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> "What if we continue this trend of just doing technically illegal things on a massive scale?" Judging from history: the wronged-customer stories will pile up

by roc 14y ago

> "What if we continue this trend of just doing technically illegal things on a massive scale?" Judging from history: the wronged-customer stories will pile up until the public demands some form of regulation. Keep in mind that the laws that make airbnb illegal, are the ones that were created as a reaction to business operating in the prior regulation-free environments. Building codes and fire safety regulations exist as a result of a history of preventably-tragic fires and building failures. Food safety regulations exist as a result of a litany of preventable food-borne illnesses, ingredient fraud, etc.

seiji 14y ago
Key words: massive scale Regulations/rules/laws require oversight. You can fine a giant hotel. You can verify conditions in restaurants. You can ticket illegal food trucks. Can you stop a guy from making experimental taco flavored cereal at home then delivering it to people who ordered it online? That's a horrible example. The new rule of startups seems to be: We'll do what we want. You can't stop us.
- _delirium 14y ago
  You can't stop small-time, independent cottage industry, and traditionally many governments turn a blind eye to it--- people selling small amounts of baked goods and such is not a new thing, and prosecuted rarely enough that it actually makes the news when it happens. What's new, and is much easier to stop, is centralized brokers turning at-scale aggregation of such cottage industry into a business plan. It's hard to stop me from privately arranging to sublet my apartment for $30/day with someone I met online, but it's much easier to shut down AirBnB doing it with thousands of properties. Basically I agree that the internet will change much of this, but I disagree that there are billion-dollar companies waiting to happen, unless they get the law to (at least tacitly) go along with them. Billion-dollar companies are juicy targets that can't sneak under the radar in the way that individuals can.
  - excuse-me 14y ago
    Google "cops close down lemonade stand" 165,000 hits
    - _delirium 14y ago
      That's what I mean by it being so rare that it makes news. And big news... one incident in Georgia in 2011 produced hundreds of news articles, including in major national newspapers, significant television coverage, and thousands of blog posts. You wouldn't expect that if cops were shutting down a dozen lemonade stands a day.
      - excuse-me 14y ago
        Good point. Although you have to wonder how much of the ubiquitous `anti-terrorism` web tracking is going to be used to report ebay/craigslist/amazon to the IRS
- mattmanser 14y ago
  And some of those startup founders are either going to get sent to jail for a long time or fined silly amounts of money. It's already starting to happen, namely Kim Dotcom. Still, more than worth the risk.
- roc 14y ago
  I would actually expect something much more like a certification process that sites and participants would volunteer to participate in. e.g. If there's a large scale discontentment with Airbnb following a growing pile of wronged-users, I would expect the site and users would be willing and eager to participate in a hypothetically reasonable/affordable certification process, as users would logically be expected to gravitate to 'certified' spaces and renters given a choice.
  - rodelrod 14y ago
    I agree, that is basically the way that the very popular bed&breakfast association "Gîtes de France" has been working for the past 50 years (http://www.gites-de-france.com/ http://www.gites-de-france.com/). From the user point of view it works wonderfully, it's very easy to get cheap, quality lodging with a personal touch in rural France. In Paris, forget about it, so airbnb is building a good market here.
- quanticle 14y ago
  Can you stop a guy from making experimental taco flavored cereal at home then delivering it to people who ordered it online? You can. All it'd really take is a few people getting sick from his invention and there'd be a huge backlash. The new rule of startups seems to be: We'll do what we want. You can't stop us. That only works because no one is trying to stop these new businesses. Don't expect that to last forever.
- rprasad 14y ago
  * Can you stop a guy from making experimental taco flavored cereal at home then delivering it to people who ordered it online?* Yes, quite easily. For the guy selling tacos, possibly prison, but more likely fines. And since we're likely dealing with interstate taco sales, these fines can be enforced via wage garnishment and may even survive a bankruptcy. For the startup...massive civil lawsuits. That corprate entity they formed? Not going to help them if they are undercapitalized with inadequate insurance or financial reserves, since the corporate veil piercing doctrine will allow plaintiffs to go after the owners and investors personally. I don't think that the government should be this zealous in enforcing these regulations, but there's a good chance that they will try to make a few examples out of a few unlucky startups/individuals to minimize violations.
darkarmani 14y ago
Food safety is more about barriers to entry than safety these days. The regulators have been captured by the industry and used to keep out competition.
- roc 14y ago
  Sure. There is no shortage of very real downsides to regulations, be they voluntary self-regulation by industry, 'reputation'-tracking done by consumers themselves or the wide variety of government regulations. I was simply pointing out the historic trend.
- rprasad 14y ago
  It's really not about preventing competition. The primary barrier to entry for restaurants and food vendors is, and always has been, access to the capital necessary to get it off the ground. It turns out that buying physical goods and equipment is more expensive than a free AWS account and a laptop.
  - darkarmani 14y ago
    I agree with your point about restaurants, but you are not acknowledging the current trend in agriculture. I'm talking about the small "organic-like" farms that want to slaughter on premise or sell homemade items. The meat industry in particular has captured the regulators and use them to keep out competition. The large packers want more regulation, because they can absorb the cost of compliance and the cost of fines for non-compliance when they get slapped on the wrist.

by roc 14y ago

seiji 14y ago

Key words: massive scale Regulations/rules/laws require oversight. You can fine a giant hotel. You can verify conditions in restaurants. You can ticket illegal food trucks. Can you stop a guy from making experimental taco flavored cereal at home then delivering it to people who ordered it online? That's a horrible example. The new rule of startups seems to be: We'll do what we want. You can't stop us.

_delirium 14y ago
You can't stop small-time, independent cottage industry, and traditionally many governments turn a blind eye to it--- people selling small amounts of baked goods and such is not a new thing, and prosecuted rarely enough that it actually makes the news when it happens. What's new, and is much easier to stop, is centralized brokers turning at-scale aggregation of such cottage industry into a business plan. It's hard to stop me from privately arranging to sublet my apartment for $30/day with someone I met online, but it's much easier to shut down AirBnB doing it with thousands of properties. Basically I agree that the internet will change much of this, but I disagree that there are billion-dollar companies waiting to happen, unless they get the law to (at least tacitly) go along with them. Billion-dollar companies are juicy targets that can't sneak under the radar in the way that individuals can.
- excuse-me 14y ago
  Google "cops close down lemonade stand" 165,000 hits
  - _delirium 14y ago
    That's what I mean by it being so rare that it makes news. And big news... one incident in Georgia in 2011 produced hundreds of news articles, including in major national newspapers, significant television coverage, and thousands of blog posts. You wouldn't expect that if cops were shutting down a dozen lemonade stands a day.
    - excuse-me 14y ago
      Good point. Although you have to wonder how much of the ubiquitous `anti-terrorism` web tracking is going to be used to report ebay/craigslist/amazon to the IRS
mattmanser 14y ago
And some of those startup founders are either going to get sent to jail for a long time or fined silly amounts of money. It's already starting to happen, namely Kim Dotcom. Still, more than worth the risk.
roc 14y ago
I would actually expect something much more like a certification process that sites and participants would volunteer to participate in. e.g. If there's a large scale discontentment with Airbnb following a growing pile of wronged-users, I would expect the site and users would be willing and eager to participate in a hypothetically reasonable/affordable certification process, as users would logically be expected to gravitate to 'certified' spaces and renters given a choice.
- rodelrod 14y ago
  I agree, that is basically the way that the very popular bed&breakfast association "Gîtes de France" has been working for the past 50 years (http://www.gites-de-france.com/ http://www.gites-de-france.com/). From the user point of view it works wonderfully, it's very easy to get cheap, quality lodging with a personal touch in rural France. In Paris, forget about it, so airbnb is building a good market here.
quanticle 14y ago
Can you stop a guy from making experimental taco flavored cereal at home then delivering it to people who ordered it online? You can. All it'd really take is a few people getting sick from his invention and there'd be a huge backlash. The new rule of startups seems to be: We'll do what we want. You can't stop us. That only works because no one is trying to stop these new businesses. Don't expect that to last forever.
rprasad 14y ago
* Can you stop a guy from making experimental taco flavored cereal at home then delivering it to people who ordered it online?* Yes, quite easily. For the guy selling tacos, possibly prison, but more likely fines. And since we're likely dealing with interstate taco sales, these fines can be enforced via wage garnishment and may even survive a bankruptcy. For the startup...massive civil lawsuits. That corprate entity they formed? Not going to help them if they are undercapitalized with inadequate insurance or financial reserves, since the corporate veil piercing doctrine will allow plaintiffs to go after the owners and investors personally. I don't think that the government should be this zealous in enforcing these regulations, but there's a good chance that they will try to make a few examples out of a few unlucky startups/individuals to minimize violations.

darkarmani 14y ago

Food safety is more about barriers to entry than safety these days. The regulators have been captured by the industry and used to keep out competition.

roc 14y ago
Sure. There is no shortage of very real downsides to regulations, be they voluntary self-regulation by industry, 'reputation'-tracking done by consumers themselves or the wide variety of government regulations. I was simply pointing out the historic trend.
rprasad 14y ago
It's really not about preventing competition. The primary barrier to entry for restaurants and food vendors is, and always has been, access to the capital necessary to get it off the ground. It turns out that buying physical goods and equipment is more expensive than a free AWS account and a laptop.
- darkarmani 14y ago
  I agree with your point about restaurants, but you are not acknowledging the current trend in agriculture. I'm talking about the small "organic-like" farms that want to slaughter on premise or sell homemade items. The meat industry in particular has captured the regulators and use them to keep out competition. The large packers want more regulation, because they can absorb the cost of compliance and the cost of fines for non-compliance when they get slapped on the wrist.