> So borrowing money from investors to compete with somebody is now a despicable thing, maybe even a crime?
Running at financial loss just to drive prices down so you can kill competition is at least unethical in my book. Also I believe it is illegal, for good reasons, in some countries.
Agreed and I think this should be handled under anti dumping Law anyways?
It's idiotic to allow these unicorns to destroy existing businesses only to screw customers later on. They are not moving the world forward in any manner. It is just a power grab.
At best we will end up replacing many small businesses with behemoths with a virtually limitless lobbying powers.
Can you provide three most prominent examples of a "unicorn" doing such thing - destroy existing businesses by low prices and then stop providing good service and low prices and instead "screwing the customers" and still surviving as a company for, let's say, 5 years? And of course aside from patents, copyrights, etc. being involved - in a free market.
I don't believe such strategy can work. Screwing you customers is an extremely bad business practice, and it only works if your competition faces very high entry barriers or prohibited altogether, e.g. by law or regulation. Otherwise you'd either have to lower your prices each time new startup comes around, or you quickly get your market share eaten, as it happens now to taxi monopoly.
> At best we will end up replacing many small businesses
Taxi medallions are not controlled by small businesses. With their prices (before Uber), they can't be. Small business doesn't have that kind of money.
> don't believe such strategy can work. Screwing you customers is an extremely bad business practice, and it only works if your competition faces very high entry barriers or prohibited altogether.
1. Once they are big enough they can sell at loss or razor thin margins at the expense of employees(see Amazon) which in itself becomes a barrier to entrry. Most of the new small competition will die out during this phase of being discovered by customers or will face a constant cash flow crisis since incumbent can wait them out.
2. Do not underestimate the power of inertia. Let's take an example of Microsoft. For how many years IE was left to rot once they destroyed Mozilla?
Did Microsoft go out of business or fail in anyways? I guess no and don't forget it took another behemoth Google to fight the it out in the form of first supporting Mozilla and then coming up with their own browser.
> Taxi medallions are not controlled by small businesses. With their prices (before Uber), they can't be. Small business doesn't have that kind of money.
Probably they are their own local monopolies not but how replacing them with with one big all encompassing entity is a solution?
This is an anecdote but it happened to me few months back. I ordered an Uber but when it didn't arrive in time, I canceled it. Next time when I took Uber they just added a charge to my current bill silently without any intimation. I had to call them and go though half an hour of explaining. After that only they agreed to adjust the amount in my next bill. There was no option to get my cash back if I wanted my money. In my view this is no different than taxi nexus and once they are the o
I already replied to this comment but would like to highlight this:
> At best we will end up replacing many small businesses with behemoths with a virtually limitless lobbying powers.
Small business has had a hard time for a while now, suffering under corporate business models, greatly helped by the government. I always seem to come back to banks as examples, but they are a good example. These financial institutions that got bailed out... if they weren't bailed out, if the government allowed the market to correct itself and let those businesses fail (these behemoths), it would facilitate or at least allow for the rise of many small businesses to replace them.
That's just one example of how the current government/corporate business model hurts small business. How many small businesses were bailed out? Trillions spent to save the institutions that created the crisis in the first place.
Absolutely and yet we are happy to create more of them all the time. I bet cloud providers will be next such institution. Once a big chuck of Industry is dependent on them, they will be too big to fail.
The laws you refer to concerns a manufacturer's export of products to another country; specifically products sold at less than 'fair value'. I.e. international trade. It's not applicable to Uber in this regard. And as Uber does not employ their driver's, you have to look at laws regarding the use of freelancers/independent contractors and anything concerning fair wage. What about minimum wage?
> The Fair Labor Standards Act does not apply the minimum wage payment requirement to independent contractors. However, merely classifying a person as a contractor instead of an employee does not automatically keep the worker from being considered an employee entitled to minimum wage. Since improperly classifying a worker as a contractor carries with it legal repercussions, you must fully examine the work a person will take on for your company and compare it to labor standards.
From the sounds of it a Trump Presidency would be for removing red tape that effects Airbnb but against the dumping practices that Uber does.
There are a lot of talk that Trump is going to break up some of the Silicon Valley companies up. Especially the ones who don't care about American jobs.
Yes I actually watched [1] this and seems like Trump's view aren't formed now just to cash on the sentiments. He is talking these ideas for a long time. So let's hope he keep his insane side in check and does something good.
No one knows what Trump will do until he does it. Even his long-held beliefs are unreliable, because he is beholden to the mainstream Republicans and religious right that got him elected.
> he is beholden to the mainstream Republicans and religious right that got him elected
Just my opinion, but these are two groups that appear to have contributed less to Trump's success than to previous Republican candidates' (in the case of mainstream Republican politicians - actively attempting to thwart him). I think he is actually less beholden to these groups than past Republican presidents were.
Why it's unethical? Do you mean when a store announces a sale they doing an unethical and illegal thing? Or it's only when you borrow money it becomes unethical? When a startup works for years in the red it's unethical and illegal? Or only if somebody has higher prices - in that case they should immediately jack up their prices too or to jail with them?
One part is driving prices down because you've got a good IT optimising system, real time tracking, ease of use,etc. Ans another part is driving prices down artificially without making money just to choke the concurrence.
Running at financial loss just to drive prices down so you can kill competition is at least unethical in my book. Also I believe it is illegal, for good reasons, in some countries.