We replaced rental brokers with software and filled 200 vacant apartments
caretaker.com
caretaker.com
I really like the service provider + financial underwriting combination, where you get basically an SLA for them providing a service, where they take 100% of the risk after the fee.
I've never heard of a landlord not allowing a subletter to convert to a full lease upon original lease expiration.
I mean, the alternative is to forego a month or two of rent while you find a new tenant. Unless there's a horrible problem with the existing subletter's credit, but then they probably wouldn't have gotten the sublease in the first place.
I'm not saying it's never happened, but it's going to be rare. I don't really see anything unsustainable or mispriced about this at all. There are already other companies doing it as well in NYC, e.g.:
> We were able to prove that we could make the financials work so long as we were able to fill the apartment within around 45 days of taking it over.
They're prescreening apartments/leases so they're not going to take on an apartment they can't turn around in a month. And honestly, modeling NYC rental supply and demand according to a number of factors (neighborhood, price, condition, amenities, etc.) is pretty straightforward. It's a relatively liquid market.
And like I said, landlords generally have explicit rules about tenant qualifications. They're not going to reject tenants on a whim. Why would they ever say no to a qualified tenant? That's like McDonald's refusing to sell you a quarter pounder.
There's nothing about this that seems obviously unsustainable at all.
I agree with the rest of your comment, but in my experience landlords in hot markets can be pretty capricious. If they know they'll have a steady stream of applicants, many will definitely reject qualified tenants based on personal whims or to hold out for someone they see as "more" qualified or more likely to stay long term. That said, as long as the apartment still gets turned around quickly then it's not really a threat to this business model.
So a better way to phrase the question would be "Why would they ever say no to all qualified prospective tenants?"
Yes they'll sometimes pick the most qualified applicant, but only if you submit your application the same day or same weekend, which is often the case with open houses. It really depends on the landlord however -- for a lot, it's literally the first qualified person to apply, which is why you want to be the first person to the open house and have all your documents ready to apply on the spot, since it might be gone 30 minutes later.
In many jurisdictions, including New York, the law requires that landlords allow subleases. Tenants have a lot more rights than you might think.
In NYC, it's usually required for a subletter to take over the remainder of a lease and then have the option of signing a new lease. The option to simply immediately break the old lease and start a new one usually doesn't exist. (Or if it does, it's only with a penalty for the lease-breaker.)
I don't know why this is, however -- if it's for administrative convenience, legal reasons, or financial reasons. But your idea that "the landlord can agree to the transfer of a lease", well it's true they can, but as a general rule they won't.
Now, in the midst of a COVID-fueled exodus and wave of unemployment, you might legit be screwed…
(Source: former NYC landlord here)
If someone brought me a tenant with good credit scores, income, and references, there's no way I would turn them down.
Why would they?
San Francisco law is that tenants may sublet / add roommates etc. Landlord has 14 days to object. Objection has to be for a good reason. At least that's how I've always understood it.
Can you cite the rule in San Francisco that landlords are under no obligation to allow subletting?
https://sfrb.org/topic-no-151-subletting-and-replacement-roo....
> nothing in the Rent Ordinance allows a tenant to sublet or assign the entire unit to a new tenant in violation of a lease
In San Francisco, once all original tenants have left, landlord can reset the rent to market rate.
So you can sublet through end of your lease (which is what most people want to do). After that, you don't care.
In my country, me moving out and saying I won't continue to pay, while the contract end date is still far in the future would of course be a breach of the contract. But that doesn't mean the landlord then can let the house sit empty for the rest of the contract time and force me to cover their loss. Landlord would instead have to try and minimize their losses by finding a new tenant, and what I would owe the landlord would be their costs to do so and the time the apartment stood empty.
Edit: "mitigation of damage" might be the US term for it. From Cornell: The mitigation of damages doctrine, also known as the doctrine of avoidable consequences, prevents an injured party from recovering damages that could have been avoided through reasonable efforts. The duty to mitigate damages is most traditionally employed in the areas of tort and contract law. To me that reads like if you want to void the contract, and the landlord doesn't accept a reasonable tenant to take over, the landlord might have to carry their losses themselves. My guess (given laws about renting being very in favor of tenants) is that there most places even might be explicit laws allowing the tenant to do this.
It does sound unfair, but see here for supporting sources https://www.nolo.com/legal-encyclopedia/tenants-right-break-...
Going into court you have no/low knowledge of what your landlord has actually done. If they pull out their ads they posted on the internet or on some zero readership newspaper. The judge will see they have made an effort and you probably are grasping at straws because you have nothing in the way of proof. If you’re lucky, judge would hear some expert testimony (realtor) that says the apartment/market/etc should have been filled within 1-2 months and they feel it’s highly unusual the unit would remain unfilled for 6 months. But even still, if the law says the landlord is required to market the property it might not imply they have to be good at marketing the property. So there’s a grey area where it could go either way, and he can proof that you can’t match.
At least with the leases I've signed, if they didn't intentionally fill a vacancy with a decent candidate they would be opening themselves up to some contractual legal exposure
It's very possible that the service is priced too low in order to get traction, but there's nothing inherently unsustainable about taking on risk (with a reasonable cap no less); it just comes down to what the company's placement rate ends up being.
As long as they can find tenants for at least 6/7 (~85%) of their apartments, they're breaking even. Clearly, they think that's an easy target to hit.
(Another way to think of it: one service they provide is amortization of the risk of not filling the apartment over their entire catalog of apartments.)
this is like half of all businesses in SV
I'm clutching my pearls so hard after reading this, I may have uttered a "I do declare..." and wiped sweat from my brow as well. :)
When you sign a lease agreement, you get a guarantee that your rent will not go up during the term of that agreement.
So, if you sign a lease for $1000 a month on Monday, and on Tuesday the market rent for that area spikes to $10,000 a month, you’re locked in with a lower rate.
If I were a landlord in Oregon, given the above law, I would just only rent month to month. Breaking a lease becomes easy, but you also lose the pricing guarantee.
So you could combine that with Oregon law. Or use the German system someone mentioned.
Basically anything but the unfettered free market is going for home tenancy, given the obvious and large power imbalance between renters and landlords.
But there’s no way you’re going to add risk into the market without that having some effect on pricing.
The landlord just CANT terminate the lease, ever. (Unless he is going to live in the place herself or the tenant stopped paying. And even then, it takes a long time to get a tenant out.
It works just fine.
I'll give you it works better than some other places because the rights are balanced.
But 3 month termination notices are just an anachronism. German "bureaucracy" still think contracts are forever when they're getting shorter with time.
Yes, I'm giving you the 3 months notice when you could terminate the lease, let's say, with 1 month then have a queue of 10 people ready to rent it again (were you not petty)
I'd wager that it's really up to you to familiarize yourself with local laws and customs.
Can just lie. My last landlord said he was moving back in because of family circumstances. As soon as he kicked me out he renovated it and put it up for sale.
Didn’t get an offer he was happy with and was asking me if I wanted to move back in 12 months later.
Tenant said "he moves back, of family"
But that never happened, just rented out to the next person for a higher rent.
"Now, I'm you're broker so if there are any problems throughout the lease, feel free to contact me. This isn't just a one time thing!"
We literally emailed/called him two weeks later and he ghosted us.
When we were moving out of our apartment when our lease was up, he was around showing another unit, introduced himself, asked us how long we lived there, etc
We banned letting agent fees charged to the tenant. Miraculously, landlords didn't find paying £250 for a contract renewal value for money.
Rents continue to go up and down, but now tenants know they are spending money on their flat or house, rather than paying inflated fees to a letting agent/broker.
All fees are passed on to the consumer in some way, it is either a line item or hidden
The consumer price depends only on supply and demand. Fees don't influence none of it, only the cost of the selling party and thus his profit.
Thinking that labor costs do not impact product costs is grossly ignorant.
No one is arguing that labor cost doesn't impact product cost, but the fact is that in general it doesn't impact product price.
Or to put it the other way: can you imagine a business not increasing product price as much as they can, regardless of the product cost, as long as the supply is matched?
If they can increase the price, why would they wait for cost to rise before doing so?
The outcome is that business/landlord already charge as much as they can, and increased cost doesn't change the product price, since they already chareg as much as they can.
Sure not all prices are infinitely elastic, but if Labor costs out strip the ability to prices to absorb them that do not mean the business simply magically makes them go away, no that business goes bankrupt and wages go to $0.
Owners / Investors demand a return on investment, if the market average is 8%, and business x is only returning 4% why would an investor continue to keep their capital there?
Worse still if inflation is 3% and the business is only returning 2% the investor is LOSING MONEY by keeping their capital in the business, better to cut their losses and move on
This mythical position where by businesses just "absorb the cost" because the prices are not elastic is pure fantasy
What are you on about? Of course McD will change prices relative to input expenditure. You can even see this across all the countries they serve. If there were to be a significant impact on margin, they can increase prices.
All fees are passed onto customers, that’s how you calculate profit margins.
>All fees are passed onto customers
is not even close to correct.
All businesses will increase prices to maintain the profits they need, up until what the market will bear - which is why taxes will also not end up pushing it too far, the gov isn’t stupid.
This is disproved very easily by reality - most places have increasing rent YoY. Same goes for house prices.
Because of low supply and large demand, like you say, landlords can charge monopoly prices. Not sure why you claim they don’t go up?
All this proves is that evolving market conditions lead to changes in price. Try charging 2030's market-rate rent in 2021, and see how many offers you get.
you are simply wrong
If local regulatory conditions cause your labor cost to go up, they are absolutely allowed to (and will) raise prices to compensate.
Like, lets say that the government adds a 20$ tax/fee on fast food, per burger sold. Clearly McDonalds would no longer be able to sell burgers for 4 dollars.
Thus price would increase. Or supply of burgers would go down (thereby only leaving higher priced burgers in the market).
But that’s just the “efficient market” part of this. A fee like this could very well be an inefficient rent-capture that has managed to make its removal more expensive in the short-term than the short-term cost of allowing it to remain. Said less charitably, it’s a racket.
I would have thought that on HN of all places, where so many folks are attempting “disruption” (ie finding these unnecessary market inefficiencies and stepping around their cultural/legal/systemic barriers in order to reap some of the otherwise captured value), this would be better understood.
Overhead is overhead. Trying to pretty it up with fancy language like "moving wealth around" and "changing captured value" doesn't alter the fundamental economics.
Brokers should be a niche service at best.
And the broker they used basically does all the listings in the condo complex, so he has a steady flow of interested and vetted renters as well as standard leases that cover the specifics of the condo complex, as well as a relationship with the management office to get the renters approved quickly and get them keys for amenities and such.
In our case we pay the broker, but I can see a lot of value in their services for the landlord.
Do they have to have their own fulltime electrician on staff or are they allowed to contract it out? Why the insistence that the work be done by their own employees instead of contractors?
The broker is an independent third party to whom you pay a fixed fee, and have no extra cost or regulatory liability beyond that. A no brainer
Previously it had seemed like nothing could get rid of them -- landlords mostly didn't care since it was mostly tenants who paid them in the end.
But COVID suddenly made everyone a bit more willing to consider other options (like virtual tours), and with some rents down landlords are perhaps a bit more willing to realize that if there's no broker's fee, tenants can pay a little more.
I'm actually really excited about this lockbox technology, I genuinely think it could be the key to "unlocking" competition again.
My only concern is that a lot of buildings don't have anything obvious in the front to lock it to, as well as plenty of buildings prohibiting tenants from storing keys in lockboxes in front, both because anyone can take a hammer to one and smash it to get the building key, and also because they don't trust it's not someone running an AirBNB.
[1] https://www.nytimes.com/2021/05/27/nyregion/broker-fees-real...
[2] https://www.timeout.com/newyork/news/you-will-still-have-to-...
For example, a new law in Germany to apply the "who hires pays" principle for brokers in the renting market basically made the renting "broker fee free" for renters. Previously, the landlords would hire a broker that needed to be paid by the renter. Why not, it doesn't cost them anything, and at least they don't need to have a contact with the potential renters. Now, that they have to pay for the brokers service themselves, it's suddenly not that valuable to them.
[0]: https://en.wikipedia.org/wiki/Principal%E2%80%93agent_proble...
It works similarly when software is chosen by people who have to use it versus those who do not. IDEs and text editors are usually chosen by the users, so there is competition on usability between different options. Timesheet and other HR software are usually chosen by upper management, and the people actually using them cannot switch, so there is not the same kind of competition on usability. Instead, they compete on other things that make them more appealing to those who can make the decision.
Tenants can't "shop around" for a different letting agent that won't charge them £250 for a £50 credit check. Landlords can.
Yes. The problem is that the one whose pocket the money comes from is not the one who selects the broker. Thus the person with the financial incentive to make that choice wisely is not the one making the choice. This is why it's a principle-agent problem.
The majority of apartments in certain cities charge this fee, so if you care to find one that doesn't you'd have to look for advertisements explicitly mentioning "no agent/broker fee". Maybe it's just my circle, but even the people I know that will look in less desirable locations for cheaper rent do not bother to look for this. It's also not far off from various psychological tricks seen in business - consumers do not behave rationally.
I'd argue it's even a bit worse than other sticker price bait and switch situations, because how many people know to look for this? Mostly only people that have signed a lease in one of these cities before, which for a place with a lot of transplants and subletting can be a surprisingly small number.
At some point I wouldn't even call it irrational to ignore the fee. Once you've decided on a place and receive the rental app to fill out, are you really going to turn back because you found out about the agent fee? Especially as time runs out to find a place and you realize more than half of them do the exact same thing?
I honestly wouldn't be surprised if some landlords have come to an agreement with the agent they use to get a bit of a kickback from the broker fee, unbeknownst to the buyer.
Nothing.
Clearly brokers are doing something or else people wouldn't pay for them.
My theory is the broker fee has positive selection for wealthier tenants, which for every property - low or high rent - makes for an economically better tenant. Raising the rent has the same effect. We care that there's cheap rent because shelter is a basic human right, and we appreciate that spending tons of money on rent couldn't possibly be good in a positivist economic sense, but of course raising the rent also selects for a wealthier tenant.
Replacing the brokers with software has a similar effect. If your users feel comfortable using a complicated website with no human beings involved, they are going to be wealthier.
This comes up everywhere. For example Oscar selects for a healthier insurance pool by being a complicated app - old people want real human beings to talk to and are turned off by apps, and they are also more expensive for insurance to carry, so it's a "win" for Oscar. Credit card only restaurants with lines make higher revenue because lower-ticket cash paying customers are substituted by higher-ticket credit card paying ones. And the iPhone is a $800 phone versus a $300 Android one, no wonder iPhone users spend 2-5x as much on IAP.
It's not unlike the role a recruiter plays for jobs.
In many cases (not talking about NYC here), what they're doing is simply blocking access to an apartment. You see an apartment, you have to deal with the broker / real-estate agent / makelaar. Or - you don't even see it in the first place, since it's only available via an agency.
This is similar to setting up a roadblock and collecting a transit tax; or the "troll under the bridge" from folk tales.
That being said - In some cases and some places brokers can help apartment seekers filter relevant apartments, and can help convince both the seeker and the landlord to compromise, agree to some arrangements to seal the deal. Another benefit of such type of apartment brokerage is that a broker with a minimum of reputation would not try to scam you (rent contract scams are a thing in some countries); and may be able to exert some pressure if, say, some serious problem is revealed right after you move in and the landlord doesn't want to address it.
They were, pre-internet. It actually made sense then in NYC with such complicated and massive amounts of inventory.
They don't make sense anymore. The only reason they still exist is because lazy landlords just want to stick with the system they've always known, because it feels "free" to them. In reality they get lower rents, but that's harder for them to see. And it's a problem of coordination -- as long as most other properties use brokers, you really don't have a reason to change.
The slow increase of no-fee listings has changed that. But it's still slow, and a lot of it is new buildings. It's hard to get landlords who have done things the same way for 40 years to change.
Just like the real estate agent business. Sellers have the option to sell it themselves, or use an agent. Agents do better and more organized marketing, handle the paperwork for the transaction, and offer help in prepping/staging the house. Etc.
When I rented my place in NYC some years ago, the broker fee was meaningful to me. Once I paid it, I was less likely to want to move since I'd have to pay it again vs renewing my existing lease which did not involve another broker fee.
There's a great Joel Spolsky comment[0] that explains why landlords use brokers. They perform work that would otherwise be done by the landlord.
The only reason landlords deal with them is that it's easier for them to do so, so why not. It's pervasive enough, as a quirk of history, that it's tolerated. They certainly do not provide value that matches up with their fees in most cases.
Rents may go up, but it will be only a fraction of the insane fees retail brokers in NY charge. It needs to change.
If you're from Germany, you have nothing to compare these people to, they run a racket that would be illegal there to begin with. They're nothing like the kind of rental agencies in Germany, they are individuals who basically figured out how to scalp entire buildings worth of apartments.
> they run a racket that would be illegal there to begin with.
Perhaps making it illegal in nyc as well, as op suggested, is the solution? Rather than letting a tech company replace the scalpers with a scalping monopoly
;)
In the mean time: software can solve this problem now. Now sounds good.
Software can displace a middle man, and replace it with a monopoly. Once monopoly power is in place, Software will then become more and more expensive until it is as bad or worse than what it supplanted. Investors will get rich, there will be a brief bubble where some people will get a VC-funded good deal, and then nobody else wins.
Because neither of those statements is exactly controversial.
Cutting out the middle man does not by definition lead to monopolies, especially not when the market has tens of thousands of sellers (if not orders of magnitude more), and tens of thousands of buyers (or, renters, in this case. And again, if not orders of magnitudes more).
It can't be quite this simple. If your renter is paying $X to you plus $Y to your broker, then their willingness to pay for the apartment was at least $X+Y, and you're leaving at least $Y on the table. In theory there should be a lot of market pressure to shrink Y. So the question becomes, what transaction costs are getting in the way of that? Or maybe, is the $Y actually buying something that's of value to the landlord?
How can that work? Landlord (absent regulation) set the rents as high as they want/can get away with. What's the difference between 100/month rent + 50/month broker fee, and 150/month rent + "zero"/month broker fee?
Of course, the real problem was that the landlords did not both to negotiate the brokers fee. There was a maximum broker fee defined by law, and everyone just charged the maximum. Not anymore!
While searching for my current apartment, I was month-to-month on my previous NYC lease and was therefore 1) not a complete noob to the city and 2) could be super picky and I kept getting the sense brokers had no patience for someone like me.
Many of the prospective tenants do not even find out about this until it is time to officially apply! Since there is usually a deadline to find an apartment, and most apartments will have (proportionally) the same exact fee, the "customer" is really a captive.
Ironically, the person you are replying to tried to actually be a customer with the agent, but since these people have no need to sell apartments (they will sell themselves in NYC and Boston), you're right - why bother? The real key is to become buddies with a few landlords, that's where to spend time.
Additionally, the landlords will often give first dibs to internal housing sites for local universities or to other current tenants to spread to their network. So it frequently doesn't even require posting on a public site, and in these cases the agent only becomes involved in the situation when it is time to fill out the rental app. This is especially common when people move for grad school or choose to stay after undergrad and want to live near their peers/friends. So you can imagine the sheer amount of money that gets collected for 0 return in Boston.
I'm not against real estate agent commissions in general obviously, but the way rental brokerage fees work is an absolute scam in parts of the US.
And yet, landlords keep using it. A $2500/month apt in NYC will cost $34,500 the first year -- but only $30,000 goes to the landlord. Can you help explain why a landlord would freely give up $4500 (standard 15% fee) in potential revenue?
For someone new to the market it is essentially a hidden fee you find out about at buy time. Since 90% of places do this it would be a huge hassle for a tenant to try to avoid the fee, especially with the pressures surrounding shopping for housing. It's not the same at all as changing a list price.
So, like Airbnb? Last I checked, that platform -- without a person -- also charges renters about 15% or more. And you don't even get to actually visit the place before you commit to paying the fee!
Before you try to argue that landlords wouldn't pay them if they didn't contribute - the landlord doesn't pay! In cities where the landlord has to pay, you will find agents are used much less often and charge cheaper prices for these sort of rental services. The problem is when the landlord chooses the agent but the tenant has to pay. Every agent just charges the max allowable fee, and the majority of landlords stick with this scheme, whether out of stubbornness, loyalty, or kickbacks I don't know - but it hurts tenants far more than landlords. Otherwise you are correct, landlords would stop using them unless their prices went down!
Let me know when a real estate agent makes their own website that gains traction across the city.
Many software companies fix the problem, disrupt rent-seekers with reduced costs, only to later become rent-seekers that have the market power to increase costs.
10 years ago I would have entertained owning rental properties. I'm so glad with todays climate I didn't go down that path!
It's like the same idea of Uber and Lyft. Less human involvement = better world /S.
edit: fb marketplace might get the brokers first, most of my friends found their places via landlords posting there
In other cities property managers do the same thing, but they skim off the top of the rent checks and provide more services.
But really all the middlemen in housing are awful.
It's like in Canada where tenants can hire a broker for "free" to find a rental. However the broker just collects 1 month rent from the landlord. Do you think the landlord just absorbs the cost? No, the quoted rent was just 8.4% higher when the broker mentioned he was a broker.
When the burden is paid by the renter, there's no efficient market because renter has no choice in the broker and the owner doesn't care.
It’s no different than the ridiculous notion that “the seller pays broker’s commission”. It’s baked into the price and the buyer is still paying it, otherwise a home would cost X% less.
The National Association of Realtors is a huge political lobby that works to perpetuate the racket.
Compass started as Urban Compass and wanted to distrupt the racket! But eventually decide to join in on it and become a VC backed brokerage with better “technology”.
No one has yet been able to educate consumers on the insane mismatch between value and price among RE brokers.
is it still better to do that? yes. Because i can now compare the cost of rental, fees included on a comparison site, instead of looking at the place i want and finding it out it has a hidden charge.
this is why they changed the law in the uk so the landlord has to pick, becasue it means they will be incentivised to put it into the rent, and this way its STILL better for the renter because now they are able to compare the full costs.
Brokers have done a good job of telling landlords that if they don't use a broker, or use a cheap one, that they'll get bad tenants and that'll cost them a lot in the long term. Good broker = good tenants = worth getting 8.4% less, because you'll lose more than 8.4% when a bad tenant burns the place down....
I'm unconvinced that the above is true, but it's certainly the message brokers (fairly successfully) give landlords.
I still think having this on a platform where a company is making a flat $250 fee (or whatever) is extremely scalable for the company and would benefit both the landlord and tenants.
Because in general, there have been easy-to-find examples in the past couple decades of rents going up 5-10% every year for folks in certain places with aggressive landlords. Were they willing to pay 5-10% more suddenly in year n+1, or were they charged less than the maximum they would've been willing to pay in year n?
Its like when a broker sells a house and says the seller pays the fee. In reality the buyer is the only source of money in the deal so they are effectively paying the fee.
At least in California, the broker’s fee is an expense of the landlord that is not directly passed on to the tenant moving in. If the cost is passed on, it’s hidden in the cost of rent.
Also, the landlord can claw back part of the fee if the tenant moves out before one year. So, it makes more sense as a landlord expense.
Both are parasitic entities that cause more harm to end users than benefits. The problem is that they control the information flow and supported by governments, hence we cannot eliminate them completely but can try to keep them at the bay using technology we can control
What if the replacement is worse?
1. Don't like tempting fate.
2. Am very aware of the limits of my imagination. 15 years ago, I probably wouldn't have been able to predict Facebook having the sorts of downsides that are now glaring.
Consider what would happen if brokers disappear and your application is rejected by an AI from a company that most landlords use.
And as for Uber/Lyft, there's no doubt that they provide a much improved experience for the consumer.
It's very easy and edgy to disdain the importance and positive impact of Uber and Lyft, but the truth of the matter is that the ride share revolution already introduced collosal improvements in quality of service in entrenched markets such as the old taxicab services.
I recall a time where unscrupulous taxicab services fraudulently inflated prices and made up twist-and-turn paths to fleece customers, and we're free to act as organized crime.
With rideshare services, you get routes and estimates generated a priori and in a deterministic way, and more importantly through a really auditable service. With rideshare services, a nasty driver is no longer totally shielded from criticism or consequences. With rideshare services, quality of service became something that was important to drivers.
And we have to than the Ubers ad Lyfts of the world for that.
- It is now cheaper for the average person to get a ride to an airport/bar than it was before. It is safer, more predictable with timing, and more predictable with pricing.
- Uber drivers make more money today than taxi drivers used to/or do today. There are also way more job openings in this than there used to be, with less friction to get involved.
The world is not a zero sum game. Technology made this a win-win long-term although there were already some people caught in the middle with old business models. However, that really cant be a reason for us not to move on.
I'm happy the services exist but they are not cheap, at least not here.
I occasionally used to try these services (I have thousands of rides so this used to be relevant). Lyft/Uber are way better.
I am also still extremely skeptical they contribute to higher prices though. If Uber and Lyft did not exist I believe (just a theory) that taxi prices would be much higher.
Perhaps someone who lives in a city where ubers are banned could state if taxi prices have grown over the years.
Can confirm. Arrived at SFO late the other night (1130pm-ish) and Uber wanted $80 to take me from Passenger pickup, to my longterm parking lot which was probably 3 miles away.
I ended up taking a Taxi for $12 + tip.
Now that we're talking about public companies, there are a lot of them. Any concern about price gouging you might have should extend to all these companies.
If not, why not?
So it feels that they'll have to change something big to meet expected returns.
And the fear is that, as they succesfully managed to kill the incumbent, they are free to change the most obvious parameter, the pricing.
I heard the same thing about amazon. That the inevitable huge price increases are coming. Hasn't happened yet.
Is it? Or are venture capitalists just footing the bill?
Whatever model of "price" you use needs to take into account the fact that not only are Uber and Lyft lighting enormous piles of Saudi money on fire to "gain marketshare" but that the actual drivers are being paid peanuts. This isn't pure win, it's more like Nestle handing out free baby formula in Africa to destroy the "domestic market" so to speak.
Same reason they pretended to work on flying taxis and self-driving cars. The multiple for high tech companies is greater than the multiple for taxi companies or even basic Web2.0-style one-trick app companies.
The US should be blessed that Saudi is so bad with its money and so willing to subsidize Americans.
It destroyed the money of people who had bought up medallions. That's it. Having medallions was not a long term solution when the city can now charge rideshare services for miles/minutes/rides on the road without any hard cap for politically connected incumbent players.
The financially-sustainable transportation market. Companies without endless amounts of capital that actually have to break even or make a profit to keep the lights on.
It's not just the medallions, they're literally selling the service itself at below-cost in many places and have been for years.
Since they're public, its any shareholder and the public market. But that also means they're probably not still raising rounds like they were.
Cab drivers have lost job stability, but others have benefitted.
But to the larger point: medallions made NYC yellowcabs more expensive than the market demands, and they’re still cheaper than ridesharing.
Uber was a god-send. You call up the driver, watch him approach on your phone, step out when he's there. Regardless of where you were, you could get a ride from there to wherever you were going. Rides for which auto-rickshaws used to charge upwards of Rs. 300 (~$4), can now be had for Rs 150 or less ( < $2 ).
Just because some countries don't value competition - and prefer to cater to existing entrenched lobbying groups - is not compelling evidence to the average American that Uber is bad.
On average, in certain locations. In others, not so much. And let's not forget surge pricing. Or people living, or wanting to get to a place, along low-profit routes. Or people with disabilities.
> more predictable with pricing
Depends. Regular taxis tended to cost a bit more, but had much lower variance.
> Uber drivers make more money today than taxi drivers used to/or do today.
That seems implausible at best.
> There are also way more job openings in this than there used to be
These aren't jobs, though. They're gigs. And highly unpredictable ones, wrt. your take-home pay.
> The world is not a zero sum game. Technology made this a win-win long-term
Absolutely true.
The problem isn't technology, it's businesses - particularly businesses that purposefully play a negative-sum game, where the losing side is society at large. Externalizing risk, costs, performing regulatory arbitrage. Making owners much better off, customers a bit better off, at the cost of making everyone else slightly worse off. And much like with greenhouse emissions - a bit here, a bit there, barely measurable puff, up until it adds up to a global crisis - these companies are killing civilized society, one VC-subsidized shiny app at a time.
More predictable as in you know the fair before you get in. I did have to take a taxi in Los Angeles from the airport earlier this year and the guy wouldn't tell me how much it would cost. Gave me a ballpark that was $22 less than what it ended up being.
There's a long, long, long list of reasons Uber has screwed over great many people, and continues to. From regulatory arbitrage, duping drivers into unprofitable deals, lack of proper insurance, privacy violations, harassing journalists, harassing employees... This has been covered non-stop on HN for pretty much a decade now. I invite you to do some searching, and you'll quickly see how Uber is one of the most ethically challenged companies of the 21st century.
> More predictable as in you know the fair before you get in.
Yes. And by higher-variance I meant that you never know what fare you'll have to either accept, or abandon the trip. With traditional taxis, the prices are variable, but it's easier to ballpark them (at least traveling in the city you know), and they have much tighter range.
I guess if you prefer being able to ballpark a taxi cost then that's cool! You can still use taxis. But most people prefer to see the price before they get in. Certainly the choice existing is better for the consumer and has helped keep taxi fares lower - even if you choose not to use an uber.
Stop defending Uber. Even if you work for them it is incumbent on you as a citizen to be honest about what they were doing.
Do you have any evidence, for any taxi network in any city on the planet, of that taxi network doing anything even remotely as illegal or antisocial as Uber has been (and still is) doing? Uber's transgressions are well documented, there is great many of them, and quite a few were done at scale.
For the "deserving" part - they were there. Good or bad, I don't think any business deserves being steamrolled by an aggressive foreign multinational corporation, with practically infinite budget to undercut competitors and keep law enforcement at bay. Local businesses don't get to break the law without impunity.
For being better to their employees, I honestly don't know. But in all the rides with traditional networks I took over two decades of my life, I don't remember any driver actually complaining about their job. Ironically, the drivers of Uber-like[0] services keep complaining all the time - mostly about constantly changing terms of contracts, and constantly testing new kinds of customer acquisition schemes, that tend to take away money from the drivers.
> But most people prefer to see the price before they get in.
I never said I didn't want it either. I like this feature - and guess what, I had that, way before Uber was a thing, thanks to a private company that fought for improvement in transport regulations. That's how I know sociopathy wasn't necessary to disrupting the taxi market.
--
[0] - I don't use Uber itself, it's a matter of principle.
According to Uber?
> Additionally, it has enabled millions of people in cities to skip buying a new car/any car which saves tons of emissions.
Citation needed. I believe the last analysis I read showed that most people used Uber etc to replace transit or walking, which means it adds to emissions.
I've used taxis in multiple cities that I booked through an app and got a fare ahead of time. At this point Uber is "a taxi, but with no guarantee of quality* and no cap on how many of them are creating traffic"
*GPS routing does no good when the driver clearly can't read a map and doesn't know where they are or how to follow directions.
- Taxi drivers (outside of NYC) in the US are going to get less rides per hour than uber drivers
- Taxi drivers traditionally have to give a larger share to the taxi company than uber drives give to Uber. If they are independent then they have identical car expenses as an uber driver.
I 100% believe that a lot of Uber drivers barely break even. I guess I'm fine with that - I bet if you try to do that 9-5 and can't do your own car maintenance you are going to be inefficient at it. I had a friend in Los Angeles who would only work nights, was fine working 2am, and could do basic tire/oil/car repair. He made 2x what he had been making as a busboy at a restaurant. I don't see why this is considered a bad option for people, especially since he enjoyed the flexibility.
You can always take a regular cab. Low profit routes were pretty much impossible to get pre-Uber. I am almost certain that Uber is more likely to obey disability laws than "Joe's taxi" with a few cars.
> Depends. Regular taxis tended to cost a bit more, but had much lower variance.
My experience with cabs is calling a dispatcher while in route and getting a price. I was charged $30 for a two mile trip to the train station before. No reasoning. Also they were much less likely to pick up minority passengers, or people in poorer neighborhoods. Also "credit card machine was broken" very often. Also you don't know the route the driver will take. I guess my experience with cabs pre-Uber was different from yours, but it was incredibly high variance.
> That seems implausible at best.
Many places you had a gatekeeper. You can't just ride a taxi, and would have to purchase a medallion or sign on to an existing vendor where there's much less competition. They would also be much less flexible with hours
> When accounting for the ride-sharing company’s commissions and fees, vehicle expenses and a modest health insurance package, Uber drivers end up earning just $9.21 in hourly wages, according to a new study from the Economic Policy Institute, a left-leaning nonprofit think tank based in Washington, D.C.
https://www.marketwatch.com/story/this-is-how-much-uber-driv...
with that said, this is all supposition, i just find it a reasonable argument.
It maybe made sense though, as your payment was your license to work, and selling the medalion on was your retirement plan. Uber screwed this up - but my feelings are mixed.
The problem with that is that there is a supply of cab drivers and demand for cabs that drives the price. If you put in a medallion system, the price of the medallion will be bid up such that the cab driver's wage is in line with the market wage. You can't just wave a magic wand and set prices without unintended consequences. So what happened was cab drivers had to take out massive debt to finance these medallions or work for some middle man that is essentially a financing arm. And when the price collapsed, they were stuck with this debt and some even got bailed out by taxpayers.
I wish Uber was around when I was younger. I had a car and a lot of spare time. I would have gladly accepted a low wage if I had a few hours to kill. No other job affords that flexibility which is probably why its so popular.
Knowing the lawsuits from people who've been refused rides from a regular Uber because they have a service dog, or their wheelchair 'probably won't fit' (I think I can tell you whether the wheelchair I usually put in the trunk of a car is likely to fit in your trunk, thank you), I am not.
But there are also specific accessible taxis. How do I call an Uber that will take a powered wheelchair?
No idea how it works in practice but it’s a thing in Toronto.
In cities, that's absurd - car services existed for decades serving just this part of the market, and they let you schedule in advance!
In the suburbs and exurbs, probably less so, but this is where everyone has a car as a prerequisite for living in a house with a multi-car garage.
You could schedule in advance. Now having them actually show up? That was debatable. lol
In cities, there were were either no taxis around in certain neighborhoods, or they simply would not come at all even if you called and asked the taxi company and the dispatcher told you they had sent a driver. Both of these I experienced personally.
Sure but that doesn't work very well for when you want to spend the weekends drinking. The cities in the US that have grown the most over the last 10 or 20 years are still very much suburban and lack good public transportation. The lack of low cost and convenient transportation services quite literally resulted in fatal accidents.
Technological progress disrupts markets.
The only thing that changes are the cast of winners and losers.
Society sometimes prefers the greater good (fairness) by reigning in the powerful.
They have also become very unreliable, with no available drivers in some areas or 40+ minute wait times, and then the driver cancels. The majority of drivers switched to food delivery it seems. Pre-pandemic you could get a driver within 5 minutes no problem in some areas, and now may be waiting 30+ minutes.
I took a trip to Asheville and Uber/Lyft service was virtually non-existent, you had to rely on local cab companies to get around.
This is no longer true. In my town, now that the firehose of VC subsidies has dried up, Uber costs more than taking a cab, even without surge pricing.
Hmmm, That must depend on the market as it's not necessarily the case based on discussions I had with both in Ottawa.
(note, when Uber first started, that was the perceived story - almost "free money!" for bored white collar workers with a car and few hours to spare here and there. I've had people in $50k, $60k cars drive me around, to "meet new people and have fun". However, once full-time professionals joined the ranks, and did math on maintenance and insurance and fuel etc, the story RAPIDLY changed).
I'm not surprised its gone down - probably a sign that it used to be very profitable even if not as much so now. I do know plenty of people that can repair cars themselves (one of whom has been uber driving foe years) so perhaps it will only work out for those people. Which seems like a 100% decent outcome.
There's an implicit assumption there that taxi driver gets less rides and I don't see why that is necessarily true.
More broadly, I think both Uber and Taxi drivers have significant distribution, and it appears there are both Uber & Taxi drivers who are better or worse at maximizing their rides and income. I've seen both drivers who just "do what app/dispatch tells them" (and are constantly complaining about their income level or nature of rides), and drivers who actively seek out timing, areas and locations that give good rides. This is not the same as parking in front of hotel and hoping for a long drive - it's a fairly active dynamic work.
Overall though, active engaged Taxi drivers seemed to find it a more predictable, profitable engagement that sufficed as main income for their family; whereas I have not gotten that sense from Uber drivers in the 12-18 months prior to Covid.
Of course, while I took taxi or uber twice a day for several years in Ottawa, this is still anecdata and limited sample - absolutely! But that's largely my point - we discuss Uber and Taxi as if the situation in London and San Francisco and New York and Ottawa and so on is the same - and it absolutely is not.
One thing that seems to often be missed in these discussions as well is edge cases; even if in a place Uber is a great alternative for 80-90% of folks, I find it is far less dependable if you're in a less active area, during less active time, and/or need Uber planned for a specific time.
Due to a decade of massive losses. This isn’t their real long term cost. It is a scam to make people think it’s cheaper and run normal taxis out of business
What we have is slightly higher pay until your car breaks. No retirement plan.
The drivers lose out.
The customer rides in someone's personal car pays a little less sometimes but a lot more (demand pricing) when they really need it.
Uber/Lift lose money on each ride but will rise prices as soon as they can once you have fewer choices.
Zero sum indeed..
The relationship between public mass transit, and private taxis (and private mass transit) was cooperative. The relationship between city transportation systems and Uber is hostile.
Their full impact is not yet decided
No it's no longer cheaper "to get a ride to an airport/bar than it was before." Especially if one considers "before" being before the pandemic. This increased price of Uber/Lyft has actually been quite a common news story of late[1][2][3]. Incidentally "why is uber so expensive right now 2021" on Google search has over 15 million results.
What evidence is there that an Uber is safer than a taxi? Also how can a model with surge pricing be more predictable than a taxi which has regulated rates per mile and per minute?
>"Uber drivers make more money today than taxi drivers used to/or do today. There are also way more job openings in this than there used to be, with less friction to get involved."
Do you have a citation for Uber drivers making more money than taxis drivers? What is the true earning per mile for an Uber/Lyft driver when you factor in auto insurance, maintenance, repairs and vehicle depreciation?
The "friction" to becoming a taxi driver is pretty minimal. One just needs obtain a hack license the requirements of which are pretty nominal.[4] Especially so if you don't already own a car. Uber/Lyft seem to be having great difficulty staffing up right now[5]. I'm not sure that would be the case if it really was such the great(100% win) opportunity you make it out to be.
[1] https://www.nytimes.com/article/uber-lyft-surge.html
[2] https://www.washingtonpost.com/technology/2021/06/09/uber-ly...
[3] https://www.curbed.com/2021/06/uber-lyft-expensive-new-york-...
[4] https://nycitycab.com/HackLicense.aspx
[5] https://www.theverge.com/2021/4/7/22371850/uber-lyft-driver-...
The older I get, the more I prefer dealing with flesh-and-blood people rather than self-service solutions. Life is too short for dealing with systems that go out of your way to railroad you into a bad deal.
Also, not likely to change the landscape in the way Uber did, the scale is so much smaller and no one is getting fooled into some gig economy loophole that exploits workers.
Will probably end up with its own problems, but can't think it's worse than some brokers having to find another job/get creative.
...why sarcasm?
The entire premise of technological and economic progress is outsourcing repetitive mind-numbing tasks (whether farming or showing apartments) to automation.
You're just describing regular old beneficial economic progress -- the reason why we're not all still farmers.
And if Caretaker becomes a massive success, then competitors will appear, which is the basic economic force that prevents prices from rising too far. All of which would be wonderful.
If they can cut that 15% to 1% and this field ends up being competitive then sure.
But, they're probably going for a monopoly play here.
So of course the percentage will be cut. That's how competition works.
Still, Uber is not sticky. Drivers aren't forced to use it exclusively (fun things would happen if they tried to pull it off, something something employees). Brokerage websites most likely will demand you don't post your apartment on multiple sites. This will encourage concentration.
Kind of like people looking for used textbooks will check eBay, Alibris, and Chegg.
Of course there will be concentration, that doesn't mean it's going to be a monopoly. It's just going to be the usual 2 main competing companies with a 3rd slightly-different company -- your Coke, Pepsi and RC, or your AT&T, Verizon and T-Mobile. It's the usual market pattern.
Did you really think investors were willing to sustain a 12 billion dollar loss for a shot at a 1% margin?
Citation needed. They've raised prices in order to be sustainable, but you're going to need to show some kind of actual evidence of collusion. Extraordinary claims require extraordinary evidence. We can't just assume conspiracy theories between publicly traded companies here.
And who's talking about 1% margins? You're making that up. Healthy competition usually results in something like 10% margins. You don't need illegal agreements to get that.
I tend to assume the path of least resistance.
You realize that in publicly traded corporations decisions are made by whole teams of people? And that people talk? Word gets out, company gets fined more than they made, executives go to prison. The US actually prosecutes this stuff, the same way they vigorously prosecute insider trading.
A couple of neighboring grocery stores can realistically collude to raise prices. Multinational public corporations, not so much.
It certainly doesnt require whole teams of people. It requires a few senior managers to be in on it.
The just world hypothesis is a powerful thing.
You should realize that at a purely practical level collusion is far more difficult to achieve than you seem to think.
A few senior managers are going to do something super-risky without the knowledge of general counsel, the board, etc.? Something that can get them sent to prison? So their stock options go up a little bit? While 99% of the benefit goes to remaining investors? At the risk of being caught and the entire company being fined, to the detriment of all remaining investors as well?
Not to mention the senior managers need to justify to C-suite, board, etc. what their strategy is, and why raising prices won't result in the competition eating their lunch. And the C-suite and board aren't dumb.
On top of this, collusion can result in defectors as well -- company A raises prices, company B promised they would but doesn't (or lowers them again later) -- and then what?
It's not so easy. Collusion is unstable, risky in multiple ways, and difficult. I'm not saying that it never happens, but regarding large publicly traded companies, it's by far the exception, not the rule.
None of this has to do with what we wish the world was like. It's just basic incentives and coordination. But sure, have fun with your conspiracy theories.
Sure they can, someone on HN described the algorithm once:
Maybe there is value, but not 10-15%.
Maybe Caretaker isn't the perfect solution either ... but brokers definitely are not.
It's definitely an activity that should be disrupted.
Uber and Lyft are great as long as we don’t think about the drivers they’re exploiting.
It's interesting how everyone conveniently forgot about the medallion system Uber and Lyft disrupted.
Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid).
The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.
And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
The difference is that cab drivers provide a real and valuable service, whereas real estate agents are a glorified key safe.
It somehow made the phrase "Everything that can be automated is automated." less... I don't know... scary I guess. I can't put my finger on it, but giving all this up to some algorithms seems wrong/worrisome for some reason, but seeing exactly how it was done made it less so.
Real estate in general is full of middlemen looking for a cut and providing little to no value. The whole industry is overdue for a shakeup.
In theory, these make sense and reduce anti-consumer inefficiency like scalping that individual venues are not equipped to deal with. In practice, they extract fees. It's not that they are bad, per se, just that if the opportunity exists, someone with a spreadsheet will spot it, likely with the best intentions but no eye to the overall impact.
EDIT: To be clear, I think these services are a net good. Stubhub allows me to get sports tickets at a reduced price if someone can't go to the game. Ticketmaster stops people from spamming the system to gobble up tickets, it's just that these industries are now going to want a fee for that and we end up back where we started. I'm sure at one time brokers were helpful as well (a landlord free way to compare properties).
But I do note that "the artist" isn't even mentioned in that list.
The author's extreme user empathy, attention to detail, and willingness to do whatever it takes to reach a standard makes this a comforting read. You know it's going to end without disappointment, because he does whatever it takes to get good results for all stakeholders.
Basically one API that can open any door (smart locks, elevators, commercial buildings...etc). We're still in private beta but feel free to reach out if you're struggling with programmatic access.
tbh, it's baffling that in 2021, this problem is still so difficult to solve. As a last point, we generally recommend against key-exhange solutions. From our experience at Sonder, people forget to return the keys and it creates a lot logistical headaches. You then have to re-key the doors...etc.
I'd be curious to know if you're building a reputation system for renters/rentees (users), since that would provide value in such a market to fight it.
My current complex specified that I had to supply internet and some other things for their smart hub service, although that turned out to not be the case (it's not on my network and works), but it was really weird to have that clause but it not match reality because I was effectively signing a document saying I was responsible for it.
Fwiw, we haven't run into cases yet where landlords want to leave our hub inside a unit once it has been rented out. I think there are pros/cons to it from a security/privacy standpoint. It can also be very convenient and reduce certain OPEX costs (e.g. insurance). But there are horror stories out there of some of the cheap OEM hubs that get deployed [1] and we (Seam) would want to have a solid conversation internally first to see what's the right approach here.
[1] https://techcrunch.com/2019/07/02/smart-home-hub-flaws-unloc...
Here's the wording if you're interested:
https://i.imgur.com/qF22wG9.jpg
Plus even though it says "If you elect to purchase..." half-way down, I basically had no option but to walk away from the lease entirely. They wouldn't remove them, turn them off and replace with a physical lock, or anything else.
Or what happens when GCP/AWS/Azure have a bad day and you lose connectivity with your API servers?
Your second point about GCP/AWS/Azure going down is really valid. When we started the company, we saw a few off-the-shelf gateways that relied on a permanent MQTT connection to function correctly, and from our Sonder experience, we knew that this was a non-starter for some of our early customers. Instead, we ended up creating our own hub and we run a ton of logic that runs entirely locally. For example, if an Airbnb reservation comes in, the hub immediately receives the door lock programming instructions even if the reservation is far out in the future. Our hub doesn't program the lock yet, but when the reservation time window arrives, the lock gets programmed by the hub irrespective of whether the internet or AWS is up/down.
[1] well at this point, it's questionable whether we should refer to, for example, wildfires as Black Swan events. But I think you'll agree that most people aren't interested in touring a new home or staying at an Airbnb when the town next door is on fire...
And yeah props for that solution to intermittent connectivity issues :)
It's the most innovative approach to smart locks I have ever seen and for this one nugget along I'm very grateful for the link to the original story!
It's not as convenient as wired/connected systems, but it's also a fraction of the price too. You can pick what's more important - real time or price :)
Their site if you didn't pick it up from the original article: https://www.igloohome.co/en-us/
https://www.igloohome.co/en-us/
I have had zero interest in using other smart locks - especially ones that require network connectivity of any sort, but this might be one that would be worth considering.
I think I used to agree with that sentiment, but then I realized that I can remotely control stuff for things like grocery deliveries (which as you point out Igloo can do while technically offline!). To be clear though, just because igloohome's lock is technically offline, it does not mean it's necessarily secure if there is a hole in their API auth.
Sure! But it sure cuts down on implementation complexity, and complexity is where security goes to die :)
I would avoid the Schlage "Smart Deadbolt" model. At least when it comes to remote control they're pretty awful. (They're also hideous imo)
btw which z-wave controller do you guys use for the Assure?
Ping me at sy@getseam.com and lets see if I can get you going with some beta units.
[1] https://www.youtube.com/watch?v=p5MQz3JjZl8&ab_channel=Kwiks...
As for self-tours, they make electronic lockboxes. They've been around forever and used by every MLS.
ps: your personal site is really interesting.
There is no way the management companies know anything about noise levels or neighbors. Larger buildings tend to have reviews online but outside of that its a gamble.
They actually do, because they receive complaints from tenants. They should be required to document that information and provide it to potential renters.
No value seems to have been lost in going from humans to software. Yes, vacancies are up, but that is probably due to the 15-20% rent increases and general migration away from the city. I'm sure they are also saving a mint on the two fewer on-site sales FTEs. Seems like a big win for both the tenant and landlord (hopefully the savings are being split.)
EDIT: I dont think virtual showings are a replacement for a physical walk-thru. However, it is a great way to filter out obviously mismatching apartments and a way to not waste time visiting apartments way out of your requirements. For example, if I just want to see the size of closets (a big deciding factor for me), i can do that on a floorplan easily. I can easily filter out apartments w/o walk-in closets.
The virtual version of the place might not represent the actual place. There's no easy way to check noise levels, lighting, ambiance, etc. And further, it's far easier to scam people with virtual showings. I had one yesterday where they sent a matterport tour link and claimed I couldn't see the place for real because they had a son and 3 friends die from COVID so "please understand, no in person showings". After looking into details it became clear it was a scam.
Now that was about 5 years ago, so the market might have changed.
I was previously living with my friend, and we had an agreement I pay sometime before the end of the month. He gave me a contract and said you'll need this, just because when you go to the next place they will ask you for your previous contract. He found it online, it was boiler plate and we agreed verbally I pay him whenever during the month. We we're really good friends, and I lived there for 3 years without a single issue.
Then when I tried to rent a new place, the agent asked for lots of details, that we're then passed on to a referencing agency. I gave them all they needed. I have a maxed out credit rating on the 2 providers I can easily check in the UK. My salary was 4x the yearly rent. And the referencing company failed me.
They failed me because I didn't always pay the rent on the 20th of the month. Now granted - that is what my contract said, but it wasn't the reality of the situation.
Of course the referencing company never asked me about this and just stamped RISK on my profile. They said they couldn't override the software - which I don't believe at all.
Luckily my agent was able to call the new landlord, we all got on a call, my agent, my friend, me and the landlord.
The landlord laughed on the call and said how stupid that was, and approved my application. The call lasted 1 minute and 28 seconds.
I have a deep knot in my stomach about where all this software takes us. In the pursuit of scale, we lose all sense of nuance and humanity. I was lucky in my case, but I know others aren't. It's going to cost us dearly.
I recently wasted a good 10 minutes trying to reach a flesh-and-blood consultant of a phone company, and I actually wanted to buy stuff from them. I just needed a human to make sure it's on the record I'm requesting a non-default service (FTTH Internet with external ONT, so that I could swap a proper router in place of the piece of garbage they normally provide).
Their fancy bot actually understood what I wanted when I repeatedly said "I want to be connected with a consultant" - it kept replying, "I understand you want to talk to a consultant; before we do that, can you tell me [insert some random idiotic question]?". I almost blew a fuse there. I only persisted because for technical reasons, I couldn't go with other providers.
In the US, I don't believe any credit agency has insight into my personal bank accounts re size (I think?) or when things are paid to whom they are paid or the like (pretty sure about this). they know about my debts, but unless the landlord puts me into collection, I ca't imagine a reason for my rent appearing on the report (it's been a while since I looked at one, but dont remember seeing them)
You won't.
Many companies - utilities, landlords, hospitals, and so on - simply won't report anything unless it is negative. The negatives are usually sending something to in-house collections, a collection agency, or filing a civil suit to get the money.
Loans, in general, will report. This includes credit cards. Some of the buy here/pay here places won't report, though, so you get no help on your credit.
[1] What I mean by "live within your means" is to simply do things like pay cash for a used car, rent an affordable place, and simply pay your bills on time.
I don't think is common practise in the U.K, but I asked around and lots of people told me it is more common that the larger agencies ask for it, plus it was for an apartment in a very competitive development so I feel like it might have been a forcing function to reduce the amount of applicants but that is speculation on my part.
WTF.
That's a crazy practice. Paystub maybe, but bank statements? My gosh.
Unrelated rant but the reason I've been looking is my current landlord has taken over 35 days to send me a renewal contract. Go figure that 10 minutes after texting him I'm going through the credit check for a new apartment he sends me the updated document.
Before I got my place there were 3 other apartments in the same complex I verbally agreed to and then agent called back to say it had been taken. Not sure if you've rented in likes of London, NY or SF before but the competition can be intense.
Look it sucks that I had to do that, in an ideal world we could have done what you said, but I valued getting the place over my reservations of handing over bank statements.
A potential employer once also wanted statements - I think 6 months' worth, and I did the same. HR pushed back but legal backed them down rather quickly. I think these people ask because most just comply without question.
And on an extremely serious note, I am utterly terrified how many people treat, "Well the AI/algorithm says xyz, it must be true. Got to believe the math/data." I'm not kidding, that's my fear. People blindly follow the almighty algorithms. It's just another form of religion and worship. And even more seriousness, atheists are fantastic at rationalizing their blind dogmatic worship over algorithms.
Could be that OP is a freelance author and is paid depending on when stories are picked up, or is contracting for multiple employers and has an irregular payment schedule depending on their invoicing.
Not everyone conforms to the same set of employment/fiscal assumptions we (here meaning "educated white collar US tech workers") may have.
I get paid “on or around the 20th” every month. In some cases it’s earlier (if the 20th falls on a weekend I’ll be paid the Thursday before that weekend), and on those occasions I paid the rent before the 20th.
I like to manually pay bills where I can as I will then write them off in a ledger I keep, especially for rent as I tend to balance everything when I get paid.
Also, and very important point here, the previous landlord, my friend, did not care at all when I paid rent as long as it was before the end of the month.
Also by using Faster Payments bank to bank transfer my friend got the money same day rather than +/-3 days like direct debit. Again he didn’t care, but it was a nice benefit, right?
For instance, what happens if you lose your income for whatever reason? Your paying irregularly might as well be proof that you will immediately be unable to pay rent in that case. Now, this may not in fact be true (perhaps you have lots of liquid assets but want the maximum amount of money invested at all times, and that was fine because your landlord didn't mind), but you can see why this is a red flag.
Payment was always before or on the 20th, in 3 years not a single rental was after the 20th. I am sorry I am not fitting your curve neatly.
I mentioned somewhere else in this thread bank-to-bank transfer like the ones I was making are through the Faster Payments network which means they reconcile same-day - I don't know if their software was checking for pay on just the 20th, or if it was docking me because the pay was irregular, but there was some naive logic in there somewhere.
It may not have covered this example, but it's a good reminder of the reasons why this kind of legislation exists.
https://ec.europa.eu/info/law/law-topic/data-protection/refo...
(edit - grammar)
Even if you don't understand or can't use (to your advantage) the rule on automated decision-making, you can still insist that data processing be "fair" - fairness is one of the fundamental rules of EU and UK data protection law, including in the current EU and UK GDPRs. Learn your rights!!
However, to get that learner's permit required her to take a couple written tests. We were told she would have to retake those tests because the software had them down as expired. Then when she went to take the test, they told her she didn't need to because she had already taken them! Our second visit they finally sorted it out but we had to wait multiple hours while they got managers involved to assist us.
There was no direct way to contact anyone on the website and the person I spoke to at the physical office told me to contact the state headquarters. After multiple calls and emails I finally got ahold of someone involved in the website... who completely blew me off.
Every year when my registration came due I'd give it a few more tries, hoping to avoid a trip to the office. Finally after almost a decade I got someone to actually fix my account. Even then they didn't admit that anything was wrong on their end, they tried to gaslight me and pretend it was working this whole time.
This was enraging and the only cost was some inconvenience. I'm terrified of this happening with a critical service.
This is why I'm worried by - no, I hate - the automation of bureaucracy, governmental and business alike. Software is giving bureaucrats the perfect escape hatch. "I'm sorry, but The System won't let me".
The System won't let a low-level clerk fix the mistake some algorithm made. You escalate to the manager, but The System won't let them do it either. If you're lucky, maybe they'll try to escalate to the main office on the other side of the country, someone there may or may not be able to fix the issue. If you're lucky. If you're not, the manager has a perfect, non-offensive way to refuse: "I'm sorry, The System won't let me".
Here on HN, we all know how The System works. A bunch of half-assed business logic, wrapped in a bloated webapp, developed by some outsourced team of code monkeys, who on their good day mostly care about playing with the newest JavaScript fad, inflicting yet another round of suffering on thousands of employees and millions of customers. One of those broken business rules blows a fuse, your debit card gets locked out, and there's nobody within 200 kilometers of you with the access rights to clear a flag. And no, the devs who maintain The System don't have them either; they're just monkeys in the outsourcing firm that was the best at underbidding on the tender.
(I'm totally not talking about my wife's bank, that managed to spontaneously block her card and on-line banking just before weekend, and took a lot of fighting to undo its own mistake.)
> Luckily my agent was able to call the new landlord, we all got on a call, my agent, my friend, me and the landlord.
That's why we need to have people in the loop. Empowered people. To fix the mistakes, file down the corner cases.
Automation of corporate bureaucracy is trying to fit everyone into well-defined and heavily optimized flows, whether it makes sense or not. If you fall off the assembly line, the gears will crush you.
In the parent story, its in everyone's interest that the person was able to sign the agreement. Saying "the system won't let me" to screw him over makes no sense. There will always be overrides or discretion involved.
If anything an automated system would help people from getting screwed over. If you check all the system's boxes and someone still doesn't want to rent to you, maybe he's being biased based on a protected class. Without automation, someone can just make something up or just keep you in limbo or sit on your application
Kafka would be proud. Or horrified. One of the two.
I've been rejected/failed/banned by an emotionless machine a handful of times, and I don't know that anything else has made me feel quite so hopeless. I like to think a similar knot in my stomach keeps me honest.
Thankfully, one of our fundamental incentives as a property management business is to get more quality tenants approved for more apartments. If there are high quality renters qualified to sign a lease and fill a vacancy, mistakenly rejecting them directly impacts a landlord's bottom line. So we're motivated beyond altruism to get this right, which is important.
Along these lines (and perhaps surprisingly, relative to the automation in the post), our income verification product is decidely not fully automated. Non-salaried income reporting can be extremely tricky, and we've run into a number of renters with reliable income on a monthly basis that doesn't fit neatly onto a bi-weekly paystub. In those circumstances, we work with them manually to sort out how we can best present it to landlords on an application.
What's wrong here isn't the idea that "the rules" could be applied evenly to everyone (that's actually a good thing). It's this kind of incredibly narrow requirement on housing where landlords get to dig deep into your financials to the point of knowing when/how you paid for things.
That's gross, and should not be allowed. It's almost certainly a part of many people's vicious cycles into poverty. It's also, as far as I know, a really recent development and part of the general trend towards more and more invasive surveillance in daily life.
TBH, this would work very well as an introduction to modern tech product development for a general audience - you could pitch this to the digital edition of the Atlantic, say, and probably get it in without much editing. It helps that the domain is so broadly relatable!
* It prevents tenants who don't meet income or other requirements from even looking at the unit.
* It makes tenants liable for noting damage as soon as they view a unit to avoid it being attributed to them, a daunting task.
* And it removes a face to face interaction that forces some accountability on landlords who don't provide a clean/cared for unit.
Notably absent is a mechanism for tenants to provide feedback to landlords on the listing. The Questions feature is helpful, but not designed for concerns/praise.
I do not think face to face interactions with landlords help when the landlord knows they are providing a poorly kept property to begin with.
I’ve had a landlord that would use various manipulative techniques to get people to sign leases.
Promises of future fixes, charm, references to the difficulty of finding a place, hints toward other interest.
Landlords can not be trusted to be benevolent. They are like the pre-Uber taxi drivers.
Landlords lack accountability and provide services to people in positions of vulnerability. They take advantage of the asymmetric power differentials and do it in the name of profit.
Anything to remove this person and unify terms is advantageous.
Jerry.ai is doing this with insurance, and various startups have made attempts to do this with car dealerships. CarWoo back in the day.
Bad algorithms can be improved overnight. Greedy, careless people are here to stay.
Submit maintenance on an app and then boom someone is contacted to fix something
We ended up figuring it out together.
The idea behind that is that recidivism is best prevented by letting people be normal parts of society (=being able to work and live in peace) once they have served their term.
As someone who has worked on tenant screening software, landlords typically care about a criminal history involving sex offenses or drug manufacturing. In case of recidivism, the former creates liability from other tenants if issues arise during tenancy, and the latter has potential for property destruction and/or harm to neighboring units.
There are also typically time limits on how far "back" they can look, typically 5-7 years at the most.
Eventually it just becomes easier to just say "no felons" than to try to figure out whether this particular brand of felony is going to negatively impact you or your other residents.
On the other hand, felons have to live somewhere...
Thanks will be looking forward to your reply.
United State Army
General SCAPARROTTI
Before I get into the solution, I should explain why
these renters have such persistent trust issues.
[...]
Because messaging/applications/leasing were all
on-platform for us, we could know when a lister was
unresponsive or a lease was signed. That insight naturally
allowed us to reliably prevent stale listings. Critically,
however, new renters to our website didn't know that. And
they wouldn't believe us when we said it. We were in a bit
of a pickle.
“Hi, this unit has been rented, what exactly are you
searching for?“
Lease contracts in my state are pretty much entirely standardized. Pretty much every place uses the same lease that has a bunch of fill in the blanks for amounts, unit numbers, etc. There's not a lot of additional forms to be filed. When I bought a house I was happy to have a real estate agent with me as there were a lot of forms, several different 3rd parties to deal with, much more risk, and the whole process was a lot longer. Plus you pretty much need an agent to get in to the more accurate MLS listings. There would be so many homes still listed as for sale on sites like Zillow and others that were already sold while the MLS listings were usually up to date within several hours.
But at least in NYC those big apartment complexes are typically only at the higher end of the spectrum. You'll be using a website like StreetEasy to find listings online which often don't have the best pictures, floor plans and you will have to schedule an appointment with one such broker for a time that works best for both of you. These days its less common but pre-pandemic it was not uncommon for a tenant to have to pay 1 month rent as broker fees.
They do nothing that can't be automated.
I wonder how much of this is due to the fact that a significant portion of rental situations end with a major conflict and even uneventful apartment living has some portion of minor conflict due to yearly rent increases.
However, I should not have had to go to the company's webpage, find no hint of the tenant side of this transaction, get no answer from the chat box, do some google searches, end up back at the blog, and go digging through the blog in order to find apartment.app to be the other half with all the magical UI improvements described in the OP. Afterward, of course I found the link in the footer of the company's main page.
UI suggestion. Make it easier for prospective tenants (we are your product, after all) who land on the landlord side to find the renter's side, and vice versa.
IMO, there is no greater sin in business than to leave a prospect who has learned of your prodcut/service and wishes to do business with you bereft of someone who will shut up and take his money.
I don't feel the paperwork part of it is a huge hassle anymore, with screening services and document signing all being online now.
It's for investors with 50+ rentals where every unit is simply a number in a spreadsheet.
Not saying your product has these issues, just asking if this is considered and handled or if it's all purely profit oriented.
However this platform does is make it easy to visually inspect the unit. Since these are long(er) term rentals, the whole point is that you can inspect before you lease so checking things like parking, WiFi, and air conditioning should be pretty easy.
That's how Amazon used to do shipping - when you go to checkout, they offer you a menu of shipping speeds, you can pick the speed you want, and then the item will arrive by the time you picked.
It has nothing to do with how Amazon does shipping now. Today, Amazon offers zero choice in shipping speeds, provides an estimate of when your item will arrive, and won't honor the estimate.
Don't try to emulate Amazon's shipping "options". They couldn't offer a worse shipping experience if they wanted to.
Someone who wishes to keep their driver's license out of S3 is getting pretty short on options.
I don't like putting people out of work but that bit about replacing someone with a shell script is not entirely inaccurate at times.
"Filled N apartments" compared to what baseline? That is, what is the comparative rate of success? And what is the total transaction cost? What about the inventory that couldn't be rented? And what about all the tenants getting dissed by the algorithm (read: discriminated against, perhaps unlawfully), per a sibling comment to this one?
Then again, these are realtors, so we expect them to blow smoke up our... nevermind.
In my country at least, the ratio of professionalism, accountability, value-added to fees/earnings is the lowest of any occupation I can think of. It would be really low-hanging fruit for tech to disrupt, but unfortunately the real estate boards recognize this, and hold the critical data with an iron fist (from what I understand).
It would probably take some serious legal battles to pry that industry open.
Thank goodness...and hopefully more competitors (choices) to come in the future. Good luck!
If I was landlord, I would definitely what to automate everything. But, this feels like it would exclude people who cannot fulfill all of the above.
I may need something temporary - at this point I'll just stay in an extended stay hotel vs. trying to find a place to rent. Anything under a year is, as you note, problematic.
Edit: Here! https://apartment.app/s
"The rent of the land, therefore, considered as the price paid for the use of the land, is naturally a monopoly price. It is not at all proportioned to what the landlord may have laid out upon the improvement of the land, or to what he can afford to take; but to what the farmer can afford to give. "
"As soon as the land of any country has all become private property, the landlords, like all other men, love to reap where they never sowed, and demand a rent even for its natural produce."
"[the landlord leaves the worker] with the smallest share with which the tenant can content himself without being a loser, and the landlord seldom means to leave him any more."
"The landlord demands a rent even for unimproved land, and the supposed interest or profit upon the expense of improvement is generally an addition to this original rent. Those improvements, besides, are not always made by the stock of the landlord, but sometimes by that of the tenant. When the lease comes to be renewed, however, the landlord commonly demands the same augmentation of rent as if they had been all made by his own. "
"RENT, considered as the price paid for the use of land, is naturally the highest which the tenant can afford to pay in the actual circumstances. In adjusting the lease, the landlord endeavours to leave him no greater share of the produce than what is sufficient to keep up the stock"
"[Landlords] are the only one of the three orders whose revenue costs them neither labour nor care, but comes to them, as it were, of its own accord, and independent of any plan or project of their own. That indolence, which is the natural effect of the ease and security of their situation, renders them too often, not only ignorant, but incapable of that application of mind"
Please keep up the good work!
And vice versa.
I applaud any service that makes former happens.
You can get condos next to The Four Seasons in Beverly Hills for that price...
Keep in mind Singapore has a higher PPP per capita than the US.
As far as I can tell most comparisons for "the price of housing between Singapore and X" only look at private condos, probably because X doesn't have anything like Singapore's public flats to compare with for almost all values of X.
(When you "buy" a public apartment from the government, you get a 99 year lease, which you can resell. There are restrictions on buying public apartments, if I remember right you have to be a citizen or PR, and you have to be married or 35+. They cannot be bought by corporations.)
Their job is to unlock a door.
Why they can make a hundred thousand dollars a year is criminal.
For instance, merely putting together an offer to buy a house can be ultra complex. Once you've dealt with viewing the house and deciding to go for it, you have to deal with inspections and financing and insurance and other legal things. If there's a problem with the house, you have to know the right questions to ask and how to take the problems into account when making an offer. You have to know the local market well and what kind of offer to make or you could overpay by thousands or miss out on a dream home.
On top of that, client contracts aren't worth the paper they're printed on for a real estate agent. A real estate agent can in theory luck out showing a client one home, they love it, buy it without a hitch, and come away with thousands of dollars for a few hours of work. A real estate agent can also work with a client for weeks/months, show them dozens of houses, but then they go off and buy that exact house with another agent and lose out on the commission with basically no real recourse after investing many hours working for somebody for free. For every good financial thing that happens to an agent, they end up getting taken for a ride by others.
Disclosure: I do have my own biases here as a friend is a real estate agent and I see some of the good and bad parts of the job.
The description on this was even funny "When you rent a place for 1 or 2 years". Just wait till it caretakes rent collecting, rent raising, and eviction services.
Also pretty nice that you do that, but one thing I would recommend is immediately not allow any landlords that require such evil practices and be banned from your system.
Most municipalities at least in the USA also have tenant-friendly laws on that books that mandate either or both of:
a) landlords are disallowed from refusing reasonable sublease (e.g. one that passes the same credit check etc that you did)
b) landlords must release you from the remainder of a lease if you leave and a reasonably suitable replacement tenant is found
ORS 90.302 E
The abandonment or relinquishment of a dwelling unit during a fixed term tenancy without cause. The fee may not exceed one and one-half times the monthly rent.