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Apple execs: Let's take a 30% cut of Uber and Lyft's membership programs (2018)

• Andrew_nenakhov 5y ago
  How come some people still don't consider Apple a monopoly is beyond me.
  • prepend 5y ago
    Because they have tons of competition and don’t dominate the market. By revenue, android is way higher. Monopolies have a few characteristics like barriers to entry and competition. Apple doesn’t command this because the market is mostly not Apple.
    • partiallypro 5y ago
      In the US, it is in fact mostly Apple.
      • mjhagen 5y ago
        The market isn't only the US though.
        • partiallypro 5y ago
          Each country gets to say what monopolistic behavior is in their own country. They don't have to consider global market share.
    • heavyset_go 5y ago
      > Because they have tons of competition and don’t dominate the market. By revenue, android is way higher. Apple has 60% of the mobile market in the US[1], and the App Store is responsible for more than 100% more revenue than the Play Store, too[2]. Regulatory bodies aren't concerned with layman definitions of monopoly[3]: > Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power. [1] https://www.pcmag.com/news/ios-more-popular-in-japan-and-us-android-dominates-in-china-and-india https://www.pcmag.com/news/ios-more-popular-in-japan-and-us-... [2] https://www.businessofapps.com/data/app-revenues/ https://www.businessofapps.com/data/app-revenues/ [3] https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/monopolization-defined https://www.ftc.gov/tips-advice/competition-guidance/guide-a...
      • labcomputer 5y ago
        You forgot the rest of the quote from your 3rd source: "Courts look at the firm's market share, but typically do not find monopoly power if the firm (or a group of firms acting in concert) has less than 50 percent of the sales of a particular product or service within a certain geographic area. Some courts have required much higher percentages." Most anti-trust cases have historically been against companies with 90+% market share: Standard Oil, Bell Telephone, Microsoft. I'd love to see an example of a company that was found to have a monopoly with only 60% market share.
        • simplestats 5y ago
          In fact I think Standard Oil wasn't far above that by the time action was taken. They were also cutting prices and modernizing heavily. To get much beyond that I think you need some special advantage like govt protection. I suspect the patent system, which literally guarantees monopolies to companies in return for a fixed fee, creates a big advantage for the leaders in tech markets. Hence modern leaders last a lot longer with more market share (and way higher margins) than they should.
      • prepend 5y ago
        They have a strong position, but I don’t think 60% is proof of any type of monopoly. I think people in this thread don’t 1) understand what monopoly means and 2) understand what US antitrust considers monopolies that damage consumers.
    • wvenable 5y ago
      They absolutely dominate the market. If you wanted to create a successful service today and don't support iOS you have no chance. If that's not domination, what is?
      • supreme_berry 5y ago
    • DrBenCarson 5y ago
      In fairness, they're a monopoly in a market they invented--the iOS "ecosystem." This includes: * the app store * subscription management * payments * any sort of digital media (music, movies, tv shows) * browser engines...there literally is no way to release a different browser on iOS, even iOS "Firefox" and "Chrome" have to use Apple's WebKit binary From myself in a lower thread
      • jabbany 5y ago
        Except there are alternatives for all of these, you just have to use a different operating system. Interoperability has never been legally mandated in the past, but for most of history it has just "happened" because people could get around hostile designs (IBM PC clones anyone?). The problem with the complexity of today's technology is that, it's no longer feasible for an upstart to make a "compatible" device. You can't engineer an "iOS capable" non Apple device or an Apple-compatible non-Apple OS, not because it is not legal but because it is not feasible technologically. There are ways to do legally clean reverse engineering (ReactOS anyone?) but you cannot get around chip level signature checks nor can you fab your own state-of-the-art chips.
        • righttoolforjob 5y ago
          Yep, regulation is way behind. None of this lockdown is for the public good and thus it should not exist. The demand side of the market doesn't seem to be able to balance this out (i.e. vote with your wallet, stop buying the products, they hurt all of us long term). You would need another global level actor building the replacement, in the fair, for public good manner. However due to these global corporations essentially being close to global states in power, there is very little any one nation state can do comparatively. The level of investment would be worth it, for the world, but not for any single state.
        • appletrotter 5y ago
          > Interoperability has never been legally mandated in the past This is pretty similar domain where it's happened: https://en.wikipedia.org/wiki/On-board_diagnostics https://en.wikipedia.org/wiki/On-board_diagnostics
    • Andrew_nenakhov 5y ago
      They absolutely dominate the market of iOS apps. Imagine the uproar you would be able to install windows apps only via MicrosoftStore? The uproar would be deafening, and yet the impact on users would be far less severe than Apple's tyranny, because you can install other OS on PCs, but you can't install other OSs on iPhones.
  • atty 5y ago
    I’m as concerned as anyone about apples behavior with services in general, and the App Store in particular. But it’s also true that the market is not iPhones, it’s smart phones. And Apple is most certainly not a monopoly in smart phones or smart phone apps. They’ve very carefully built up an ecosystem that attracts the best app dev talent and the most lucrative app customers, but that does not make them a monopoly.
    • heavyset_go 5y ago
      > But it’s also true that the market is not iPhones, it’s smart phones. And Apple is most certainly not a monopoly in smart phones or smart phone apps. Apple certainly has a duopoly with Google in the mobile device market, mobile operating systems market, mobile app distribution market and the mobile app payments market.
• seabriez 5y ago
  30% seems to imply that Apple somehow brings 1/3 of the value, simply by not allowing you to sell anywhere outside of the marketplace. It's extreme lockin.
  • Lamad123 5y ago
    The only solution is to drop regulators hammer on their ass!
    • imglorp 5y ago
      Or offer a competing platform.
      • cheriot 5y ago
        Want to launch a delivery service? Start by manufacturing a phone and getting a deal with AT&T.
      • dralley 5y ago
        Competing platforms (to Apple, Android Store, etc) don't exactly grow on trees. Especially when both have done everything in their power to make the lives of "competing platforms" as difficult as possible. It's hardly a winning VC pitch.
        • judge2020 5y ago
          The App Store was ruled not to be a separate product from iOS in Epic v Apple, so the iPhone really is the full package including iOS and App Store, and you must compete against it fully.
        • cbozeman 5y ago
          > It's hardly a winning VC pitch. Strong language is coming, skip my post if you're delicate. They're cowards. Plain and simple. They want a "safe" investment with a pre-defined path to an IPO in 2-10 years so they can cash out. Makes me fuckin' sick. We could have a third alternative to iOS and Android, but it won't be easy, it won't be fast, and it won't be cheap. These VC vultures don't have the goddamned balls to put significant amounts of money on the line with the prospect of absolutely no return ever, and that's why it'll take a miracle straight from Heaven for us to get a third option - because these people have no real grand vision and no damned backbone. No one on Planet Earth is going to convince me that the best the human species can do is Android and iOS.
• DaveExeter 5y ago
  The answer is simple. Uber, Lyft, and everyone else, should have different pricing on Android and iPhone. For something that costs $10 on Android, charge $13 for iPhone. This is a win-win solution. The app companies get more money and Apple gets positioning as a premium brand.
  • supreme_berry 5y ago
  • post_break 5y ago
    I disagree. I think Apple should get nothing from them. The rent seeking has to stop. Anything with a service fee should be outside their grasp. The product isn’t the app, it’s the service.
    • DaveExeter 5y ago
      I tend to agree with you, but Apple doesn't want to leave that pile of Benjamins on the table! And AFAIK, what Apple is doing is legal. There should be the iPhone price and the Android price. Just charge iPhone users more.
      • post_break 5y ago
        Apple should not be entitled to any transaction that happens on the phone. They don't get a cut of money I move through my banks app. Anything I buy on the Amazon app. Do they get 30% of my water bill I pay? Again if something is being bought through the app store, like a game, an app, etc sure. But if your app is about a service that exists completely beyond apple, they should get nothing. Imagine comcast asking for 30% because it happened between your internet provider and an online store.
  • colinmhayes 5y ago
    Except that just means they'll get less subscribers. The margins on these things are razor thin. If people don't think they're getting a deal they won't sign up.
• jokoon 5y ago
  It's strange how I remember that there was a time where microsoft was the evil corporation and Apple was the cool underdog. I mean microsoft didn't sell hardware, and now Apple sells hardware and software and takes a cut from software sales.
• hirundo 5y ago
  • dang 5y ago
    Would you please stop posting flamewar comments to HN? You've been doing it repeatedly, and we've already asked you more than once to stop. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    • hirundo 5y ago
      Hello dang, I'm not aware of posting flamewar comments. Can you point me to some? Thanks.
      • dang 5y ago
        We could start with "You Apple users are the wife whose husband keeps beating her" - that's obvious flamebait and name-calling, and quite against the site guidelines. If that isn't obvious to you, please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and recalibrate. https://news.ycombinator.com/item?id=29935035 https://news.ycombinator.com/item?id=29935035 was even worse. That's pure religious flamebait. We ban accounts that post like that, so please don't post like that.
        • hirundo 5y ago
          Thank you for responding dang, sincerely. "pure religious flamebait" seems to me to be a very hostile reading. I simply meant to add context to the parent's argument, which I agree with. I apologies for any offense given, but it was just a religious reference, not a sneer of any kind. I do apologize for "You Apple users", the intended lightness obviously did not come through, and it could have been more neutral. Perhaps my comparison of an abusive corporate relationship to an abusive personal one was overly terse, but I think that the metaphor adds useful perspective. I'll try to be more civil, sir. It wasn't my intention to be anything else. Apparently that involves avoiding the poignant as well as the malicious.
• nabla9 5y ago
  Many don't know this, but monopoly is not illegal in the US. Misusing monopoly power is.
  • r00fus 5y ago
    Please explain to me how Apple is a monopoly.
    • Bud 5y ago
    • timmg 5y ago
      AppStore is the only way to sell/put apps on an iPhones.
      • r00fus 5y ago
        iPhones aren't a "market". If that were the case, then Amazon would have a monopoly on Amazon ad placements, and Microsoft would have a monopoly on Excel features. In terms of overall downloads, Google Play Store probably exceeds what Apple's store processes.
        • timmg 5y ago
          > iPhones aren't a "market" Interestingly, lawyers/regulators can define a "market" any way they want. The courts can decide. But, while iPhones are part of the "phone market", "iOS Apps" are their own unique market. Probably only a matter of time before regulators think of it that way.
    • marricks 5y ago
      It definitely seems like a vertical monopoly, which people seem to forget exists.
      • r00fus 5y ago
• mindwok 5y ago
  I feel like these marketplaces could maybe justify 30% on the purchase of an app up front, where there are clear benefits to the exposure and platform offered by them. But ongoing revenue is really attributable to the app itself and feels to me much harder to justify. At this point I’d be happy if Apple just let me install apps outside their ecosystem, then they could at least defend themselves by saying if the developers aren’t happy with the terms of the App Store they can offer alternative methods.
  • zndr 5y ago
    It's more than that: it's the fact that all of the payment info is there. Every step, field entry, hurdle you put infront of a consumer is usually associated a significant increase in "cart abandonment". By apple allowing you to just apple pay straight in and avoid CC, and billing address etc, they are decreasing the hurdles and increasing the conversion. Is it worth 30%? In 2013? Maybe In 2021? Definitely not. It should be closer to 5%. That being said I do like using Apple subscriptions because they make it REALLY easy to cancel them, all in one place, something that can't be said for a lot of other services.
    • Drew_ 5y ago
      Apple Pay isn't the only payment processor that's convenient like this. But of course, Apple has created a market where their processor is the only one allowed.
      • Spivak 5y ago
        I mean I pay for shit on my iPhone with PayPal, "Shop Pay", "Amazon Pay", or direct CC entry -- not digital goods obviously but still it's a frame of reference. None are half as good as Apple Pay's "hit button, double click, FaceID, done" flow. Like I will actually switch to using my phone to make purchases because I don't want to enter my CC info on some random site.
        • lwansbrough 5y ago
• joebob42 5y ago
  I still don't think they deserve the 30%, but it's interesting that there doesn't seem to be any concern in that direction mentioned here. They mention in passing that the 30% may be a concern for partners but they seem basically unfased by it and don't mentioned that it might not be reasonable.
  • supreme_berry 5y ago
• yua_mikami 5y ago
  This is good because the more large companies that Apple pisses off, the sooner the App Store garden walls will come down.
  • quickthrower2 5y ago
    They could have a union to represent {!apple} and negotiate fees down. The threat could be uber and others chuck in a free android phone loaded with their app with their subscriptions!
• Kyragem 5y ago
  I was going to comment that Steve Jobs would be turning in his grave if he would hear about this, but unfortunately Apple was already the money grabbing company today that it was back then as well.
• mikl 5y ago
  Apple execs might have convinced themselves that they are entitled to a huge cut of pretty much everything that goes on an iPhone/iPad/etc. To everyone else, this just looks like mustachio-twirling, cackling evil and unfathomable greed from a company that’s already the world’s richest and sitting on a mountainous pile of cash.
  • fancymcpoopoo 5y ago
    30% is assholeish, no doubt
  • taurath 5y ago
    TBH, they've basically gotten away with it for years because consumers aren't effected in a way you can see, because the blackmail of the app store platform lock in is so effective. Its absolutely extortion since you literally won't be allowed to do patches on your app until you cow to whatever policy they put in place that month.
  • outside1234 5y ago
    Yes, not sure about the evil part (lots of industries rent seek like this), but am sure of the greed part.
    • toss1 5y ago
      Since the Venn diagram of this is concentric circles, with the Greed circle on the inside, you can also be sure about the Evil part (greed being a subset of types of evil) ...
      • stanmancan 5y ago
        All business is evil?
        • jessaustin 5y ago
          All business is based on greed?
• tech-no-logical 5y ago
  maybe I'm a cynic, but why should I care that Evil Corp A tries to rip off Evil Corp B and Evil Corp C ?
  • righttoolforjob 5y ago
    At the end of the day the consumers also hurt, so you should care. If basic economic theory puts the optimal price for this service at 10$ without the middleman, then perhaps it becomes 12$ with the middleman.
    • tech-no-logical 5y ago
      that's implied by every Evil Corp, but yes, you are correct. still, to the consumer it does not really matter which of the Evil Corp gets the money since they will pay it anyway. I don't, for a minute, think that the 30% would not be paid by the end-user if Evil Corp A was not in play. B and C would just raise prices.
      • righttoolforjob 5y ago
        > I don't, for a minute, think that the 30% would not be paid by the end-user if Evil Corp A was not in play. B and C would just raise prices. That's what I hint at with "basic economic theory". Evil Corp X wants maximal returns and there is a price point at which they get maximal returns. They can't just raise prices infinitely, because nobody will buy the service. If a middleman takes a cut then that optimal price point moves. Explaining it as the cut being shifted onto the consumer is too simplistic of a model. A part of the cut is shifted onto the consumer and the rest is lost by Evil Corp B, to maximise their total revenue.
        • tech-no-logical 5y ago
          I get your point. still, in this case B and C are, in my opinion, equally evil in exploiting their workers. so having them raise their optimal price to something the consumer would not buy their service would be, in essence, a good thing.
• DrBenCarson 5y ago
  > "Unfortunately, IAP being 'optional' means that no one will ever use it," writes App Store VP Matt Fischer Um...yeah, that's pretty damning.
  • wraptile 5y ago
    Can you imagine saying "no one would use our product if they weren't forced to" and still winning the case against you?
  • kevincox 5y ago
    To be fair their argument is it is better for the users. This comment is talking about the price bring too high for apps. Of course it is a good indication that it is overpriced.
    • DrBenCarson 5y ago
      Not saying I agree with what I'm about to respond with, but nonetheless: If not using IAP is worse for users, wouldn't users then immediately gravitate to apps that do use IAP? Meaning not using IAP would be a competitive disadvantage and tada, capitalism magic--especially given iOS users are the most valuable segment in the world (typically wealthier and much more willing to spend $1.99 on an app than their Android counterparts) The counter-argument is it is better for users in ways they are oblivious to (i.e. security), but even that should eventually make its way to the user. If eventually all but IAP cards are compromised or abused, users will eventually change their behavior, especially iOS users (typically more educated). * all iOS user characterizations are based on 3rd party research and not my own opinions
• friedman23 5y ago
  Someone give me a good argument for why Apple deserves a THIRD of revenue generated from apps on their platform? Apple's app store is pure rent seeking. Even the supposed curation everyone is paying for is lackluster. People are scammed left and right. Funnily enough, this applies to Uber and Lyft too. These middlemen companies have too much power to unilaterally dictate what cut they get from their service.
  • ApolloFortyNine 5y ago
    If Apple allowed installing other apps or appstores from outside sources it'd be one thing. That they've managed to go on this long without an antitrust is incredible. Microsoft got an antitrust case against them for simply installing a default browser. What Apple does is magnitudes worse.
    • gorbypark 5y ago
      It really comes down to the definition of monopoly and how a market is defined. If Microsoft wasn't found to have a monopoly in desktop operating systems, what they did wouldn't be illegal. Microsoft had north of 90% desktop OS market share at the time of the anti-trust suits. Does Apple have a monopoly? It depends on how you look at it. If the market is defined as iOS market share, then they definitely do (obviously). If it's defined as mobile operating systems, then maybe not. Currently iOS has a 59% market share in the US and only about 16% worldwide.
      • cokeandpepsi 5y ago
        all is know is that apple asks folks to bend over and this crowd smiles then crows about it endlessly dumb
  • prepend 5y ago
    I think it’s similar to why Walmart deserves a third (or more) from manufacturers selling stuff in their store. Or Amazon. Or any store. Physical goods have about a 100% markup between manufacturer and what a customer pays. I think it should be less for digital goods, but you wanted a good argument. Apple charges because they are between you and the app makers, like Walmart and target and stuff.
• starik36 5y ago
  Why stop there? If I have money in my pocket and place the iPhone there as well, Apple should be entitled to 30% of it.
  • heavyset_go 5y ago
    Text your boss using iMessage? Then Apple is entitled to 30% of your paycheck, too.
    • shashashasha___ 5y ago
      or at least own 30% of the text message content.
  • supreme_berry 5y ago
  • pxtail 5y ago
    Recently there was discussion[0] about Apple devices dominance amongst teenagers ~85% mobile devices in US. Apple is heading towards market domination in a couple of years - in US first but in some European countries trend seems to be catching as well. With company's total control over locked down hardware, software, software delivery and browser (and other, fresh endeavors like identity management aka AppleId, payments etc) it will be very interesting time and quite a show to observe. [0]https://news.ycombinator.com/item?id=29851317 https://news.ycombinator.com/item?id=29851317
  • 2OEH8eoCRo0 5y ago
    People will just work around that by choosing a different pocket, screwing Apple out of their fair cut.
  • Jleagle 5y ago
    Does the electricity company take a cut from online payments too for allowing people to use their infrastructure.
    • 5y ago
• MattGaiser 5y ago
  The tweet seems to be gone. What did it say?
• 2OEH8eoCRo0 5y ago
  30% is obscene. Apple obviously deserves to get paid. Either abolish app store fees (Apple gets paid by selling hardware) or force them to allow 3rd party stores on their own store with transparency reporting requirements to foster competition.
  • deleted 5y ago
    [deleted]
• Barrin92 5y ago
  Apple is a small country disguised as a company. This is nothing else but essentially a tax, collecting economic rent from their digital fiefdom. Of course unlike actual nation states, Apple's not really in the business of providing many public services in return. Seems like we're kind of at the point where actual nation states should take that as a sign of peer competition and do something about it because I honestly have no idea why we're tolerating this.
  • thehappypm 5y ago
    They sell computers.. I think you’re reaching a bit.
    • appletrotter 5y ago
      Some people spend day and night on those computers (such as myself.)
    • yurishimo 5y ago
      As an attempt to steelman their point, Apple has more employees than about 30 countries and has more CASH on hand than the GDP of over a 100 countries (220~ total worldwide). As far as regulations go, I think those points could be an argument that more regulation could be warranted.
      • hrez 5y ago
        I just looked at AAPL and it has $62B cash and $136B debt. If you do the math ... where is all that CASH you're talking about?
        • Strom 5y ago
          The US also has a lot of debt. Thus debt does not seem like a valid counter-signal here.
          • hrez 5y ago
• whiddershins 5y ago
  The cut apple takes is too big, and, afaict the cut seamless and Instacart and probably Uber and Lyft take is way too big too. Technology can increase ease while also lowering prices, but it’s just so easy for it to go the other way. I think Uber and Seamless are most obvious to me in NYC. The overall cost of doing basic stuff was initially depressed and now has increased way over inflation. Regulators have played their part. Contrast with Amazon who we all like to hate on, and who may be abusive to retailers and manufacturers, but the savings is clearly passed on to the consumer. No real ideas. Just an observation.
  • thehappypm 5y ago
    Why don’t these companies just drop Apple then? They can just make web sites and then users can order Uber’s and food from any browser on any device and pay nothing to anybody.
• mrtksn 5y ago
  I think, if they did not insist on the %30, which I believe is fine when it comes for stuff that scale with almost no cost increase(like crystals in a game), and came up with something reasonable to accommodate transactions with thin margins they would have actually provide a good service. Receiving payments via IAP is hugely valuable because it reduces friction big time, however it is unreasonable to ask %30 in businesses where margins are %10 or even lower. I think Apple realised that to some degree as they have much lower commission for certain categories like 1:1 tutoring etcetera. Anyway, I think Apple might have crossed a line on these commissions and we see rulings all over the world requiring Apple to allow alternate payment methods. With my user hat put on, I'm not excited about that because it's actually much much pleasant experience to use IAP because you have all your subscriptions in one place and Apple is super good on refunds. What I would like to see one day is some kind of "Universal payment protocol" that provides standardised UI for mobile payments. Imagine the IAP interface being able to accept any kind of payment(like paying with your card of choice with Apple Pay) and keeps track of these payments in your iDevice with a button for cancelling subscriptions that makes an API call to the payment provider.
• heavyset_go 5y ago
  Both Apple and Google enforce using their payment methods on any app distributed on their app stores. That means that there's a 15% to 30% rent incurred on all revenue in the mobile app space. Just to participate in the mobile app market, you need to give up to 30% of your revenue to either company. The entire mobile app market essentially has to pay either company a significant chunk of their revenue just to exist. That's insane.
  • hackerfromthefu 5y ago
    Its the troll under the bridge, the bandits on your way home from market - they are not fair, just violent bullying thieves that society once banded together to expel.
    • mjhagen 5y ago
      If that troll had built the bridge.
      • hackerfromthefu 5y ago
        Getting things to market is a lengthy endeavour, a long term project with many stages. Finding land, that is suitable, renting the land, matching the crop to the land, acquiring the seeds, planting, watering, weeding for many months. Losing crops due to weather, harvesting, storing (renting a structure to store in), preparing for transport. Then transporting them to market, then selling them etc. A bridge the cart crosses twice (once to and once from market) provides perhaps 1% of the necessary effort. If Apple charged 1% of revenue, or perhaps 5% of profit, that might be fair for the bridge. Many/most things have expenses nearly matching revenue, so their profit is low. If it costs $90 to hire land, hire a shed, hire a cart, hire labour, get wiped out by weather sometimes, hire a market stall, hire market sellers and so forth, and your revenue from the sales is $100, then your profit margin is 10%. Apple would honestly be asking too much at 30% of profit. But in this situation Apple is taking 30% of REVENUE.
• righttoolforjob 5y ago
  The argument against an app store being controlled by a private entity is to me similar to that of other infrastructure, like broadband, roads, utilities, access to the market itself, etc. It should be available to everyone at self-cost or less. Major and common infrastructure must abide under special rules.
  • thehappypm 5y ago
    How in the world is an App Store infrastructure? It’s a proprietary platform. We have the Web as the free open platform, anyone can use any device to visit any web site. The App Store is a premium alternative.
    • righttoolforjob 5y ago
      Millions of service users use it to interact with perhaps millions of service providers in an app market. That's infrastructure.
      • thehappypm 5y ago
        Is 7/11 infrastructure? Tens of millions of people use it to buy the products of providers in a market.
        • tick_tock_tick 5y ago
          I mean you're picking something that has a massive amount of regulation on it to compare? What can be sold, prices, taxes, what customers you can or can not deny service to, legal operating hours, and more. The list goes on and on if the app store had 1/100th the regulations 7/11 has it would look vastly different.
    • adam_arthur 5y ago
      Remember the fight for net neutrality? Well a lot of the infrastructure that makes up the internet is owned by private companies. e.g. Comcast, Verizon. If Comcast (Google) and Verizon (Apple) both charged 30% markup on anything you bought on Amazon, would you think that's reasonable? Without them, you wouldn't be able to purchase anything at all, of course! Electric, water utilities are private companies. There will likely be a legal framework that develops to define a threshold and definition for when something constitutes a "platform" with sufficient market size such that competition within the platform be allowed.
• bastian 5y ago
  Postmates founder here. I am subscriber to Internal Tech Emails and I couldn't help but smile reading these emails this morning. It was in 2017, around April 12th when we launched Postmates Unlimited - the subscription program that inspired all this. Now, we all know Postmates didn't win the space but some product decisions outlast a company and this was one one of them. I still remember the meeting when we decided to launch the subscription. No one had ever done it, the board thought it was nuts. It became the industry standard. ¯\_(ツ)_/¯
  • ImaCake 5y ago
    Regardless of outcome, it must feel pretty good to know you and your company ended up being a keystone in corporate tech history. Very few people get to say they were at the meeting when these subscription models became the future. Historians 30 years down the road would love you if you wrote a book about your perspective on it.
    • CPLX 5y ago
      Is this comment parody? I guess Poe’s Law applies, I’m genuinely mystified.
    • coldtea 5y ago
      >Very few people get to say they were at the meeting when these subscription models became the future. Yeah, it's like being at the meeting where planned obsolelense was first invented, or when a telco devised the "jump through hoops to to cancel your service" concept...
      • citizenpaul 5y ago
        They invented the multi year "free" device and contract bundle. If you are not on one of those it is quite easy to cancel or change provider.
  • bastian 5y ago
    I forgot to mention that I also remember when Apple called about a year later to tell us about their plan to charge us 30%! Amazing we prevailed.
• endisneigh 5y ago
  use web apps, pay 0%
  • upbeat_general 5y ago
    Web apps that must run on Safari since no other browser engines are allowed. Safari has dragged it's feet for supporting common web app features and fixing bugs. To this day there are no push notifications on web.
    • endisneigh 5y ago
      Agreed, that's a problem, but most apps can be engineered regardless with just a web app and SMS/Email for notifications.
• Fomite 5y ago
  I'd be more sympathetic to this if Uber and Lyft hadn't built their businesses on the premise that regulations are for other people.
  • passivate 5y ago
    That's a very fair point, but the smaller businesses probably can't bankroll any legal pushback and Apple can de-platform their App/Service with ease.
• kache_ 5y ago
  I seriously don't understand why people purchase apple devices. SWEs too, just use linux.
  • andbberger 5y ago
    they're very good?
  • neop1x 5y ago
    App ecosystem (great apps, often good UX/usability and lots of small "details"), interoperability between devices and to show their social status. Why do some people buy an expensive Mercedes if basically any car can drive you from A to B? I am a Linux user and I love FOSS, GNU CLI tools, etc. But it takes more time, crashes and nerves to edit a video using Kdenlive than it would by using iMovie. FOSS software is awesome but it is hard for their authors to compete with commercial SW made by highly-paid full-time professionals. And commercial software on Linux is often non-existent or problematic (mainly due to ensuring support for so many distributions).
• tylerchilds 5y ago
  You know who would love a 30% cut of Uber and Lyft's membership programs? Drivers.
  • jsnell 5y ago
    In Q3 2021 (the latest earnings release), Uber's gross bookings were $23 billion while their revenue was $4.8 billion. I.e. 79% of the bookings were being paid out to the drivers, Uber's cut was 21%. I suspect the drivers are much happier with that than you suggestion of 30%...
    • tylerchilds 5y ago
      I'm not advocating that drivers only be paid 30%. Just that Apple is over exaggerating their value add to the ecosystem. Netflix ran a global quasi experiment[1] to see if it was worth dropping IAP with Apple's rates. Consumers want to watch a movie and are willing to pay for it. The same as they just want to get home safe after a bar session and are willing to pay for it. Netflix was able to drop IAP because the web is a viable platform. Apple's platform is their justification for their slice of the pie, but it pales into comparison to what drivers and filmmakers actually do day in and day out to actually add value to the economy. 1: https://www.theverge.com/2018/8/21/17764424/netflix-feature-bypass-apples-app-store-fees https://www.theverge.com/2018/8/21/17764424/netflix-feature-...
    • wolverine876 5y ago
      > In Q3 2021 (the latest earnings release), Uber's gross bookings were $23 billion while their revenue was $4.8 billion. I.e. 79% of the bookings were being paid out to the drivers I don't see that follows. Does Uber provide that number explicitly? And what is the net for driver/hour?
• onphonenow 5y ago
  Folks here seem fixated on companies being able to make money when using Apple. Why is that such a policy priority? Most of these companies are scammers. I really wish politicians and everyone would focus on USER experience here. Apple benefits because there is a ton of crap and user harm in the marketplace that goes COMPLETELY unaddressed. We are just getting around to rules on subscription cancellation practices on the web more generally. Apple has this solved. Additionally, with a lot of these big players, only apple has negotiating leverage, no individual user could EVER force them to accept things like hide my email or clear trial periods or non-scam cancellation policies. So USERS benefit from the power apple has in some cases. Is it worth the apple tax? For some it is worth it even though apple has relatively small smartphone marketshare.
• mabbo 5y ago
  This is just textbook rent-seeking. Like the classic example is someone setting up a barrier on the river and charging boats that want to pass through. There's no value being added by the person blocking the river. Just the same, when Apple says "Let's charge for this", what value are they adding for doing so? They make money off the current system. They just want to make more money while providing zero additional value to consumers or to app makers. All I can ask is "How do you sleep at night?" but I'm sure I'll get the Rainier Wolfcastle's answer.[0] [0]https://www.youtube.com/watch?v=GO0JaecRWy0 https://www.youtube.com/watch?v=GO0JaecRWy0
  • righttoolforjob 5y ago
    That doesn't seem entirely fair of a comparison. If you built the canal, filled it with water, made sure it's wide enough for the boats that need to travel, etc, etc, then you are doing a useful service right. Apple has built something useful and yet we can all see it's wrong to take advantage of it to this extent, but we're having a hard time explaining why. I think fundamentally corporations should only exist for the purpose of the public good. That is what's wrong with America and capitalism in many ways. It's not the shareholders but the public that they should answer to. If it does not serve the public good to take a 30% cut, then they should not be allowed to do so. As easy as that.
• miguelazo 5y ago
  Unbelievable level of hubris. Another shining example of why we need massive antitrust actions across the tech industry.
• bsaul 5y ago
  what happened to the pressure US senate was supposed to put on those platforms to stop behaving like the mafia ? Apple lowered its fees to 15% but that can't be the end of the story, right ?
• cardosof 5y ago
  I just wonder how history would be if in the 90s the Microsoft suits tried to get a cut of everything running on Windows. "Oh you used Windows and Internet Explorer to buy AutoCAD?"
  • giantrobot 5y ago
    You mean by charging money for Windows which was required to run Windows software? Yeah if only they had figured that one out.
  • cablexl 5y ago
    Microsoft did not control the entire ecosystem. They would have locked the entire ecosystem down in a heartbeat if they had full control over hardware and software. You can look at Xbox as an example, they do exactly that.
• xyst 5y ago
  Greedy fucks get 30% for doing nothing. You already got your massive nut [from iDevice sales and first party subscriptions] and now they want a piece of everybody's smaller nut [from the developers via "IAPs" shares]. Not to mention the yearly fees you pay to apple if you want to publish to the App Store. I really hope the anti-trust laws come down heavy on Apple, Google, and et al.
  • supreme_berry 5y ago
• stanmancan 5y ago
  I love that Apple forces subscriptions on their platform through Apple Pay. As a consumer, it's incredibly easy for me to view and cancel subscriptions in one central location. I've signed up for tons of services in the past and all to often they decide to make it a nightmare to try and cancel. The 30% might suck as a developer, but then just charge more for Apple customers. As long as the rule is applied to all apps on the platform then everyone is playing by the same rules. Nobody is forcing you to release your app on the Apple Ecosystem, you -want- to because it's a huge potential customer base. If you want to participate then play by their rules. If it's too expensive, then don't build your app there. If more developers refused to release their app on iOS they would start to re-evaluate their 30% fee. My only qualm is the news that in certain situations they have lowered their fee's which isn't fair as it gives those companies a competitive advantage as they can charge less.
• netcan 5y ago
  Opinions/commentary on such things tend to focus on some detail, and judge it right or wrong. Is forced use of Apple's payment processor OK? Would X be ok if Apple provided some way of installing externally to the app store? Would 15% be OK. I think these lines of thought miss the point. This discussion demonstrates, IMO, the mentality & reality of bigness/monopoly. Mentality-wise, Sheree & Lindsey are expressing something more akin to "We feel that Apple is entitled to a 30% cut of this" than a business idea. Second it's obviously more about power than anything else. The "window of opportunity to set a precedent and claim this cut" is the reality. Whether or not Apple adds value that reflects or justifies the revenue is irrelevant. That's not how they are making the revenue either way. They get a big cut of Google's ad revenue on iphones via their default search deal. This is about getting a cut of ecommerce & such. Smaller developers are entirely exposed to their whims. It's too much power, and they are abusing it. There are two levels to monopolism. One is simple prices. You own the only highway to MetroX. You charge truck drivers a high toll. They have to pay it, if they want to truck at all. The second level is when the highway owner wants a cut of all goods sold in MetroX stores. That's what's happening hered.
• sub7 5y ago
  Apart from being entirely unearned and unfair, these 30% cuts incentivize platforms to not weed out scams and bad actors. There are an infinite supply of bullshit apps that have been scamming people with subscriptions that are impossible to cancel. Apple/Google both just send out lip service.
  • heavyset_go 5y ago
    See this HN submission if you haven't already: https://news.ycombinator.com/item?id=27413934 https://news.ycombinator.com/item?id=27413934
• emsy 5y ago
  Just now there’s also an ongoing coverage about scammy Wordle clones that currently haunt the App Store. Their whole protect the customer narrative is a sham when it comes to the App Store. I think the only upside are easily cancellable subscriptions, which, if you think about it, is actually a problem that is a result of their push for the subscription model and should be solved by regulation: mandatory reminders for subscriptions and easy cancellation. There, problem solved for all platforms not just Apple’s.
  • heavyset_go 5y ago
    > Their whole protect the customer narrative is a sham when it comes to the App Store It's about protecting Apple's ~80% profit margins on the App Store[1], not protecting customers. [1] https://www.bloomberg.com/news/articles/2021-05-01/apple-s-app-store-had-78-profit-margin-in-2019-testimony-shows https://www.bloomberg.com/news/articles/2021-05-01/apple-s-a...
• ksec 5y ago
  > It is Apple's Devices, Apple's Software, Apple's Platform, Apple's user and Apple's Customer, everything belongs to Apple. But Apple is very generous and give "70%" of those revenue to developers and business partners. > These companies and developers are greedy. They want even more than 70%! Uber and Lyft should be kicked out of the App Store. > Laws and Regulations wants to fine Apple for Anti-Trust and Anti Competitive practice, Apple should pull out those market, that is the EU common market, Australia, Japan, South Korea, Russia, India! I wish I made these sentiment up, except you will find many Apple apologist supporting Apple writing exactly that. But none of these matters to the general public. Apple is Three Trillion Market Cap company, they are very successful, selling iPhone and Mac in record numbers. Tim Cook will continue to tell you Apple is making the world a better place. To enrich people's lives. And privacy is a fundamental human right. [ Subject to Terms and Condition ]. With a big smile on the face. On another note it is interesting this isn't the first time Phil Schiller has been fighting the battle for users and developers. But now he is "promoted" ( cough ) to Apple Fellow. And Eddy Cue......
• quantum_state 5y ago
  This is yet another sign that we the people should have a good open source phone.
  • supreme_berry 5y ago
  • cblconfederate 5y ago
    It will be forever sabotaged by mountains of cash
• cblconfederate 5y ago
  The companies that don't take their business out of app stores deserve all the pain in the world. I'm with apple on this
• FpUser 5y ago
  I suggest those execs ask governments for a special Apple tax to make sure there is guaranteed cash flow.
• softwarebeware 5y ago
  Did anyone read the emails? That's not what they said at all. The reference to 30% was to an existing membership cut that predated these emails on their subscription platform. The language, "...would be a concern for them" indicates they're pointing out that they will have to adjust the 30% value.
• librish 5y ago
  "Unfortunately, IAP being 'optional' means that no one will ever use it" I think one of the biggest issue is that Apple is trying to capture all of the revenue from the App eco system from a single function, the in app billing. Which is an extremely bad value prop for any large corporation, and also means a lot of big apps get to use the AppStore completely free. I think Apple needs to do some shuffling in how they charge for the AppStore.
• dontbeabill 5y ago
• hatware 5y ago
  I don't get the point of this. Am I supposed to feel bad for Uber and Lyft? Am I supposed to feel some need for justice against Apple? What's the narrative?
• maerF0x0 5y ago
  I wonder how this model compares to things like videogame consoles where the device is (afaik) sold below cost but then made up in licensing fees and royalties on sales? I think it's a good comparison and would give insight into how a similar scenario has played out in adjacent industries
• phs318u 5y ago
  I think a lot of the takes on this are coming at it from the wrong angle - "Why does Apple deserve a third of app revenue?" What if we flip it to: "Why do app developers deserve access to Apple's customers?" 30% is the price to access Apple's customers. If you're a developer and don't like this, then don't build an iOS app. Build Android-only, or build a web app. If you're a customer and don't like this, then don't buy an iPhone. Vote with your feet. Buy an Android. Or a Pinephone/Fairphone/Librem which are as close to a general purpose computer-as-a-phone outside of the Apple-Google duopoly that there is at the current time. I understand that the value of the Apple ecosystem is not just what Apple bring to the table. It's the ecosphere of apps available. So there's definitely a symbiosis here. But Apple is like China here. No matter how ethically questionable, there will always be those for whom the market that Apple represents is too tempting to ignore. Even with a 30% cost of doing business. Meaning there will always be app developers building apps for iOS.
  • brokencode 5y ago
    This is way too charitable to the largest company in the world, one which enjoys a duopoly over the smartphone market in the United States. If you are Lyft and you don’t have an iOS app, then you probably go out of business.
    • expensive_news 5y ago
      I realize that the only reason they don’t have an iOS app is because Apple didn’t let them, but OnlyFans is doing very well as a web based service. It’s certainly not iOS-or-nothing.
    • phs318u 5y ago
      Lyft would only go out of business (without an iOS app) because there are Lyft competitors who won't cede the Apple customer segment. If all those players stayed Android-only, not only would they survive, but they'd be turning Android into a more compelling alternative. But this would require two things - for them to collude to stay off iOS, and for no new competitors to write an iOS app. If having access to the Apple customer segment is the difference between success or failure - even despite the 30% tariff - then why is it strange that access to that segment has a price? This is a market.
• objektif 5y ago
  This I believe is exactly how empires go down.
• ameister14 5y ago
  This would be a weird thing to do, which is obviously why they made it optional in the end - it's such a large amount of money that it creates a massive incentive to switch or undercut apple's business. Most teenagers use an apple, but it's not impossible to switch. In the 90's, almost all computer users were on PC's, and a big problem for apple was a lack of software offerings on their OS to compete with windows. It seems like some executives are interested in short term profits to the point that they are comfortable creating an environment that would seriously disincentivize use of apple products and the math on that is nuts - if it's no longer profitable (and I can't imagine it is at a flat 30% increased costs) then you remove the service.
• JoeJonathan 5y ago
  Wow. You know you're in a weird echo chamber when you hear an outpouring of sympathy for such deeply reviled companies.
• deleted 5y ago
  [deleted]
• pookeh 5y ago
  Imagine if all the malls around the world that lease a physical store to Apple say to Apple: 30% of everything you sell at the store in our mall belongs to us.
  • hamlsandwich 5y ago
    Presumably they pay rent in those malls, and the bigger the store, the more rent they pay. The problem with that arrangement is that you need to be at a certain minimum scale in order to afford rent at all - you can't just occupy a free/basically free store to play around and make toys in. Taking a commission avoids that issue by making 'rent' scale with the amount of business you do, not how much floor space you need. I'm not saying that 30% is the right amount - I really don't know. But the mall comparison doesn't seem like a cut-and-dry case to me at all.
• evancoop 5y ago
  Next week, on "lifestyles of the rich and rent-seeking," we'll speak to the folks from Apple, who have discovered how to extract copious sums from captive app developers and their downstream customers! You won't want to miss this episode! (Of course, if you do, you can livestream from another app whose access they probably control)
• stakkur 5y ago
  Uber and Lyft execs: let’s take a 30% cut of every driver’s income while trying to classify them as contractors and avoid employee costs and other bothersome rules.
• pyuser583 5y ago
  I’d more interest in how Apple decided 30%. Why not 20%? 25%? 35%? They can make up whatever number they want.
  • chii 5y ago
    its likely that they chose the highest amount they believe the app developers would accept without trying to fight. Similarly at the time, steam and other platforms charged something like that too. I couldn't find it, but i really want to know the margins of the app store compared to the revenue. How much ripping off are they doing? If the margins are 50%, it's way too high!
• WisNorCan 5y ago
  I am hoping that the same scrutiny is quickly applied to other platforms that are getting a pass. Like Roblox which only pays developers 25%. But even that is better than Peloton where I can't even install any other apps.
• cityzen 5y ago
  Oh, you mean this Apple: Ten former members of Apple's supplier responsibility team told The Information that Suyin wasn't an isolated incident, and that Apple had refused or was slow to stop doing business with suppliers that had repeatedly violated labor laws or failed to improve workplace safety when it would have cut into its profits. https://www.businessinsider.com/apple-knowingly-used-child-labor-supplier-3-years-cut-costs-2020-12?op=1 https://www.businessinsider.com/apple-knowingly-used-child-l... If you're going to use child labor, i don't see any issue with charging 30% for anything you can get your hands on.
• andi999 5y ago
  Since this is from 2018: how did it play out?
• pabs3 5y ago
  Apple should split up the 30% cut into different portions of their value add, and then let developers choose which portions they want to have access to. Dropping the Apply Pay stuff would be 5% or whatever. Access to the Apple Store would be 5% or whatever. They could even charge more over the 30% by offering additional stuff, like auctioning off "app of the week" on the Apple Store.
• exabrial 5y ago
  Apple need to be broken up into tiny tiny tiny companies.
• skc 5y ago
  I'm still looking in those emails for the oft quoted HN comment of "Apple does all the heavy lifting wrt payment processing and discovery so 30% is fair" All I see there is talk of how to make even more money.
• midjji 5y ago
  Its astonishing that the sellers of branded small laptops get away with this shit at all. Its orders of magnitude higher than any other infrastructure provider gets alwat with.
• account-5 5y ago
  Can someone confirm that apple here are trying to get other companies to pay them if that other company offers its customers a subscription service? What is apple offering the other companies for the pleasure of paying apple? I feel like I'm missing something.
• Mentlo 5y ago
  Someone working on a subscription application here and quite intimiately know all data around our acquisition, retention, engagement - you can subscribe to us through apple or you can subscribe outside the apple ecosystem - and apple only takes the cut when through them. Ultimately - it's the user choice where they're going to do it - and if the user wants to reward the company, they could subscribe through other means. Most users don't know this, obviously, but it is a possibility. And if we reach them through a different acquisition channel, the users won't subscribe through Apple, they will subscribe elsewhere. However, the customers who subscribe through Apple are usually a lot more valuable to us (more affluent, stable payments, more engaged), and even with the 30% cut, having Apple as an acquisition channel is valuable. It is not worth it for us to go out of Apple's ecosystem. Apple know this - and are just playing the economics. They are aware the added benefits to the user and the marketing pull they have in their store. The next step for App Store is going to be changing the 30% to fit the business model of whatever they're marketing - if they're rational. There was already suggestion that for streaming apps (very high operating cost, very low margin) they might drop to 15% - because they'll try matching the economics to the barely positive tradeoff for the businesses using the app store. I see nothing wrong with the Apple model from a business standpoint of a multi-platform business. When something is specifically an app business it becomes more tricky because essentially in order to acquire the customer they have to install the app so the app store becomes your main acquisition channel. But even there you could argue that your business model wouldn't exist if Apple wasn't providing the customers, OS, app store and marketing. So it makes sense for Apple to take a larger cut (in relative terms per acquisition volumes).
• krisdigital 5y ago
  Nice read after my app update got rejected some weeks ago for not using in app purchases, even though it was already on the store for a year. It is a news reader app, but they said it does not fall under the "reader" category where they make an exception. I did not even want to make an app, but basically all the feedback from users I got was: is there an app out yet? Sadly progressive web apps are bullied, for example you cannot play audio in the background as I do for podcasts. But there is no way I will add IAP, I am not even trying to sell anything, it just for existing users. Kind of sad you cannot just provide an app even though you pay a fee for the store as developer. The second problem I have as someone who is offering subscriptions himself, is how Apple earns money with scam subscriptions. I could have justified the closed Appstore in the past by saying that they take care that you do not get trash on your phone, but - the App Store is full of trash. Check the top two guitar tuners, they are free. Open them up and you will see a 8$/week subscription, that you accidentally agree to with the finger on your home button. The ratings are full of people complaining, but Apple puts them at the top. There is no way they don't see this shady business. Wonder how much of their revenue comes from shitty scam apps. People who suggest to just not be present on the app store, it is just not an option for many businesses, as the App Store is basically a monopoly.