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Comment by horsawlarway | Hacker News Reader

I want to see this legislated out of existence.

To be clear, because every time this comes up some dickfucks come in here and start making excuses about how it's better to rent in some cases and that this is just amortizing the whole payment, and there are some people who want this: No.

This is a fucking terrible deal even just using mercedes numbers. It takes a whopping 30 months (2.5 years) for the monthly payment to exceed the upfront cost. The average length of new car ownership in the US is between 8 and 11 years (varies by source and accounting methods).

You will be charged fucking $6000 dollars for a item that is already present in your car, you just don't have the damn key.

RENT FUCKING SEEKING.

Even on cars that cost 100k, Mercedes just gets to pocket an extra 5% of the sale price here at literally no cost or effort.

Piss on these car manufacturers.

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These complaints remind me of complaints I've heard about "day one" DLC (DownLoadable Content) in video games. For those unfamiliar, it's content which is available in the game upon its release but you have to pay extra for it. Sometimes, players are given the option to buy the Ultra Digital Deluxe Collector's Edition which comes with the DLC and "exclusive" shit (and also costs extra).

If it's not rent seeking, it's drip pricing, it's added-on sales tax, it's $0.99 instead of $1[0], it's the Ultra Digital Deluxe Collector's Edition. I would always advocate: don't give them your business.

I'm sure I'm preaching to the choir here. I know it's a lot easier said than done to avoid such ploys. Still, that is the strongest personal option. Avoid them like the plague and tell your friends and family why. If a business' current practices seem better than you remember, hold on to the memory; make them work to prove any marketed change of heart. (It may be hazardous to my health to hold my breath waiting for the $0.99 shit to stop.)

[0] There was a card shop (games shop, comic book store, that sort of thing) I went to as a kid. They priced stuff like $5 and it was actually $5 when I went to pay. 12-year-old me "didn't even know that was legal".

Isn't this all the same thing as what airlines did after 9/11? You pay the fare and get a seat. Want it to not be a middle seat? That's $50. Want to carry on a bag? That's $50. Want to check a bag? That's $50. Want to check out the lounge before you depart? That's $50. Want some WiFi? That's $50. Want a snack? That's $50. Now your flight is $200 more than the quoted fare. (OK OK you can probably get WiFi and a snack for less than $50.)

Everyone seems to love this, or at least, they didn't stop flying. So why would any rational company not try to use this business model? Your AAA game gets to be $59.99 + $0.99 download, and your competitor's game is $60.00. Sort by price ascending makes you the top result, but you actually get $0.99 more money with each copy sold.

You are right that legislation is the only answer to curb this abuse. Consumers fall for it hook/line/sinker. Companies can't resist free money.

> Now your flight is $200 more than the quoted fare.

> Everyone seems to love this, or at least, they didn't stop flying.

Nobody "loves" it. They just have to put up with it because even for people who know what they're doing with flight searches, the only way to dig into all that dark pattern shit is to have fifty browser tabs open comparing the fine details of different flights.

If it was possible to, say, compare all those up-charges up front using flight search tools, I'm sure you'd see a lot more people choosing the slightly more expensive tickets.

Google flights will let you input the number of bags you are checking/carrying on to produce a "final" price.

That still leaves out leg room, meal service, lounge access, and all the other things that somebody might want.

I mean, you do get to know airlines by reputation - generally speaking I expect Ryanair to do all the bullshit dark pattern nickel and diming and not expect it from national airlines like Lufthansa.

I think overall you overestimate the amount most people fly. Generally, many people fly very little or almost never. Sure, there's world travelers that know who are bad airlines, but knowing the 'secrets' to not having a bad flight is assuming a lot of the average occasional flight consumer.

And the people who fly a lot? Almost all of them are flying on business, on somebody else's money.

Which is also why the hotel where people stay when they're visiting friends has free wifi, and the hotel next to the convention center does not.

...Are you of the impression that people like this? People hate it. It's like, the one thing everyone complains about all the time when flying. How did you get to the conclusion that people like this about flights

Actions speak louder than words. People say they hate it. But they aren't upgrading to all-inclusive first class or full-fare economy tickets. They happily buy the cheapest flight, whine, and then do it all against the next time they take a vacation.

To some extent, this is quite rational. You're in pain for like 2 hours because the seat pitch is now 4 inches. But then you get off the flight and never think about it again. The fact that flights include things that people don't need to have just made air travel more accessible, though less fun.

Have you considered that most people can't afford to upgrade to first class? The choice is either deal with the shit seat or not go on vacation.

Of course. It being cheaper is why people like it. Same reason that games are free and offer DLC, or Mercedes offers a car that could go faster if you have extra money laying around this month.

I hate the nickel and diming but it does make things more accessible in general.

Just because somebody buys something, that doesn't mean they like it. I don't like my ISP. It's shit service at a ridiculous price. I pay for it because the glorious free market has failed to provide acceptable options. No ISPs provide good service for a reasonable price. Therefore, my choice is to pay for something I don't like, or not have Internet.

Every time a company finds a way to make the product worse but increase profits, they will do it, and all other companies will eventually have to do it in order to remain competitive. It's an inevitable force that is built into the so-called free market. Nearly every product available today is worse and/or more expensive than an otherwise comparable product 10 years ago.

Mark my words, bookmark this comment and come back in 10 years. If these subscriptions turn out to be profitable, then in 2033, every car manufacturer will have functionality locked behind monthly subscriptions. And people will buy them because they have no other choice besides not buying a car. There will be no way to vote with your wallet--you'll just have to abstain with your wallet.

Yeah, it's especially toxic to capitalism when tight oligopolies (like the car industry, telecoms, mobile phone OSs) develop. Barriers to entry are super high, so when one company does a customer-hostile move like this and makes money, the others know everyone else will follow suit too, so rather than advertise how they won't exploit you like the bad guys do, everyone just adopts or "improves on" the d*ck move. Think about it. Some car company was the first to do a Destination Fee. Some ISP invented the bandwidth cap. And somehow these became universal, because who would/could challenge the oligopoly?

A $60/month difference is not what's going to make or break someone buying a Mercedes. Flying economy is cheap enough that many people can do it, there is no right Mercedes subscription model that will get people into one of their cars.

That's exactly right. If they want $6000 dollars more for the car over the lifetime of the car, the $6000 being right there in the sticker price might dissuade some buyers. But if they say it's $60/month, now you're only looking at the sticker price, and the Mercedes is cheaper than the everything-included BMW, so you buy that instead. (Sorry, I don't know enough about cars to know if Mercedes vs. BMW is a comparison that people make. I never even got a driver's license.)

This additionally acts as a nice A/B test; you sell the same car and get data on whether or not people would pay $6000 more for it to be faster.

I reflexively hate this, but it seems so rational to me.

It would maybe make things more accessible if there were caps on corporate profits. As it stands, corporations have 0 obligation to pass those savings on to consumers.

Don't really love or hate, but am ok with it. If I'm flying something short, I'll buy the cheapest ticket possible, which are really cheap now. Longer flights I like being able to get more leg room w/o having to spring for first class.

There is a large group of people who only want the cheapest flight possible, then there is a decent sized group who want more than basic economy, but don't want to pay for first class. This is basic customer segmenting.

There's a big difference between something you rent and something you own.

You rent seats on planes. Some seats are more desirable than others, so you pay more to rent those. You rent access to their storage space. You rent access to their services. The seat doesn't come with food, so if you want the food they have on the plane, you buy that from them. If you don't, someone on the next flight will.

When you buy a car, ostensibly you own the car. It's your property. A company should not be able to disable features unless you pay them not to, indefinitely, on something you own.

People don’t love that about the airlines. People hate it.

… but they like saving money more than they hate it.

I don’t think that people -_love it_ or _fall for it_ per se. rather, people don’t have much of a choice but to accept it unless they can afford to fly private.

You can’t really fly and not take luggage with you, for example.

The key here is that because the US government's antitrust division has been sitting on its hands for 40 years, there are now only 4 airlines in the US. This lack of competition means that all 4 can play this game (except Southwest, which has other problems) because there's not enough competition to stop it.

But there are more than 4 car companies. There's enough competition to stop this kind of horseshit, which is a fact Mary Barra seems not to recognize.

Everyone seems to love this, or at least, they didn't stop flying.

“Complains about air pollution, but still breathes the air”, amirite? Or perhaps there’s another explanation for the dynamic. Because I can tell you that my game-buying habits have changed as a result of your parallel example.

You are right that legislation is the only answer to curb this abuse.

Perhaps! But a big part of the problem is airlines have near monopolies on domestic routes. I want to fly non-stop to Charlotte, my only choice is American, I want to fly to Atlanta, my only choice is Delta, for the same price as a flight to Europe. Some monopoly enforcement, or laws requiring more airport diversity might fix this without micromanaging prices or services.

People pay the fare and usually don't buy any extra. And the plane doesn't go any faster if all passengers paid an hypothetical Speed Improvement.

Seeing this as a problem with personal responsibility misses that the problem is structural. Culture as expressed through individual choices works great for many situations, but it does not fix broken dynamics.

Besides, if you want to apply that axe put it against the people making those decisions to conduct business in that fashion. If your first thought is that it doesn't make sense to because then that person will be outcompeted then consider that it makes even less sense to hold people with zero agency in that decision responsible.

I don’t feel personally responsible but recognize that I can take actions to avoid these things, at least in some cases. If I ever found a store (literally any kind) today that didn’t price almost everything at $X.99 they would have all of my business which they could support. However, I recognize that I’m just one person and ultimately these decisions primarily benefit me. That’s also why I advocate for it; the behavior can benefit those close to me if they happen to agree.

Indeed it is a systemic issue and I don’t claim to have a systemic solution. Even the personal solution is pretty shaky, considering the ubiquity of these practices. Oh well, it’s better than giving in.

I think I read more into your post than intended, specifically your suggestion to vote with your wallet. It is frequently stated in such a way as to be the end of the conversation - shut up and change your purchasing habits, essentially. You didnt put it that way, my bad.

No, it's absolutely rent-seeking in the Mercedes case. Your DLC analogy doesn't hold water: when you buy the game, you are paying for the core game. The DLC costs time, money, and resources for the game studio to produce, and you're buying that separately.

In the Mercedes case, they ship the car with the more-powerful motor already installed in it. The cost of it has been paid already. They just artificially limit it through software unless you pay extra for it.

At least in this case Mercedes is offering a one-time flat fee, which would at least be somewhat sorta vaguely like paying extra at the time of sale for a more-powerful engine rather than whatever is stock. Still kinda slimy, but at least not absolute highway robbery, like the subscription plan is.

I think you might want to give my comment another read. It doesn’t seem we disagree as much as you believe.

The problem is that capital intensive industries like car manufacturing (or airlines as was mentioned elsewhere in this thread) tend to have low margins, high volume and high barrier to new entrants. This means unless you can convince a lot of the volume to boycott with you, minority purchasing decisions of people doing the math and taking a principled stance can’t really affect the behavior of the incumbents or attract new players. Then your choices quickly turn into not using the good or service _at all_ or engaging with the pricing scheme you find abhorrent.

Thank you for being a voice of righteousness in a sea of simps.

It’s hard to tell on this site, are people really this devoted to corps or are they shills?

Even with what you said there are still so many people defending this behavior. The world is full of weak and/or deceitful people.

A lot of people here think building a successful subscription based product is the absolute goal in life. To them Mercedes (and BMW and others) doing this isn't dumb - it's super smart and worth applauding. Otherwise you're just leaving money on the table /s.

You put the /s, but I don't think this comment is inaccurate in any way. Some people really have enthusiasm for nothing but making money. No hobbies, no interests, no friends, no other goals.

I'm very enthusiastic about making money too but I don't really want to sell my soul to make it happen.

Some people heard "A fool and his money are soon parted" and thought, "If I could make everyone a fool..."

It isn't even enthusiasm, it's the most passive "doesn't make sense not to" type of reasoning.

> Some people really have enthusiasm for nothing but making money.

As long as those people have morals, what’s wrong with that?

Greed has long been understood to be fundamentally immoral by many civilizations and cultures throughout history.

It has also been understood to be fundamentally inherent to humanity as a consequence of our "need to survive", so trying to regulate it away is just inviting people to skirt said regulation

Since it's unavoidable, the best next thing is to design a system which takes greed as an input and outputs productivity. That system is called Capitalism and that is why it always wins.

The people who seem most enthusiastic for giant bank accounts (read: billionaires) seem to lack these morals, by and large.

The economy is based on too simple rules, hence unfair, hence this is what happens.

honestly yes it's smart(doesn't mean it's kind), if I was selling 6 figures cars I'd do my best to milk customers in every possible way as long as it's still profitable in the long run

mercedes isn't selling baby formulas or epipens

plenty of other brands will take your 100 years of 3rd world salary to give you some shiny vehicle

should I cry for some pampered millionaires who just want to drive faster?

I find it really amusing that you think you need to be a millionaire to own one of these, but whatever - that's not a core of this argument.

The point is that everywhere outside of the powerhouse first world economies runs on second hand cars imported from those economies. I'd know - in my country most cars are ex-german cars. And then once we're done with them, they go to Ukraine(or they used to). Then after that they go to far east or Africa. Your 100k mercedes has 15 lives before it gets scrapped.

But you know what stops that chain early? If everything in the car has subscription and strong encryption to prevent messing with payment options, which "incidentally" will mean those cars can't be worked on by anyone other than the official garage. Wouldn't want anyone to pirate some subscription-only stuff now, would we.

I'm not mourning rich people wanting to drive fast - I'm mourning regular folks who will get these cars at 15-20 years old and find out that the heating seats don't work because Mercedes won't enable them on a "legacy" vehicle. Or it's from the wrong region so they can't do anything for you, sorry.

I don't believe that, I've met people living on minimum wage with brand new mercedes, and I call those people brain dead. Buying a six figures car only makes sense if you're a millionaire.

EV cars are most likely not going to be exported to have a second life.

>EV cars are most likely not going to be exported to have a second life.

What reason do you have to believe that?

that's what's already happening

What is already happening? Quick look at otomoto.pl shows plenty of ex-German EVs being brought over here already, I don't understand what you're insinuating.

There aren’t any 20 year old EVs to export yet…

>>EV cars are most likely not going to be exported to have a second life.

Well, that's absolutely inevitable given how things are going. It might not be in the next 10 years, but in 30? Almost certainly guaranteed.

Everyone here is a temporarily embarrassed SAAS billionaire and god help anyone trying to step on their future hypothetical probable profit margins

Simps is a strange choice of words for a post on hackernews.

I think bootlicker is a stronger but more appropriate word. I genuinely cannot believe people support being sold a fully standalone physical product and being charged just for the ability to use it, while thinking it is in their best interest.

Not particularly as of recent.

Seems fine. Always go for Sir Mix-A-Lot nostalgia drips whenever I can get them.

Why do you think it is strange?

I thought simp stood for "someone idolizing mediocre pu__y", a slur for guys commiting and caring too much about lower tier women. Doesn't really seem to fit a discussion about people agreeing with a corporation.

Protip: Slang words almost never come from acronyms (The lone exception I've found is "thot")

It may not have come from an acronym, but that seems to be the common usage and inferred meaning these days. If not, what is it?

Yep there’s a lot of backronyms out there

It's short for simpleton.

It might be, but that doesnt explain why it's #1 usage is towards guys being lame in hopes of getting women. If it was just simpleton, it makes no sense.

>are people really this devoted to corps or are they shills?

I think a lot of people defend this because they themselves work for tech companies who's products or services are also profitable due to some for of rent-seeking which ensure great profits and wages that wouldn't be possible otherwise because let's face it, the most profitable SW companies where the HN audience most likely works at, don't sell you a lifetime license to their product on a CD for a flat fee anymore like it's the '90s but are most likely subscription-ware.

It is indeed a bit hypocritical to criticize automakers for doing the same thing that beloved tech companies are doing which is what makes them so profitable and yet nobody bats an eye.

Continually running a service with its own recurring costs with additional improvements (SaaS) justifies a subscription, because your product is constantly improving, and constantly incurring costs.

A one-time car purchase costs the car company some capex upfront. They actually incur more cost running whatever DRM servers lock these motors down to prop up this extortionary business model.

Are you saying there's no rent-seeking SW out there?

There certainly are, I'm just pointing out that much of the software that is charging a subscription is doing so to more closely structure their revenue to their expenditures.

Software as a service is a continuous operation. Cars aren't. Not hypocritical at all. No one cares that they want to be as profitable as big techs. We want to own our damn cars. We want to accelerate as much as we want. It's that simple and requires no further justification.

We take issue with big techs locking down computers too. No problem with them running whatever they want on their servers but we want to run whatever we want on our computers too without their interference.

>Software as a service is a continuous operation.

I would pay to get software not as a service. Fuck your updates, I don't want bloody updates that end up breaking my stuff and wasting my time. Give me one version, no updates and no support, and I will give you top dollars. If I want an update I'll come back to repeat the process again, giving you top dollars again, several years down the road.

Are big purchases every several years cheaper than a subscription? I don't know and I don't care. Sell me your fucking software as a fucking static product, I am happy to pay the premium for it.

That's okay, I was just pointing out that it's not hypocritical at all. Personally I'd rather have free as in freedom software running locally on unlocked computers. This should be the norm and use of technology like remote attestation to penalize us for exercising our freedoms should be illegal.

I guess I sort of grew up in the SaaS era - to this day it blows my mind that one of the most perfect pieces of software I have ever enjoyed - N64's Goldeneye - was created by ~10 devs, who had one single release. I often fantasize about joining team like that while daydreaming in the poker-card scrum sessions at the agile sweatshop I currently take my paycheck from :/

>N64's Goldeneye - was created by ~10 devs, who had one single release

Wait till you hear how many people it took to build Roaler Coaster Tycoon .... in assembly. Spoiler alert: 1; one; uno.

Chris Sawyer's achievements are definitely the stuff of legend.

> Thank you for being a voice of righteousness in a sea of simps

Where is this sea of simps? I don't see anyone defending this type of behavior.

Personally i’m not in favor or against this particularly, but in favor of free market, after all mercedes or BMW are not selling lifesaving drugs or food if someone is able and willing to pay for a stupid “addon” why not?

I am against the government deciding that contracts between two people are illegal. No one is forced to buy a mercedes. There is nothing even close to a monopoly when it comes to cars. If Mercedes wants to charge customers every time they push a button in their car, why should the government decide to stop them.

Then you must be against child labor laws, and laws that prohibit people selling themselves into slavery because they have few choices in the world.

Power imbalances mean that some people will use contracts to exploit others. Protecting people from that is valuable.

Certainly a Mercedes purchaser is not quite in the same league there, but it's not like we haven't heard of similar subscription ploys on lower-end cars too.

So what are you doing to change it? Are you getting involved in helping this become a focus of regulation? Maybe you'll call your representatives up?

I ask these questions because often times people work themselves into a frenzy, and then take zero action. Hopefully you aren't one of them.

Nice, an ad hominem attack.

We can't all afford to devote our lives to activism. But change starts with education and we can be educators when these topics come up. That's not useless.

It's the old very tiresome, well why don't you devote your life to fixing the problem while I do absolutely nothing. Then get back to me.

What are you doing about it, complaining on the internet? :P

Nobody's asking you to do anything, except maybe stop with the ad-hominem attacks and participate in the conversation in a rational way.

Take a look at the profit margin (and market valuation) of automotive companies and compare them to tech companies. Now also make a comparison of average developer/engineer salaries at both.

Is it not OK for the automotive folks to get to the same level as their FAANG brethren?

Disclaimer: I work for an automotive OEM.

I have zero fucks to give for the profits of corporations, and the idea that any of this money will make it into the hands of engineers is ludicrous. If you want higher salaries start a union, otherwise the people at the top (executives + shareholders) will just use any extra profits to pay themselves more. There's no incentive for them to do anything else.

And as a software developer whose income is propped up by adjacency to FAANG: we're paid an inordinate amount compared to our contribution to society. The vast majority of software development makes rich people richer at the expense of everyone else. I've managed to avoid the most egregiously harmful companies my entire career, but the idea that FAANG pay or any pay is meritocratic is just wrong. I'm paid well because my work pays my clients well, not because of anyone involved "deserves" our high salaries.

It's fine for automotive companies to maximize their profit margin. If they have smaller margins than google, that's probably because google is nearly a monopoly, and there's fierce competition in the automotive space.

A key difference here is a car is a product that we buy and own. It doesn't cost Mercedes an ongoing cost every month to support these hardware features they change a monthly fee to unlock, and so the monthly fee doesn't provide additional value. To the extent it does, it's because the manufacturers are artifically limiting their product. Compare this to, say, and Adobe Creative Cloud subscription. With that, you're getting access to cloud services that costs Adobe to keep running, it also gets you access to new features and security updates. Whether or not you like Adobe's business model, this provides a justification for the subscription model that is simply absent in the automotive space.

Going back to the competition point, even if you just look at the monthly fee as cost shifting, it lets the manufacturers advertise a price that's lower than what the consumer is going to pay.

You’re completely ignoring the customer (people like you) in favor of the (already mega rich) corporations. What a mindset.

> You’re completely ignoring the customer (people like you) in favor of the (already mega rich) corporations. What a mindset.

No, I want the company I work for to have similar profit margins as FAANG and thus increase my compensation. Do you also attack those employees because their companies are charging extra for pure software unlocks or subscriptions?

>to have similar profit margins as FAANG and thus increase my compensation

Why would they do this? They have enough labor working for the money they give already. If their profits doubled, why on earth would their labor costs go up too instead of them just keeping the money?

High prices require both a buyer to be able to pay and the buyer to have to pay (due to lack of sufficient sellers). High profit margins provide the first condition.

Car companies already and always have made money from continued support of their products. Car maintenance and repairs and spare parts and the work already cost money. So, not even remotely the same.

You can complain about any company that wants to continuously make money for nothing in return. Just look at ink printers. Rent seeking sure is attractive, yes.

Nobody owes you anything. There are MANY jobs that deserve such high salaries far more, just try anything related to caring for sick and/or old people. It's just that "deserve" has got nothing to do with anything!

Also, look at all the other countries and companies. That kind of complaint to me sounds more like a multi-millionaire looking at the even grander mansion next door and claiming they deserve at least that much too and that the world is so unfair to them. You picked the very, very few where some people make even more. It's hardly all the tens of thousands of employees of the FAANGs that all make a few hundred thousand, just a small fraction.

Cars also are not nearly as innovative. They are much farther along their product cycle. Oh sure, they did a lot of work, but the car still uses about as much fuel as it always did, and gets you barely any faster than it always did from A to B. But all the entertainment you get now! And all the electronics! Yeah okay. But the end product still doesn't deliver that much more value compared to a 1970s car. Some of them were actually more comfortable, easier to use, and easier to look out of. I do understand that there's been a lot of work on safety too since then, and that deaths went down. But I didn't claim there was zero innovation, did I? Only that you compared yourself with the latest and greatest new tech, such as AI, and in that elevated niche you again picked their highest paid people, and that seriously is your chosen comparison?

Oh and when we are looking at all the innovation in cars, may I point to the discussions - right here on HN too - about software, UIs, and cheating German car makers (I'm German too by the way), and how German car makers are big losers in China, and quality issues in German cars (https://newsingermany.com/german-car-manufacturers-fail-us-s...)?

Your compensation has very little to do with the profit margins of your well-established employer.

(Tesla is profitable. Uber is not. Who pays their software engineers more?)

If you want a higher salary, find a job and a company that will give you one. Don't advocate for your company to charge their customers for something that costs them $0 to provide. I guarantee that things like that will turn the world into a place none of us want to live in over the long run.

Also, if you think that your employer is going to increase your compensation due to anti-features like this... well, hate to break it to you, but they won't. They'll pocket that money and/or distribute it to shareholders. Your salary is, roughly, the smallest number that they can offer you to get you to do the job, and has very little to do with their profit margins.

> Do you also attack those employees because their companies are charging extra for pure software unlocks or subscriptions?

I would attack any company that charges customers extra for nothing.

So you're fine with fucking over the customer, as long as you get your cut of the compensation? Is that what you're saying?

As long as tech companies do it, I guess it's fine if everybody does it, because profits, and you get a cut of it?

Who cares about your compensation or your corporation's margins? We want to own our goddamn cars.

It's fine if they get more profit from having a better and more unique product for some sub-market. Everyone is happy in that case.

Not by locking features.

What does that have to do with anything? If you sell a product and then try to put a subscription on hardware that is already in the customer's hands, that's scummy.

If you put a subscription on something where you have to continuously maintain server capacity and build and distribute new features, then that... seems fair?

Not gonna claim that there's no rent-seeking going on in the software industry, certainly. And they're scummy.

But once I'm sold a car, every bit of hardware in that car should work without artificial limits (well, modulo safety and legal concerns). Sure, it's fair for a car maker to charge for map updates for the navigation, real-time traffic information, remote functionality, etc. -- stuff that requires on-going cost to the manufacturer. But charging a subscription to send a few bits of information to the software in the car to give the motor more power? Robbery.

I think it might be if automobiles weren’t such a necessary item in many parts of the world. Or, for many people in North America you require a car to engage in society.

Say it louder for the people in the back. As a consumer, never accept this. Not now, not ever.

This depends on if they actually charge you for it upfront in the MSRP.

Say the cost for a motor made of x material is $2000 more than a lower spec motor made of z. So here they could make two specs, say charge $5000 more for the better motor, and profit $3,000 when anyone with a kick for adrenaline chooses the better motor.

However, there are hidden costs to inventorying multiple different variations of the main drive train of your car. You are no longer sharing parts, so you now need two lines making that motor, you need to split the warehousing space, you need some sort of analytics / data scientists to tell you how many of each motor you need to order. In this scenario, the cost to this amount of inventorying something as critical as the main drive unit might be a thousand dollars per unit or so (of course decreasing with scale), but it means your margins aren't simply profit - BOM.

Taking these small increments in profit (at the expense of making the logistics of your plant more complex) was all the rage for Ford and GM throughout the 1990s-now with 20 different trim levels for a model, but with EVs specifically the extra trim levels make you feel like you're missing out on the most fun or useful parts of a car, and the automaker really isn't making that much extra money when it's all said and done (and it results in the car feeling cheap after the honeymoon period).

In this case, the $60/month is optional. This means that Mercedes can take the negligible hit on their bill of materials, but this will likely be offset by, and made profitable by, the people who do pay for it every month over the lifespan of the car - there is a lot of FOMO and getting to click a button that says "increase the dopamine I get by punching the throttle this month" might be what people want if they think they shouldn't splurged for a different ev x months ago.

Of course they're charging up front. The goal is to make as much money as possible. What's much more likely to happen, especially with a brand like Mercedes, is instead of charging $A for trim x and $1.1A for trim z, they'll just charge $1.1A for both and tack the subscription fee on.

or, crazy thought, pass the cost savings of not having to manage multiple trimlines onto the consumer instead of trying to make a quick buck by artificially borking the motor.

The all-fronts assault on consumer surplus is definitely depressing.

It's interesting how it takes reading someone else's writing to realize how little profanity adds to the substance of a comment. You never realize it when it's your own comment.

It adds the substance of communicating to me that the poster's about as fed up as I am with treating the "dickfucks" with respect. On this and several other market-regulation topics.

That says more about the reader and their unwillingness or inability to absorb the content, than it says about the writer and their writing.

I disagree, the information it communicates is visceral in nature rather than 'rational', but it provides a much broader cross-section of a person to relate to (or feel alienated from).

I’ve found profanity can add impact when I’m a regular reader of someone who normally doesn’t use profanity and I’m familiar with their normal lack of profanity.

"Manufacturers may intentionally damage a portion of their goods ... "[0]

The intel chip example has already been mentioned in comments. The general idea of "Damaged Goods" (and how this can benefit consumers) appears here (at Preston McAfee's site).

[0] https://mc4f.ee/Papers/PDF/DamagedGoods.pdf

Even worse - if you pay for the subscription and then later sell the car, you don't get anything back and the next owner doesn't get the feature unless they pay as well.

If you pay to have it permanently, you can probably recoup some of the cost when you sell. (Unless Mercedes does something so that the feature is gone once you sell, which I wouldn't put past them)

This is the same thing people found out trying to sell their used game consoles with a bunch of downloaded games. No extra value to the buyer, because as soon as the seller disconnects their account, all those games disappear. And in the case of the WiiU and 3DS, are now unavailable for purchase.

> at literally no cost or effort.

But somebody designed, implemented and tested (presumably) the feature of remote enabling functionality for money, manages the subscription and payment systems, real time communications to the fleet of cars, etc.... that costs a lot of money and effort, doesn't come for free.

"It's okay that they lock things behind subscriptions because how else would they pay for the mechanisms necessary to lock things behind subscriptions"

“If I don’t charge you to pass how will my boss pay me?” said the highwayman to the traveler.

It’s only purpose is literally to enable this rent-seeking, though.

And imagine if instead of wasting their time on that they added more features to the vehicle, or made existing features better.

> You will be charged fucking $6000 dollars for a item that is already present in your car.

How so? The one-time fee is $1950. Also, this is nothing new: top end Mercedes-AMG cars always had an optional "AMG Driver's Package" [0] for years now, which did nothing but electronically unlock Vmax from 250km/h to 290km/h. No changes in hardware at all. It used to retail for around $2500.

Now you have the possibility to order a performance unlock after buying the car. You can even try it out for a few months to see whether you really need it or not.

You might not like it, but it's actually a better deal than before.

[0] https://www.mercedes-benz.co.uk/passengercars/mercedes-benz-...

The AMG Driver's Package also came with a track day at the AMG Driver's Academy.

> You might not like it, but it's actually a better deal than before.

So if Apple would ask you for a nice $10/m to use their famous iPhone camera features you would be okay with that, because otherwise you would be fine with 8MP photos or pay additional $10 * 12m * 3y = $360 upfront? Of course, no changes in hardware at all. And the price of iPhone is the same, not $360 cheaper.

Try looking at it from the other side: you're getting a product at a lower base price and can upgrade to a higher model at a later point in time. It's more like buying, and paying for, an iPhone 14 and then having the possibility to upgrade the camera to the iPhone 14 Pro version afterwards.

There's ton of precedent for products that are artificially locked to a lower version. The difference between a NVidia GeForce and the much more expensive Quadro used to be just a bunch of ID resistors. Processor speeds are locked in a similar way.

Same thing with software. There's many cases where you purchase a piece of software and can later buy a feature or "Pro" unlock. You already downloaded all the bits & bytes to you device. Are you not OK with that?

I'm a bit surprised that the people on Hackernews of all places has such a reaction to this. Subscription models and SaaS have been practically invented here.

Those precedents in hardware are not exactly good. And the more expensive a product is, the less acceptable artificial locks are.

With software, the entire model is buying functionality, and then you can use it on the hardware of your choice. And it has to work that way. It's worth keeping in mind but it's not directly comparable to a hardware purchase.

> Try looking at it from the other side: you're getting a product at a lower base price

Do you really think what you pay less?

If we talk about software unlocked hardware this is a moot point, the manufacturer still needs to spend money to produce and install the thing in the product, so you are paying for the hardware anyway. BMW heated seats subscription is a good example. And again you are taking the manufacturer words for it, despite they would never show how exactly they manage to drive the price down.[0]

> It's more like buying, and paying for, an iPhone 14 and then having the possibility to upgrade the camera to the iPhone 14 Pro version afterwards.

Which implies the change to the hardware. We are now discussing when there is no change in the HW, only some SW lock on that hardware.

> The difference between a NVidia GeForce and the much more expensive Quadro used to be just a bunch of ID resistors. Processor speeds are locked in a similar way.

Yes, and that forced NVidia to actually implement something useful for CAD (or degrade CAD performance on consumer products, alas). CPUs doesn't fit here, because again, nobody gives you an option to "unlock" more cores or speeds (but Intel tried and IBM did this for ages for their mainframes and POWER systems, but these are not a consumer products).

> Same thing with software. There's many cases where you purchase a piece of software and can later buy a feature or "Pro" unlock. You already downloaded all the bits & bytes to you device. Are you not OK with that?

There is no additional costs, waste and carbon footprint to produce a different software. You, as a vendor, spent money one time on R&D/development, now you support it for a tiny fraction of the cost. You don't spend money and resources on never be used part of software.

For a heated seats you spend the resources to actually manufacture and install it, even if it would be never used.

> I'm a bit surprised that the people on Hackernews of all places has such a reaction to this. Subscription models and SaaS have been practically invented here.

Sorry, but leasing and subsidizing were invented centuries before Internet and HN. And what you mix software with hardware and protecting the poor capitalistic companies are quite telling.

[0] Hint: those who pay for the feature pay not only for themselves, but for the others, who did not pay, too. Even the manufacturer never actually lowered the cost of the product.

PS automotive manufacturers are well known for charging absurd prices for things what costs peanuts. How can you believe them what 'they are reducing the base price' is beyond me.

Peak humanity in this thread:) The trade-offs are driving a Mercedes at 250 km/h vs 295 km/h; or some Apple camera with three lenses vs one lens. I am so glad I live in a country where I have to make these choices.

There are a number of pay for apps like Halide that make the iPhone camera more useful beyond what Apple provides using the same underlying hardware.

How is this relevant to the manufacturers extorting a subscription for the existing hardware? It's totaly up to you take to pay or not for Halide. Halide doesn't gut your iPhone cameras performance if you didn't pay them.

Who said anything about gutting the performance? This is about adding a performance package that is software based. In the, albeit poor, iPhone analogy the performance camera package happens to come from a different company.

Well, if we are here for poor analogies, it's more like you gone to some 3rd-party shop and they flashed your ECU with a new firmware which gives you options your car hadn't before. And this is a thing already, for at least two decades, people are reprogramming the ECU to have more power. It's extremely popular.

What is similar in the both cases is what it's a 3rd-party option.

Look at my other comment in this thread, maybe it would be clearer what I mean.

> The average length of new car ownership in the US is between 8 and 11 years

I would wager thats not actually true for Mercedes, they don't last that long before becoming a money pit. If you really want a Mercedes just lease then bail.

BMW posted their numbers recently - something like 90% of buyers of new BMWs keep them 3 years or less. I imagine it's somewhat similar for Mercedes.

At least in Germany, a very large portion of new BMWs, Mercedes, Audis and even boring things like Toyotas and Fords are corporate leases, often driven by individual employees who get them at their employer's negotiated rates and sometimes as part of their compensation.

This results in a fantastic pool of 3-4 year old cars with low odometers and scrupulous maintenance records, keeping the rest of the used market in check.

Due to the slow downs and supply chain issues of the past few years, I imagine the used market is not going to be as nice the next few years, and the usual off-lease classes will be a lot smaller than usual.

No matter how many times I read this, it just blows my mind. I can't believe how many people buy new cars--and then dump them right after the steepest part of the depreciation curve. I mean: Thank you, people, for making horrible financial decisions and eating all the depreciation, and then providing a nearly-new car to the market at a steep discount!

It's just that unfortunately the financial system is geared toward making this the "best" option. I don't know about Germany specifically but here for instance if you run a company you can't buy a car and expense it(or get a loan and expense payments for the loan), but a lease is technically a rental so you can expense it, which means that "renting" a brand new car for 3 years is actually cheaper for your company than buying it and keeping it for longer. So yes, you have loads of companies essentially paying for that worst depreciation period in a vehicle's lifetime and then immediately these cars hit the market again.

I've had excellent service from several Mercedes after buying them at 4-7 years because people believe they turn into money pits. Dealer service is expensive; the solution is to use an indy mechanic or DIY. (They're quite DIY friendly for consumables.)

I'm glad other people are willing to buy or lease them from new so there are cheap ones available secondhand.

If you don't like it, just don't buy cars whose performance is artificially limited. Let the market decide the issue.

It's curious that the market (almost?) always decides what is bad for the consumer and profitable for the companies. As a person who is a person not a company, I would rather we don't let the market decide so much about our lives.

Examples: Smart (spying ad-showing) TVs, non-compete agreements, water heater rentals, not-really-unlimited "unlimited data" cell plans, surveillance economy, only-rentable-not-buyable software and films and TV shows and audiobooks, etc.

Because most of the free market theory that most normal people believe is based on the assumption of perfect competition[1]. However, that almost never actually occurs in the real world and even ends up being impossible in most cases.

For example, there is always going to be a huge barrier to entry for automakers. They need to invest an enormous amount of time and money in design, factories, raw materials, labor, etc before they can deliver an actual car. This barrier protects automakers from feeling the full repercussions of their anti-consumer practices because it is extremely difficult for a new pro-consumer competitor to enter the market.

When we remove that assumption of perfect competition, the whole free market theory starts to fall apart. A well functioning free market requires power to be balanced between all parties, otherwise whoever has the most power can end up corrupting it and using their power advantage to grab even more money and/or power.

[1] - https://en.wikipedia.org/wiki/Perfect_competition

What are our alternatives? I’ve said in posts before that legislating against each anti-consumer product or feature is a fool’s errand. The legislature cannot keep up the rate at which corporate entities produce consumer-unfriendly products. I also don’t trust it to represent citizens rather than corporate donors, at least here in the US.

Pitchforks? Seriously though, your comment is way too defeatist. Legislature has worked for centuries for this problem. Imperfectly, but don't let the perfect be the enemy of the good.

But if all else fails, giant corporations are eventually going to get the good ol' pitchforks up their butt.

To the contrary, I think settling for a mechanism that (maybe) cleans up the damage after it’s done is defeatist.

This isn’t a case where you have to wait until after the damage is done though. Making a blanket regulation of “you can’t sell a physical good that has its capabilities artificially limited to create price brackets”, or something similar, would work in advance of people trying to sell such products in the US market.

I'm not saying it's good, I'm just saying it is to be expected.

I already decided I will not buy cars with touch screens or cars that limit my usage (for ex. Tesla limiting how you can use its battery). I am guessing I will keep driving my 12 years old ICE car for another 5-6 years. It seems to work: car makers are starting to go back to buttons instead of touch screens [0]. Maybe the same will happen with these features (charging $/month for extra engine power / remote car startup / heated seats)?

[0] https://slate.com/business/2023/04/cars-buttons-touch-screen...

> It's curious that the market (almost?) always decides what is bad for the consumer and profitable for the companies.

In some cases people choose things that are bad for them, for all kinds of reasons. Someone will always sell you a subscription to your own car, if you tell them you want one. The market is the mechanism, the responsibility lies with the consumer. I know that it feels like there's a conspiracy, but it's almost always just people getting what they say they'll pay for.

The best solution is for people to exercise good judgment. The nuclear option is to regulate what people can and cannot buy and sell. It's not to have that nuclear option on the table, and it is necessary sometimes, but it does not feel like this particular case is one when people cannot reasonably be expected to decide for themselves what they want, or have the power to exercise that decision. Nobody HAS to buy a Mercedes.

I agree with this comment. I have a smart TV that does not show me ads. I could have bought maybe a better one that shoots Ads every now and then, but finally, luckily there is still choice. Same either cars. There are so many nice brands out there that it's now difficult to choose from - no offense to Mercedes, but there is so much good competition for that price...!

> The best solution is for people to exercise good judgment.

Good judgement comes from experience. Experience comes from bad judgement.

Guess which phase we're in now.

"Experience comes from bad judgement." Are you speaking from your own experience???

In the culture I grew up in its a well-known aphorism.

Yeah, the market doesn't decide when there are only a few major players.

The "market" didn't decide to exclude headphone jacks and SD cards on mobile phones. Apple went that direction and other companies followed suit. Customers had no real choice in those matters.

> Customers had no real choice in those matters.

Yes they did, they could vote with their wallet. And they voted for ear buds.

There's still plenty of phones with jacks out there by the way.

No, they didn't vote for headphone jacks to be removed, they were forced to decide whether it was a dealbreaker for them. This kind of incremental erosion of the user experience is a very different thing than consumers making a binary choice about what they would prefer. They 'get away' with it, then it becomes the new normal, and the previous experience becomes niche and expensive or comes with other compromises.

Are there any recent examples when a boycott worked? That did not work for dumb TV's and privacy-oriented business phones like Blackberry. Sometimes when market converges to the cheaper and more predatory choices, and that kills the market segment that was normal in the past.

Sony stopped selling rootkit-infested CDs when buyers 'objected'.

>If you don't like it, just don't buy cars whose performance is artificially limited. Let the market decide the issue.

You are unfortunately one of the apologetic quote, "dickfucks", endquote the parent was referring too. When all players eventually do this, where will you got to buy?

There is no more free market left in the auto industry after a century of consolidations. We're at the mercy of a few giant automakers who own the entire market and make the rules in their flavor. The current greed-flation is another nail in the coffin of the "free market competition benefits the consumer" trope.

If we had left everything to the so called "free market" our food would have still contained lead, mercury and arsenic. That's why governments need to step in and regulate some things in flavor of the consumer because we can't expect the corporations to do it themselves through "free market" competition, as it's much easy and profitable for them to form rent-seeking cartels and work against us that compete for us.

It seems all lessons from the past have been forgotten.

I don't like a lot of the features in modern cars. That doesn't mean the world should be legislatively changed to suit my personal tastes. Because maybe I'm in the minority. But neither will I buy stuff I don't like; plenty of second-hand cars to go round.

> plenty of second-hand cars to go round.

Until Cash4Clunkers2.0 comes out and/or they’re regulated out of existence.

You don't have to use bad words. But since you brought it up - here is a recent lesson. Consumers do not like touch screens and it seems car makers are listening: https://slate.com/business/2023/04/cars-buttons-touch-screen...

Corporations do not make (significant) sums of money on a button vs screen choice, and there's important evidence about the safety and ergonomics that favors buttons.

Paying extortion to get more speed? That's just a cash cow.

You are missing the point. (So I will spell it out for you: consumers have more power than your comments indicate).

I will spell it out for you, since you were so kind to spell it out for me: consumers' power is limited by the interests of corporations. When a corporation can fix what is viewed by the consumer as a mistake without significant financial downsides, they frequently will (if the consensus is strong enough that it really was a mistake). However, they will not fix anything that causes them financial hardship unless forced to by the legal system.

Arguing for the sake of arguing? If you read the article I linked you would have seen that touch screens were used by car manufacturers to lower their cost. Switching from touch screens to buttons causes them some financial hardship (their costs are going up). The article I linked directly refutes your argument.

1. evidence for the cost savings in a single vehicle build is hard to find. The article you linked to cites a cost of $50 for the screen, claiming this is significantly less than tactile controls, but this is contradicted by the actual cost of the typical tactile controls used in mass-market vehicles.

2. design costs with tactile controls maybe a little higher for the first stage of a new design, but its not as if car companies did not have (a) in-house talent for this (b) decades of experience. Contrast with the (amortized) cost of implementing "car OS's" on touchscreens before even getting to "what does the infotainment screen look like".

3. where the screens do potentially save money is in allowing rollouts of new features without requiring new hardware (which in fact would generally be impossible to rely on). Of course, as Tesla found out, this doesn't always go as planned, and the company can incur extra costs because users know the change can be rolled back.

4. as the article you linked to, and dozens of others, makes clear, there is a growing body of both scientific and anecdotal evidence that screens are terrible for safety while driving.

5. whether manufacturers are responding more to consumers' demands for buttons, or the evidence that they are exposing themselves to legal liability for their interface designs is hard to get a handle on at this point, since they notoriously do not speak openly and honestly about such things. Therefore, please do feel free to believe it is an example of corporations responding to consumer demands, while I'll continue to believe that it is corporations covering their collective asses for the design mistakes they've made (preferably before they get sued over a collision on par with the navy vessel one that led to their removal from US navy ships).

That's nice, until the entire industry decides that this needs to happen. This is why the mystical "free market" is only "free" for corporations.

Like buying a dumb TV or a printer that isn't a scam. Good luck!

Then you can expect the carmaker to jerk you around indefinitely. This month, 300 HP costs $5. Next month it's $10. One month, your wipers won't go intermittent unless you pay an extra $3. Want ABS to function? Uh oh, your subscription lapsed. No brakes for you.

Sure, all those terms were written into the purchase contract, but with dozens of subscriptions, what sane owner wants to stay on top of all those options, activations, and deactivations?

Will the carmaker let you upgrade your software without buying new hardware? Don't bet on it. Not if there's a chance to suck more money out of your generous wallet.

Screw all that. While I much prefer to own cars with elan, I'll buy a Honda just to avoid being jerked around. And after a couple decades of owning BMWs, that's just what I did. No more hostage-taker carmakers for me.

In fact, that's why Jay Leno doesn't own a Ferrari: jackass sales tactics.

The problem is when the entire market becomes nothing but dog turds. Or, realistically, 98% dog turds and 4% premium-priced diamonds (note the overlap)

Seriously. It isn't like anyone needs a Mercedes. There whole brand is around flashing wealth around and crap like this is inline with that. Buy something else.

When every available "something else" needs a subscription just to start in the morning, what then?

Drive an old car and maintain it forever, I suppose.

You are correct that nobody needs a luxury vehicle but those are the brands that the Fords and Chevys of the world will emulate in their mid to lower priced tiers.

And when the market decides to form an oligopoly and switch to the rent-seeking model, then what do consumers do?

It's bizarre to me that in 2023 there are still so many people who think that anarcho-capitalism works.

Priority should probably be in legislating 280 horsepower in passenger vehicles out of existence.

I'd just like to point out that Tesla's performance upgrade, (which is software only) unlocks screens to tune how the drivetrain works.

There is a non-trivial amount of engineering that goes into making those features. I suspect that the software that controls the drivetrain requires making non-trivial changes to operate at higher horsepower, too.

Is it worth it? I haven't paid the price for it in my Teslas, but it's certainly worth it for someone to pay for it.

> I'd just like to point out that Tesla's performance upgrade, (which is software only) unlocks screens to tune how the drivetrain works.

No it doesn't unfortunately (I bought it). Elon tweeted years ago the in-app/in-car purchase for the performance increase would get the drivetrain tuning screen that the Performance models have, but it has never shipped.

The feature, similar in concept to Mercedes here, $2000 (one time) "acceleration boost", adds/unlocks ~50hp and reduces 0-60 time to under 4 seconds on the dual motor non-performance model 3s etc, but you don't get any additional screens.

> https://www.notateslaapp.com/tesla-reference/1040/tesla-acce...

"Although vehicles with Acceleration Boost have better performance than their Long Range counterparts, they do not include Tesla's Track Mode feature."

"track mode" is the extra screens.

What would be interesting is if we have continued high interest rates whether the push for monthly subscriptions will subside.

Recurring revenue brought back for a DCF at an interest rate of 5-6% is very different from when an interest rate of 0-1% is used.

Also if the credit crunch gets worse with continued high interest rates, access to the upfront capital from the customer to fund expansion/R&D becomes a lot more interesting compared to when banks are throwing money at you.

I will get downvoted to oblivion for this and apparently this makes me a simp.

But if I buy the car and don’t care for the acceleration, then I can NOT book this feature. And in a competitive market, which the auto market is, this will mean that the MRSP for the car is lower for me than it would otherwise have been.

Unbundling is part of what made air travel affordable. In a competitive market, unbundling lowers base prices and creates consumer choice.

Sure, but that doesn't mean a subscription is the consumer-friendly way to manage those costs.

If a buyer wants 500hp instead of 300hp, there should be a 1-time fee assessed at the time that feature is unlocked (traditionally at purchase because it required a whole different engine; now via app/cloud/magic because it's all software).

The only reason a subscription model should be foisted on the consumer is when the vendor has actual recurring costs to provide a service. In this case, they do not - it's a one time software update.

If you bothered to click on the article before commenting, you would know that Mercedes gives customers the option to buy it outright or pay a subscription.

> the option to buy it outright

Does the next owner of the car also get it? No? Then it is not "bought outright", it isn't a purchase at all.

I did read it, so get fucked.

In some ways, they do have costs - the on-going extra wear / load on everything in the vehicle, which presumably is covered by the warranty if you pay for this. That's not free, nor zero.

Sure, but that should be baked into the one-time fee.

The warranty period is known. The rate of failure is know. Etc.

And by your argument, once the warranty is done, the go-fast software should be free (or nearly so).

Wouldn’t the additional wear and tear accumulate over time? The effect of added acceleration doesn’t apply all at once. Mercedes probably does know the rate, and the fee may well cover that.

I'm sorry — I wasn't aware vehicle manufacturers were obliged to pay for my servicing costs for regular, let alone undue, wear and tear?

It depends what wore out.

Brakes and tires? That's on the consumer.

Higher warranty claim rate due to the higher motor output? That's on Mercedes. But only during the warranty period. And if they have any sense they've modeled out that additional wear and now how much it costs (they need it to correctly price a subscription too).

Chances are they've over-engineered the car so there aren't (many) additional warranty clams. So any argument that you get savings passed to the consumer are likely incorrect. The buyer pays for a chassis/brakes/etc that can handle 500hp even if they only want the 300hp version.

I'm sure when the warranty is up they offer it to everyone for free right?

That's absolutely false. You are painting the picture as if the car maker will sell you a high performance model (with all the necessary parts for performance) at a lower cost. No they will sell you that model with all their profit margin and then charge you extra monthly for the performance.

this is untrue in a competitive market

And yet here we are. If they won’t compete with each other, regulation would seem the answer to this crap (as the original poster proposed).

This isn't even going to work in the long run anyway. Imagine being the car sales person. It makes you sound like a cheap used car salesman trying to nickle and dime the customer while selling "luxury".

The whole idea will be perceived for the pettiness and ripoff it is. Especially when no one will even know you pay the extra a month so there is zero status symbol with this.

No way this is around in a few years. They will lose more sales than they will ever make up with the monthly fee.

Markets which require billions of dollars to compete in are not truly competitive. They may be competitive in a regulatory sense, but not in a practical one. And these markets have huge amounts of regulation as well that limits competition on top of the financial limitations on competition.

The slim margins in the automotive sector would like to have a word with this argument.

The 14.8B € profits in 2022 would also like to have a word with your "slim margins".

Slim margins say nothing about competitiveness. You can lose money in uncompetitive or competitive markets. You can have huge margins in competitive ones.

Also I don't think the 10.5% profit margin of Mercedes is low - the average for the S&P 500 is 11%.

This is often raised as a caveat when a business does something anti-consumer.

Maybe it's worth accepting that businesses will not behave as you expect.

If you don't care about the acceleration, then you can simply not accelerate. Don't press down on the pedal so much. Why the hell do you need to "unbundle" the car's acceleration? It's not even "unbundled", the engine is perfectly capable of doing it but it's refusing to obey your command. How is it even possible that people are justifying this insanity? What's next, paying extra to unlock geofenced destinations? Car shuts down in the middle of the road unless you pay for the premium destination package? Car is in perfect condition and can absolutely go there, it's just refusing to?

Does the same apply to medical care?

Should doctors cripple children that are born unless their parents charge extra to allow them to walk?

In both cases the product is initially created with the ability, and it’s a competitive market where the parents who are okay with this can save money on their birth expenses…

Edit: This “service” is waste, and morally reprehensible like burning a perfectly good house down, or shooting a deer and letting it lie to waste. Mercedes does not gain any additional capacity by reducing individual cars ability.

You think you're paying less? You sweet summer child. You're paying for that hardware, they just charge the other folks twice for it.

I believe that the statement "the car will be cheaper because there is a subscription add-on enhancing the amount of horsepower available" is false

This is a case of creative business modeling. I believe that companies should invest in creating good business models. They also shouldn't over complicate them

Given that, I believe that the subscriptions to unlock seat heaters are a worse example of this and not great for customer satisfaction. Specially since all those cars are already equipped with seat heaters and essentially artificially jailed by software

LOL. There's that saying... "We pass the savings on to the customer."

Nobody ever does this. The savings is never passed onto the customer. The only time that happens is when they're trying to get just in under the competition's price, but will never go lower than that. Nobody is trying to pass the savings onto the customer, ever.

The problem with this line of thinking is that the price reduction for the "affordable" option compared with the old all-in pricing is $5. The price premium for the new deluxe (with additional features compared to the old all-in price) is $20. [Note that the $5 and $20 are meant to be relative to each other, not to the base price]

People then say, "customers must prefer dogshit because their spending habits tell the story"

not sure if the current airline industry is a great model for all other industries.

at some point unbundling becomes extreme lack of transparency and customer-hostility if not a downright scam.

there are such things as externalities and transaction costs. they are manufacturing externalities and transaction costs to their benefit.

some companies put out the initial product with high-quality parts and as soon as it gets good reviews and traction they sub out cheaper parts. you could say if they didn't do that they'd have to charge more, they are giving early adopters an incentive or something, people should research which parts they are getting and let the market sort it out. if you value your time and expect reliable information from reviewers it's your problem.

today everything is a SaaS and you are permanently in a hostage situation where your car could get remotely downgraded, they could stop supporting it or discontinue a feature.

a market is a set of legal and social conventions and this is a pretty bad one. if you like markets you should want them to not be hellish, which means reasonable rules and conventions.

Unbundling is also what made air travel a shitty experience for everybody. Same thing with cable TV.

As opposed to a great experience for the privileged few, yes :)

Someone has to cover the cost of hundreds of thousands of cars that have this unused feature. That's the rub.

Frictionless competition in an economic vacuum does not exist. It especially doesn't exist in the US, where foreign car manufacturers are banned from selling their superior, smaller, efficient, lower tech cars that have everything I actually want. Car makers now have a gigantic grapple on an industry that takes billions of dollars to get into. There is nothing approaching a free market for cars in the US.

Price discrimination makes this "affordable", until the base price is just raised back to where it was originally except now you have a gazillion fees you have to pay so that companies can extract more money from people less sensitive to price changes.

A company's dream is to enact price discrimination on every single transaction so that there is no such thing as a consumer surplus. The absolute dream of a company is to make it so everybody pays exactly the largest amount they can bear for everything.

This is why we have tipping everywhere. This is why we have features locked behind paywalls for no reason. This is why we have colleges that are uber-expensive, unless you are poor, in which case they aren't expensive because you actually care about the price.

Price Discrimination and Big Data, when combined, allow for companies to give prices in such a way that no consumer on earth gets a surplus. Legislation to ensure markets with consumer surplus continue to exist is badly needed.

is it ok to unlock this in your car without paying?

Always and everywhere. Bomb anyone who uses government power to enforce a decision of "no"

I'm not defending this, nor promoting. TBH, this is similar to what BMW is doing with heated seats...the hardware is in the car, but you have to pay to option it in. /smh.

Regardless... based the info in the article, you can bypass this particular monthly cost, and pay upfront. Nothing unusual about charging for options... other than this is an option already built into the car, that you pay extra to enable.

From the article: Buyers can bypass the monthly subscription completely however, and opt for an annual subscription payment or simply pay a one-time flat fee. For instance, a buyer could take an all-wheel-drive Mercedes-Benz EQE 350 sedan from its standard 288 horsepower to 348 permanently for $1,950."

This type of option add is similar to Tesla, who charges $2k (no monthly option) for "performance boost" on their model 3 and Y, and $15k for their FSD (don't get me started on this feature), which has a $200/mo option.

ok well there probably is somewhere here but I just scrolled through 20 comments and everybody was talking about how Mercedes sucks and this was a dick move, and also that the people who thought that it was a cool move were losers and I'm starting to wonder if these people with opinions that to me seem super unlikely actually exist in any sizable numbers.

> RENT FUCKING SEEKING.

That's not rent seeking. Rent seeking is when an entity has control of something that can't be traded in a liquid/efficient way (this part is important!) and tries to leverage this uncompetetive situation into revenue that isn't subject to market forces.

Cars are pretty liquid. Subscription products are very liquid. If people don't want this they won't buy it. If they don't want cars with this subscription model they'll buy a Tesla[1] or VW. That's exactly the opposite of rent seeking.

That's not saying it's good (or bad) for consumers. But it's not rent seeking.

[1] Tesla also sells over-the-air performance upgrades, but it's a fixed price and goes with the vehicle after purchase. They do have subscription fees for data access features, and for FSD though.

> That's exactly the opposite of rent seeking.

Untrue. They aren't monopoly rents but they are rents. Can you get better performance from your Mercedes EV through another provider? No? It's rent.

> Can you get better performance from your Mercedes EV through another provider? No?

No, but you can sell it and buy a Tesla. Having more features is just "selling a better product". By that standard any optional feature on a market-leading product is "rent-seeking", and that's silly. Is the App Store rent seeking? Is selling junk on Fortnite rent seeking?

No, that's just "selling products". Rent seeking is a specific form of market distortion, and the concept just doesn't apply to consumer products. It's about stuff like real estate control or regulatory capture. As always Wikipedia has a great page: https://en.wikipedia.org/wiki/Rent-seeking

Tesla does the same fucking thing.

One of the reasons I didn't buy a Tesla. Though to be clear with Tesla it's not a never-ending sub, it's a flat fee and transferrable.

For optional features it’s rent seeking if they’re charging much higher margins for the optional extras than for the base product.

"Rent seeking" does not mean "seeking to charge rental fees" but that seems to be how it's being used by GP and others here.

Don't know why the parent comment is downvoted--it's totally right. "Rent seeking" is a term of art with that doesn't at all mean "trying to get people to rent something they could buy".

They're charging extra for something that would cost them nothing, deny them the use of nothing, require none of their resources, if you could use it without paying them. I can see an angle for calling that rent-seeking.

Is charging for a feature unlock in a piece of software also rent-seeking?

The feature has already been developed, I have already downloaded the software to my device. It would cost the developer nothing, deny them the use of nothing, require none of their resources for me to use the feature and yet they charge for it.

How is that different?

This would make more sense as a comparison if adding two or more modes of operation hadn't taken more work than just having one.

I think the "it's rent-seeking" position would be weaker for toggling entire features on and off—the specific example of unlocking better acceleration was them adding a worse mode just so they could charge a subscription for the better one.

Like making a specfic mechanic in a video game worse so they can sell the fix later on.

It could be justified with a warranty opt out; ie higher discharge from the batteries increases battery warranty claims.

But you should then also be able to opt out of the battery warranty.

I agree but why does the software world get away with the same behavior? Why are we only outraged when it comes to physical goods?

Hosting? Updates?

Physical goods like cars 'get away with it' for things like fuel; hosting is in some sense similarly 'consumable'.

Not hosting or updates. Paying money to unlock content or in game BS currency

It’s a free market they can do what they want.

Im ready for the after market EV control systems too…

It's stupid, but so is anybody buying a luxury car in the first place unless they have millions and millions of dollars to burn on stupid shit to satisfy their own vanity and other frivolous tendencies.

I have much stronger feelings about general right-to-repair (which crap like this tends to obstruct, so I'm definitely against it in that sense) and speculative worlds down the slippery slope where actual safety is compromised if you don't pay an additional subscription (just $60/mo to enable your side curtain airbags!). But you won't see me crying over conspicuous wealth-signalers wasting their money on crap—they're going to do that anyway, with or without Mercedes' help. And faster cars are more deadly cars, so locking this functionality behind a paywall may actually save lives (though the real, sane solution would be to regulate excessively fast/massive/etc. personal vehicles off public roadways).

I feel like people miss the point of cars like Mercedes/BMW/Audis

All of those cars are essentially badge cars - i.e you pay more for the badge that shows that you have money and are able to pay more for the cars. Nobody buys those cars because they are better at commuting than other cars. So subscription services is natural for this type of market.

I think that's how it looks from the outside, but people I know who have bought these cars look at it different.

They like the attention to detail of mercedes and the quietness.

They like the attention to detail of bmw and the performance.

(not sure about audi, don't know anyone well who has one)

But this move sort of pulls back the curtain between the marketers in charge at these companies and their view of the customers. "they are price insensitive and will pay more without worrying".

But really - you don't want to piss off a first-class customer. it's easy to get under their skin if you treat them with disrespect and they remember.

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