6 ms·

> You have insanely large pools of capital creating an incredibly inefficient money-losing business model. It's used to subsidize an untenable customer expectat

> You have insanely large pools of capital creating an incredibly inefficient money-losing business model. It's used to subsidize an untenable customer expectation. You leverage a broken workforce to minimize your genuine labor expenses. The companies unload their capital cannons on customer acquisition, while this week’s Uber-Grubhub news reminds us, the only viable endgame is a promise of monopoly concentration and increased prices. But is that even viable? Inequality is driving this. We have let money become so accumulated, that the owners of the capital are being silly with it at the same time that workers are having a hard time. We have to tax this capital and make it work for everyone.

saint_fiasco 2y ago
But the whole point is that in this case the money is not accumulated. Lots of different companies are each spending a lot of money in the hopes that they will be the last standing, at which point they will get to accumulate the money. It's possible that if one company does end up with a monopoly, they will treat their employees better. Because then they will finally be able to charge higher prices to the customers without losing those customers to the other more exploitative businesses.
- deleted 2y ago
  [deleted]
- wpm 2y ago
  The money they’re spending didn’t poof into existence, it’s coming from private equity and investors that accumulated it.
  - saint_fiasco 2y ago
    Right, they must have accumulated the money beforehand. But what they are doing right now with it is the opposite of accumulating it. They are taking the money that they previously accumulated and spending it on lots of random bullshit. Suppose you were to discourage accumulation, with a tax for example. Wouldn't that lead to investors investing in even more random bullshit?
    - kragen 2y ago
      plausibly the money was just printed rather than being accumulated. the article is from the zero interest rate epoch
- lambertsimnel 2y ago
  > It's possible that if one company does end up with a monopoly, they will treat their employees better. If they can get away with paying employees so little, why would they voluntarily pay more as a monopoly? (Presumably they wouldn't have a monopoly in the labour market, in which case I would expect pay to remain the same, rather than worsen.)
fortran77 2y ago
Won't blowing money like this redistribute it quickly, taking care of the "inequality"? It looks like this is a good way to take wealth from people who have accumulated it (the investors) and disperse it widely. I can't make your argument make any sense.
- chasing 2y ago
  Burn a billion dollars. Artificially pump the market value of your company by 10 billion dollars. Pizza company gets a few hundred dollars for free. "Haha, we pulled one over on the man!" Go public or sell. Founders and initial investors (likely already wealthy) get billions. Other people take the hit. No, this does not distribute wealth down. It's a ploy to gin up enough excitement that people who are already wealthy can expand that wealth dramatically with weak business offerings while leaving other people (smaller investors, employees, customers, other businesses, the government, the public at large) to hold the bag. Not every start-up is like this, but a lot of 'em sure are!
  - throwaway59148 2y ago
    [dead]
  - lotsoweiners 2y ago
    Who the hell cares? When I pay for things I have no interest in thinking about where things are trickling or not. If ten years later DoorDash/other delivery services still have people willing to pay for the service and people willing to deliver the orders for what they are being paid, then the business seems reasonably viable to me.
- blargey 2y ago
  Any “redistribution” is in the form of wages, so it’s income based in the exact opposite direction of what people want from wealth redistribution, or think of when they say “wealth redistribution”. C suite gets giant cuts, office workers get medium-large cuts based on career, gig workers just have a new type of low-wage part-time labor to fill their hours with. Money technically changes hands, but calling the existence of a company with status-quo wages “wealth redistribution” is really taking the term too literally.
walr000s 2y ago
>We have let money become so accumulated, that the owners of the capital are being silly with it Is that not just an inherent part of the debt cycle that we are at the tail end of?
bko 2y ago
Isn't this a problem that fixes itself? People have lots of money and throw it at stupid businesses and lose it.
- nicbou 2y ago
  They aren't building libraries with it, but sustaining an underpaid workforce. Someone loses a million, a million gets a few cents.
  - jjmarr 2y ago
    So, direct wealth transfer is happening from the rich to the poor. The only flaw with this is that people have to work economically inefficient jobs delivering food, instead of the wealth transfer occurring through taxes on the rich and funding something like basic sciences.
    - dralley 2y ago
      It's equivalent to "broken window" spending. Yes, breaking a window allows you to generate economic activity by paying the manufacturer to create a new one and paying an installer to install it, but it's not socially useful economic activity. You could have spent the same money building excess renewable energy resources, or on basic science research, or a million other things that might be equally "inefficient" from an investment standpoint but at least have a chance of providing benefit to society. It's a serious flaw and not one that can be waved off as easily as you do.
      - ianferrel 2y ago
        I disagree with that. In the case of food delivery, there's socially and economically useful work of getting food from where it can be efficiently created (restaurants) to where it can be efficiently consumed (hungry people's location). In the absence of that work, the hungry people would be making their own food (less efficient, generally, than restaurant cooking which can do larger batches) or going to get their own food (less efficient, at least plausibly, because a delivery worker can make multiple deliveries on one drive rather than a strict out and back trip that people would take). The thing that makes fixing a broken window "fake" economic growth is that it is arguing that destruction is economically useful because of the work to fix it, but nothing's being broken in this case. People are naturally hungry on a pretty regular basis, and the production and transportation of food is economically and socially useful work, which in this case was being subsidized by capital. Is it curing cancer? No, but it's not digging holes and filling them up again either.
Alupis 2y ago
[flagged]
- decremental 2y ago
  [dead]
- kortex 2y ago
  > This view of the world must be stamped out. It is a totally absurd viewpoint and I'm really tired of pretending it's not. This is very argumentative and shuts down the discourse before it even begins. It's not very in the spirit of HN.
  - Alupis 2y ago
    > This is very argumentative and shuts down the discourse before it even begins. It's not very in the spirit of HN. There cannot be productive discourse where people advocate forcefully taking things from other people that worked hard to earn the things. The spirit of HN is entrepreneurship. It is literally run by a VC business - not for the goodness of their hearts or whatever, but to foster a community of thinkers and doers. This line of thought is toxic and antithetical to everything YCombinator stands for. It's just a shame it's being coopted into such an anti-entrepreneur place largely by those who think so little of themselves as-to believe they'll never be capable of being thinkers or doers. You don't need to be the next Bill Gates, or next Uber to be successful and build things of value. But if you ever do, you'll have a ton of people wanting to tear you down just because you dared to be successful.
    - JumpCrisscross 2y ago
      > you'll have a ton of people wanting to tear you down just because you dared to be successful The article describes DoorDash intentionally deceiving its customers to gain their money, and wilfully depriving the restaurant owner of control of their brand. That's fraud. It's perfectly fine and in the spirit of HN to debate how contributes to measures of success.
insane_dreamer 2y ago
Ultimately it's driven by customer behavior. If people went to restaurants instead of expecting to be served hot food in their living room, this whole destructive business model wouldn't even exist or would be small enough as to not be negatively impactful. People are not forced to use DoorDash, UberEats, etc. We never do and are surviving just fine.
- digging 2y ago
  > Ultimately it's driven by customer behavior. If people went to restaurants instead of expecting to be served hot food in their living room, this whole destructive business model wouldn't even exist or would be small enough as to not be negatively impactful. No, you've got that backward. Customer behavior is driven by the tides of capital. Advertising is a pretty clear example but it's not the limit. I mean, how many people were ordering DoorDash before DoorDash existed? I'm not being entirely facetious - it's impossible for customers to behave in a way that's not allowed by the market. That you are resistant to these tides is not evidence against, it's just accounted for. You're not the target audience. Nor am I. But neither of us has ever made a decision in a vacuum; we choose our purchases from what's available, according to the information we're exposed to.
  - JumpCrisscross 2y ago
    > Customer behavior is driven by the tides of capital Source? The best argument against this is how elastic demand was when ZIRP ended. Customers responded to an underpriced product. When the price was raised to a profit-clearing level, it no longer cleared most of the market.
    - digging 2y ago
      I don't understand your argument. It sounds like customers were reacting to their environment more than driving change.
      - JumpCrisscross 2y ago
mikejulietbravo 2y ago
Taxes are not the answer, let the free market figure it out
- saagarjha 2y ago
  …which seems to be going poorly?

saint_fiasco 2y ago

But the whole point is that in this case the money is not accumulated. Lots of different companies are each spending a lot of money in the hopes that they will be the last standing, at which point they will get to accumulate the money. It's possible that if one company does end up with a monopoly, they will treat their employees better. Because then they will finally be able to charge higher prices to the customers without losing those customers to the other more exploitative businesses.

deleted 2y ago
[deleted]
wpm 2y ago
The money they’re spending didn’t poof into existence, it’s coming from private equity and investors that accumulated it.
- saint_fiasco 2y ago
  Right, they must have accumulated the money beforehand. But what they are doing right now with it is the opposite of accumulating it. They are taking the money that they previously accumulated and spending it on lots of random bullshit. Suppose you were to discourage accumulation, with a tax for example. Wouldn't that lead to investors investing in even more random bullshit?
  - kragen 2y ago
    plausibly the money was just printed rather than being accumulated. the article is from the zero interest rate epoch
lambertsimnel 2y ago
> It's possible that if one company does end up with a monopoly, they will treat their employees better. If they can get away with paying employees so little, why would they voluntarily pay more as a monopoly? (Presumably they wouldn't have a monopoly in the labour market, in which case I would expect pay to remain the same, rather than worsen.)

fortran77 2y ago

Won't blowing money like this redistribute it quickly, taking care of the "inequality"? It looks like this is a good way to take wealth from people who have accumulated it (the investors) and disperse it widely. I can't make your argument make any sense.

chasing 2y ago
Burn a billion dollars. Artificially pump the market value of your company by 10 billion dollars. Pizza company gets a few hundred dollars for free. "Haha, we pulled one over on the man!" Go public or sell. Founders and initial investors (likely already wealthy) get billions. Other people take the hit. No, this does not distribute wealth down. It's a ploy to gin up enough excitement that people who are already wealthy can expand that wealth dramatically with weak business offerings while leaving other people (smaller investors, employees, customers, other businesses, the government, the public at large) to hold the bag. Not every start-up is like this, but a lot of 'em sure are!
- throwaway59148 2y ago
  [dead]
- lotsoweiners 2y ago
  Who the hell cares? When I pay for things I have no interest in thinking about where things are trickling or not. If ten years later DoorDash/other delivery services still have people willing to pay for the service and people willing to deliver the orders for what they are being paid, then the business seems reasonably viable to me.
blargey 2y ago
Any “redistribution” is in the form of wages, so it’s income based in the exact opposite direction of what people want from wealth redistribution, or think of when they say “wealth redistribution”. C suite gets giant cuts, office workers get medium-large cuts based on career, gig workers just have a new type of low-wage part-time labor to fill their hours with. Money technically changes hands, but calling the existence of a company with status-quo wages “wealth redistribution” is really taking the term too literally.

walr000s 2y ago

>We have let money become so accumulated, that the owners of the capital are being silly with it Is that not just an inherent part of the debt cycle that we are at the tail end of?

bko 2y ago

Isn't this a problem that fixes itself? People have lots of money and throw it at stupid businesses and lose it.

nicbou 2y ago
They aren't building libraries with it, but sustaining an underpaid workforce. Someone loses a million, a million gets a few cents.
- jjmarr 2y ago
  So, direct wealth transfer is happening from the rich to the poor. The only flaw with this is that people have to work economically inefficient jobs delivering food, instead of the wealth transfer occurring through taxes on the rich and funding something like basic sciences.
  - dralley 2y ago
    It's equivalent to "broken window" spending. Yes, breaking a window allows you to generate economic activity by paying the manufacturer to create a new one and paying an installer to install it, but it's not socially useful economic activity. You could have spent the same money building excess renewable energy resources, or on basic science research, or a million other things that might be equally "inefficient" from an investment standpoint but at least have a chance of providing benefit to society. It's a serious flaw and not one that can be waved off as easily as you do.
    - ianferrel 2y ago
      I disagree with that. In the case of food delivery, there's socially and economically useful work of getting food from where it can be efficiently created (restaurants) to where it can be efficiently consumed (hungry people's location). In the absence of that work, the hungry people would be making their own food (less efficient, generally, than restaurant cooking which can do larger batches) or going to get their own food (less efficient, at least plausibly, because a delivery worker can make multiple deliveries on one drive rather than a strict out and back trip that people would take). The thing that makes fixing a broken window "fake" economic growth is that it is arguing that destruction is economically useful because of the work to fix it, but nothing's being broken in this case. People are naturally hungry on a pretty regular basis, and the production and transportation of food is economically and socially useful work, which in this case was being subsidized by capital. Is it curing cancer? No, but it's not digging holes and filling them up again either.

Alupis 2y ago

[flagged]

decremental 2y ago
[dead]
kortex 2y ago
> This view of the world must be stamped out. It is a totally absurd viewpoint and I'm really tired of pretending it's not. This is very argumentative and shuts down the discourse before it even begins. It's not very in the spirit of HN.
- Alupis 2y ago
  > This is very argumentative and shuts down the discourse before it even begins. It's not very in the spirit of HN. There cannot be productive discourse where people advocate forcefully taking things from other people that worked hard to earn the things. The spirit of HN is entrepreneurship. It is literally run by a VC business - not for the goodness of their hearts or whatever, but to foster a community of thinkers and doers. This line of thought is toxic and antithetical to everything YCombinator stands for. It's just a shame it's being coopted into such an anti-entrepreneur place largely by those who think so little of themselves as-to believe they'll never be capable of being thinkers or doers. You don't need to be the next Bill Gates, or next Uber to be successful and build things of value. But if you ever do, you'll have a ton of people wanting to tear you down just because you dared to be successful.
  - JumpCrisscross 2y ago
    > you'll have a ton of people wanting to tear you down just because you dared to be successful The article describes DoorDash intentionally deceiving its customers to gain their money, and wilfully depriving the restaurant owner of control of their brand. That's fraud. It's perfectly fine and in the spirit of HN to debate how contributes to measures of success.

insane_dreamer 2y ago

Ultimately it's driven by customer behavior. If people went to restaurants instead of expecting to be served hot food in their living room, this whole destructive business model wouldn't even exist or would be small enough as to not be negatively impactful. People are not forced to use DoorDash, UberEats, etc. We never do and are surviving just fine.

digging 2y ago
> Ultimately it's driven by customer behavior. If people went to restaurants instead of expecting to be served hot food in their living room, this whole destructive business model wouldn't even exist or would be small enough as to not be negatively impactful. No, you've got that backward. Customer behavior is driven by the tides of capital. Advertising is a pretty clear example but it's not the limit. I mean, how many people were ordering DoorDash before DoorDash existed? I'm not being entirely facetious - it's impossible for customers to behave in a way that's not allowed by the market. That you are resistant to these tides is not evidence against, it's just accounted for. You're not the target audience. Nor am I. But neither of us has ever made a decision in a vacuum; we choose our purchases from what's available, according to the information we're exposed to.
- JumpCrisscross 2y ago
  > Customer behavior is driven by the tides of capital Source? The best argument against this is how elastic demand was when ZIRP ended. Customers responded to an underpriced product. When the price was raised to a profit-clearing level, it no longer cleared most of the market.
  - digging 2y ago
    I don't understand your argument. It sounds like customers were reacting to their environment more than driving change.
    - JumpCrisscross 2y ago

mikejulietbravo 2y ago

Taxes are not the answer, let the free market figure it out

saagarjha 2y ago
…which seems to be going poorly?