WhatsApp: circumvent cellphone texting charges
Airbnb: circumvent hotel laws
Uber: circumvent taxi laws
Amazon: circumvent state taxes
Facebook: circumvent people's anonymity online
Google: circumvent copyrights (take people's content slap on ads)
Amazon's era of sales tax evasion is mostly over. And if anyone is monetising copyright infringement it's not Google (who are somewhat conscientious about this after some lawsuits) but Tumblr (literally made of copyright infringing photos)
(The era of Amazon posting things from Jersey to UK and other destinations for similar reasons ended ages ago)
I was also restricting myself to the question of sales taxes; tax evasion/avoidance among the internet tech monoliths is a wider question.
WhatsApp: cheap plentiful messaging
Airbnb: cheap plentiful vacation rentals
Uber: cheap plentiful taxis
Amazon: cheap plentiful stuff
Facebook: ... umm i'm sure there's something here ...
Google: cheap plentiful access to information
All of these disrupt the slow-moving complacent dinosaurs of the past.
In the case of WhatsApp, it came from telco monopolies overcharging for a particular use of data. I'm certainly ok with that.
And I was initially excited about Airbnb, rideshare, etc, because some of the cheap comes from finding underutilized resources (an apartment that happened to be empty for a few weeks, people who were going somewhere anyhow) and putting them to work.
But I find the second-order effects fascinating. Certainly some of Airbnb and Uber's cheapness comes from dodging regulation and shifting costs onto other people.
"Privatize the gains, socialize the losses" is undeniably a lucrative business strategy, but it's not one I particularly want to celebrate.
This doesn't describe anything that AirBnB or Uber are doing.
Taxis were expensive and horrible because governments created artificial scarcity via taxi medallion systems. They were "socializing the gains", to build off your aphorism.
Uber re-privatized the gains by circumventing this ridiculous system, and we're all much better for it.
"Socializing the losses" refers to groups getting bailed out on taxpayer dime when they fail, and nothing even resembling that has happened with AirBnB or Uber.
But taxi medallion systems served a number of purposes. One of the big ones is reasonable regulation of taxi and driver quality. Another was keeping supply and demand balanced at a level where people didn't have to cut corners on things like taxi maintenance just to survive, which helped keep taxi fleets safe. A third was setting up a reasonably livable wage for career taxi drivers. A fourth, at least in some cities, was creating a de-facto retirement system: since drivers had dibs on medallions, they could invest and create an asset that would fund their retirement. A fifth was creating a revenue stream for cities to that helps pay for regulatory and road costs. Those are off the top of my head; I'm sure there were more.
Now instead a lot of those costs are borne by other people. Uber has shifted capital and maintenance costs entirely away from cab companies and on to random people desperate enough to drive for Uber. Losses are no longer the problem of the cab company, but individuals. When those drivers go bankrupt, society bears the costs. When those drives use public assistance [1], society bears the costs. When they retire and we make up for their lost retirement savings, society bears the costs. And that's to say nothing of the direct and indirect societal costs that come from more traffic.
Similar issues come up with Airbnb. E.g., if you thought you were living next to a neighbor and now are dealing with an illegal one-unit hotel in your building, you are experiencing a loss. If the apartment you rent out is trashed because somebody is running an illegal business out of it [2], you experience significant loss. When rent goes up because people are illegally converting housing to de-facto hotel stock, that is a socialized loss with privatized gains.
I'm not even saying this is necessarily worse. As with the bankruptcy system as a whole, it can sometimes be overall better for society to pay for something. But we shouldn't sweep this stuff under the rug.
[1] E.g., https://uberpeople.net/threads/you-may-qualify-for-governmen...
[2] https://www.cnbc.com/2017/09/01/airbnb-nightmare-homeowners-...
I can only imagine that someone who rarely or never travels would say something like this. The main reason I switched to uber is that taxis are universally horrible, both in terms of drivers and vehicles. It's gotten much better since uber forced them to compete, but they still generally suck.
So maybe you're right, and that was the reason for taxi medallions; but guess what? It didn't work.
> Uber has shifted capital and maintenance costs entirely away from cab companies and on to random people desperate enough to drive for Uber.
Again, this is something that I can't imagine hearing from someone who actually uses Ubers on a regular basis. Most Uber drivers I've talked to love the platform, and a good portion of them are e.g. students working a side job, none of them "desperate" people.
> I can only imagine that someone who rarely or never travels would say something like this.
Your imagination is poor. I've lived on 4 continents and am on an extended trip even as I write this.
We're talking about different kinds of regulation. You apparently care about things being shiny; most regulation, though, is about setting a minimum bar.
In the early, high-growth days of something, regulation is rarely useful because everybody's on their best behavior. It becomes more important when things settle down into a relatively steady state. Then, the incentive to shave nickels and dimes can come out elsewhere. E.g., taxis face significant safety inspections and maintenance requirements because when you use a car as a commercial vehicle, you put a lot more miles on it and you are more likely face safety issues.
We don't yet see these problems with UberX because it has only been going for a few years, and because Uber has a strong incentive to keep from becoming an obvious disaster until growth slows and revenue gains come more from exploiting their market position.
> Most Uber drivers I've talked to love the platform
Gosh, might they have some incentive to only say happy things to you? Gosh, might there be some selection bias in your sample? Gosh, might people not talk about their pain and fears to random strangers?
But if the system isn't sustainable, then in the long term customers don't get what they want. So when we're designing society-level systems, we need to think about society-scale sustainability.
Personally, instead of our hodgepodge of retirement and health insurance systems, I think we should just fund a strong safety net out of taxes. That minimizes barriers to entrepreneurship and avoids distortions. But that's not what America had when the medallion system was being developed, so we got what we got. You can certainly propose a change to that, but if you want to be taken seriously, you have to explain how you'll solve the problems the existing system solves, or at least be honest that you're not solving them.
Who are those all? Taxi drivers or the general public? I'd rather have professional, decently paid, taxi drivers instead of amateur hour weekend drivers making minimum wage at the expense of yet another working class job.
Almost every day.
In London, Uber is a taxi service. The people driving for Uber are taxi drivers, with taxi driver licenses [1], and the vehicles they drive are taxis, with taxi licenses [2]. The experience is therefore much the same. The difference arises from three things: Uber has a nice app, whereas legacy taxi offices are a shambles; Uber drivers are desperate to keep their star rating up, and so might be nicer; Uber subsidises the whole operation to win market share. The app is the only significant difference, in my experience.
[1] https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing...
[2] https://tfl.gov.uk/info-for/taxis-and-private-hire/licensing...
WhatsApp: circumvent cellphone texting charges, making texting cheaper
Airbnb: circumvent hotel laws, making staying anywhere cheaper
Uber: circumvent taxi laws, making taxis and flexible transport cheaper
Amazon: circumvent state taxes (and VAT, until recently, and still the case in Europe, Australia and I'm sure many other jurisdictions), making getting mail-order goods cheaper
PS for Amazon: and also making mail-order a great deal faster.
PPS for Amazon: also cut out many middlemen to make things cheaper.
Facebook: make advertising to particular groups, accurately identified, a LOT cheaper
Google: Make it a lot cheaper to find things online.
But Why stay in tech ?
Aldi + their discounter competitors: Make groceries a lot cheaper by cutting out the middleman
GE, in their day: Make lighting and anything that could be done cheaper electrically a lot cheaper. Or possible at all in the first place.
VW, in their day: make owning a car a lot cheaper.
GDF/Suez: make transporting goods from Europe to Asia a lot faster (but mostly cheaper).
Keep in mind Jevon's paradox. Cheaper does not just mean cheaper, as in less dollars. It also means that whatever becomes cheaper becomes more ubiquitous. Faster. Becomes accessible for more people, either in difficult geographies, or poor, or ... It also means those things become feasible to use for various purposes that they couldn't be used for before. It means a lot more of said good/service will get used. And so on and so forth.
You want to make $1 million ? Become great in a particular subject, and consult.
You want to make $10-$100 million ? Start a company with a niche product, and do it really well.
Want to make $100 million - $1 billion ? Start a company and bribe the government, so that it either pays you directly or forces loads of people to pay for your services (lots of these in Washington and Brussels)
You want to make $1-$10 billion ? Make some stupid ubiquitous product cheaper. Think the most moronic normal things in existence. Breakfast cereal. Grapes. Web search.