One of the first things I remember about moving to a rich country was the absence of knockoff products sold in retail stores. It seemed amazing to me that companies would deal only with authorized distributors.
These days, I feel like I'm in a twilight zone where 'wealth creation' is happening by putting a fresh face on 3rd-world country business models.
First it was Uber with the "hire a random guy off the street to be my driver". Next it was Fiverr/Upwork/ etc, the digital equivalent of rounding up day labourers in the Home Depot parking lot.
Now it's Amazon selling bootleg crap at scale. What's their excuse? Some variant of "move fast, break things", no doubt.
> These days, I feel like I'm in a twilight zone where 'wealth creation' is happening by putting a fresh face on 3rd-world country business models.
It's not a secret that lots of business models coming out of Silicon Valley are just regulatory workarounds/loopholes. It's a matter of chance that they coincide with some 3rd world country models as the latter's fuels are survival/corruption/perceived lawlessness while over here it's 'disruption'/first-to-market and the drive to become a temporary monopoly on a regulatory loophole.
Sometimes is outpaces legislation (self-driving cars, cryptocurrencies, all the privacy things) but more than often it just finds a vulnerability in the unspecified existing legislation/regulation (see airbnb, uber, lyft).
It's a matter of chance that they coincide with some 3rd world country models as the latter's fuels are survival/corruption/perceived lawlessness
It's not a matter of chance. The earlier government regulation was better than no regulation, but had significant downsides. Taxi regulation got corrupt and the market didn't work very well. Uber and company came in with technology that worked better than the old government bureaucracy at cleaning up and regulating the market. I can't attest to how well Fiverr works.
Uber and company came in with technology that worked better than the old government bureaucracy at cleaning up and regulating the market.
To me, at least, this assertion requires some substantiation.
It seems to me that what Uber has been better at than traditional taxi services is solely the technology. I can only expect to hail a taxi on demand if I'm in a big city, airport, train station, or other transit center; if I'm in a rural area, suburb, or even a smaller city, I'll probably have to call to arrange a pickup and hope it actually arrives. (My personal luck with calling for taxis has been...spotty at best, while for Uber and Lyft so far it's been 100%.)
But "cleaning up and regulating the market?" I don't see how ride-sharing services are doing anything to regulate the market, and "cleaning up" is pretty hard to measure. Ride shares tend to be cheaper than taxis, and I don't doubt that part of the cost of a taxi fare is due to regulation -- but a large part of it comes from the uncomfortable fact that Uber and Lyft are both subsidizing rides with VC money. If they actually charged enough for the ride to make a profit, average ride prices would easily double.
Also, while taxi regulation is pretty corrupt, well, Uber is maybe not the poster child we want for how unregulated companies are gonna do better on that front.
To me, at least, this assertion requires some substantiation.
Taxis used to be smelly and dirty. Drivers were quite cavalier in their attitudes towards customers. Hailing a taxi was difficult and chancy. I was scammed by drivers who would take me on indirect routes for more money.
It seems to me that what Uber has been better at than traditional taxi services is solely the technology.
That is precisely the point.
I don't see how ride-sharing services are doing anything to regulate the market, and "cleaning up" is pretty hard to measure.
There are now rapid and technologically mediated consequences for both drivers and riders for behaving badly. Uber drivers are always polite, and riders are always polite. Riders are now strongly motivated to never keep their drivers waiting, which was not the case for taxis. The vehicles smell better! Drivers never scam you by driving a circuitous route.
It's pretty obvious to me that the market is much better regulated through the technology.
Also, while taxi regulation is pretty corrupt, well, Uber is maybe not the poster child we want for how unregulated companies are gonna do better on that front.
The point is that while Uber is far from a poster child -- no argument there -- the technology (read: the rapid flow of accurate information in the market) still has them doing a better job than regulatory mechanisms from the 20th century.
I've also had quite rude Uber drivers, who were worse than the worst cab driver I've ever had. They are by far an exception. I've also been in a taxi that smelled like an ashtray many times. I think it's happened just once to me with Uber. Overall, the track record is much better with Uber.
Ignoring the benefits to taxi drivers, and focusing on a pure economic standpoint, Uber/Lyft did clean up the market place by busting local government taxi commissions which had previously created both economic minimums and maximums around fixed prices and fixed number of cars on the road respectively. This lead drivers to focus on only a certain type of trip, and reduced the total number of rides people took due to a higher cost, uber pool further added to the later one there.
This said, every tragedy of the commons scenario that was previously avoided by regulation happened, the streets of major cities are almost entirely cars for hire, where it's nearly impossible to make a living wage working as a driver on only 40 hours a week. This right here is the cost of neoliberalism, yes more people have jobs, the economy expanded to meet a more desired demand, but the workers in the field are largely worse off than had they all been protected in other industries alongside scarce resources being even more competitive than they were previously.
This said, every tragedy of the commons scenario that was previously avoided by regulation happened,
What are the downsides that regulation avoided, which are now happening?
the streets of major cities are almost entirely cars for hire, where it's nearly impossible to make a living wage working as a driver on only 40 hours a week.
Making a living wage wasn't so great for beginning cab drivers either. They had to rent their cabs from medallion holders, which often meant they had to take a lot of rides before they saw dollar 1.
You have received anecdotes, but not the underlying reason.
With a taxi, if you complain about poor service, the driver will remain a taxi driver. Therefore drivers have little cause to care about customers that they will never see again.
With an Uber driver, drivers that fail to get good reviews quickly stop being Uber drivers. The result is that Uber drivers are much better on average than taxi drivers.
To me, at least, this assertion requires some substantiation
Then let me invite you to come visit my city, Vancouver, the last major city in North America where ride-share isn't available and taxis are the only game in town.
First, taxi regulations stipulate that taxis get to charge a flat-rate tariff on every ride. They have to/get to charge this. Whatever this tariff was meant to accomplish, it incentivizes taxi drivers to ignore their dispatcher when taxis are in high demand (like on weekend evenings) and only pick up off the street for short hops around downtown. If you need a trip further out (say 5 miles), forget about it - you'll wait for hours before you can get a cab (I have, on multiple occasions).
Second, taxi medallions are crazy-expensive (hundreds of thousands of dollars) and are a cash-cow for municipalities. They're meant to tie taxi cabs to a local city, but they also make elastic cab-supply impossible - you can never have more cabs on the road than you have medallions and because the medallions are so expensive they need to be amortized with constant use. That incentivizes everyone to have far fewer medallions than the industry would need to satisfy demand during peak periods. The most efficient deployment of medallions for a taxi company is to have enough medallions to satisfy minimum, not peak demand.
And don't think that medallions will guarantee good local service - just because a taxi company has a medallion issued by the municipality that you live in doesn't mean that they can pick you up and drive you home. I live in Burnaby (city next to Vancouver) where Bonny's Taxi has a legally-granted monopoly, but if I'm downtown (which is in Vancouver) I can't call Bonny's to pick me up - medallions regulate pick-up, not drop-off.
And even if you manage to flag down a cab on a busy night, they'll quite commonly flat-out refuse to take you anywhere other than downtown. They're barred from doing this, but the industry is self-policing and you can guess how likely it is that a driver would face any consequences for this. Maybe if you film them and post it to social media. But certainly not otherwise. And who can blame them? They have to pay down their medallion-mortgage, and exploiting the flat-rate tariff on short-hop rides downtown is the best way to do that.
Also, carry cash. Many taxi drivers will insist on cash. "Oh, my machine is broken. You need to pay with cash." Again, they're barred from doing this, but again, the industry is self-policing and you can guess how often complaints lead to consequences. It still happens all the time.
And because these are a great bunch of guys, their industry spends millions lobbying the provincial government to stall legislation that would allow ride-share in Vancouver. British Columbia went through a period in the 70's where it was indistinguishable from a Soviet republic with a planned economy, and implemented socialized car insurance. Everyone needs to buy basic liability auto insurance from our govt car insurer (at about twice the market rate in other provinces), and that insurer has simply refused to insure ride-sharers. That's been a far more effective barrier to ride-share than has existed anywhere else that I'm aware of. And the taxi industry spends aggressively to make sure that that doesn't change.
Also, while taxi regulation is pretty corrupt, well, Uber is maybe not the poster child we want for how unregulated companies are gonna do better on that front.
They are exactly that "poster child". Uber at their very very worst is better than the taxi companies and the taxi industry in a city where ride-share isn't available.
I live in a city with Uber & Lyft, and avoid taxis wherever possible for exactly the reasons you gave. Every time I take a taxi I regret it and swear it'll be the last time.
Another problem with cabs is that they are not incentivized to use the fastest route. Determining the fee at the start of the journey aligns both the driver's and passenger's interests.
Once I actually manage to get a cab, after the bars have closed and I've been waiting 3 hours or more, I can always be certain they'll putter me down Hastings street when Prior street would get me home a full 15 minutes faster.
The British Columbian government recently 'legalized' ride-share. They were elected in 2016 on a promise to legalize ride-share, but taxi-industry money bought a 2 year delay in the legislation. You can't ride-share yet, though, because taxi-industry money also bought an additional 1 year delay in deployment of ride-share-compatible car insurance, which won't be available until late 2019, 3 years after the government promised, and 5 years after the previous government proposed legalizing it. But don't get your hope up yet, though, because
1. we don't know what the ride-share-compatible insurance will look like. In Manitoba, another province with government-owned car insurance monopoly, the ride-share insurance was crafted to make it impossible for Uber and Lyft to enter the market. Ride-share companies quite reasonably want their drivers to be able to get a separate rate between when they are driving privately vs when they are driving for ride-share, just like what they can get from private insurers. Manitoba's government monopoly wasn't willing to give them that, which makes ride-share unworkable.
2. the government's 'legalization' legislation enables a public commission to set supply limits on taxis and ride-share, much like medallions. This almost completely nullifies any benefit ride-share would bring to the city and is a poison-pill that will probably keep Uber out of Vancouver.
So on top of the 5 years we'll have been waiting by fall 2019, figure in another 2 or 3 years for everyone to realize that the legislation is a bust and that we've been suckered by the taxi lobby again.
The taxi-industry's lobbying money has been very well spent.
cost savings/increased efficiency is the name of the game, and first world regulations are costs SV can ignore. sometimes the quasi employees suffer the burden (but get increased flexibility), sometimes the consumer suffers (lower price but increased variance in quality of goods/service)
> cost savings/increased efficiency is the name of the game
I'd say "socializing losses, privatizing gains" is the name of the game. Those popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally; it's just disrupting the society and hoping money pours through the cracks.
nah i wouldn't go that far, banking employees and shareholders of recapitalized companies in 2007/2008 privatized gains and socialized losses when they were mostly bailed out with taxpayer money/federal reserve credibility instead of going under, but uber/airbnb/aws are pure efficiency plays. they increase the utilization of (what used to be) private cars, real estate, and servers respectively. there are trade offs between renting and buying, and we are moving more towards a rental economy mostly because it's more efficient in many cases to just rent what you need when you need it (opex) rather than spending big on a depreciating asset (capex)
If uber/lyft are pure efficiency plays, then why do they have their own programs to finance the purchase of new cars just so people can drive for uber/lyft?
By the same token, but much harder to substantiate, why are people buying property just to rent it out with airbnb?
The negative externalities are there. You just have to know where to look.
Because the regulatory environment around taxis and hotels are so onorous that doing something a reasonable person might find absurd actually improves the efficiency of car services/boarding.
People buying new cars is bad for the environment. Houses being bought up solely be rented out by the day drives up housing prices for people who actually want to live in those neighborhoods. Come on, dude.
Never seen this formulated as such but I really like it. I was reading a book which tangentially dealt with that [0]. It changed my perspective on how new businesses are increasingly externalizing their costs to the consumers.
I don't think "externalizing their costs to the consumers" really makes sense.
In an idealized market, costs should be passed onto the consumer. From what I can tell, the book you reference is just complaining that this cost changed from money to labor.
It is also worth noting that, in many cases, this results in a net win for the consumer. Eg, whwn I buy from a full service gas station, I am paying someone to pump my gas, and paying the to sit idle waiting for customers, and paying (in time) to wait for them to finish.
In contrast, in self service, the only cost from above I have is 1 person pumping gas (which switched from being paid with money, to being paid with labor)
An idealized market requires full awareness of all of the costs. A key factor in "externalizing" costs is hiding those external costs from the consumer.
E.g. a perfect market would notice the increased quality variance of goods and services and would require the price to go down proportionally so the total cost is the same. But consumers don't all see it at the same time, so every company has a chance to hoodwink every consumer by pushing additional costs onto them without their initial knowledge.
The key innovation of money is the ability to accurately evaluate the value of goods and services; by pushing all of these extra external costs onto the consumer we're basically going back to bartering.
Every additional variable that the consumer is required to consider during a purchase decision is additional cognitive load. That's why people pay so much for free/fixed shipping costs: it reduces the number of variables you have to keep in your head by 1. It's also why I think that adding tax after the listed price (like the US does it) is terrible: it puts more cognitive load on the consumer. Consumers today are attacked with dozens of potential hidden external costs around every corner, it's like a DOS attack on the consumer's brain and inhibits their decision making ability.
The book is arguing about using a service which costs X. The business then makes the service more efficient by reducing labor costs for itself and not passing the savings back to the consumer but instead keeping the same price while making the service shittier by having the consumer do more work. So for the same price, you get less service, need to do more work while the business hoards the money.
I also have never head it put quite this way, and realize how true it is. One example is American Football stadiums. Get the people to pay for it and charge them to go there.
It's not any kind of socialism. I know in American parlance "socialism" somehow means anything to do with government, but this is not how the rest of the world thinks of the word, and the word "socialism" has its correct interpretation right in it.
If it's a private entity capturing the state's revenues, that's anything but social. It's the opposite. It should be called what it is: lemon corporatism.
That phrase always made sense to me in the context of banks for example who basically expected to be bailed out if they fail a la 2008, but how does it apply here? How is uber socializing losses?
It might help to use "costs" rather than "losses"?
For one, consider that we attempt to constrain the price of labor upward to cover the cost of living. By having a large workforce that is not necessarily subject to these constraints (minimum wage, employer health plan, payroll taxes, etc.) Uber fails to meet the CoL for a large slice of its workforce, which then has to lean on society to make up the balance.
By pushing the burden of operating and maintaining a taxi fleet onto its drivers, rather than making it a cost of doing business like a real taxi fleet.
>hose popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally
Pretty lame analysis. There are lots of companies that are in it to do good or actually improve society.
I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful.
> There are lots of companies that are in it to do good or actually improve society.
I don't disagree. They rarely get media attention though, and I don't mention them here, because their disruption is a quite different thing from Uber/AirBnB disruption.
For that "lame analysis" part, I'll give you a task: given that you wrote there are lots of such companies, name three. ;).
> I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful.
Taxis were awful in many places, not everywhere. I'm usually taking people's word for it when they describe how Uber service is better than taxi (though I'm increasingly noticing stories about Uber quality declining). But there are cities, including my home town and the current town I live in, where taxis are almost universally good. And yet, Uber came and attacked taxis everywhere, whether good or bad. You can do things like that when you can freely break the law[0] and get away with it[1], and when you can lose money for longer than all your competitors can stay solvent.
Honestly, Uber story looks pretty much like a typical story of a corporation entering international market and displacing all little local players, except with more disregard for law, and some weird belief people still have that Uber is a startup.
Still, I'll grant Uber that some of the disruption came out for the better, because it allowed more ethical and legal competitors to emerge in this space. And yet:
> working there as an employee isn't great
Here's a thing: do we consider pushing more and more people into wage slavery to be "improving society"?
--
[0] - Not just general "taxi regulations", but also traffic safety (a common story to hear was Uber without valid insurance) and tax laws (in my country, I remember our equivalent of IRS being the most active in hunting down Uber drivers).
[1] - Half of the blame here goes to the municipal governments, who should've punished Uber immediately for breaking local laws. AFAIR only Germany behaved correctly, and started issuing service bans quickly.
Not just general "taxi regulations", but also traffic safety (a common story to hear was Uber without valid insurance) and tax laws (in my country, I remember our equivalent of IRS being the most active in hunting down Uber drivers).
Don't forget mandatory rest periods, enforced by technical means. My ex-girlfriend used to drive taxis and if you got caught breaking your mandatory rest period the fines were sky-high. Repeat offenders lose their taxi license.
Contrast that to the nice Uber driver, who has no restrictions on driving you around after a double shift at the widget factory and a couple of double whiskies to drown his sorrows, before picking up passengers as an "independent contractor"
What really seems lost on some of the more libertarian inclined, regulation hating chaps here is that most regulation is actually there for a reason. Among other things like protecting your life and health.
When people here start to delve into the "evil hotel lobby that is so mean to this scrappy AirBnb start-up, which sends all their communication 'with love'" then I usually want to start to gag.
Uber/Fiverr/Upwork automate the trust aspect, so I can be assured decent service or I’ll get a refund and the provider’s reputation will be dinged. Outright scams are hard to pull off in this environment.
Amazon... I can only speculate what’s going on there. Maybe the resulting price pressure turns the screws on suppliers? And honestly I’ve never gotten a branded product from them that I thought was fake.
This could just be a fulfillment optimization; there are obvious cost savings and efficiencies from commingling, and maybe they’re working on a solution now.
Amazon... I can only speculate what’s going on there. Maybe the resulting price pressure turns the screws on suppliers?
Scammers looking for places to scam, which Amazon provides by relying on customer ratings to police its suppliers, which clearly doesn't work.
Most of the recent SV business models only work in a hypothetical place where everyone is good and altruistic.
Look at self-driving cars. There are thousands of words written about how self-driving cars will create a transportation utopia with clean, efficient transportation for all.
None of the startups address what happens when someone refuses to get out of a self-driving car. Or when a self-driving car arrives at my door and it's full of barf. Or some homeless guy decides to set up camp in there. Or it gets all graffiti tagged.
Think about how people treat current modes of public transportation. Now imagine how miscreants will treat them with more privacy, and no chance of human intervention.
Oh man, can't wait to see the future graffiti all over self-driving cars. Tech dystopia, here we come!
But for real, it's for these reasons that Google et al. place such a high value on systems to identify and deanonymize people. In a world where all of your biometric data can be easily identified and linked back to you, there won't be much room for bad behavior. The real question is who gets to decide what behavior qualifies as "bad."
Perhaps the long play is to intentionally reduce trust in competitors brands (read: anyone who isn't amazon) to push people towards an ever expanding amazon basics line, which are presumably more profitable.
Some of that seems right, but I don’t agree with the Uber example. Ride sharing has been a much more convenient and reliable service than taxis, and with less fraud (broken meters or credit card machines) and less discrimination (actually willing to drive me to the neighborhood I want). And with Uber I have a record of who drove me where. This seems pretty different from being picked up by a random person on the street. I haven’t used Upwork etc, but I wouldn’t be surprised if it was a similar experience.
problem with uber from a customer perspective is if you are a single woman taking a ride, the drivers are not full time cab employees that can possibly be fired/lose their cab medallion/permits. some women i know are considering switching to licensed cabs due to the harassment they get from uber drivers with no good mechanism to report and avoid those drivers aside from never traveling alone. as a guy, i've only had good experiences (except for the opaque surge pricing which always feels extortionate)
> as a guy, i've only had good experiences (except for the opaque surge pricing which always feels extortionate)
Totally off the main topic here, but I'm also a guy and I've had one ride that was a little hair-raising. I wasn't harassed, mind.
I was riding with two girls (downtown Toronto) in an Uber and the driver was clearly on speed. He was extremely chatty, actually quite friendly, but very frantic. Took many last-second turns, wrong way down one-way streets and driving over curbs to get out of the way of cars on said one-way streets. It was nuts.
That said, all other rides I've had have been just fine. Often better than my experiences with Toronto cabs. There's no cash benefit for them taking the "scenic route" or "making wrong turns" which I've had less-scrupulous cabbies do to drive up the fare. That's a feature I appreciate. But I just make myself deal with transit since removing the app— their privacy measures didn't instill much confidence in me.
FWIW, in the market where I drove, it was very common for taxi drivers who were so bad they lost their taxi jobs (think about that) to just turn around and drive for Uber.
If the drivers are in any way even possibly breaking the law, then the riders could go to the police. If the drivers were acting in a completely lawful, but undesirable, way then the riders could give the drivers a low rating. It is very safe to assume that the servers of Uber (and all other ride sharing services) work to opaquely disconnect passengers and drivers when either party has given the other a low rating. It's a good and obvious idea on all levels, including even just optimizing for max profit.
Personally I love Uber and avoid taxis as much as possible. The worst Uber ride was still far better than the best taxi I've taken. A driver might be chatty and you have a great conversation, or they just stay quiet. Either ways a much better experience than the angry cab driver.
I was a little shocked when Uber sent me my stats for last year 1000+ rides.
This has also been my experience. I think a meta here is that the vast majority of cab drivers don't, and can't, own their cab. Medallion cabs, for instance, are sold based on bids and have gone for upwards of $2 million and as "low" as around $500k. And in some places they have government granted monopolies meaning playing this game is the only way to drive a cab.
So most drivers rent their taxi, often by the day. And since fares are front-loaded (you earn a lot more picking up 100 people for 5 miles, than 1 person for 500 miles) it creates an incentive for taxi drivers to go crazy. Granted that same pressure is ostensibly there for Uber drivers, but I think it's different when your car is your car rather than a temporary asset you just dropped a fair chunk of change to rent for a single day.
Somehow transportation, world wide, always ends up in these sort of scummy monopolistic rackets.
I've noticed that Uber drivers tend to drive much slower and more cautiously than taxi drivers, and break traffic laws far less often. As a result when I really need to get somewhere quickly I do tend to look for a taxi first.
Personally I would say it is a mix. There are some Uber drivers that definitely can be a bit more aggressive but still safe. I suppose it depends on the area/time of day but I'll walk past the line of taxis to get an Uber. If it takes 2 minutes longer to get to my destination, the experience is much better. Hell there have been a few times I wanted the trip to take longer because of the pleasant and engaging conversation.
One pattern I've noticed, taxis honk their horn constantly and obnoxiously. Uber drivers rarely do it. When you hear someone honking their horn for upwards of ten straight seconds, it's a taxi.
Question, are Uber drivers penalized for speeding or hard cornering, stopping, etc. that would indicate aggressive driving? I would assume Uber could know this based on GPS and accelerometer readings from the driver's app.
I am highly doubtful. Uber GPS is terrible in general so I'm guessing they don't have that level of granularity. Plus what do you define as aggressive driving? It can vary depending on traffic flow and patterns of the area.
Fortunately, that bottom is rising, on average. But "first world" systems have taken a lot of abuse, along the way.
In my opinion, abuse that was unnecessary. But we let the shysters in to arbitrage against the disparities, instead of helping other countries to grow for themselves into more well-rounded and autonomous entities. Maybe I'm a fool, but that's how I see it.
> Now it's Amazon selling bootleg crap at scale. What's their excuse? Some variant of "move fast, break things", no doubt.
Competing with Alibaba. Amazon seems to have decided to increase product variety (through increasing foreign based stores) at the cost of losing quality control.
> Now it's Amazon selling bootleg crap at scale. What's their excuse? Some variant of "move fast, break things", no doubt.
Seems to me Amazon felt they couldn't compete against eBay or AliExpress and still be "low on prices". Essentially they chose that market (including copying sellers products and rebranding them as Essentials) over legitimate sales.
"There are three ways to make a living in this business: be first, be smarter, or cheat. Well, I don't cheat. And although I like to think we have some pretty smart people here in this room, it sure is a hell of lot easier to just be first." -Margin Call
First and smarter are getting more and more taken.
> These days, I feel like I'm in a twilight zone where 'wealth creation' is happening by putting a fresh face on 3rd-world country business models.
Or maybe making those that scale well more accessible and socially accepted in the service economy. Is there maybe some source that you've read, someone who has analyzed that statement (3rd-world country business models = gig economy) in more detail? I don't have much time to dig but if there was a thesis or article about this I'd be super interested in reading it.
...putting a fresh face on 3rd-world country business models...Now it's Amazon selling bootleg crap at scale.
Why does Amazon have to be limited to stores? What if they could put the right near field detection technology into a portable form factor? Like, a blanket spread on the sidewalk?
Those “3rd world business models” are amazingly efficient though. Just because the “1st world” is rich doesn’t make us smart, in fact it may be the opposite. Also, when all the bootleg crap and non-bootleg crap is made in the same factories in China, what’s the difference?
If by 'amazingly efficient', you mean the burden of assessing risk and quality is shifted entirely to the customer for every single transaction, then sure.
I'm coming from the developing world. The lack of regulations and product safety standards, is not some kind of competitive advantage, it is a problem that leads to ever falling living standards. A fire in a clothing factory killed 1300 people in my country, an incident that would have been avoidable if the building owner enforced fire safety standards.
I suppose if you think about things in terms of MR/MC curves, such loss of life is the price of efficiency.
* pretend to be upset about ever-shrinking middle class, and
* sort by lowest price and buy an obvious knockoff from an online marketplace third-party seller that takes three weeks to arrive from Shenzhen in order to save 52¢ on an item...
...is almost 100%.
They don't realize that their own cheapassedness caused the shrinking.
You aren't in the twilight zone, 3rd-world business models are creeping into the rest of the world because they worked so well in the 3rd-world.
Except in the 3rd-world the models maximized profit for businesses while consumers had no choice due to pre-existing poverty and in what is left of the non-3rd-world they are maximizing profit for businesses while appealing to rabid cheapassed consumers.
I had the same feeling a few years ago when the sharing economy was the next big thing and people were prompted to subrent their flat, guest room, tools or car. Depending on who you'd ask, it was touted as the best (or the worst) of capitalism and communism combined.
As proof that I am clearly not qualified to run a nearly trillion-dollar company, I offer this advice to Amazon -- ditch the marketplace. No more third party sellers.
I have been a reliable Amazon Prime consumer for years, but I have begun making purchases elsewhere because I can not even trust "Ships from and sold by Amazon" any more.
At the very least, quite intermingling stock. And at this point you're going to have to be public about that change and put a guarantee behind it. Your reputation is slipping.
I had the same issue. And ordering the same product (even from the same "seller") is hit or miss.
It's a weird story but I ordered a kids plate from Amazon. I ordered 2 that were totally fine but when I ordered a 3rd one, it was completely different quality, seemed to be a different material, and had a weird smell to it. It was "Prime" but almost immediately, you could tell it was a different product.
This has happened to me a bunch and I've heard crazier stories about people ordering supplements/vitamins and getting fake bottles :(
I don't trust Amazon as much either outside of a few products I trust + majority of common electronics. I wouldn't buy an HDD from Amazon for instance due to their crazy shipping shit.
Also, their shipping is so fucking unreliable. I get delays on my packages at least twice a month, and they've lost packages before :(
> I wouldn't buy an HDD from Amazon for instance due to their crazy shipping shit
I stopped buying anything electronic from Amazon because one power to USB adapter burned up, tripped a circuit breaker, and it broke my fridge. Luckily, that was the only other thing I had plugged into that circuit at the time.
Another big issue was my friend bought an Apple power adapter that started smoking after a few hours of it being plugged into the wall.
Scary stuff, especially when you consider anything that goes on or in your body could be counterfeit too.
And the prices on some of the stuff is just weird, with a lot of the Amazon provided stuff now stuck behind Amazon Prime Pantry.
I used to order a lot of our daily household stuff from Amazon: cleaners, dish soap, detergent, etc. So much of that stuff now is priced just horribly. $4 for a bottle from Amazon, but it's just from Prime Pantry so you have to order a bunch of stuff or be stuck with a high shipping cost.
If you go with one of the other sellers, the prices are frequently 2-3x normal retail, I guess preying on the fact that people don't realize they're getting ripped off.
Perhaps I spent too much of my youth watching supermarket-themed game shows, but I'm very much in tune with how much things should cost in supermarkets, and how they vary from chain to chain and region to region.
It was for that reason I started buying my household stuff at Amazon — because I could save a buck or two, per item, which adds up.
Then — as you pointed out — stuff got weird. Amazon's prices became consistently higher than the supermarkets.
Then the third-party sellers started using "AI" pricing, so that a package of soap bars that is $3.59 at Safeway is $61 on Amazon.
Then the counterfeits arrived, and now my family has a policy of not buying anything from Amazon that goes on, or in, our bodies.
These days there are bargains to be had through Amazon, but only through the two-hour shipping from Whole Foods. At least in my market. (A particular cheese that is $15/pound at Kroger is $5/pound when I get it delivered from my local Whole Foods.)
It's not too late to Amazon to regain trust. But it's not going to be a quick or easy process.
I find it a little worrying that in that vice article they don't seem to at all talk about the counterfeiting issue that was widespread on Amazon for Apple products.
Amazon manufacturer/distributor of home and kitchen goods here - the rule of thumb is that if it's <$20 (and especially if it's <$10), Amazon's pricing structure to its third party sellers basically compels low dollar items to be more expensive than retail.
Basically we pay Amazon $1 or 15% of sale (whichever is higher + ~$2.50 for shipping before anything else, so after margins and what not that's a minimum of $4 going to Amazon for marketing and logistics. That's why low dollar 1-pack items feel like price gouging -- there's been years of A/B testing on the marketplace that shows a $4.99+free ship item is way more attractive than $1.99+$3 shipping.
Amazon itself sells stuff direct from manufacturer at a loss or breakeven-ish cost for items under $3 because they can, but even those prices aren't hugely sustainable and they play around with algorithmic pricing themselves over time.
Retail logistics for low dollar items is a Hard problem. :|
It's also worth noting that people don't think of the externalized cost of actually getting to the store verses getting these things shipped. If you have to drive a mile each way just to get that one extra item, the amount your saving from not ordering online is insignificant.
Yep, Target.com is 2.89 with $25 free ship https://www.target.com/p/formula-409-powerful-all-purpose-cl... -- but for what its worth, the online stores are mostly loss-leaders for the big department/grocery stores trying to stay relevant against Amazon.
>If you go with one of the other sellers, the prices are frequently 2-3x normal retail, I guess preying on the fact that people don't realize they're getting ripped off.
And as a result, I've become much more careful about checking prices on Amazon, which can't be good for Amazon overall.
By contrast, when I go to the grocery store, I generally assume the amount I'm paying is more-or-less the same as what I would pay elsewhere. (Likely a poor overall mindset on my part, but good for the store.)
Yeah, there's a lot of specific products that are always wildly overpriced on Amazon. Mostly anything that is out of print/out of production, no matter how recently it went out or how easy it is to find, but I recently ran into it with Hanes underwear of all things--there wasn't a single seller that wasn't asking at least 50% over Target's online price.
For out-of-print books/toys/games/etc., eBay is usually your best bet. Computer hardware (video cards, RAM, etc.) is often cheaper on either eBay or NewEgg. Et cetera.
I expect out of print stuff to fetch a high price, I'm more talking about standard grocery items. I've seen ridiculous markups on penne pasta, diet soda, certain brands of hand-soap, etc etc.
Some of these items, like the pasta, are things I'd previously ordered from Amazon for a fraction of the current price. Which, again, has caused me to be much more cautious—every time I reorder something nowadays, I have to check whether the price has changed. How does Amazon expect people to use stuff like the dash button when prices can vary this much?
The reality is is that shipping an amazon item costs between $3-7. For expensive items, they can cover that cost out of the wholesale/retail markup, so you don't really have to pay it. For cheaper items, or items without that much of a markup, it starts showing up in the price. Now, sometimes a manufacturer will want to buy some market share, so they'll sell an item to Amazon cheaper to reduce that impact, and then it's available. However, it will usually go back up to the normal price, with them hoping that you won't notice.
It's the products that suddenly shoot up to 2-3x normal retail that throw me, not the ones that change by a few dollars.
But the products that double in price have made more sensitive to the ones that change by a few dollars, because I'm now on high alert for price changes in general.
Yeah, the doubling in price is usually when the low-cost vendor sells out, and only high-cost vendors are left, but you're totally right; I also refrain from purchasing via dash button, Echo commands, or any option where I can't evaluate how reasonable the price is.
How does Amazon expect people to use stuff like the dash button when prices can vary this much?
I have a couple of Dash buttons for Gatorade and pistachios and such. I stopped using them because I couldn't be certain of a reasonable price, or that the products wouldn't be fakes.
I'm saying Amazon can be just as misleading about out-of-print stuff as about groceries and household items. Many times I've seen a book that's years or decades out of print selling for $100+ on Amazon when eBay has two dozen copies for $20-$30 each.
I think it all stems from the same thing. Dishonest Amazon sellers know that most Amazon shoppers don't price check, so they can all get away with selling way over market price as long as everyone selling a given item stays the course.
I've mentioned elsewhere that I dropped eBay because of a series of bad experiences with sellers. I switched to Goodwill, which was OK, but sometimes you just want to buy something used actually that works and doesn't smell like cat vomit.
Last week I tried Mercari, and it was... OK. Better selection than Goodwill. The shippers don't seem to be in a hurry to get things out. Both sellers offered excuses when they missed Mercari's three day window. But the stuff finally got here.
Can anyone recommend another marketplace? Something not Alibaba or DX.com?
I dont like Facebook. That being said, I've had great experiences with Facebook marketplace. The creepiness works in the buyers favor because you get a name and face of the person selling.
I think Amazon dug themselves into a hole with this one. The Amazon Marketplace is the biggest liability to their brand reputation, but now it is also a big revenue driver. It would be in the long term interest of Amazon to ditch it, or severely clamp down on authorized marketplace participants. But Amazon is now in a sticky situation because the stock price, which they rely on for many reasons, is heavily dependent on revenue growth.
AMZN's ridiculous P/E ratios aren't really ridiculous when you think about it. Everybody knows Amazon pumps most of its free cash flow back into the business, which increases their growth rates at the expense of current earnings. The prices they are getting for the stock are just the result of a market betting on the future profit potential of Amazon when the growth stops or slows to normal levels. High prices imply that investors see huge amounts of growth potential, and if you extrapolate out what that P/E means, it shows that AMZN investors see Amazon growing 10x larger (or more) than it currently is.
But now Amazon has this huge liability of the Marketplace, and in order to cut it out they have to cut back their revenues by a substantial amount. And a revenue slowdown or decline signals to investors that growth is slowing. Needless to say, the anticipated future value of Amazon will cut quite drastically with a hit to revenues.
Compounding the problem is the fact that so much of their compensation comes in the form of RSUs, which are new issues. This is a great growth strategy, because it reduces their dependence on free cash flow for compensation, allowing it to be used for investment. BUT, any hit to their stock price will require drastic increases in RSU grants in order to maintain personnel, further exacerbating a drop in stock prices through dilution.
I don't envy the person who has to solve this problem.
This is why I think Amazon will continue to push hard on Amazon Basics. That is an area that has the potential to be Amazon's Kirkland (Costco private label).
Amazon has the data from Amazon Marketplace to know the top selling products, and Amazon has the scale to arrange manufacturing deals with perhaps the same overseas factories Amazon Marketplace sellers are using to economically produce private label brands for Amazon, thereby decreasing the market share of Amazon Marketplace sellers. Amazon could also make their Amazon Basics more visible to consumers by default, and have more control over the QA of the items.
With growing negative feedback about the quality-side of Amazon's Marketplace items/sellers, there is an opportunity to accelerate into private-label territory with more control over manufacturing oversight/customer service while using the Amazon Marketplace as the "proving grounds" to determine which products are most profitable for Amazon to private-label. Sure AMZN's earnings are doing well, but the real secret sauce for Bezos isn't just logistics - it's holding control over a market.
Right now, Amazon's quality-gatekeeping on their platform is the equivalent of Mac doing an "ocular pat down" on entrants. If there is monetary incentive to stray away from this, Amazon would be more willing to flip the switch on the marketplace. And thus we come one step closer towards living in an Amazon corporate town buying Amazon-branded items from the Amazon general store.
Yeah it's going to be a long draw down period if they're going to try to control this without tanking themselves. Think about all the warehouse capacity that is devoted to these third party products. Not to mention the backlash if they start to block 3rd party sellers. I was reading the other day that companies (Popsockets for example) were mad that Amazon was making them switch from 3rd party vendors to direct vendors--for reasons like control on assortment, promos, and pricing.
It's rather more likely that the marketplace won't be cut back, due to exactly the factors you've mentioned. The real issue, of course, is that all of this cheap junk sells, and sells really well, even if it's counterfeit or just junk. So there really is a lot of growth potential in that part of the business: the growth and success of Walmart over the past twenty years is further evidence of this.
Probably wait for something to be announced like "Prime Plus" for premium brands as they try to figure out how to differentiate products in the market, or watch them continue to expand into new types of markets altogether... there's very little for them else to do.
As a former marketplace seller I couldn't agree more. The only inventory I would ever want commingled is the stuff that's not quite up to new quality. It never made sense that Amazon would want that risk. When I sent it in it was only tagged by the ASIN, so I assume they couldn't even trace bad counterfeit or damaged merchandise supplied by a 3rd party merchant.
For this precise reason, I've stopped buying things like baby food, baby toiletries, skin lotion, etc. from Amazon. I now purchase direct from the respective online store, or sites like walmart.com/target.com
Right there with you. I moved all my purchases to ebay. At least there you know who you are buying from, and many manufactures have official stores. There are still bootlegs, but you have some say in how much risk you are willing to take. Eg, don't buy classic nintendo games from overseas. If amazon let you research a seller and see if they are a knockoff mill that would be a huge step forward, but they would ALSO have to isolate inventory again for it to be reliable.
Just ordered an Apple cable a couple months ago directly from Apple through their Apple Store app, and about $1K USD of Ring security gear off their web site for exactly this fraud reason. If I know I want to purchase a name brand object, I now shop at the manufacturer's site first; if I don't need the Prime delivery aspects, and there is no significant difference in pricing, then the manufacturer site gets my consumer information.
And I haven't even been bitten by the Amazon commingling fraud yet, just bitten by egregiously craptastic products bought off of Amazon. I can't trust the reviews without carefully parsing them to figure out which ones are likely factory-generated. I can't trust the pricing without looking through various historical price add-ons. At that point, the cognitive load between using Amazon and choosing alternative channels is pretty meh, and I'd rather just go "straight to the source", ordering direct from the manufacturer and finding the manufacturer by looking up forum discussions.
For renewing household goods, I'm finding myself shopping at my local grocery chain, Target and WalMart a lot more these days. Once Amazon pricing for the same household item shows it is more than these other sources (and often by a surprisingly large delta), Amazon doesn't get a crack at that spend for another year, as it isn't worth the cognitive bandwidth to comparison shop each time I go to the grocery store, or if Target/WalMart deliver the best price, they get the subscription for the year. I use a credit card number generator for subscriptions, so we have to renew the configuration each year.
Amazon is losing its convenience value proposition, and I find taking their eye off of that ball very odd for a B2C context, but what do I know.
Maybe a more "nearly trillion-dollar company" twist on your idea: The Prime Marketplace, only official providers, e.g. Sony, Bose, and products sold, and vetted, by Amazon only available to Prime members.
>I offer this advice to Amazon -- ditch the marketplace. No more third party sellers.
But for many things I shop for, that would be extremely inconvenient for me. For example, I needed to buy replacement fuses for a Fluke multimeter. Amazon itself didn't sell it but a 3rd-party marketplace seller did. If the marketplace was shut down, I'd have to go through the hassle of registering a new account on yet another ecommerce website just to buy that fuse. In this day and age of customer databases getting hacked, I'd rather not create any new accounts unless absolutely necessary.
Yes, I get the danger of counterfeit items. I did get bit by that with fake eclipse glasses from China last year but nevertheless, the 3rd-party marketplace has been a net positive for my shopping experience. I just pay attention to the seller ratings and make sure they're better than 98%.
That sounds like a good match for eBay, though. Amazon is presenting itself as a store, eBay is presenting itself as a marketplace. In the same way I would run Amazon into the ground, I would suggest to eBay to embrace the marketplace and phase out the auction aspect.
This is why I'm a software engineer and not a retail tycoon ;-).
Ebay has bought a number of companies in other countries that are much more marketplace-oriented.
For example Mercado Libre. Originally from Argentina (I think) but it's all over Latin America now. They used to have auctions but at least in Mexico it's mostly a marketplace.
> I just pay attention to the seller ratings and make sure they're better than 98%.
Maybe I'm just extremely cynical, but you don't feel those are somehow gamed? For parts that you've described, I've actually moved to eBay as my first stop.
>Maybe I'm just extremely cynical, but you don't feel those are somehow gamed?
I think the reviews for products are gamed but I don't think the seller feedback ratings are.
I used to sell used books as a Amazon marketplace seller and I once sold a book that was damaged and put that condition in the description. The buyer bought and gave me 1 star rating for it and described the damage that I already put in the description. The buyer just didn't bother to read the description before he bought it. I couldn't get Amazon to remove that unfair rating.
If there's a way to game the seller feedback in a sustainable way across thousands of ratings, I'd like to know how. Sure, sellers could offer refunds to bribe customers to change their seller rating from 1 star to 5 stars (not sure if that's even possible) but eventually, the seller will run out of money with that scheme. On the other hand, product reviews are easier to hack.
The data they get from what is popular on marketplace justifies its existence alone. Without marketplace, Amazon would be in the dark about what products they should even begin stocking.
> As proof that I am clearly not qualified to run a nearly trillion-dollar company, I offer this advice to Amazon -- ditch the marketplace. No more third party sellers.
Last I heard, it was ~50% of their revenue. And they take a 15% cut of the price, plus a per-transaction fee, for the cost of maintaining a product catalog (which they already do).
As a long time independent seller, Amazon has virtually already done this by gating nearly every brand under the sun. It's hard to sell so much as a box of pens without a bulk purchase invoice and a picture of you high-fiving the manufacturer's CEO.
I agree with this. Amazon could still be a huge marketplace if they stocked the virtual shelves and only sold legitimate items or their own brands. Target does it and that is where my business has been going instead of Amazon.
You could eliminate most of the problem by Amazon just ditching seller central and moving to exclusively vendor central where Amazon is purchasing from the buyers but they still manage their listings, marketing, etc. Since Amazon purchases and resells the inventory I imagine they have a vested interest in it not being junk products.
>Amazon in recent weeks also has deleted thousands of suspect reviews,
That's a drop in the ocean. But it's not reviews and brushing, the real issue is fraudulent and counterfeit products. I don't even trust Amazon to buy books anymore.
Just like craigslist, facebook, and countless other things, once something gets to be too big, it gets co-opted by bad actors and the risks outweigh the benefits.
Fakespot and others like it have crappy algorithms. I know sellers that have never done anything shady for reviews that get graded poorly by fakespot. And their Chinese competitors that blatantly fake reviews get A.
I suspect that the spammers are also starting to do things to not get flagged by Fakespot, especially since FS lists out a lot of the criteria that they use.
My (anecdotal) experience with dodgy sellers was this: I bought something that didn't work correctly, I left a review. The seller contacted me and offered money direct to paypal, bypassing Amazon. They did so by attaching an image with the offer to the ticket.
I wasn't comfortable with that kind of interaction, so I informed Amazon. Lots of copious apologies from Amazon, and I assume the company was "fired". But the company just changed their name slightly and are still selling the same items.
With the ability to create fake reviews that can (far) outnumber the negative, I'm surprised sellers bother that much like this... I wonder if a legitimate negative review somehow has more "signal to noise" in it in terms of how it's shown and received by buyers.
It's gotten to the point where I won't buy from sellers with names that look like they're from a password generator set to "letters only, human pronounceable"
I did send amazon fraud dept a detailed email about my experiences and the new company selling the exact same items.
Amazon needs to have a vastly larger fraud department staffed with actual humans, instead of automated systems that people can game very easily.
Or offer bounties to customers for successful fraud removals. Although people would probably game that too.
I would take the refund too, but some other avenue than Paypal. For all the buyer knows, the seller could have been using a stolen Paypal account that would have been charged back via a dispute by the victim, and the buyer would be SOL. The seller could also refund the buyer and still open a dispute with Paypal to claim a chargeback. It's suspicious the seller strongly wants to avoid using Amazon for refunds.
I'm not a crypto-fanatic, but I would have pushed the seller to send money to a crypto wallet address, and then I would have immediately withdrawn it to a bank account. Then still posted the bad review of the seller anyways.
They wouldnt call the police. They would simply open Paypal dispute and tell paypal that he agreed to remove his review for money and now he posted it again.
> The tactics include pummeling rivals’ listings with overly positive or negative reviews, and repeatedly clicking on links to products they want boosted to trick Amazon’s algorithm into ranking them higher in search results
Amazon is seemingly coming to this realization very late. The downfall of many search engines has been the inability to deal with the tricks that subvert their ranking systems. If you take any external signal as an indication of popularity, it will be manipulated.
The overly positive reviews is an interesting spin on this manipulation; it creates seeds of doubt when a product looks like it's been overly reviewed. The "fake review" is easy to pick out.
Well that's fair. Realized AND acted on a problem vs. just realizing the problem. It unfortunately has to hit them in the public eye before they are willing to really start addressing the problem.
I further contend there really is no solution. It's a war of escalation. We've seen it play out with SEO and search engines over the years. You can still "game" Google, but it's a lot harder to do it, the barrier to entry is a lot harder than it used to be when you could just list your site with a link farm. I am guessing that Amazon is in a similar war.
Maybe the current state of affairs is despite significant efforts to combat it. That would explain some of the silence on all these complaints, since "we're doing everything we can and it's still happening" is more embarrassing than "we know it's happening and we're looking into it."
This time last year I ordered some Rose Oil from "Essential Oil Labs" at Amazon. What I got wasn't Rose Oil, it was garbage.
Amazon issued I refund but when I looked into it further I found reviews from others who got crap from them as well, but those reviews were well buried. Because I'd requested a refund I wasn't allowed to post a review that warned others about them. That felt to me like Amazon was shielding the vendor from negative reviews.
As a result of how this was handled I've not bought anything from Amazon this year and I canceled our "Prime" membership this month when it expired.
This "crackdown" feels like too little too late, and it will be a long time before I go back there, if ever.
(Please hold your pitchforks) Since a lot of these scams come from Chinese sellers, I wonder if Amazon could talk to the Chinese government about interfacing with their new social-credit system... you can't sell on the platform if your score is below XYZ, and reports of fraud affect them directly.
Obviously this would lead to a lot of sellers mysteriously relocating to other countries, and there would be a lot of patsies set up to take the credit score hit, but it's all about defense-in-depth right?
Yeah I suppose it's true that a system which has only "blocked more than 11.14 million flights and 4.25 million high-speed train trips by the end of April [2018]" http://www.globaltimes.cn/content/1103262.shtml is not "real".
If vastly fewer than 1% of rides are affected by the so-called social credit blacklist, is it a real thing?
Personally I have been disappointed that the commentators are making the "Black Mirror" comparisons without carrying the reference further back to Cory Doctorow's "Whuffie".
I'm glad this has finally begun. But it's too late for the Christmas shopping season.
With the exception of items from Amazon Global, I've already bought all of my gifts from brick-and-mortar stores because I can no longer trust that Amazon won't ship me fakes.
One thing I've been thinking about: Amazon (and Google) have essentially taken the old CPG paradigm of stock shelves (including visibility and monetization of that physical space) and turned it into a new paradigm: Infinite shelf space that dynamically changes based on customer inputs.
Across one axis, this is better for the consumer and better for Amazon: customers get better results, and Amazon can charge for the (still limited) high priority space much more than a typical retailer could charge a CPG manufacturer for visibility.
Across another axis, this is much worse for Amazon: they cede a significant amount of control over a highly valuable asset, which also greatly impacts customer experience. All of the inputs they build their system on can be faked or gamed, and now they have the added responsibility of distinguishing real vs fake, and managing those inputs.
I don't really have any answers, but I think it is an interesting thought exercise to consider how the old paradigm had some advantages, even if those advantages are likely unable to scale.
I think the gist of the article was "Hey we're working on fixing the problems." but my experience with Amazon is that they aren't working hard enough. The question is when does it show up in their bottom line (and stock price) and when does Walmart start advertising "100% fully verified products on our web site."
I was shopping with my fiancee on Amazon last night, and she mentioned that she always ignores the first row of search results, which are often highly reviewed but unknown Chinese brands, and goes for the brands that she knows and trusts. She feels that the reviews are not always trustworthy.
Amazon fixing fake reviews would be a giant step in the right direction. What could be more important than having your users believe you're a trusted source?
I used to go to Amazon to look at reviews, regardless of where I was shopping. Now, in the rare moments I'm shopping on Amazon, I go to other sites to read the reviews.
I've noticed that too -- it's kind of a weird full circle. I used to stand in a brick and mortar store and pull up my phone to checkout amazon reviews before purchasing. Now, I feel higher levels of trust in the supply chain of most Brick and Mortar stores.
I've got no clue who to trust in the review space. I tend to trust comments I find in niche subreddits more than I should. They're probably 50% astroturfed or driven by poor incentives, but overall it tends to push towards higher end established brands rather than cheap knockoff garbage. At least going towards the former isn't an electrocution risk, I guess..
One of the first things I remember about moving to a rich country was the absence of knockoff products sold in retail stores. It seemed amazing to me that companies would deal only with authorized distributors.
These days, I feel like I'm in a twilight zone where 'wealth creation' is happening by putting a fresh face on 3rd-world country business models.
First it was Uber with the "hire a random guy off the street to be my driver". Next it was Fiverr/Upwork/ etc, the digital equivalent of rounding up day labourers in the Home Depot parking lot.
Now it's Amazon selling bootleg crap at scale. What's their excuse? Some variant of "move fast, break things", no doubt.
> These days, I feel like I'm in a twilight zone where 'wealth creation' is happening by putting a fresh face on 3rd-world country business models.
It's not a secret that lots of business models coming out of Silicon Valley are just regulatory workarounds/loopholes. It's a matter of chance that they coincide with some 3rd world country models as the latter's fuels are survival/corruption/perceived lawlessness while over here it's 'disruption'/first-to-market and the drive to become a temporary monopoly on a regulatory loophole.
"Disruption" is SV for "Easier to ask for forgiveness than permission."
Technology always outpaces legislation.
That’s a popular SV cliche, but it’s not true.
For example, without the DMCA, neither Twitter nor YouTube would exist.
mmm.. yes and no.
Sometimes is outpaces legislation (self-driving cars, cryptocurrencies, all the privacy things) but more than often it just finds a vulnerability in the unspecified existing legislation/regulation (see airbnb, uber, lyft).
It's a matter of chance that they coincide with some 3rd world country models as the latter's fuels are survival/corruption/perceived lawlessness
It's not a matter of chance. The earlier government regulation was better than no regulation, but had significant downsides. Taxi regulation got corrupt and the market didn't work very well. Uber and company came in with technology that worked better than the old government bureaucracy at cleaning up and regulating the market. I can't attest to how well Fiverr works.
Uber and company came in with technology that worked better than the old government bureaucracy at cleaning up and regulating the market.
To me, at least, this assertion requires some substantiation.
It seems to me that what Uber has been better at than traditional taxi services is solely the technology. I can only expect to hail a taxi on demand if I'm in a big city, airport, train station, or other transit center; if I'm in a rural area, suburb, or even a smaller city, I'll probably have to call to arrange a pickup and hope it actually arrives. (My personal luck with calling for taxis has been...spotty at best, while for Uber and Lyft so far it's been 100%.)
But "cleaning up and regulating the market?" I don't see how ride-sharing services are doing anything to regulate the market, and "cleaning up" is pretty hard to measure. Ride shares tend to be cheaper than taxis, and I don't doubt that part of the cost of a taxi fare is due to regulation -- but a large part of it comes from the uncomfortable fact that Uber and Lyft are both subsidizing rides with VC money. If they actually charged enough for the ride to make a profit, average ride prices would easily double.
Also, while taxi regulation is pretty corrupt, well, Uber is maybe not the poster child we want for how unregulated companies are gonna do better on that front.
To me, at least, this assertion requires some substantiation.
Taxis used to be smelly and dirty. Drivers were quite cavalier in their attitudes towards customers. Hailing a taxi was difficult and chancy. I was scammed by drivers who would take me on indirect routes for more money.
It seems to me that what Uber has been better at than traditional taxi services is solely the technology.
That is precisely the point.
I don't see how ride-sharing services are doing anything to regulate the market, and "cleaning up" is pretty hard to measure.
There are now rapid and technologically mediated consequences for both drivers and riders for behaving badly. Uber drivers are always polite, and riders are always polite. Riders are now strongly motivated to never keep their drivers waiting, which was not the case for taxis. The vehicles smell better! Drivers never scam you by driving a circuitous route.
It's pretty obvious to me that the market is much better regulated through the technology.
Also, while taxi regulation is pretty corrupt, well, Uber is maybe not the poster child we want for how unregulated companies are gonna do better on that front.
The point is that while Uber is far from a poster child -- no argument there -- the technology (read: the rapid flow of accurate information in the market) still has them doing a better job than regulatory mechanisms from the 20th century.
FWIW, the most rank smelling drivers/cars ive ever had, were both Uber drivers.
I've also had quite rude Uber drivers, who were worse than the worst cab driver I've ever had. They are by far an exception. I've also been in a taxi that smelled like an ashtray many times. I think it's happened just once to me with Uber. Overall, the track record is much better with Uber.
Ignoring the benefits to taxi drivers, and focusing on a pure economic standpoint, Uber/Lyft did clean up the market place by busting local government taxi commissions which had previously created both economic minimums and maximums around fixed prices and fixed number of cars on the road respectively. This lead drivers to focus on only a certain type of trip, and reduced the total number of rides people took due to a higher cost, uber pool further added to the later one there.
This said, every tragedy of the commons scenario that was previously avoided by regulation happened, the streets of major cities are almost entirely cars for hire, where it's nearly impossible to make a living wage working as a driver on only 40 hours a week. This right here is the cost of neoliberalism, yes more people have jobs, the economy expanded to meet a more desired demand, but the workers in the field are largely worse off than had they all been protected in other industries alongside scarce resources being even more competitive than they were previously.
This said, every tragedy of the commons scenario that was previously avoided by regulation happened,
What are the downsides that regulation avoided, which are now happening?
the streets of major cities are almost entirely cars for hire, where it's nearly impossible to make a living wage working as a driver on only 40 hours a week.
Making a living wage wasn't so great for beginning cab drivers either. They had to rent their cabs from medallion holders, which often meant they had to take a lot of rides before they saw dollar 1.
You have received anecdotes, but not the underlying reason.
With a taxi, if you complain about poor service, the driver will remain a taxi driver. Therefore drivers have little cause to care about customers that they will never see again.
With an Uber driver, drivers that fail to get good reviews quickly stop being Uber drivers. The result is that Uber drivers are much better on average than taxi drivers.
To me, at least, this assertion requires some substantiation
Then let me invite you to come visit my city, Vancouver, the last major city in North America where ride-share isn't available and taxis are the only game in town.
First, taxi regulations stipulate that taxis get to charge a flat-rate tariff on every ride. They have to/get to charge this. Whatever this tariff was meant to accomplish, it incentivizes taxi drivers to ignore their dispatcher when taxis are in high demand (like on weekend evenings) and only pick up off the street for short hops around downtown. If you need a trip further out (say 5 miles), forget about it - you'll wait for hours before you can get a cab (I have, on multiple occasions).
Second, taxi medallions are crazy-expensive (hundreds of thousands of dollars) and are a cash-cow for municipalities. They're meant to tie taxi cabs to a local city, but they also make elastic cab-supply impossible - you can never have more cabs on the road than you have medallions and because the medallions are so expensive they need to be amortized with constant use. That incentivizes everyone to have far fewer medallions than the industry would need to satisfy demand during peak periods. The most efficient deployment of medallions for a taxi company is to have enough medallions to satisfy minimum, not peak demand.
And don't think that medallions will guarantee good local service - just because a taxi company has a medallion issued by the municipality that you live in doesn't mean that they can pick you up and drive you home. I live in Burnaby (city next to Vancouver) where Bonny's Taxi has a legally-granted monopoly, but if I'm downtown (which is in Vancouver) I can't call Bonny's to pick me up - medallions regulate pick-up, not drop-off.
And even if you manage to flag down a cab on a busy night, they'll quite commonly flat-out refuse to take you anywhere other than downtown. They're barred from doing this, but the industry is self-policing and you can guess how likely it is that a driver would face any consequences for this. Maybe if you film them and post it to social media. But certainly not otherwise. And who can blame them? They have to pay down their medallion-mortgage, and exploiting the flat-rate tariff on short-hop rides downtown is the best way to do that.
Also, carry cash. Many taxi drivers will insist on cash. "Oh, my machine is broken. You need to pay with cash." Again, they're barred from doing this, but again, the industry is self-policing and you can guess how often complaints lead to consequences. It still happens all the time.
And because these are a great bunch of guys, their industry spends millions lobbying the provincial government to stall legislation that would allow ride-share in Vancouver. British Columbia went through a period in the 70's where it was indistinguishable from a Soviet republic with a planned economy, and implemented socialized car insurance. Everyone needs to buy basic liability auto insurance from our govt car insurer (at about twice the market rate in other provinces), and that insurer has simply refused to insure ride-sharers. That's been a far more effective barrier to ride-share than has existed anywhere else that I'm aware of. And the taxi industry spends aggressively to make sure that that doesn't change.
Also, while taxi regulation is pretty corrupt, well, Uber is maybe not the poster child we want for how unregulated companies are gonna do better on that front.
They are exactly that "poster child". Uber at their very very worst is better than the taxi companies and the taxi industry in a city where ride-share isn't available.
I live in a city with Uber & Lyft, and avoid taxis wherever possible for exactly the reasons you gave. Every time I take a taxi I regret it and swear it'll be the last time.
Another problem with cabs is that they are not incentivized to use the fastest route. Determining the fee at the start of the journey aligns both the driver's and passenger's interests.
Once I actually manage to get a cab, after the bars have closed and I've been waiting 3 hours or more, I can always be certain they'll putter me down Hastings street when Prior street would get me home a full 15 minutes faster.
Taxis suck hard.
what happens if you refuse to pay?
Then I get dropped off outside the Ivanhoe in a sketchy part of town in the middle of the night.
As an addendum, here's a taxi driver who was caught on video refusing to take someone to the neighboring city of New Westminster.
https://globalnews.ca/news/3907475/taxi-driver-refuses-to-dr...
The British Columbian government recently 'legalized' ride-share. They were elected in 2016 on a promise to legalize ride-share, but taxi-industry money bought a 2 year delay in the legislation. You can't ride-share yet, though, because taxi-industry money also bought an additional 1 year delay in deployment of ride-share-compatible car insurance, which won't be available until late 2019, 3 years after the government promised, and 5 years after the previous government proposed legalizing it. But don't get your hope up yet, though, because
1. we don't know what the ride-share-compatible insurance will look like. In Manitoba, another province with government-owned car insurance monopoly, the ride-share insurance was crafted to make it impossible for Uber and Lyft to enter the market. Ride-share companies quite reasonably want their drivers to be able to get a separate rate between when they are driving privately vs when they are driving for ride-share, just like what they can get from private insurers. Manitoba's government monopoly wasn't willing to give them that, which makes ride-share unworkable.
2. the government's 'legalization' legislation enables a public commission to set supply limits on taxis and ride-share, much like medallions. This almost completely nullifies any benefit ride-share would bring to the city and is a poison-pill that will probably keep Uber out of Vancouver.
So on top of the 5 years we'll have been waiting by fall 2019, figure in another 2 or 3 years for everyone to realize that the legislation is a bust and that we've been suckered by the taxi lobby again.
The taxi-industry's lobbying money has been very well spent.
cost savings/increased efficiency is the name of the game, and first world regulations are costs SV can ignore. sometimes the quasi employees suffer the burden (but get increased flexibility), sometimes the consumer suffers (lower price but increased variance in quality of goods/service)
> cost savings/increased efficiency is the name of the game
I'd say "socializing losses, privatizing gains" is the name of the game. Those popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally; it's just disrupting the society and hoping money pours through the cracks.
nah i wouldn't go that far, banking employees and shareholders of recapitalized companies in 2007/2008 privatized gains and socialized losses when they were mostly bailed out with taxpayer money/federal reserve credibility instead of going under, but uber/airbnb/aws are pure efficiency plays. they increase the utilization of (what used to be) private cars, real estate, and servers respectively. there are trade offs between renting and buying, and we are moving more towards a rental economy mostly because it's more efficient in many cases to just rent what you need when you need it (opex) rather than spending big on a depreciating asset (capex)
If uber/lyft are pure efficiency plays, then why do they have their own programs to finance the purchase of new cars just so people can drive for uber/lyft?
By the same token, but much harder to substantiate, why are people buying property just to rent it out with airbnb?
The negative externalities are there. You just have to know where to look.
Because the regulatory environment around taxis and hotels are so onorous that doing something a reasonable person might find absurd actually improves the efficiency of car services/boarding.
neither of those examples are negative externalities
the heart and core of each company is just more efficient matching with less regulation and more technology between renters and owners of capital
People buying new cars is bad for the environment. Houses being bought up solely be rented out by the day drives up housing prices for people who actually want to live in those neighborhoods. Come on, dude.
> "socializing losses, privatizing gains"
Never seen this formulated as such but I really like it. I was reading a book which tangentially dealt with that [0]. It changed my perspective on how new businesses are increasingly externalizing their costs to the consumers.
[0] https://www.amazon.com/Shadow-Work-Unpaid-Unseen-Jobs/dp/161...
I don't think "externalizing their costs to the consumers" really makes sense.
In an idealized market, costs should be passed onto the consumer. From what I can tell, the book you reference is just complaining that this cost changed from money to labor.
It is also worth noting that, in many cases, this results in a net win for the consumer. Eg, whwn I buy from a full service gas station, I am paying someone to pump my gas, and paying the to sit idle waiting for customers, and paying (in time) to wait for them to finish.
In contrast, in self service, the only cost from above I have is 1 person pumping gas (which switched from being paid with money, to being paid with labor)
An idealized market requires full awareness of all of the costs. A key factor in "externalizing" costs is hiding those external costs from the consumer.
E.g. a perfect market would notice the increased quality variance of goods and services and would require the price to go down proportionally so the total cost is the same. But consumers don't all see it at the same time, so every company has a chance to hoodwink every consumer by pushing additional costs onto them without their initial knowledge.
The key innovation of money is the ability to accurately evaluate the value of goods and services; by pushing all of these extra external costs onto the consumer we're basically going back to bartering.
Every additional variable that the consumer is required to consider during a purchase decision is additional cognitive load. That's why people pay so much for free/fixed shipping costs: it reduces the number of variables you have to keep in your head by 1. It's also why I think that adding tax after the listed price (like the US does it) is terrible: it puts more cognitive load on the consumer. Consumers today are attacked with dozens of potential hidden external costs around every corner, it's like a DOS attack on the consumer's brain and inhibits their decision making ability.
The book is arguing about using a service which costs X. The business then makes the service more efficient by reducing labor costs for itself and not passing the savings back to the consumer but instead keeping the same price while making the service shittier by having the consumer do more work. So for the same price, you get less service, need to do more work while the business hoards the money.
I'm not sure why it isn't more common to see that on HN. On reddit, it's reliably one of the top comments in such threads.
"It is difficult to get a man to understand something, when his salary depends on his not understanding it."
--Upton Sinclair
Welcome to The Jungle, baby.
one of the dumbass paid mods on here warned a user for using this "cliche" the other day, fyi
https://news.ycombinator.com/item?id=18652541
Gonna guess a bias to entrepreneurs who are actively trying to cash in on externalities and opportunities for arbitrage, etc.
> "socializing losses, privatizing gains"
I also have never head it put quite this way, and realize how true it is. One example is American Football stadiums. Get the people to pay for it and charge them to go there.
I'm surprised you've never seen it before, it's been pretty common for a long, long time.
See also: https://en.wikipedia.org/wiki/Lemon_socialism
It's not any kind of socialism. I know in American parlance "socialism" somehow means anything to do with government, but this is not how the rest of the world thinks of the word, and the word "socialism" has its correct interpretation right in it.
If it's a private entity capturing the state's revenues, that's anything but social. It's the opposite. It should be called what it is: lemon corporatism.
And it's sadly nothing new.
That phrase always made sense to me in the context of banks for example who basically expected to be bailed out if they fail a la 2008, but how does it apply here? How is uber socializing losses?
It might help to use "costs" rather than "losses"?
For one, consider that we attempt to constrain the price of labor upward to cover the cost of living. By having a large workforce that is not necessarily subject to these constraints (minimum wage, employer health plan, payroll taxes, etc.) Uber fails to meet the CoL for a large slice of its workforce, which then has to lean on society to make up the balance.
By pushing the burden of operating and maintaining a taxi fleet onto its drivers, rather than making it a cost of doing business like a real taxi fleet.
>hose popular disruptive startups dump plenty of externalities on everyone around them. Don't think for a moment that anyone there is increasing efficiency for the sake of increasing efficiency globally
Pretty lame analysis. There are lots of companies that are in it to do good or actually improve society.
I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful.
> Pretty lame analysis. There are lots of companies that are in it to do good or actually improve society.
Like who?
> There are lots of companies that are in it to do good or actually improve society.
I don't disagree. They rarely get media attention though, and I don't mention them here, because their disruption is a quite different thing from Uber/AirBnB disruption.
For that "lame analysis" part, I'll give you a task: given that you wrote there are lots of such companies, name three. ;).
> I'd even argue that society is net better off with Lyft (not sure about Uber) even though working there as an employee isn't great. Taxis were awful.
Taxis were awful in many places, not everywhere. I'm usually taking people's word for it when they describe how Uber service is better than taxi (though I'm increasingly noticing stories about Uber quality declining). But there are cities, including my home town and the current town I live in, where taxis are almost universally good. And yet, Uber came and attacked taxis everywhere, whether good or bad. You can do things like that when you can freely break the law[0] and get away with it[1], and when you can lose money for longer than all your competitors can stay solvent.
Honestly, Uber story looks pretty much like a typical story of a corporation entering international market and displacing all little local players, except with more disregard for law, and some weird belief people still have that Uber is a startup.
Still, I'll grant Uber that some of the disruption came out for the better, because it allowed more ethical and legal competitors to emerge in this space. And yet:
> working there as an employee isn't great
Here's a thing: do we consider pushing more and more people into wage slavery to be "improving society"?
--
[0] - Not just general "taxi regulations", but also traffic safety (a common story to hear was Uber without valid insurance) and tax laws (in my country, I remember our equivalent of IRS being the most active in hunting down Uber drivers).
[1] - Half of the blame here goes to the municipal governments, who should've punished Uber immediately for breaking local laws. AFAIR only Germany behaved correctly, and started issuing service bans quickly.
Not just general "taxi regulations", but also traffic safety (a common story to hear was Uber without valid insurance) and tax laws (in my country, I remember our equivalent of IRS being the most active in hunting down Uber drivers).
Don't forget mandatory rest periods, enforced by technical means. My ex-girlfriend used to drive taxis and if you got caught breaking your mandatory rest period the fines were sky-high. Repeat offenders lose their taxi license.
Contrast that to the nice Uber driver, who has no restrictions on driving you around after a double shift at the widget factory and a couple of double whiskies to drown his sorrows, before picking up passengers as an "independent contractor"
What really seems lost on some of the more libertarian inclined, regulation hating chaps here is that most regulation is actually there for a reason. Among other things like protecting your life and health.
When people here start to delve into the "evil hotel lobby that is so mean to this scrappy AirBnb start-up, which sends all their communication 'with love'" then I usually want to start to gag.
Uber/Fiverr/Upwork automate the trust aspect, so I can be assured decent service or I’ll get a refund and the provider’s reputation will be dinged. Outright scams are hard to pull off in this environment.
Amazon... I can only speculate what’s going on there. Maybe the resulting price pressure turns the screws on suppliers? And honestly I’ve never gotten a branded product from them that I thought was fake.
This could just be a fulfillment optimization; there are obvious cost savings and efficiencies from commingling, and maybe they’re working on a solution now.
Amazon... I can only speculate what’s going on there. Maybe the resulting price pressure turns the screws on suppliers?
Scammers looking for places to scam, which Amazon provides by relying on customer ratings to police its suppliers, which clearly doesn't work.
Most of the recent SV business models only work in a hypothetical place where everyone is good and altruistic.
Look at self-driving cars. There are thousands of words written about how self-driving cars will create a transportation utopia with clean, efficient transportation for all.
None of the startups address what happens when someone refuses to get out of a self-driving car. Or when a self-driving car arrives at my door and it's full of barf. Or some homeless guy decides to set up camp in there. Or it gets all graffiti tagged.
Think about how people treat current modes of public transportation. Now imagine how miscreants will treat them with more privacy, and no chance of human intervention.
Oh man, can't wait to see the future graffiti all over self-driving cars. Tech dystopia, here we come!
But for real, it's for these reasons that Google et al. place such a high value on systems to identify and deanonymize people. In a world where all of your biometric data can be easily identified and linked back to you, there won't be much room for bad behavior. The real question is who gets to decide what behavior qualifies as "bad."
In a world where all of your biometric data can be easily identified and linked back to you, there won't be much room for bad behavior.
That's a world that I sure as shit never want to inhabit.
"John C. Doe III, according to hair and skin cell analysis on flakes left in the AUTO-CAR V9 you were transported in on
2027 SEPT 19th,
you are being fined
$300 DOLLARS
for improper behavior. Said behavior was
DIGITAL PENETRATION, NASAL
IMPROPER DISPOSAL / DISPERSAL OF BODILY FLUIDS (NASAL)
LEWD OR IMPROPER CONDUCT (NOSE-PICKING)
Fine will be assessed from your credit number on file. Have a nice day."
If I can put on my tin-foil hat for a minute:
Perhaps the long play is to intentionally reduce trust in competitors brands (read: anyone who isn't amazon) to push people towards an ever expanding amazon basics line, which are presumably more profitable.
Some of that seems right, but I don’t agree with the Uber example. Ride sharing has been a much more convenient and reliable service than taxis, and with less fraud (broken meters or credit card machines) and less discrimination (actually willing to drive me to the neighborhood I want). And with Uber I have a record of who drove me where. This seems pretty different from being picked up by a random person on the street. I haven’t used Upwork etc, but I wouldn’t be surprised if it was a similar experience.
problem with uber from a customer perspective is if you are a single woman taking a ride, the drivers are not full time cab employees that can possibly be fired/lose their cab medallion/permits. some women i know are considering switching to licensed cabs due to the harassment they get from uber drivers with no good mechanism to report and avoid those drivers aside from never traveling alone. as a guy, i've only had good experiences (except for the opaque surge pricing which always feels extortionate)
> as a guy, i've only had good experiences (except for the opaque surge pricing which always feels extortionate)
Totally off the main topic here, but I'm also a guy and I've had one ride that was a little hair-raising. I wasn't harassed, mind.
I was riding with two girls (downtown Toronto) in an Uber and the driver was clearly on speed. He was extremely chatty, actually quite friendly, but very frantic. Took many last-second turns, wrong way down one-way streets and driving over curbs to get out of the way of cars on said one-way streets. It was nuts.
That said, all other rides I've had have been just fine. Often better than my experiences with Toronto cabs. There's no cash benefit for them taking the "scenic route" or "making wrong turns" which I've had less-scrupulous cabbies do to drive up the fare. That's a feature I appreciate. But I just make myself deal with transit since removing the app— their privacy measures didn't instill much confidence in me.
FWIW, in the market where I drove, it was very common for taxi drivers who were so bad they lost their taxi jobs (think about that) to just turn around and drive for Uber.
That's a thought that had never occurred to me. Seems like a massive oversight.
If the drivers are in any way even possibly breaking the law, then the riders could go to the police. If the drivers were acting in a completely lawful, but undesirable, way then the riders could give the drivers a low rating. It is very safe to assume that the servers of Uber (and all other ride sharing services) work to opaquely disconnect passengers and drivers when either party has given the other a low rating. It's a good and obvious idea on all levels, including even just optimizing for max profit.
Personally I love Uber and avoid taxis as much as possible. The worst Uber ride was still far better than the best taxi I've taken. A driver might be chatty and you have a great conversation, or they just stay quiet. Either ways a much better experience than the angry cab driver.
I was a little shocked when Uber sent me my stats for last year 1000+ rides.
This has also been my experience. I think a meta here is that the vast majority of cab drivers don't, and can't, own their cab. Medallion cabs, for instance, are sold based on bids and have gone for upwards of $2 million and as "low" as around $500k. And in some places they have government granted monopolies meaning playing this game is the only way to drive a cab.
So most drivers rent their taxi, often by the day. And since fares are front-loaded (you earn a lot more picking up 100 people for 5 miles, than 1 person for 500 miles) it creates an incentive for taxi drivers to go crazy. Granted that same pressure is ostensibly there for Uber drivers, but I think it's different when your car is your car rather than a temporary asset you just dropped a fair chunk of change to rent for a single day.
Somehow transportation, world wide, always ends up in these sort of scummy monopolistic rackets.
I've noticed that Uber drivers tend to drive much slower and more cautiously than taxi drivers, and break traffic laws far less often. As a result when I really need to get somewhere quickly I do tend to look for a taxi first.
Personally I would say it is a mix. There are some Uber drivers that definitely can be a bit more aggressive but still safe. I suppose it depends on the area/time of day but I'll walk past the line of taxis to get an Uber. If it takes 2 minutes longer to get to my destination, the experience is much better. Hell there have been a few times I wanted the trip to take longer because of the pleasant and engaging conversation.
One pattern I've noticed, taxis honk their horn constantly and obnoxiously. Uber drivers rarely do it. When you hear someone honking their horn for upwards of ten straight seconds, it's a taxi.
Question, are Uber drivers penalized for speeding or hard cornering, stopping, etc. that would indicate aggressive driving? I would assume Uber could know this based on GPS and accelerometer readings from the driver's app.
I am highly doubtful. Uber GPS is terrible in general so I'm guessing they don't have that level of granularity. Plus what do you define as aggressive driving? It can vary depending on traffic flow and patterns of the area.
Let me cough up this chestnut from the '90's:
"Race to the bottom."
Fortunately, that bottom is rising, on average. But "first world" systems have taken a lot of abuse, along the way.
In my opinion, abuse that was unnecessary. But we let the shysters in to arbitrage against the disparities, instead of helping other countries to grow for themselves into more well-rounded and autonomous entities. Maybe I'm a fool, but that's how I see it.
> Now it's Amazon selling bootleg crap at scale. What's their excuse? Some variant of "move fast, break things", no doubt.
Competing with Alibaba. Amazon seems to have decided to increase product variety (through increasing foreign based stores) at the cost of losing quality control.
This definitely appears to be the case. I'll say one thing in Amazon's defence however— their customer service is fantastic in my experience.
> [Amazon's] customer service is fantastic in my experience.
Try not having Prime. I tried that once, for a short while. The difference in service was striking.
Sadly I'd believe it and have heard similar before. It wouldn't even really bother me if they were up front about it.
It's not uncommon to sell premium service packages, or restricted shopping (like Costco).
> Now it's Amazon selling bootleg crap at scale. What's their excuse? Some variant of "move fast, break things", no doubt.
Seems to me Amazon felt they couldn't compete against eBay or AliExpress and still be "low on prices". Essentially they chose that market (including copying sellers products and rebranding them as Essentials) over legitimate sales.
"There are three ways to make a living in this business: be first, be smarter, or cheat. Well, I don't cheat. And although I like to think we have some pretty smart people here in this room, it sure is a hell of lot easier to just be first." -Margin Call
First and smarter are getting more and more taken.
> These days, I feel like I'm in a twilight zone where 'wealth creation' is happening by putting a fresh face on 3rd-world country business models.
Or maybe making those that scale well more accessible and socially accepted in the service economy. Is there maybe some source that you've read, someone who has analyzed that statement (3rd-world country business models = gig economy) in more detail? I don't have much time to dig but if there was a thesis or article about this I'd be super interested in reading it.
Sounds like he's spent a lot of time living in third-world countries, so he's speaking from experience.
I've spend a good amount of time in third-world countries, and my experience aligns with his.
"What's their excuse? Some variant of "move fast, break things", no doubt. "
Possibly "sell at 50% discount, thrice"
...putting a fresh face on 3rd-world country business models...Now it's Amazon selling bootleg crap at scale.
Why does Amazon have to be limited to stores? What if they could put the right near field detection technology into a portable form factor? Like, a blanket spread on the sidewalk?
Those “3rd world business models” are amazingly efficient though. Just because the “1st world” is rich doesn’t make us smart, in fact it may be the opposite. Also, when all the bootleg crap and non-bootleg crap is made in the same factories in China, what’s the difference?
If by 'amazingly efficient', you mean the burden of assessing risk and quality is shifted entirely to the customer for every single transaction, then sure.
I'm coming from the developing world. The lack of regulations and product safety standards, is not some kind of competitive advantage, it is a problem that leads to ever falling living standards. A fire in a clothing factory killed 1300 people in my country, an incident that would have been avoidable if the building owner enforced fire safety standards.
I suppose if you think about things in terms of MR/MC curves, such loss of life is the price of efficiency.
Most people are greedy.
They only want more for less.
The overlap between people who:
* pretend to be upset about ever-shrinking middle class, and
* sort by lowest price and buy an obvious knockoff from an online marketplace third-party seller that takes three weeks to arrive from Shenzhen in order to save 52¢ on an item...
...is almost 100%.
They don't realize that their own cheapassedness caused the shrinking.
You aren't in the twilight zone, 3rd-world business models are creeping into the rest of the world because they worked so well in the 3rd-world.
Except in the 3rd-world the models maximized profit for businesses while consumers had no choice due to pre-existing poverty and in what is left of the non-3rd-world they are maximizing profit for businesses while appealing to rabid cheapassed consumers.
You look down your nose at day laborers in front of Home Depot (and their digital counterparts) like they don't deserve to make a living.
Should an Uber driver just starve to death because he doesn't fit your specific model of what a worker looks like?
That's a pretty classist elitism viewpoint, and it's completely unwarranted.
I think Fiverr came before Uber if I'm not mistaken.
I had the same feeling a few years ago when the sharing economy was the next big thing and people were prompted to subrent their flat, guest room, tools or car. Depending on who you'd ask, it was touted as the best (or the worst) of capitalism and communism combined.
As proof that I am clearly not qualified to run a nearly trillion-dollar company, I offer this advice to Amazon -- ditch the marketplace. No more third party sellers.
I have been a reliable Amazon Prime consumer for years, but I have begun making purchases elsewhere because I can not even trust "Ships from and sold by Amazon" any more.
At the very least, quite intermingling stock. And at this point you're going to have to be public about that change and put a guarantee behind it. Your reputation is slipping.
I had the same issue. And ordering the same product (even from the same "seller") is hit or miss.
It's a weird story but I ordered a kids plate from Amazon. I ordered 2 that were totally fine but when I ordered a 3rd one, it was completely different quality, seemed to be a different material, and had a weird smell to it. It was "Prime" but almost immediately, you could tell it was a different product.
This has happened to me a bunch and I've heard crazier stories about people ordering supplements/vitamins and getting fake bottles :(
I don't trust Amazon as much either outside of a few products I trust + majority of common electronics. I wouldn't buy an HDD from Amazon for instance due to their crazy shipping shit.
Also, their shipping is so fucking unreliable. I get delays on my packages at least twice a month, and they've lost packages before :(
> I wouldn't buy an HDD from Amazon for instance due to their crazy shipping shit
I stopped buying anything electronic from Amazon because one power to USB adapter burned up, tripped a circuit breaker, and it broke my fridge. Luckily, that was the only other thing I had plugged into that circuit at the time.
Another big issue was my friend bought an Apple power adapter that started smoking after a few hours of it being plugged into the wall.
Scary stuff, especially when you consider anything that goes on or in your body could be counterfeit too.
When people tell me they buy condoms and sex toys from Amazon,I get legitimately worried.
And the prices on some of the stuff is just weird, with a lot of the Amazon provided stuff now stuck behind Amazon Prime Pantry.
I used to order a lot of our daily household stuff from Amazon: cleaners, dish soap, detergent, etc. So much of that stuff now is priced just horribly. $4 for a bottle from Amazon, but it's just from Prime Pantry so you have to order a bunch of stuff or be stuck with a high shipping cost.
If you go with one of the other sellers, the prices are frequently 2-3x normal retail, I guess preying on the fact that people don't realize they're getting ripped off.
Perhaps I spent too much of my youth watching supermarket-themed game shows, but I'm very much in tune with how much things should cost in supermarkets, and how they vary from chain to chain and region to region.
It was for that reason I started buying my household stuff at Amazon — because I could save a buck or two, per item, which adds up.
Then — as you pointed out — stuff got weird. Amazon's prices became consistently higher than the supermarkets.
Then the third-party sellers started using "AI" pricing, so that a package of soap bars that is $3.59 at Safeway is $61 on Amazon.
Then the counterfeits arrived, and now my family has a policy of not buying anything from Amazon that goes on, or in, our bodies.
These days there are bargains to be had through Amazon, but only through the two-hour shipping from Whole Foods. At least in my market. (A particular cheese that is $15/pound at Kroger is $5/pound when I get it delivered from my local Whole Foods.)
It's not too late to Amazon to regain trust. But it's not going to be a quick or easy process.
For the longest time I would have added to your list of things not to buy on Amazon anything claiming to be OEM Apple products.
It was likely they were fakes and if they provide electrical power they may be a fire hazard.
Amazon seemed to realize how big of a problem this was (or Apple took them aside and made it a problem for them) because they just announced they are taking action: https://motherboard.vice.com/en_us/article/bjexb5/amazon-is-...
I find it a little worrying that in that vice article they don't seem to at all talk about the counterfeiting issue that was widespread on Amazon for Apple products.
Amazon manufacturer/distributor of home and kitchen goods here - the rule of thumb is that if it's <$20 (and especially if it's <$10), Amazon's pricing structure to its third party sellers basically compels low dollar items to be more expensive than retail.
Basically we pay Amazon $1 or 15% of sale (whichever is higher + ~$2.50 for shipping before anything else, so after margins and what not that's a minimum of $4 going to Amazon for marketing and logistics. That's why low dollar 1-pack items feel like price gouging -- there's been years of A/B testing on the marketplace that shows a $4.99+free ship item is way more attractive than $1.99+$3 shipping.
Amazon itself sells stuff direct from manufacturer at a loss or breakeven-ish cost for items under $3 because they can, but even those prices aren't hugely sustainable and they play around with algorithmic pricing themselves over time.
Retail logistics for low dollar items is a Hard problem. :|
It's also worth noting that people don't think of the externalized cost of actually getting to the store verses getting these things shipped. If you have to drive a mile each way just to get that one extra item, the amount your saving from not ordering online is insignificant.
Retail price at Target, Walmart, etc on this is ~$2.89 a bottle. On Amazon it's the "Amazon Choice" for $13.97 for two bottles.
https://www.amazon.com/Formula-409-Purpose-Cleaner-Bottles/d...
You can get the normal retail prices on all this stuff and still shop online. You just can't do that on Amazon any more.
Yep, Target.com is 2.89 with $25 free ship https://www.target.com/p/formula-409-powerful-all-purpose-cl... -- but for what its worth, the online stores are mostly loss-leaders for the big department/grocery stores trying to stay relevant against Amazon.
https://money.cnn.com/2018/05/23/investing/target-earnings/i...
>If you go with one of the other sellers, the prices are frequently 2-3x normal retail, I guess preying on the fact that people don't realize they're getting ripped off.
And as a result, I've become much more careful about checking prices on Amazon, which can't be good for Amazon overall.
By contrast, when I go to the grocery store, I generally assume the amount I'm paying is more-or-less the same as what I would pay elsewhere. (Likely a poor overall mindset on my part, but good for the store.)
Agreed, which is why I really love camel camel camel. Makes me a much more informed consumer. I wish they had other sites that they tracked.
They used to, but I think the other vendors made them stop, and they don't have the same affiliate program that Amazon does.
Yeah, there's a lot of specific products that are always wildly overpriced on Amazon. Mostly anything that is out of print/out of production, no matter how recently it went out or how easy it is to find, but I recently ran into it with Hanes underwear of all things--there wasn't a single seller that wasn't asking at least 50% over Target's online price.
For out-of-print books/toys/games/etc., eBay is usually your best bet. Computer hardware (video cards, RAM, etc.) is often cheaper on either eBay or NewEgg. Et cetera.
I expect out of print stuff to fetch a high price, I'm more talking about standard grocery items. I've seen ridiculous markups on penne pasta, diet soda, certain brands of hand-soap, etc etc.
Some of these items, like the pasta, are things I'd previously ordered from Amazon for a fraction of the current price. Which, again, has caused me to be much more cautious—every time I reorder something nowadays, I have to check whether the price has changed. How does Amazon expect people to use stuff like the dash button when prices can vary this much?
The reality is is that shipping an amazon item costs between $3-7. For expensive items, they can cover that cost out of the wholesale/retail markup, so you don't really have to pay it. For cheaper items, or items without that much of a markup, it starts showing up in the price. Now, sometimes a manufacturer will want to buy some market share, so they'll sell an item to Amazon cheaper to reduce that impact, and then it's available. However, it will usually go back up to the normal price, with them hoping that you won't notice.
It's the products that suddenly shoot up to 2-3x normal retail that throw me, not the ones that change by a few dollars.
But the products that double in price have made more sensitive to the ones that change by a few dollars, because I'm now on high alert for price changes in general.
Yeah, the doubling in price is usually when the low-cost vendor sells out, and only high-cost vendors are left, but you're totally right; I also refrain from purchasing via dash button, Echo commands, or any option where I can't evaluate how reasonable the price is.
How does Amazon expect people to use stuff like the dash button when prices can vary this much?
I have a couple of Dash buttons for Gatorade and pistachios and such. I stopped using them because I couldn't be certain of a reasonable price, or that the products wouldn't be fakes.
Safety > price > convenience, Amazon.
I'm saying Amazon can be just as misleading about out-of-print stuff as about groceries and household items. Many times I've seen a book that's years or decades out of print selling for $100+ on Amazon when eBay has two dozen copies for $20-$30 each.
I think it all stems from the same thing. Dishonest Amazon sellers know that most Amazon shoppers don't price check, so they can all get away with selling way over market price as long as everyone selling a given item stays the course.
I've mentioned elsewhere that I dropped eBay because of a series of bad experiences with sellers. I switched to Goodwill, which was OK, but sometimes you just want to buy something used actually that works and doesn't smell like cat vomit.
Last week I tried Mercari, and it was... OK. Better selection than Goodwill. The shippers don't seem to be in a hurry to get things out. Both sellers offered excuses when they missed Mercari's three day window. But the stuff finally got here.
Can anyone recommend another marketplace? Something not Alibaba or DX.com?
I dont like Facebook. That being said, I've had great experiences with Facebook marketplace. The creepiness works in the buyers favor because you get a name and face of the person selling.
I think a lot of people were using Prime to small quantity low-margin items, and they were losing on shipping costs.
I think Amazon dug themselves into a hole with this one. The Amazon Marketplace is the biggest liability to their brand reputation, but now it is also a big revenue driver. It would be in the long term interest of Amazon to ditch it, or severely clamp down on authorized marketplace participants. But Amazon is now in a sticky situation because the stock price, which they rely on for many reasons, is heavily dependent on revenue growth.
AMZN's ridiculous P/E ratios aren't really ridiculous when you think about it. Everybody knows Amazon pumps most of its free cash flow back into the business, which increases their growth rates at the expense of current earnings. The prices they are getting for the stock are just the result of a market betting on the future profit potential of Amazon when the growth stops or slows to normal levels. High prices imply that investors see huge amounts of growth potential, and if you extrapolate out what that P/E means, it shows that AMZN investors see Amazon growing 10x larger (or more) than it currently is.
But now Amazon has this huge liability of the Marketplace, and in order to cut it out they have to cut back their revenues by a substantial amount. And a revenue slowdown or decline signals to investors that growth is slowing. Needless to say, the anticipated future value of Amazon will cut quite drastically with a hit to revenues.
Compounding the problem is the fact that so much of their compensation comes in the form of RSUs, which are new issues. This is a great growth strategy, because it reduces their dependence on free cash flow for compensation, allowing it to be used for investment. BUT, any hit to their stock price will require drastic increases in RSU grants in order to maintain personnel, further exacerbating a drop in stock prices through dilution.
I don't envy the person who has to solve this problem.
This is why I think Amazon will continue to push hard on Amazon Basics. That is an area that has the potential to be Amazon's Kirkland (Costco private label).
Amazon has the data from Amazon Marketplace to know the top selling products, and Amazon has the scale to arrange manufacturing deals with perhaps the same overseas factories Amazon Marketplace sellers are using to economically produce private label brands for Amazon, thereby decreasing the market share of Amazon Marketplace sellers. Amazon could also make their Amazon Basics more visible to consumers by default, and have more control over the QA of the items.
With growing negative feedback about the quality-side of Amazon's Marketplace items/sellers, there is an opportunity to accelerate into private-label territory with more control over manufacturing oversight/customer service while using the Amazon Marketplace as the "proving grounds" to determine which products are most profitable for Amazon to private-label. Sure AMZN's earnings are doing well, but the real secret sauce for Bezos isn't just logistics - it's holding control over a market.
Right now, Amazon's quality-gatekeeping on their platform is the equivalent of Mac doing an "ocular pat down" on entrants. If there is monetary incentive to stray away from this, Amazon would be more willing to flip the switch on the marketplace. And thus we come one step closer towards living in an Amazon corporate town buying Amazon-branded items from the Amazon general store.
Yeah it's going to be a long draw down period if they're going to try to control this without tanking themselves. Think about all the warehouse capacity that is devoted to these third party products. Not to mention the backlash if they start to block 3rd party sellers. I was reading the other day that companies (Popsockets for example) were mad that Amazon was making them switch from 3rd party vendors to direct vendors--for reasons like control on assortment, promos, and pricing.
It's rather more likely that the marketplace won't be cut back, due to exactly the factors you've mentioned. The real issue, of course, is that all of this cheap junk sells, and sells really well, even if it's counterfeit or just junk. So there really is a lot of growth potential in that part of the business: the growth and success of Walmart over the past twenty years is further evidence of this.
Probably wait for something to be announced like "Prime Plus" for premium brands as they try to figure out how to differentiate products in the market, or watch them continue to expand into new types of markets altogether... there's very little for them else to do.
In case you're interested, Steve Yegge had a recent post about the origin of the marketplace: https://medium.com/s/story/jeff-bezos-jack-ma-and-the-quest-...
Definitely an interesting read, thanks!
As a former marketplace seller I couldn't agree more. The only inventory I would ever want commingled is the stuff that's not quite up to new quality. It never made sense that Amazon would want that risk. When I sent it in it was only tagged by the ASIN, so I assume they couldn't even trace bad counterfeit or damaged merchandise supplied by a 3rd party merchant.
For this precise reason, I've stopped buying things like baby food, baby toiletries, skin lotion, etc. from Amazon. I now purchase direct from the respective online store, or sites like walmart.com/target.com
Right there with you. I moved all my purchases to ebay. At least there you know who you are buying from, and many manufactures have official stores. There are still bootlegs, but you have some say in how much risk you are willing to take. Eg, don't buy classic nintendo games from overseas. If amazon let you research a seller and see if they are a knockoff mill that would be a huge step forward, but they would ALSO have to isolate inventory again for it to be reliable.
Just ordered an Apple cable a couple months ago directly from Apple through their Apple Store app, and about $1K USD of Ring security gear off their web site for exactly this fraud reason. If I know I want to purchase a name brand object, I now shop at the manufacturer's site first; if I don't need the Prime delivery aspects, and there is no significant difference in pricing, then the manufacturer site gets my consumer information.
And I haven't even been bitten by the Amazon commingling fraud yet, just bitten by egregiously craptastic products bought off of Amazon. I can't trust the reviews without carefully parsing them to figure out which ones are likely factory-generated. I can't trust the pricing without looking through various historical price add-ons. At that point, the cognitive load between using Amazon and choosing alternative channels is pretty meh, and I'd rather just go "straight to the source", ordering direct from the manufacturer and finding the manufacturer by looking up forum discussions.
For renewing household goods, I'm finding myself shopping at my local grocery chain, Target and WalMart a lot more these days. Once Amazon pricing for the same household item shows it is more than these other sources (and often by a surprisingly large delta), Amazon doesn't get a crack at that spend for another year, as it isn't worth the cognitive bandwidth to comparison shop each time I go to the grocery store, or if Target/WalMart deliver the best price, they get the subscription for the year. I use a credit card number generator for subscriptions, so we have to renew the configuration each year.
Amazon is losing its convenience value proposition, and I find taking their eye off of that ball very odd for a B2C context, but what do I know.
Maybe a more "nearly trillion-dollar company" twist on your idea: The Prime Marketplace, only official providers, e.g. Sony, Bose, and products sold, and vetted, by Amazon only available to Prime members.
>I offer this advice to Amazon -- ditch the marketplace. No more third party sellers.
But for many things I shop for, that would be extremely inconvenient for me. For example, I needed to buy replacement fuses for a Fluke multimeter. Amazon itself didn't sell it but a 3rd-party marketplace seller did. If the marketplace was shut down, I'd have to go through the hassle of registering a new account on yet another ecommerce website just to buy that fuse. In this day and age of customer databases getting hacked, I'd rather not create any new accounts unless absolutely necessary.
Yes, I get the danger of counterfeit items. I did get bit by that with fake eclipse glasses from China last year but nevertheless, the 3rd-party marketplace has been a net positive for my shopping experience. I just pay attention to the seller ratings and make sure they're better than 98%.
That sounds like a good match for eBay, though. Amazon is presenting itself as a store, eBay is presenting itself as a marketplace. In the same way I would run Amazon into the ground, I would suggest to eBay to embrace the marketplace and phase out the auction aspect.
This is why I'm a software engineer and not a retail tycoon ;-).
Ebay has bought a number of companies in other countries that are much more marketplace-oriented.
For example Mercado Libre. Originally from Argentina (I think) but it's all over Latin America now. They used to have auctions but at least in Mexico it's mostly a marketplace.
https://www.mercadolibre.com.mx/
> I just pay attention to the seller ratings and make sure they're better than 98%.
Maybe I'm just extremely cynical, but you don't feel those are somehow gamed? For parts that you've described, I've actually moved to eBay as my first stop.
>Maybe I'm just extremely cynical, but you don't feel those are somehow gamed?
I think the reviews for products are gamed but I don't think the seller feedback ratings are.
I used to sell used books as a Amazon marketplace seller and I once sold a book that was damaged and put that condition in the description. The buyer bought and gave me 1 star rating for it and described the damage that I already put in the description. The buyer just didn't bother to read the description before he bought it. I couldn't get Amazon to remove that unfair rating.
If there's a way to game the seller feedback in a sustainable way across thousands of ratings, I'd like to know how. Sure, sellers could offer refunds to bribe customers to change their seller rating from 1 star to 5 stars (not sure if that's even possible) but eventually, the seller will run out of money with that scheme. On the other hand, product reviews are easier to hack.
The data they get from what is popular on marketplace justifies its existence alone. Without marketplace, Amazon would be in the dark about what products they should even begin stocking.
Or separate regular Amazon from the marketplace so a user can search one or the other.
> As proof that I am clearly not qualified to run a nearly trillion-dollar company, I offer this advice to Amazon -- ditch the marketplace. No more third party sellers.
Last I heard, it was ~50% of their revenue. And they take a 15% cut of the price, plus a per-transaction fee, for the cost of maintaining a product catalog (which they already do).
Not a chance they'll drop it.
If they do not find a way to believably eliminate the counterfeit problem, the marketplace may end up a lot more than 50% of their revenue.
As a long time independent seller, Amazon has virtually already done this by gating nearly every brand under the sun. It's hard to sell so much as a box of pens without a bulk purchase invoice and a picture of you high-fiving the manufacturer's CEO.
I agree with this. Amazon could still be a huge marketplace if they stocked the virtual shelves and only sold legitimate items or their own brands. Target does it and that is where my business has been going instead of Amazon.
You could eliminate most of the problem by Amazon just ditching seller central and moving to exclusively vendor central where Amazon is purchasing from the buyers but they still manage their listings, marketing, etc. Since Amazon purchases and resells the inventory I imagine they have a vested interest in it not being junk products.
>Amazon in recent weeks also has deleted thousands of suspect reviews,
That's a drop in the ocean. But it's not reviews and brushing, the real issue is fraudulent and counterfeit products. I don't even trust Amazon to buy books anymore.
Just like craigslist, facebook, and countless other things, once something gets to be too big, it gets co-opted by bad actors and the risks outweigh the benefits.
edit: highly recommend this Reply All episode about Amazon, brushing, and counterfeit goods: https://www.gimletmedia.com/reply-all/124
Thus the importance of sites like https://www.fakespot.com/
checking for likely-fake 5-star reviews before making an expensive purchase is a good idea.
Fakespot and others like it have crappy algorithms. I know sellers that have never done anything shady for reviews that get graded poorly by fakespot. And their Chinese competitors that blatantly fake reviews get A.
I suspect that the spammers are also starting to do things to not get flagged by Fakespot, especially since FS lists out a lot of the criteria that they use.
My (anecdotal) experience with dodgy sellers was this: I bought something that didn't work correctly, I left a review. The seller contacted me and offered money direct to paypal, bypassing Amazon. They did so by attaching an image with the offer to the ticket.
I wasn't comfortable with that kind of interaction, so I informed Amazon. Lots of copious apologies from Amazon, and I assume the company was "fired". But the company just changed their name slightly and are still selling the same items.
With the ability to create fake reviews that can (far) outnumber the negative, I'm surprised sellers bother that much like this... I wonder if a legitimate negative review somehow has more "signal to noise" in it in terms of how it's shown and received by buyers.
It's gotten to the point where I won't buy from sellers with names that look like they're from a password generator set to "letters only, human pronounceable"
I did send amazon fraud dept a detailed email about my experiences and the new company selling the exact same items.
Amazon needs to have a vastly larger fraud department staffed with actual humans, instead of automated systems that people can game very easily.
Or offer bounties to customers for successful fraud removals. Although people would probably game that too.
You want to know the best way, in my experience, to see if an Amazon seller is legitimate?
Check if their seller name is trademarked with the USPTO.
Trademarks take 9 months to get, and aren't necessary to sell on Amazon, but a real business will usually trademark its name.
That sounds like a Firefox/Chrome extension waiting to be written ;)
Huh. Great idea. I'll let you know when it's done.
How much money were they offering? I definitely would have taken it, and then re-posted the same review a day later.
I would take the refund too, but some other avenue than Paypal. For all the buyer knows, the seller could have been using a stolen Paypal account that would have been charged back via a dispute by the victim, and the buyer would be SOL. The seller could also refund the buyer and still open a dispute with Paypal to claim a chargeback. It's suspicious the seller strongly wants to avoid using Amazon for refunds.
I'm not a crypto-fanatic, but I would have pushed the seller to send money to a crypto wallet address, and then I would have immediately withdrawn it to a bank account. Then still posted the bad review of the seller anyways.
I was just thinking the same thing. Street taught me that criminals can be victimized to no end because they won’t call the police no matter what.
They wouldnt call the police. They would simply open Paypal dispute and tell paypal that he agreed to remove his review for money and now he posted it again.
while that's true in a lot of cases, I'd be careful. calling the police is far from the only recourse available to people.
They were offering a refund of what I had paid. I really wasn't comfortable with giving them my paypal address.
I think PayPal will freeze your account if you do this.
How exactly would they do that? Beyond Paypal just doing whatever they want whenever they want.
If it can be gamed for profit, it will be gamed.
> The tactics include pummeling rivals’ listings with overly positive or negative reviews, and repeatedly clicking on links to products they want boosted to trick Amazon’s algorithm into ranking them higher in search results
Amazon is seemingly coming to this realization very late. The downfall of many search engines has been the inability to deal with the tricks that subvert their ranking systems. If you take any external signal as an indication of popularity, it will be manipulated.
The overly positive reviews is an interesting spin on this manipulation; it creates seeds of doubt when a product looks like it's been overly reviewed. The "fake review" is easy to pick out.
[edit: formatting]
They've surely realized very early on, they've just been trying very hard to be hush about it. Can't blame them, much as I dislike them.
Well that's fair. Realized AND acted on a problem vs. just realizing the problem. It unfortunately has to hit them in the public eye before they are willing to really start addressing the problem.
I further contend there really is no solution. It's a war of escalation. We've seen it play out with SEO and search engines over the years. You can still "game" Google, but it's a lot harder to do it, the barrier to entry is a lot harder than it used to be when you could just list your site with a link farm. I am guessing that Amazon is in a similar war.
Maybe the current state of affairs is despite significant efforts to combat it. That would explain some of the silence on all these complaints, since "we're doing everything we can and it's still happening" is more embarrassing than "we know it's happening and we're looking into it."
This time last year I ordered some Rose Oil from "Essential Oil Labs" at Amazon. What I got wasn't Rose Oil, it was garbage.
Amazon issued I refund but when I looked into it further I found reviews from others who got crap from them as well, but those reviews were well buried. Because I'd requested a refund I wasn't allowed to post a review that warned others about them. That felt to me like Amazon was shielding the vendor from negative reviews.
As a result of how this was handled I've not bought anything from Amazon this year and I canceled our "Prime" membership this month when it expired.
This "crackdown" feels like too little too late, and it will be a long time before I go back there, if ever.
https://outline.com/rjnnqM
Does outline have some special deals with media sites?
And if it's simply stealing content, why aren't companies suing outline into oblivion like they did with Napster?
I doubt they have a deal. The only place I've seen it used is HN, so they might not have noticed yet.
Thanks! A short note what is under the link would get more clicks/be more usable. Otherwise you're asking too much trust.
On HN, it is well known what an Outline link is for, especially on WSJ articles.
It was actually new to me.
(Please hold your pitchforks) Since a lot of these scams come from Chinese sellers, I wonder if Amazon could talk to the Chinese government about interfacing with their new social-credit system... you can't sell on the platform if your score is below XYZ, and reports of fraud affect them directly.
Obviously this would lead to a lot of sellers mysteriously relocating to other countries, and there would be a lot of patsies set up to take the credit score hit, but it's all about defense-in-depth right?
Abusing Orwellian government schemes to protect your company seems really gross.
The much talked about social credit score doesn't really exist yet https://foreignpolicy.com/2018/11/16/chinas-orwellian-social...
Yeah I suppose it's true that a system which has only "blocked more than 11.14 million flights and 4.25 million high-speed train trips by the end of April [2018]" http://www.globaltimes.cn/content/1103262.shtml is not "real".
Chinese high-speed rail carries more than a billion passengers per year ( http://en.people.cn/n3/2017/1110/c90000-9291147.html ).
If vastly fewer than 1% of rides are affected by the so-called social credit blacklist, is it a real thing?
Personally I have been disappointed that the commentators are making the "Black Mirror" comparisons without carrying the reference further back to Cory Doctorow's "Whuffie".
So, only most of its features are real, and most of the rest are planned for the next couple of years? That's not really reassuring.
Much as I hate Amazon scammers, I think I'd rather suffer them than cooperate with the Chinese social credit system in even the most indirect way.
I'm glad this has finally begun. But it's too late for the Christmas shopping season.
With the exception of items from Amazon Global, I've already bought all of my gifts from brick-and-mortar stores because I can no longer trust that Amazon won't ship me fakes.
Maybe next year.
One thing I've been thinking about: Amazon (and Google) have essentially taken the old CPG paradigm of stock shelves (including visibility and monetization of that physical space) and turned it into a new paradigm: Infinite shelf space that dynamically changes based on customer inputs.
Across one axis, this is better for the consumer and better for Amazon: customers get better results, and Amazon can charge for the (still limited) high priority space much more than a typical retailer could charge a CPG manufacturer for visibility.
Across another axis, this is much worse for Amazon: they cede a significant amount of control over a highly valuable asset, which also greatly impacts customer experience. All of the inputs they build their system on can be faked or gamed, and now they have the added responsibility of distinguishing real vs fake, and managing those inputs.
I don't really have any answers, but I think it is an interesting thought exercise to consider how the old paradigm had some advantages, even if those advantages are likely unable to scale.
I think the gist of the article was "Hey we're working on fixing the problems." but my experience with Amazon is that they aren't working hard enough. The question is when does it show up in their bottom line (and stock price) and when does Walmart start advertising "100% fully verified products on our web site."
I was shopping with my fiancee on Amazon last night, and she mentioned that she always ignores the first row of search results, which are often highly reviewed but unknown Chinese brands, and goes for the brands that she knows and trusts. She feels that the reviews are not always trustworthy.
Why on earth would Amazon allow whole-seller accounts to edit other peoples listings?
That just seems like a recipe for disaster, as seen here...
Amazon fixing fake reviews would be a giant step in the right direction. What could be more important than having your users believe you're a trusted source?
I used to go to Amazon to look at reviews, regardless of where I was shopping. Now, in the rare moments I'm shopping on Amazon, I go to other sites to read the reviews.
I've noticed that too -- it's kind of a weird full circle. I used to stand in a brick and mortar store and pull up my phone to checkout amazon reviews before purchasing. Now, I feel higher levels of trust in the supply chain of most Brick and Mortar stores.
I've got no clue who to trust in the review space. I tend to trust comments I find in niche subreddits more than I should. They're probably 50% astroturfed or driven by poor incentives, but overall it tends to push towards higher end established brands rather than cheap knockoff garbage. At least going towards the former isn't an electrocution risk, I guess..
If there is an alternate news source can you please not use WSJ? It is paywalled pretty hard.
https://outline.com/rjnnqM
For any article, replace the wsj with fullwsj in the url. It will redirect you to a non paywall link through Facebook.
If don’t have to have a FB account.
I have to pay to read this article? Shameful promotion of a paid service.
I remember when they could ship booked undamaged. Those were good times.