6 ms·

There's definitely a trend where large corporations/institutions push risk and liability down onto individuals, who have a hard time quantifying it properly. Th

There's definitely a trend where large corporations/institutions push risk and liability down onto individuals, who have a hard time quantifying it properly. They make promises about "independence" and "entrepreneurship" and "building wealth", but they're really just taking advantage of an information asymmetry, tricking uninformed individuals into accepting a deal that is much worse than they think. See: Uber, Subway franchises, academia, Amazon truck drivers, or any of your classic MLMs

deleted 4y ago
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monkeybutton 4y ago
Any kind of sales where you are buying leads or paying for the right sell someone else's product. If it was as good as they say, they'd be doing it themselves not pitching it to you.
- JumpCrisscross 4y ago
  > it was as good as they say, they'd be doing it themselves not pitching it to you Counterfactual: franchises.
  - antisthenes 4y ago
    Franchises offload the risk on the franchisee and collect their percentage fee regardless of the performance. There was a segment on John Oliver's program about Subway being particularly predatory about this, as well as deliberately maintaining information asymmetry to mislead franchisees. In which sense do you think franchises are counterfactual here?
    - JumpCrisscross 4y ago
      > In which sense do you think franchises are counterfactual here? Plenty of franchises have sustainably made money for the franchiser and the bulk of their franchisees. That stands in stark relief to the history of MLMs.
      - asapitts 4y ago
    - deleted 4y ago
      [deleted]
    - ocdtrekkie 4y ago
      Similarly, McDonald's is now, in fact, largely a real estate company: All of the franchises have to pay them rent, and it's the largest portion of their revenue.
      - m463 4y ago
        It's interesting how some corporations do not do what they seem to be doing. I think of the airlines and rewards programs, google identifying people, and silicon valley startups selling stock.
    - seneca 4y ago
      John Oliver is a comedian. Referring to him as a source isn't something that gives merit to an argument.
      - antisthenes 4y ago
        What gives merit to an argument is whether something has been researched and the accuracy of information behind it, not the occupation of the person presenting it. If your research into the Subway franchise indicates otherwise, I'm all eager to hear the counterfactuals.
        seneca 4y ago
        > What gives merit to an argument is whether something has been researched and the accuracy of information behind it, not the occupation of the person presenting it. That's not really the point. I'm not disputing the correctness, I'm saying your argument is flawed. Imagine I told you "the sky is blue, my cat told me so". Well sure, the sky is in fact blue, but that doesn't make my cat a good source of information. A comedian, even one playing as a social crusader, is not a source, much like my cat is not. > If your research into the Subway franchise indicates otherwise, I'm all eager to hear the counterfactuals. Do you mean counterarguments? Counterfactuals are things that didn't happen or are not true, not a response to an assertion.
        antisthenes 4y ago
        > I'm saying your argument is flawed. Imagine I told you "the sky is blue, my cat told me so". Well sure, the sky is in fact blue, but that doesn't make my cat a good source of information. I think we just have a different approach to communication. If you told me "the sky is blue, my cat told me so", I would probably just verify the color of the sky and completely disregard the 2nd portion. And no, that doesn't make your response flawed, because it mentioned a cat. It just makes it padded with irrelevant information. Part of comprehension is filtering irrelevant stuff like that from text in order to arrive at distilled facts that can be checked or verified through an experiment. Same way that my mentioning John Oliver doesn't really impact the weight of my arguments, since the facts within accurately reflect reality. It was just an irrelevant padding for context, not something that was supposed to give extra weight to my arguments. Does that make sense?
  - bryanrasmussen 4y ago
    right, Ray Kroc should definitely have been running a McDonald's franchise if he wanted to see some real success.
- kube-system 4y ago
  The plain concept of the specialization of labor demonstrates that this is false, at least as a blanket statement. Sales is a skill. Making products is a skill. The people who have these skills is not always the same person or organization. Information or power asymmetry is the problem. Sometimes it’s the other way around. E.g. a large retailer selling a small company’s products.
  - idontpost 4y ago
    If you cherry pick half the comment to respond to, then you get an irrelevant response like this. That first sentence was important context for the second.
    - kube-system 4y ago
      I’m directly addressing it. If I wasn’t clear: there are, for example, large companies that buy leads or exclusive product rights from small players and have an asymmetric power over them.
- EricMausler 4y ago
  That's simply not true, even though these types of sales do harbor a lot of scams. 1 person has limited time. They can be doing it themselves and still sell you the rights to do it too. It would be pure coincidence if the market demand fit exactly into 1 persons ability to supply it. I say 1, but this is not limited to 1 person. Selling information is a valid transaction. It requires much less time, and the price is justified by a similar idealogy to having trade secrets. Yes I could pursue this list of 100 potentials and convert 5% of them for 50k over the next couple months OR I can sell it to someone else for 2k and do something else with my time. If selling information is an established type of sale, then it follows that at a large enough scale of demand, someone can specialize in that sale rather than acting on the relevant information at all. And now AGAIN it would be pure coincidence if that 1 person specializing in selling only information is exactly meeting the demand for such activity. So they accept money to train others on how to sell information. Hence the entire data broker industry. The problem is that even though this truth exists, the trust involved is easily abusable. I don't think I need to explain how. It isn't a pyramid scheme, but it can very easily become a saturated market where late comers end up getting no value back since there still is a very real limit on demand. But it is not good for sales for the people training others in the sale of information to acknowledge that limit, so it ultimately leads to people effectively getting scammed even without anyone explicitly trying to scam anyone.
  - netizen-936824 4y ago
    Because people don't hire other people to handle sales? It has to be an MLM? Something smells off here
frankbreetz 4y ago
Aren't Amazon Truck Drivers hourly employees? What risk and liability do they have? I am not sure how this an MLM like your other examples
- bri3d 4y ago
  Amazon have a gig delivery program called Amazon Flex. Additionally, in many markets Amazon truck drivers aren't Amazon employees, they work for DSPs (Delivery Service Partners), although I think Amazon do require that individual drivers be full-time hourly employees with benefits, it's still a liability fan-out mechanism. Founding a DSP is marketed heavily at "entrepreneurial spirits" in various markets who aren't as likely to be skilled or experienced negotiators.
  - selecsosi 4y ago
    Can't find the original article I read but here is some more info on the relationship the program maintains with "owners" >The materials touted that he could make more than $75,000 and perhaps as much as $300,000 every year. The application required that you have $10,000 in startup capital, but the ad he saw also said that the fee might be waived for veterans. >Aside from Ramos, all of the business owners and drivers interviewed for this piece see themselves as working primarily for Amazon, not for an independent small business. That mentality has added to the disappointment for workers seeking autonomy >“It’s not a partnership. This is working for Amazon,” the veteran said. “We DSPs are not business owners, we’re paid managers. They control every aspect.” >After the DSP owner is paid by Amazon, the owner then has to pay the drivers, taxes, leases on the vans, repairs to the vans, new clothing (the physicality of the job means some drivers go through gear every couple of weeks), worker’s comp and other costs. https://www.protocol.com/workplace/amazon-delivery-program-trap https://www.protocol.com/workplace/amazon-delivery-program-t...
    - hattmall 4y ago
      Same model as FedEx ground.
RicoElectrico 4y ago
Yeah, I just don't understand how franchises are able to get away with their shitty tactics, at least in the EU. They do not provide any net value to the society, all they do is shift the risk onto the franchisee with a pretty much unilateral contract. You have to engage in whatever shit they come up with, like buying expensive equipment. (McDonald's pizza anyone?) The only instances where a franchise makes sense is when a franchisee could realistically walk away from the contract and stay in the business somehow.
- ghaff 4y ago
  While Subway franchises specifically don't seem to be especially profitable, others aren't bad and a local businessman can own multiple. Overall, it's probably a safer bet--though possibly less non-financially rewarding--than going independent. https://www.eposnow.com/us/resources/how-much-do-franchise-owners-make/ https://www.eposnow.com/us/resources/how-much-do-franchise-o...
- HWR_14 4y ago
  A franchise makes good theoretical sense. The franchisee gets an operations manual and the ability to use valuable trademarks to streamline you business, and pays a percentage that is lower than what movie stars and athletes pay their agents. The customer gets knowing that McDonalds, which values their trademarks, is standing behind the restaurant with higher (or at least different) standards than the health department in terms of quality, and the menu and deals will be what they expect. The franchise parent company gets to expand without capital costs. Done properly, all three parties benefit.
- bombcar 4y ago
  I know of one franchisee that actually did walk away from a pizza franchise to their own when the franchise changed their sauce. He’s still doing well but it wasn’t a dominos kinda thing.
toiletfuneral 4y ago
[dead]
mbesto 4y ago
> See: Uber, Subway franchises, academia, Amazon truck drivers, or any of your classic MLMs These are weird comparisons. In some cases, the individual is the sales function, in some cases its the supply function, in other cases its a full blown SBU. I don't think you can bucket all of these into MLM, because, well, some of them have nothing to do with marketing (ya know, the M part of MLM).
- jacquesc 4y ago
  Agreed. I don't know how one could classify any of those as "Multi Level" either. If it were MLM, your local neighborhood Subway would by trying to sell you a franchise (instead of a sandwich)
  - cuteboy19 4y ago
    Yes, an uber driver does not typically go around recruiting other drivers. That's not how he makes money
- superb-owl 4y ago
  Agreed, calling these things "MLMs" doesn't make sense. But they prey on the same instincts, and I think should be called out for doing so. Maybe we need a new term for these types of businesses. "Contract Predators" sounds about right. Maybe "Risk Pushers."

deleted 4y ago

[deleted]

monkeybutton 4y ago

Any kind of sales where you are buying leads or paying for the right sell someone else's product. If it was as good as they say, they'd be doing it themselves not pitching it to you.

JumpCrisscross 4y ago
> it was as good as they say, they'd be doing it themselves not pitching it to you Counterfactual: franchises.
- antisthenes 4y ago
  Franchises offload the risk on the franchisee and collect their percentage fee regardless of the performance. There was a segment on John Oliver's program about Subway being particularly predatory about this, as well as deliberately maintaining information asymmetry to mislead franchisees. In which sense do you think franchises are counterfactual here?
  - JumpCrisscross 4y ago
    > In which sense do you think franchises are counterfactual here? Plenty of franchises have sustainably made money for the franchiser and the bulk of their franchisees. That stands in stark relief to the history of MLMs.
    - asapitts 4y ago
  - deleted 4y ago
    [deleted]
  - ocdtrekkie 4y ago
    Similarly, McDonald's is now, in fact, largely a real estate company: All of the franchises have to pay them rent, and it's the largest portion of their revenue.
    - m463 4y ago
      It's interesting how some corporations do not do what they seem to be doing. I think of the airlines and rewards programs, google identifying people, and silicon valley startups selling stock.
  - seneca 4y ago
    John Oliver is a comedian. Referring to him as a source isn't something that gives merit to an argument.
    - antisthenes 4y ago
      What gives merit to an argument is whether something has been researched and the accuracy of information behind it, not the occupation of the person presenting it. If your research into the Subway franchise indicates otherwise, I'm all eager to hear the counterfactuals.
      - seneca 4y ago
        > What gives merit to an argument is whether something has been researched and the accuracy of information behind it, not the occupation of the person presenting it. That's not really the point. I'm not disputing the correctness, I'm saying your argument is flawed. Imagine I told you "the sky is blue, my cat told me so". Well sure, the sky is in fact blue, but that doesn't make my cat a good source of information. A comedian, even one playing as a social crusader, is not a source, much like my cat is not. > If your research into the Subway franchise indicates otherwise, I'm all eager to hear the counterfactuals. Do you mean counterarguments? Counterfactuals are things that didn't happen or are not true, not a response to an assertion.
        antisthenes 4y ago
        > I'm saying your argument is flawed. Imagine I told you "the sky is blue, my cat told me so". Well sure, the sky is in fact blue, but that doesn't make my cat a good source of information. I think we just have a different approach to communication. If you told me "the sky is blue, my cat told me so", I would probably just verify the color of the sky and completely disregard the 2nd portion. And no, that doesn't make your response flawed, because it mentioned a cat. It just makes it padded with irrelevant information. Part of comprehension is filtering irrelevant stuff like that from text in order to arrive at distilled facts that can be checked or verified through an experiment. Same way that my mentioning John Oliver doesn't really impact the weight of my arguments, since the facts within accurately reflect reality. It was just an irrelevant padding for context, not something that was supposed to give extra weight to my arguments. Does that make sense?
- bryanrasmussen 4y ago
  right, Ray Kroc should definitely have been running a McDonald's franchise if he wanted to see some real success.
kube-system 4y ago
The plain concept of the specialization of labor demonstrates that this is false, at least as a blanket statement. Sales is a skill. Making products is a skill. The people who have these skills is not always the same person or organization. Information or power asymmetry is the problem. Sometimes it’s the other way around. E.g. a large retailer selling a small company’s products.
- idontpost 4y ago
  If you cherry pick half the comment to respond to, then you get an irrelevant response like this. That first sentence was important context for the second.
  - kube-system 4y ago
    I’m directly addressing it. If I wasn’t clear: there are, for example, large companies that buy leads or exclusive product rights from small players and have an asymmetric power over them.
EricMausler 4y ago
That's simply not true, even though these types of sales do harbor a lot of scams. 1 person has limited time. They can be doing it themselves and still sell you the rights to do it too. It would be pure coincidence if the market demand fit exactly into 1 persons ability to supply it. I say 1, but this is not limited to 1 person. Selling information is a valid transaction. It requires much less time, and the price is justified by a similar idealogy to having trade secrets. Yes I could pursue this list of 100 potentials and convert 5% of them for 50k over the next couple months OR I can sell it to someone else for 2k and do something else with my time. If selling information is an established type of sale, then it follows that at a large enough scale of demand, someone can specialize in that sale rather than acting on the relevant information at all. And now AGAIN it would be pure coincidence if that 1 person specializing in selling only information is exactly meeting the demand for such activity. So they accept money to train others on how to sell information. Hence the entire data broker industry. The problem is that even though this truth exists, the trust involved is easily abusable. I don't think I need to explain how. It isn't a pyramid scheme, but it can very easily become a saturated market where late comers end up getting no value back since there still is a very real limit on demand. But it is not good for sales for the people training others in the sale of information to acknowledge that limit, so it ultimately leads to people effectively getting scammed even without anyone explicitly trying to scam anyone.
- netizen-936824 4y ago
  Because people don't hire other people to handle sales? It has to be an MLM? Something smells off here

frankbreetz 4y ago

Aren't Amazon Truck Drivers hourly employees? What risk and liability do they have? I am not sure how this an MLM like your other examples

bri3d 4y ago
Amazon have a gig delivery program called Amazon Flex. Additionally, in many markets Amazon truck drivers aren't Amazon employees, they work for DSPs (Delivery Service Partners), although I think Amazon do require that individual drivers be full-time hourly employees with benefits, it's still a liability fan-out mechanism. Founding a DSP is marketed heavily at "entrepreneurial spirits" in various markets who aren't as likely to be skilled or experienced negotiators.
- selecsosi 4y ago
  Can't find the original article I read but here is some more info on the relationship the program maintains with "owners" >The materials touted that he could make more than $75,000 and perhaps as much as $300,000 every year. The application required that you have $10,000 in startup capital, but the ad he saw also said that the fee might be waived for veterans. >Aside from Ramos, all of the business owners and drivers interviewed for this piece see themselves as working primarily for Amazon, not for an independent small business. That mentality has added to the disappointment for workers seeking autonomy >“It’s not a partnership. This is working for Amazon,” the veteran said. “We DSPs are not business owners, we’re paid managers. They control every aspect.” >After the DSP owner is paid by Amazon, the owner then has to pay the drivers, taxes, leases on the vans, repairs to the vans, new clothing (the physicality of the job means some drivers go through gear every couple of weeks), worker’s comp and other costs. https://www.protocol.com/workplace/amazon-delivery-program-trap https://www.protocol.com/workplace/amazon-delivery-program-t...
  - hattmall 4y ago
    Same model as FedEx ground.

RicoElectrico 4y ago

Yeah, I just don't understand how franchises are able to get away with their shitty tactics, at least in the EU. They do not provide any net value to the society, all they do is shift the risk onto the franchisee with a pretty much unilateral contract. You have to engage in whatever shit they come up with, like buying expensive equipment. (McDonald's pizza anyone?) The only instances where a franchise makes sense is when a franchisee could realistically walk away from the contract and stay in the business somehow.

ghaff 4y ago
While Subway franchises specifically don't seem to be especially profitable, others aren't bad and a local businessman can own multiple. Overall, it's probably a safer bet--though possibly less non-financially rewarding--than going independent. https://www.eposnow.com/us/resources/how-much-do-franchise-owners-make/ https://www.eposnow.com/us/resources/how-much-do-franchise-o...
HWR_14 4y ago
A franchise makes good theoretical sense. The franchisee gets an operations manual and the ability to use valuable trademarks to streamline you business, and pays a percentage that is lower than what movie stars and athletes pay their agents. The customer gets knowing that McDonalds, which values their trademarks, is standing behind the restaurant with higher (or at least different) standards than the health department in terms of quality, and the menu and deals will be what they expect. The franchise parent company gets to expand without capital costs. Done properly, all three parties benefit.
bombcar 4y ago
I know of one franchisee that actually did walk away from a pizza franchise to their own when the franchise changed their sauce. He’s still doing well but it wasn’t a dominos kinda thing.

toiletfuneral 4y ago

[dead]

mbesto 4y ago

> See: Uber, Subway franchises, academia, Amazon truck drivers, or any of your classic MLMs These are weird comparisons. In some cases, the individual is the sales function, in some cases its the supply function, in other cases its a full blown SBU. I don't think you can bucket all of these into MLM, because, well, some of them have nothing to do with marketing (ya know, the M part of MLM).

jacquesc 4y ago
Agreed. I don't know how one could classify any of those as "Multi Level" either. If it were MLM, your local neighborhood Subway would by trying to sell you a franchise (instead of a sandwich)
- cuteboy19 4y ago
  Yes, an uber driver does not typically go around recruiting other drivers. That's not how he makes money
superb-owl 4y ago
Agreed, calling these things "MLMs" doesn't make sense. But they prey on the same instincts, and I think should be called out for doing so. Maybe we need a new term for these types of businesses. "Contract Predators" sounds about right. Maybe "Risk Pushers."