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"The question would be whether Uber, Zipcar, Etsy, etc are taking any more of a cut than a a more traditional taxi medallion, a car dealership, an art gallery,
by sjiang 11y ago
"The question would be whether Uber, Zipcar, Etsy, etc are taking any more of a cut than a a more traditional taxi medallion, a car dealership, an art gallery, etc. I suspect they are taking less, since they are transferring a lot of the risk of owning the property and running a business to their contractors."
I would think the opposite. What makes you think the companies wouldn't take maximal profit and make their contractors accept increased downside risk at little-to-no increased net income?
- netfire 11y agoCompetition. If companies are making huge margins by simply providing brokering and marketing services (instead of also providing assets like a car or a gallery), more companies will get in the space and drive the cost down.
- sjiang 11y agoI think you're underestimating the network effect barrier to entry (or infra cost in ZipCar's case). Look at what eBay's head start bought them and what they've done to drive up margins since they won their market. A viable competitor would need to have a significantly better product.