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The problem is the byzantine nature of the car market in the US. It's split up in 50 states plus DC. Thus you have all these patchwork set of laws. It favors

The problem is the byzantine nature of the car market in the US. It's split up in 50 states plus DC. Thus you have all these patchwork set of laws. It favors the local dealer easily as they get quite cozy with the state legislature and dictate terms. AKA a regulatory capture environment. The Feds will not touch this issue as it's too much of a political landmine to consolidate the whole market to be regulated on a federal level. Everything else about the car except sales is consolidated (safety, design, emissions, etc) This is the nature of the Untied States - 50 states doing their own thing as long as the economy is within the borders. See health care, insurance, funeral business, hairdressers, and so on. The model has its pluses and drawbacks. Unfortunately we are seeing the drawback with Tesla. The only option I think is for Tesla to focus on their online presence and in the long term people will develop habits of buying a car through that way. Then maybe finally the stupid dealer cartel will die off.

freehunter 12y ago
Tesla might get away with it now, but in the long run many people aren't going to buy a car without test driving it or at least getting inside and feeling around. Some buyers will purchase purely on looks and nothing else, but others want to buy the way the car feels, how much storage is inside, or how it drives. Then again, it might depend on the return policy. My wife buys tons of clothes online and returns all the stuff she doesn't like due to the retailer's free return policy.
- smackfu 12y ago
  It seems like Tesla should still be able to give test drives and have a showroom without actually selling the car on-site.
- mikeash 12y ago
  They already separate test drives from purchases somewhat. I test drove one last year in Maryland and the guy who handled it was careful and explicit about never, ever discussing anything like an actual purchase of the car, because that would be illegal. He wouldn't discuss prices or ordering or anything of the like, he was just there to let me drive the car and tell me all about the actual equipment. This is obviously stupid, but if it's legal then it solves the problem of needing to try before you buy online. Well, mostly. Some people will want to try the actual unit they're going to purchase. A reputation for quality and a good warranty should be able to overcome that with time.
  - smeyer 12y ago
    >A reputation for quality and a good warranty should be able to overcome that with time I'm not so sure about that. Regardless of the reputation of a brand, people have different tastes when it comes to cars. It's hard to know whether you'll feel comfortable driving a car, like the way it handles, and so on just because it has a good reputation, because different people have different tastes (which they may not understand well). I think taste is the main reason people test drive a few cars before buying, even if they know the reputation of chevy/toyota/tesla going in.
    - mikeash 12y ago
      You misunderstand that sentence. The "that" which is overcome with a good warranty and a reputation for quality is the need to test drive the exact unit you're going to buy. Tesla's test-drive-then-order-online approach takes care of trying out the model of car, seeing how it drives, etc. What it doesn't take care of is finding out that the specific unit you actually purchased has an annoying squeak somewhere or explodes when you hit 45MPH.
      - smeyer 12y ago
        That makes more sense. I don't think that's unique to Tesla. If I'm not mistaken, people already occasionally test drive, say, a Chevy Malibu then decide to have the dealer order another Malibu with a specific option set, color, et cetera. With new car purchases (but obviously not used car purchases), it seems that it's not so much about test driving the exact unit.
        mikeash 12y ago
        I imagine it varies depending on the person, and maybe the brand. Some people will want to test drive the exact car they're going to buy, while others will be happy trying out the model and trusting that their unit will be the same. When I bought a new car last year, I appreciated being able to test drive the exact car I bought, although it definitely wasn't necessary. In any case, I don't think it's a big problem, just the only one I can see that would potentially remain with a test-drive-then-order-online approach.
- vermontdevil 12y ago
  Maybe investing in occulus rift style simulation would get around this barrier?
DanielBMarkham 12y ago
We're not seeing the drawback; we're seeing the benefits. The system is designed to corrupt itself in little pieces, with citizens being free to share information and compare notes about how all the little pieces work. That's a beautiful system that, as far as I know, no other country has tried. So Georgia screwed the pooch on this. A newspaper in CA writes an article, and folks from the other 49 states get angry. Some folks may move out of Georgia. The lawmakers there -- no matter which party they are -- get embarrassed. They don't do that again. They probably retract whatever they did. Compare that to a winner-takes-all system, where one party is in control. You have one adjustment, sometimes only made after years of fighting with the minority party. It doesn't work, or it's crooked, or whatnot. There are no comparisons. There are no other places to go if you don't like it. There is no pushback from all the political parties to make this go away. Instead it's just circle-the-wagons time. This, and a few other stories in technology like it, are powerful examples of how a loosely federated and decentralized system can easily outperform every centralized system of governance there is. Cool stuff.
- vermontdevil 12y ago
  the drawback for me is the barrier of entry for a small company. You'll have to deal with 50 different laws. I do like the idea of a loosely federated and decentralized system as you say but nothing is perfect.
  - seanflyon 12y ago
    Small companies tend to launch in limited areas anyway.
walshemj 12y ago
From outside the byzantine complexity of the USA having 52 different sets of law and an overly complex tax system is all downside.
raldi 12y ago
> See health care, insurance, funeral business, hairdressers, and so on. Could you clarify the pattern?
- sosuke 12y ago
  Each have state licensing and regulation.
- icebraining 12y ago
  They are all licensed professions in many US states. Not only do you need a license, as they're usually not valid across states, so a Texas hairdresser can't work in California, and vice-versa. NPR had a report about the growth of licensing a couple of years ago: http://www.npr.org/blogs/money/2012/06/21/154826233/why-its-illegal-to-braid-hair-without-a-license http://www.npr.org/blogs/money/2012/06/21/154826233/why-its-...
  - rrradical 12y ago
    It's terrifying to think that a license could be required for software development.
    - th0ma5 12y ago
      I know with Android you can, but can you develop for I devices without a license? I understand you're talking government licenses, and that one could jailbreak an iDevice, but can you develop legally without an Apple license?
      - PeterisP 12y ago
        Sure, you can - the publisher needs an agreement with Apple to publish stuff on App Store; but it's perfectly legal to have a hundred "unlicenced" developers (as in, out of Apple Developer Program) working on that product as long as you've got someone "licenced" to handle the submission process. And it's also perfectly legal to develop iOS stuff without any license whatsoever, simply then it won't be distributed by Apple in it's store, and will be usable only on jailbroken devices. There's nothing illegal about jailbreaking devices nor about developing for them. iOS development as such isn't a licenced profession, simply the main distribution channel is very controlled.

freehunter 12y ago

Tesla might get away with it now, but in the long run many people aren't going to buy a car without test driving it or at least getting inside and feeling around. Some buyers will purchase purely on looks and nothing else, but others want to buy the way the car feels, how much storage is inside, or how it drives. Then again, it might depend on the return policy. My wife buys tons of clothes online and returns all the stuff she doesn't like due to the retailer's free return policy.

smackfu 12y ago
It seems like Tesla should still be able to give test drives and have a showroom without actually selling the car on-site.
mikeash 12y ago
They already separate test drives from purchases somewhat. I test drove one last year in Maryland and the guy who handled it was careful and explicit about never, ever discussing anything like an actual purchase of the car, because that would be illegal. He wouldn't discuss prices or ordering or anything of the like, he was just there to let me drive the car and tell me all about the actual equipment. This is obviously stupid, but if it's legal then it solves the problem of needing to try before you buy online. Well, mostly. Some people will want to try the actual unit they're going to purchase. A reputation for quality and a good warranty should be able to overcome that with time.
- smeyer 12y ago
  >A reputation for quality and a good warranty should be able to overcome that with time I'm not so sure about that. Regardless of the reputation of a brand, people have different tastes when it comes to cars. It's hard to know whether you'll feel comfortable driving a car, like the way it handles, and so on just because it has a good reputation, because different people have different tastes (which they may not understand well). I think taste is the main reason people test drive a few cars before buying, even if they know the reputation of chevy/toyota/tesla going in.
  - mikeash 12y ago
    You misunderstand that sentence. The "that" which is overcome with a good warranty and a reputation for quality is the need to test drive the exact unit you're going to buy. Tesla's test-drive-then-order-online approach takes care of trying out the model of car, seeing how it drives, etc. What it doesn't take care of is finding out that the specific unit you actually purchased has an annoying squeak somewhere or explodes when you hit 45MPH.
    - smeyer 12y ago
      That makes more sense. I don't think that's unique to Tesla. If I'm not mistaken, people already occasionally test drive, say, a Chevy Malibu then decide to have the dealer order another Malibu with a specific option set, color, et cetera. With new car purchases (but obviously not used car purchases), it seems that it's not so much about test driving the exact unit.
      - mikeash 12y ago
        I imagine it varies depending on the person, and maybe the brand. Some people will want to test drive the exact car they're going to buy, while others will be happy trying out the model and trusting that their unit will be the same. When I bought a new car last year, I appreciated being able to test drive the exact car I bought, although it definitely wasn't necessary. In any case, I don't think it's a big problem, just the only one I can see that would potentially remain with a test-drive-then-order-online approach.
vermontdevil 12y ago
Maybe investing in occulus rift style simulation would get around this barrier?

DanielBMarkham 12y ago

We're not seeing the drawback; we're seeing the benefits. The system is designed to corrupt itself in little pieces, with citizens being free to share information and compare notes about how all the little pieces work. That's a beautiful system that, as far as I know, no other country has tried. So Georgia screwed the pooch on this. A newspaper in CA writes an article, and folks from the other 49 states get angry. Some folks may move out of Georgia. The lawmakers there -- no matter which party they are -- get embarrassed. They don't do that again. They probably retract whatever they did. Compare that to a winner-takes-all system, where one party is in control. You have one adjustment, sometimes only made after years of fighting with the minority party. It doesn't work, or it's crooked, or whatnot. There are no comparisons. There are no other places to go if you don't like it. There is no pushback from all the political parties to make this go away. Instead it's just circle-the-wagons time. This, and a few other stories in technology like it, are powerful examples of how a loosely federated and decentralized system can easily outperform every centralized system of governance there is. Cool stuff.

vermontdevil 12y ago
the drawback for me is the barrier of entry for a small company. You'll have to deal with 50 different laws. I do like the idea of a loosely federated and decentralized system as you say but nothing is perfect.
- seanflyon 12y ago
  Small companies tend to launch in limited areas anyway.

walshemj 12y ago

From outside the byzantine complexity of the USA having 52 different sets of law and an overly complex tax system is all downside.

raldi 12y ago

> See health care, insurance, funeral business, hairdressers, and so on. Could you clarify the pattern?

sosuke 12y ago
Each have state licensing and regulation.
icebraining 12y ago
They are all licensed professions in many US states. Not only do you need a license, as they're usually not valid across states, so a Texas hairdresser can't work in California, and vice-versa. NPR had a report about the growth of licensing a couple of years ago: http://www.npr.org/blogs/money/2012/06/21/154826233/why-its-illegal-to-braid-hair-without-a-license http://www.npr.org/blogs/money/2012/06/21/154826233/why-its-...
- rrradical 12y ago
  It's terrifying to think that a license could be required for software development.
  - th0ma5 12y ago
    I know with Android you can, but can you develop for I devices without a license? I understand you're talking government licenses, and that one could jailbreak an iDevice, but can you develop legally without an Apple license?
    - PeterisP 12y ago
      Sure, you can - the publisher needs an agreement with Apple to publish stuff on App Store; but it's perfectly legal to have a hundred "unlicenced" developers (as in, out of Apple Developer Program) working on that product as long as you've got someone "licenced" to handle the submission process. And it's also perfectly legal to develop iOS stuff without any license whatsoever, simply then it won't be distributed by Apple in it's store, and will be usable only on jailbroken devices. There's nothing illegal about jailbreaking devices nor about developing for them. iOS development as such isn't a licenced profession, simply the main distribution channel is very controlled.