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Comment by streamofdigits | Hacker News Reader

Regulatory arbitrage of some sort seems to be involved in many recent digital business models. Whether it concerns or involves (lack of) data privacy regulation, "reinventing" labour contracts or undercutting taxation frameworks, it is a most cruel reminder of how poor the management of the commons.

While many of the efficiencies and attractions of re-inventing various businesses for the "digital age" seem genuine, their deployment within a fog of regulatory risk seems like a lose-lose proposition for anybody but the most short-term minded.

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> Regulatory arbitrage of some sort seems to be involved in many recent digital business models. Whether it concerns or involves (lack of) data privacy regulation, "reinventing" labour contracts or undercutting taxation frameworks, it is a most cruel reminder of how poor the management of the commons.

Well here is the thing, in my country the majority of Airbnb rental are(at least were) illegal. Authorities knew this but hypocritically, illegal rentals were good for tourism, so the state cracked down on a few illegal rentals, for the example, while allowing 99% of them. This is regulatory arbitrage.

Uber on the other hand, didn't have the same luck since legal taxi drivers started to beat up Uber drivers so Uber quickly shut down their operation, as they were running illegal taxis and they couldn't have their cake and eat it too with the justice system... Sometimes it does backfire.

One of the reasons why all these SV tech business got away with it is the fact that they are all located in US, only the landlord or the driver are taking real risks legally. As I said before, if I tried such an operation in my own country, I'll be shut down in no time and sent straight to jail for running illegal hotels. "it's just an app" wouldn't work.

I still think that my government could have banned these apps if they really wanted to at first place, they are so eager to shutdown torrent/illegal VOD websites for instance, but they didn't.

The irony of law abiding vigilante drivers beating up regulation abritraging drivers

> The irony of law abiding vigilante drivers beating up regulation abritraging drivers

Who's going to go file a complain? Uber running illegal taxis? Judges looking into this would be delighted for Uber to get a local presence in order for them to file a complain so the police could arrest a few of their executives...

Wouldn't they just send a lawyer. Even if they did send an executive there is zero chance of an arrest being made

Recently I heard a joke about postmen leaving aviso instead of delivering post. If you see him leaving aviso, you can legally beat him. You have his signed proof that you weren't home at the time.

'aviso'?

Written notification about tried delivery of a letter or package which can only be received in person. If you are not home, you can go to nearest post office and receive it there. Sorry, I thought it's english word.

https://en.wiktionary.org/wiki/avis#Old_French Wiktionary says it comes from Latin.

In English "advise", alas, not used in the common language in regards to mail, like it is used in Polish (and Czech?).

In Spanish 'aviso' would be 'notice' or 'warning'. Italian 'avviso' is kind of similar.

Interestingly not far from the semantics you wanted to convey :-)

Collins ...in British English (əˈvaɪzəʊ) - NOUN

"a boat carrying messages; a dispatch-boat"

The thing with legal taxis is that the quality of their service is complete shit. At least in some countries.

You dont know how much you will pay (their estimates are always too low) and the first questions by the driver are to check if you know the town. If you dont sound like a local, then they will drive you through the longest route possible. And worst: you can do nothing about it. No way to report the licensed driver. Before uber it was like a license to steal.

In uber you can give 1 star - so the cheaters dont get any customers + you have some idea of price and route.

And because taxis are so heavily regulated it wasn't possible to compete with those bad taxis either. Regulation can cement an oligopoly.

I wonder if we can make Yelp for taxis. Open the app, scan the plate, check the reviews, if they're bad, go to the next taxi. But I guess dodgy taxi drivers would just buy new license plate (e.g. for their "own" private cars) and swap them - ok in a lot of jurisdictions taxi plates look different to normal car plates.

Or the taxi driver can be made aware of the bad reviews and they'd have to do a deal with the app user, e.g. a fixed price with a 20% discount, for a fair review. (Rough idea, there are probably bigger issues when you're dealing with crooked drivers).

I know it's normal for taxi drivers here to own their taxi, and therefore be the only one who drives it - I wonder how common that is throughout the rest of the world? Are there places where different drivers might drive the same cab in shifts?

It's not even normal in the US for medallioned taxis. 50% of the medallions are owned by one man and leased out to others who can loan the car out to others as well.

The medallions are owned (and leased), not the taxis. Furthermore, medallions only exist in a few cities. And I'm very curious about your "50%" number. 50% of the medallions in NYC? 50% of the medallions in the country? Dubious either way.

In some countries there are some private apps for Taxis that work just like Uber. I know of some stories of drivers who were banned after dodgy behaviour, or cancellations.

In locations that have taxi stands like airports and large hotels, passengers are required to take the next taxi in line. You can't pick and choose.

Decades ago, if you wanted a work-when-you-want lifestyle and no boss, and you didn't know how to start your own business, becoming a cabbie was the obvious career path. And cabbies do occasionally experience unpleasant customers with nobody to turn to for help, so you have to have a thick skin to last in that job.

For whatever reason, in the US the crowd self-selected towards the immigrant population, whereas in many less developed countries it went towards the bare knuckle boxing type of crowd. No wonder that the latter didn't hesitate to use their knuckles on Uber drivers, whereas in the US that rarely ever happened.

> One of the reasons why all these SV tech business got away with it is the fact that they are all located in US

Well, they could still be (at the very least) prohibited from operating in your country.

Sadly, most of these services (Airbnb, Uber) were also illegal here in the US, but for "some reason" (aka lots and lots of $$$), no one ever bothered enforcement against them. Eventually they spent enough money on bribes^H^H^H^H^H^H lobbying to legalize themselves.

(Then, of course, at least in the case of Uber and friends, once they were established they quietly raised prices and reduced driver income, which were the very reasons the short-sighted public liked them so much.)

In defense of the short-sighted public (me), I don’t know the operating costs, profit requirements, accounting model, etc of a hired car service. I can’t assume any time the price of a product goes down, that someone is trying something shady.

I can say I loved Uber et al primarily because unlike any experiences I ever had with calling a taxi, a car actually showed up to bring me to my destination.

If I correctly interpret your definition of “the public” to mean “the common men and women using these services”: it’s a bit unfair to give them the blame, rather than pursue a failure of regulators or regulations.

Everybody forgets that this is why Uber did so well in SF. The cabs are complete garbage - they don't come when you call, their credit card machines are always "broken" and the drivers are screaming at people on their cellphones for the whole ride.

Before UberX was a thing I was paying more for Ubers than for cabs because I would get actual, quality service that way. The SF cab industry abused its regulatorily privileged position. If that industry (or their regulators) had enforced even basic decency and respect for their customers, there would've been no need for Uber in the first place.

If you didn't know that Uber was skirting regulations to offer their cheap prices, then you literally weren't paying any attention and I don't know how you even knew Uber existed.

> Eventually they spent enough money on bribes^H^H^H^H^H^H lobbying to legalize themselves.

It worked for the hotel and taxi industry, seems a logical way to succeed for Uber and Airbnb in the same domains.

Huh? The regulations on the hotel and tax industry are exactly what Uber and Airbnb succeeded by evading.

I'm curious if Uber/Lyft is going to last in SF. It does not take more than one $90 for 3 mile ride experience for me and my friends to never want to count on Lyft again.

The way it works is, you think I'll just Uber/Lyft to meet my friends. So you order one say 20 minutes before you're supposed to meet only to find an extremely high price. You pay it so you're not late but then you also vow to plan ahead so you never have to take it again. I haven't taken one since I was burned in June. Another friend got burned last month and I'd guess he's likely to not take another either.

I mean, the $90, 3 mile experience doesn't happen as a surprise occurrence... you agree to the price upfront, so you must have really needed to get somewhere 3 miles away as fast as possible. The price being high is just a function of there not being as many drivers available (its especially bad these days as many drivers have moved on to better jobs or not engaged in the workforce or don't want to do this job during covid times)

To your second point, there are still scheduling options, "wait + save" where they do offer pickup 20 min from now and locking in your price, but... if you are using those features couldn't you also use the bus?

I don't see any of your problems steering you back towards taxis, especially in SF where they were AWFUL (can't say if they have improved in the last 7 years)

I noticed this too. When I was in the bay area previously (temporarily) before moving out here permanently, about 2 years ago, I was able to uber places like the grocery store due to not having a car. Flash forward to today and I actually opted to buy my own car because uber and lyft have become ridiculously expensive

> You pay it so you're not late but then you also vow to plan ahead so you never have to take it again.

This is (usually) a better situation than when you're burned by phone dispatched taxi than never comes. At least you got where you were going.

The thing is, lots of people like Uber and Airbnb. Any action against them is unpopular.

> Uber on the other hand, didn't have the same luck since legal taxi drivers started to beat up Uber drivers so Uber quickly shut down their operation, as they were running illegal taxis and they couldn't have their cake and eat it too with the justice system... Sometimes it does backfire.

In my country taxi drivers also started to beat up Uber drivers, but it backfired hard on them, it only reinforced the notion that taxi drivers are dangerous, not to be trusted (after all, if they are the kind of person capable of randomly assaulting business competitor, they certainly are capable of assaulting a client in a disagreement, so why would I risk ride with them?), so the beatings helped steer the public opinion in favour of Uber, resulting in the legalization of Uber. Also, in my country breaking a minor (administrative/civil) law doesn't mean you are not protected by more important criminal law, so the victim Uber drivers did seek criminal charges against the offending Taxi drivers.

Interestingly, in the aftermath, the taxi lobby (which used to be fiercely anti-consumer) worked to reform taxi laws to be much more pro-consumer in order to compete with Uber, they lowered their prices, removed the ridiculous accessory fees (extra for baggage, extra for more than 2 passengers, ...), added a requirement for background checks for drivers (this was a important one), gps tracking of cars, ... . So official taxis actually got much better due to Uber.

> a lose-lose proposition for anybody but the most short-term minded.

"[I]n recent years the realisation has dawned that what’s good for Silicon Valley is not always good for everyone. What started with scrappy upstarts promising to make the world a better place has morphed into something more sinister: a pantheon of faceless multinationals who collectively dominate the world’s digital infrastructure, flouting regulations, avoiding taxes, and taking advantage of precarious labour to make a small number of people tremendously wealthy."

https://tribunemag.co.uk/2019/01/abolish-silicon-valley

It hasn't "morphed" into anything. It always was a way to easy money (while lying through their teeth), but way too many people are naive and couldn't see it earlier.

> but way too many people are naive and couldn't see it earlier.

right, yeah, so others are dumb and you're enlightened?

> It hasn't "morphed" into anything. It always was a way to easy money (while lying through their teeth)

i don't get comments like yours. i'm sharing this quote because i like that whole article by Wendy Liu. Wendy agrees with you, and so do i. so why not just read it? your comment comes across know-it-all-y and bitter.

> It always was a way to easy money

Tell me again how Amazon, Microsoft, Google, Apple and Facebook were "easy money"

The devil personified in here, Mark Zuckerberg turned down the most "easy money" ever. 1 billion in cash for a couple years old company with an unproven business model, very few paying customers and no moat to speak of.

You gotta choose one, if extreme luck is involved in the process then it's not "easy" because it could have gone the other way as well, and the protagonists knew it too, but still decided to step into the arena.

We all know what happened to Digital Equipment which was the "easy money" company for the longest time.

Kodak? What happened to that "easy money printing machine"

Xerox anyone?

The reality is that you either die as a hero or live long enough to become the villan.

So now the villans are Bezos, Gates and Zuckerberg. Jobs and Allen died so they are the dear heroes who we miss and things would be much better if they were here today.

Musk is the hero charging on his white horse right now, but unless he OD's on that pure cartel coke he snorts or blows up together with one of his rockets , I expect the tide to turn against him violently and suddenly.

Then it's the turn of the crypto guys such as Brian Armstrong and Vitalik to have their moment of glory, and on and on and on.

Just like informed people knew about why Gates was bad while he was still CEO of Microsoft, we all know most of the shenanigans that Musk is up to and it seems like that's already been folded in to his image.

>You gotta choose one, if extreme luck is involved in the process then it's not "easy" because it could have gone the other way as well, and the protagonists knew it too, but still decided to step into the arena.

No, you can make very easy money playing the lotto. All you have to do is give the gas station guy $2 and you're a billionaire. Just because you're the one who got lucky doesn't mean it's hard work or anything.

The hard work is concentrated in the process of betting your life on a very unprobable outcome

Betting your life? Zuckerberg was at Harvard and I assume has well-off parents. FB could have been a total dud and I'm sure he would have done fine.

You got me curious, so from Wikipedia:

> Mark Elliot Zuckerberg was born in White Plains, New York, on May 14, 1984,[9] the son of psychiatrist Karen (née Kempner) and dentist Edward Zuckerberg.[10] He and his three sisters (Arielle, businesswoman Randi, and writer Donna) were raised in a Reform Jewish household[11][12] in Dobbs Ferry, New York.[13] His great-grandparents were Austrian, German, and Polish Jews.

Sounds like the typical HN contributor to be honest.

Anyway, I agree with your stated point that children of rich people are "merely" risking a few years of hard work and an opportunity cost of a few hundred thousand dollars when they found companies, and disagree with the possibly unintended insinuations that children of rich people can't work hard because they have a safety net, that facebook was an easy success, etc etc.

> I disagree with the possibly unintended insinuations that children of rich people can't work hard because they have a safety net, that facebook was an easy success, etc etc.

did you really just try to defend the children of billionaires?

No breakfast either. Air"bnb" my ass.

It's been a scourge on my small town. We were down to 0.01% vacancy. People were renting porches in a desperate attempt to find a roof over their heads and not pay $2,000 for the porch.

There's some good and some bad out of Silicon Valley like with most things but you can always ban the bad and take advantage of the good.

Can you? The businesses that were actually illegal have legalized themselves, and the businesses that virtually everyone agrees do bad things have been getting "investigated" by Congress with no action for the past decade...

The prosocial case for regulatory arbitrage is that regulations can be good or bad but either way are usually sticky- so when they’re bad they’re bad for a long time. Societies, like all things, accumulate cruft over time and without arbitrage bad regulations won’t get reset until govt or economic collapse forces a major reset.

Arbitrage offers exposure to a world without some regulation and people can decide if they like that or not.

Right. Regulatory arbitrage aside, I think it’s hard to make the case that Uber was anything but a massive improvement over incumbent taxi companies.

It was there from the start, piracy was rampant in most companies that appear "serious" today, youtube is the most memorable.

It's a most cruel reminder of how bad regulations are.

Some regulations.

The ones passed in response to fat campaign donations. eg:anti municipal broadband, ever-ratcheting copyright laws

Sounds like you dont have a problem with regulations, but with political corruption.

Obviously, if we just get rid of regulations entirely, the corruption problem will be solved.

.. or maybe the carton of milk i buy can now kill me.

The presence of corruption poisons the soil for well-constructed, effective regulation. Corruption fueled regulation thrives in those toxins.

I like the regulation where you can't physically murder your competitor.

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