When they have to change the rules | Hacker News Reader

When they have to change the rules

waxman.me

49 pointsnottombrown17 comments

Open articleView on HN

I have some degree of sympathy for the incumbents. Imagine you're in the hotel business. In your world:

* You're a corporation

* You've got insurance requirements

* You've got operational licenses

* Your product is taxed

All these burdens were layered on over the years. Some of them are a result of consumer protection advocacy. Some of them are intended to support the communities in which the hotel is based. Agree or disagree with them, all hotels have to play by the same rules. When right-wingers complain about "regulation", this is the kind of thing they're up in arms about. Services like Uber and Airbnb do an end-run around these business burdens, and the incumbents are crying foul.

Granted, many of the incumbents are easy villains. Corruption almost always accompanies regulation. When you focus the power to set the rules in the hands of a small group of people, that group is always going to get a lot of attention from those whose interests are affected by the rules. The trick is to find the right balance between regulation that protects the public and limiting the power of regulators so that corruption doesn't consume the whole industry.

Having said all that, occasionally an industry needs a reboot. This could be the time for taxis and hotels.

At AirBnB's current scale this actually causes an annoying problem. It seems they have a non-negligible effect on the cost of rent.

Since AirBnB does not have the requirements listed by the OP above they are able to operate at a lower cost and capture demand that would have otherwise gone to hotels. This demand then fills up buildings that were originally intended to be multi-family residential buildings and are now effectively being used as hotels reducing apartment supply and driving up cost.

You're right and you explained it well, but I don't agree with the characterization of it being "annoying". It's just the market figuring out the best use of the space. But I also don't live in NYC... :D

So now maybe some hotels will realize they can make more as apartments?

I don't feel any sympathy for the taxi cab industry. Many of the regulatory "burdens" they face are consumer protections enacted because the taxi cartels were constantly abusing their customer base. With no outside competition, they could afford to do that. Uber has voluntarily implemented most of the requirements that taxi companies have been forced into compliance with simply because it makes for a better customer experience. Fixed rates to airports? Check. Accepts credit cards? Check. I've gotten into countless arguments with taxi drivers over taking credit cards even when it's written right on their cab that they have to take credit cards.

There are so many industries where entrenched groups have so many advantages they stop feeling the need to innovate.

Off the top my head:

- Insurance of all kinds

- Payments (visa/mastercard)

- Mattresses - I have no idea why I put this here but I feel like this industry is a cartel

- Diamonds - Speaking of cartels...

- Healthcare

Re mattresses, it's not just your imagination. Many/most of the industry leaders have been caught up in private equity shenanigans over the last few years. http://online.wsj.com/article/SB123629959334046669.html

I believe Leaky (YC S11) was aiming to disrupt the auto insurance industry, yea? Anyone know how they're doing? And if they have ambitions larger than price comparisons?

Also, somebody please disrupt the diamond industry. I can't wait for the day artificial diamonds easy to find, customize, and purchase online.

Diamonds are super easy to purchase online so that isn't the problem. I am fairly certain the real issue is the DeBeers marketing machine.

"A diamond is forever". There is a whole essay on this that was an awesome read. Made me never want to purchase a diamond.

Yes! http://www.theatlantic.com/magazine/archive/1982/02/have-you...

There's also a deeper trend from more rules to less. In the mid 20th century much of the economy had the shape it did as a result of negotiations between powerful groups. Now things are more fluid. Which on the whole is good, because the old arrangements often embodied technical limitations that have now disappeared.

But to devil's advocate that point of view, isn't this also the case with the banking industry- to negative effect? It was systematically deregulated over the course of a decade and the hugely negative effects of that are only coming to light now.

Things are now more fluid and there is much more pressure on being efficient but I'm not convinced that we're moving in the direction of less rules, for example

> Fifty years ago, only 5% of the American workforce was licensed; today it is nearly 30%.

http://online.wsj.com/article/SB120701341410579079.html

This is really surprising to me.

I can think of countless things that were okay when I was a kid, but illegal now. On the other hand, there's very little I can think of that was illegal then but legal now. From everything I've read, laws, regulations and even types of crimes classified as felonies are increasing and at an ever-faster rate.

I think Uber and AirBnB are in very different situations. Uber is a clever hack within the rules, that seems to follow the claimed intention of the laws (though violates a lot of the reasons that certain interests had for aiding in the creation of those laws).

AirBnB however has a business model that encourages people to do something that in many, many places is just not allowed. It also runs afoul of the spirit of zoning laws.

I love the design of that blog. Simple but subtly original.

It's called svbtle and the theme is part of a blog network.

https://svbtle.com/

Reply on news.ycombinator.com