer to be serviced/employed by a serious company yet many drivers prefer to freelance and many customers prefer real people over corporations. In fact I myself mostly use classic taxis and hotels but I understand the value of being able to choose the other model.
- miohtama 6y ago
  > Airbnb: we don't need to own hotel properties and employ managers and housekeepers This is correct for AirBnb, but incorrect for the value chain. Someone must have the flat on their balance sheet. Someone must have a cleaner lady on a payroll. Is Airbnb value chain more effective that hotel value chain? Maybe. Maybe not. But for AirBnb host having a tax advantage of not being charged as a tourism business while in fact being one was clearly an advantage. Similar laws have been passed all over the world, including the US where it goes by a city or a state, Las Vegas being notable.
- jasode 6y ago
  >Airbnb: we don't need to own hotel properties and employ managers and housekeepers Fyi because this is a common misunderstanding: Hotel chains like Marriott, Hilton, Four Seasons, etc also do not own most of their physical properties[1]. They are primarily management companies instead of owning a portfolio of real estate. If you see a Hilton logo on the side of a building, it doesn't mean that Hilton actually owns it. The logo is there because they have a long-term contract to manage the hotel for the real owners of that property. >Amazon: we don't need to own retail stores or inventory Amazon isn't a totally "virtual" company. Amazon owns (or leases) physical distribution centers instead of retail stores. They've always paid sales taxes based on nexus of those DCs. What's recently changed (circa 2017?) was collecting sales taxes on behalf of 3rd-party marketplace sellers. [1] https://www.quora.com/Do-hotel-chains-like-Hilton-Mandarin-or-Marriott-own-their-real-estates-and-buildings https://www.quora.com/Do-hotel-chains-like-Hilton-Mandarin-o...
- jonny_eh 6y ago
  Opendoor is disrupting real estate agents by buying real estate and selling directly. Seems fair to me.
jannes 6y ago
Didn't Amazon also avoid collecting sales tax in the US until recently? I think they didn't have to collect sales tax on any cross-state transactions (tax is owed at the point of delivery). Whereas brick and mortar stores almost never make transactions with their customers across state borders. According to Wikipedia [0] they only had to collect sales tax in all states since 2017 after some "Amazon laws" were introduced? That sounds later than I expected. [0]: https://en.wikipedia.org/wiki/Amazon_tax https://en.wikipedia.org/wiki/Amazon_tax
- syshum 6y ago
  >>> I think they didn't have to collect sales tax on any cross-state transactions That is not how it worked (or works), in the US Sales tax is owed by the consumer, just like income tax. Amazon nor any other retailer "owes" the tax, they collect it on your (the customers) behalf and submits it to the state. In fact most states pay the retailer to do this as they get to keep a small part of the collected tax. Before some TERRIBLE court rulings in 2017, Sales tax was required to collective if your business had a "legal nexus" in the state which generally meant you had a physical location in the state you were required to collect sales tax on the sales you made to consumers of that state, so even "cross state" shipments had to be taxed if you say had a office in that state but your warehouse with the goods was in another state If the sales tax was not collected by the retailer, you the consumer were suppose to pay the tax yourself, most states have a self reporting question on your states income tax return form. Many people did not do this, so the states started passing laws attempting to "close this loop hole" aka the Constitutional Power grated to the federal government to regulate interstate commerce Sadly the Federal Courts are TERRIBLE at applying the commerce clause of the US Constitution in its plainly written meaning, as they allow the federal government to use it regulate completely intrastate commerce (which should be unconstitutional) and now (as of 2017) allow the states to regulate interstate sales which also should be unconstitutional by allowing states for retailers that have no Nexus in their state to collect sales tax on sales to consumers in the state This is also why Amazon, Walmart and others are pushing for Congress to come up with a Interstate Sales tax regulation to override the patch work for some 3000 taxing jurisdictions that make up the US sales tax regulations
- ghaff 6y ago
candu 6y ago
It reminds me a lot of the excesses of software patents, many of which in effect say "it does (insert mundane thing X)...BUT WITH MORE TECHNOLOGY".

AmericanChopper 6y ago

My reading of that article was that tax liability hasn’t changed at all. The Airbnb hosts were always liable for paying all of their taxes, including whatever sales taxes they were liable for. This change means that Airbnb are now responsible for collecting that sales tax and paying it to the government on behalf of their hosts. Whatever opinion you have about that, it doesn’t seem to be addressing any sort of loophole. It’s not a new tax, it’s just a new regulation for collecting it.

throwaway201103 6y ago

The biggest and most common "loophole" being "we don't need all the physical infrastructure" Amazon: we don't need to own retail stores or inventory Airbnb: we don't need to own hotel properties and employ managers and housekeepers Uber: we don't need to own cars and employ drivers Are there any examples of tech disruptors that are really displacing classic competitors only on the basis of tax loopholes?

rob74 6y ago
Can't think of any, but it's still fair to say that tax loopholes (and lack of other regulations that the established competitors are subject to, e.g. Taxi licenses) provide an additional advantage...
TheOtherHobbes 6y ago
Amazon: We don't need to pay sales tax or look after our warehouse employees AirBnB: We don't need to pay sales tax or look after our hosts Uber: We don't need to pay sales tax or look after our drivers The sales tax problem is only a loophole in some territories. The "look after" part is a problem in all of them.
buran77 6y ago
I never said (or meant only) "tax loopholes", Uber may even end up paying more tax than taxi companies. But taxi companies have a far, far higher bar in the eyes of the law. In most countries you can't just decide to climb in your private car and provide commercial transportation service. You have to spend a lot of time and money to get there, authorizations, commercial insurance, driver certifications, etc. Uber bypassed it by saying "we're a tech company" and left it to the drivers, making the enforcement of the law a lot harder. Hotels also have higher requirements than an AirBnB host but the company says "we're just the tech platform". Just look at conflict resolution and what kind of leverage and protections a client has when dealing with a hotel vs. dealing with a private renter to see the massive gap that comes attached to that "disruption". Because that's the thing, you could have short-term renting in the past but that wasn't an alternative to hotels. AirBnB made it a hotel alternative so that's the benchmark. Same with Uber, you could (legally) hitchhike in the past but Uber made the service a taxi alternative. Imagine Google "disrupting" the state/national/federal identity registry, as in become the equivalent of the passport or identity card issuer while offering Google-style support and SLAs. Some services are important enough to be regulated, this is what today's disruptors are bypassing. The solution to an industry being crap isn't to allow someone to bypass existing regulation, it's to create a set of effective regulations that can be applied equally to everyone.
- kd5bjo 6y ago
  > Uber bypassed it by saying "we're a tech company" and left it to the drivers, making the enforcement of the law a lot harder. The original loophole that Uber used was San Francisco’s different regulations between taxis and limo companies: The latter are less regulated but are allowed to accept prebooking, and not street hails. Uber realized that ordering a ride via a phone app is more convenient than trying to hail a passing taxi in many cases and can be served by a limo company instead.
  - emteycz 6y ago
    What's the difference from calling by phone, also served by many limo companies?
  - 6y ago
mellavora 6y ago
uber: we don't need to demand/provide commercial insurance even though the vehicles are used commercially, private insurance can pick up the risk.
qwerty456127 6y ago
Nevertheless, all these are legitimate things if viewed from a different perspective. As a driver I like to have a platform to list my own services an independent way at instead of applying for a job at a transportation company. And as a passenger I like to be able to hire an individual driver. I don't want a taxi company nor the Uber company, just a private individual + a convenience website where I can find one. As a traveler I don't want a fancy hotel, let alone a shitty one - I prefer a decent room or a bed in an ordinary private home. If only Uber and AirBnB were just doing their job connecting individuals rather than trying to conquer the markets for themselves I would certainly be on their side.
- ghaff 6y ago
  >As a traveler I don't want a fancy hotel, let alone a shitty one - I prefer a decent room or a bed in an ordinary private home. I think that's a generally minority position though. For the most part, people prefer their own room, bathroom, and possibly kitchenette/sitting space. Along with flexibility about checking in and out. Not always of course. Sometimes you need to adapt if you're off the beaten path. But I'm pretty sure that if you surveyed most people, especially business travelers, they're not really looking for a speare room or bed in a private home.
  - qwerty456127 6y ago
    Obviously. But I believe there is enough no-hotel people to consider this an option worth existing. Same thing with transportation: a significant portion (if not the majority) of people would prefer to be serviced/employed by a serious company yet many drivers prefer to freelance and many customers prefer real people over corporations. In fact I myself mostly use classic taxis and hotels but I understand the value of being able to choose the other model.
miohtama 6y ago
> Airbnb: we don't need to own hotel properties and employ managers and housekeepers This is correct for AirBnb, but incorrect for the value chain. Someone must have the flat on their balance sheet. Someone must have a cleaner lady on a payroll. Is Airbnb value chain more effective that hotel value chain? Maybe. Maybe not. But for AirBnb host having a tax advantage of not being charged as a tourism business while in fact being one was clearly an advantage. Similar laws have been passed all over the world, including the US where it goes by a city or a state, Las Vegas being notable.
jasode 6y ago
>Airbnb: we don't need to own hotel properties and employ managers and housekeepers Fyi because this is a common misunderstanding: Hotel chains like Marriott, Hilton, Four Seasons, etc also do not own most of their physical properties[1]. They are primarily management companies instead of owning a portfolio of real estate. If you see a Hilton logo on the side of a building, it doesn't mean that Hilton actually owns it. The logo is there because they have a long-term contract to manage the hotel for the real owners of that property. >Amazon: we don't need to own retail stores or inventory Amazon isn't a totally "virtual" company. Amazon owns (or leases) physical distribution centers instead of retail stores. They've always paid sales taxes based on nexus of those DCs. What's recently changed (circa 2017?) was collecting sales taxes on behalf of 3rd-party marketplace sellers. [1] https://www.quora.com/Do-hotel-chains-like-Hilton-Mandarin-or-Marriott-own-their-real-estates-and-buildings https://www.quora.com/Do-hotel-chains-like-Hilton-Mandarin-o...
jonny_eh 6y ago
Opendoor is disrupting real estate agents by buying real estate and selling directly. Seems fair to me.

jannes 6y ago

Didn't Amazon also avoid collecting sales tax in the US until recently? I think they didn't have to collect sales tax on any cross-state transactions (tax is owed at the point of delivery). Whereas brick and mortar stores almost never make transactions with their customers across state borders. According to Wikipedia [0] they only had to collect sales tax in all states since 2017 after some "Amazon laws" were introduced? That sounds later than I expected. [0]: https://en.wikipedia.org/wiki/Amazon_tax https://en.wikipedia.org/wiki/Amazon_tax

syshum 6y ago
>>> I think they didn't have to collect sales tax on any cross-state transactions That is not how it worked (or works), in the US Sales tax is owed by the consumer, just like income tax. Amazon nor any other retailer "owes" the tax, they collect it on your (the customers) behalf and submits it to the state. In fact most states pay the retailer to do this as they get to keep a small part of the collected tax. Before some TERRIBLE court rulings in 2017, Sales tax was required to collective if your business had a "legal nexus" in the state which generally meant you had a physical location in the state you were required to collect sales tax on the sales you made to consumers of that state, so even "cross state" shipments had to be taxed if you say had a office in that state but your warehouse with the goods was in another state If the sales tax was not collected by the retailer, you the consumer were suppose to pay the tax yourself, most states have a self reporting question on your states income tax return form. Many people did not do this, so the states started passing laws attempting to "close this loop hole" aka the Constitutional Power grated to the federal government to regulate interstate commerce Sadly the Federal Courts are TERRIBLE at applying the commerce clause of the US Constitution in its plainly written meaning, as they allow the federal government to use it regulate completely intrastate commerce (which should be unconstitutional) and now (as of 2017) allow the states to regulate interstate sales which also should be unconstitutional by allowing states for retailers that have no Nexus in their state to collect sales tax on sales to consumers in the state This is also why Amazon, Walmart and others are pushing for Congress to come up with a Interstate Sales tax regulation to override the patch work for some 3000 taxing jurisdictions that make up the US sales tax regulations
ghaff 6y ago

candu 6y ago

It reminds me a lot of the excesses of software patents, many of which in effect say "it does (insert mundane thing X)...BUT WITH MORE TECHNOLOGY".