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At what point do hundreds of millions of dollars in operating losses begin to constitute "dumping," where a product (service in this case) is priced below its c
by readflaggedcomm 6y ago
At what point do hundreds of millions of dollars in operating losses begin to constitute "dumping," where a product (service in this case) is priced below its cost in order to accumulate market share and harm competitors?
Other comments mention that delivery "worked fine" before, which implies DoorDash can't argue that they were perfectly innovative against a "dumping" accusation.
- nradov 6y agoIn legal terms "dumping" is only applicable to imports. There's generally nothing illegal about delivering a local service at a loss, except in limited cases when one company has an effective monopoly and uses that pricing to drive out competitors. For now the food delivery market is still highly competitive.
- kqvamxurcagg 6y agoI don't think existing competition law or theory applies to this new phenomenon. The delivery companies are essentially selling at a loss to obtain an overwhelming network effect to become a long term monopoly.
- bagacrap 6y agoin this case, Uber eats is importing foreign capital and "dumping" it into the system as subsidies to the consumer which are designed to establish a monopoly. They will either fail to establish a monopoly and close shop, or succeed and jack up prices. Whatever term you want to apply here, this doesn't seem like a business practice that should be permitted.