Innovation
by Mike Masnick
Tue, Jul 10th 2012 3:03am
Filed Under:
cabs, car service, dc, disruption, innovation, regulations, taxis
Companies:
uber
Permalink.
DC Seeks To 'Legalize' Uber... By Forcing It To Be Way More Expensive Than Cabs
from the can't-have-competition dept
If you want to understand local corruption at a really, really deep level, do something simple: fly into a new city, hop into a cab at the airport and ask them about taxi licensing. I've done this a few times, and you'd be amazed at what a ridiculous situation this is. For reasons that still do not make any sense, most cities have very strict regulations on cabs -- which they always position as being for the protection of customers, but in reality are always about limiting the market and keeping competition out. Planet Money's discussion of NYC cab medallions last year highlighted just what a ridiculous system this is. It's almost impossible to find an economist who thinks this setup is good for the public. And yet it's quite common.
Over the last few years, a few startups have tried to disrupt this market -- and they always get attacked for it, either by local cab/limo services or the local officials in charge of regulating the market. The most well known of these companies is Uber, who is looking to really disrupt the market with a service that they admit is more expensive, but which provides really amazing convenience and service in exchange. Users of Uber love the service, in my experience. A couple weeks ago, I was in Chicago to speak at a conference, and Uber's CEO, Travis Kalanick, spoke at the same event, with a really entertaining talk -- much of it about how every time he tries to disrupt a market, legacy players get really, really pissed off at him.
As part of that talk, he discussed the situation in Washington DC, where the local Taxicab Commission Chairman, Ron Linton, ran a "sting" to claim that Uber was violating DC laws. Since then there's been a lot of back and forth in the fight in DC, leading to a new set of regulations that are being introduced. Of course, as is typical of taxi/limo regulations, they often say one thing but mean the exact opposite. In this case, the Taxicab Commission appears to be positioning the new regulations as being designed to make Uber "legal,", but, as Uber's Kalanick notes in a blog post, it includes some really poisonous provisions that require Uber to charge at least 5 times what a taxi charges. They're not even subtle about this. As the text of the bill reads:
(c) (1) The minimum fare for sedan-class vehicles shall be five times the drop rate for taxicabs, as established by 31 DCMR § 801.3 (a).The DC Taxicab Commission claims this is to "ensure that sedan service is a premium class of service with a substantially higher cost that does not directly compete with or undercut taxicab service." But why? We don't do this in any other market. We don't tell nice restaurants that they must charge more than fast food restaurants, so as not to compete. We don't tell Apple that it must charge more for computers so that they're seen as "premium" devices. We let the market work things out. That's what enables disruptive innovation and competition to take place.
(2) The time and distance rates for sedan-class vehicles shall be greater than the time and distance rates for taxicabs, as established by as established by 31 DCMR § 801.3 (b) and (c).
What's amazing here (and, to a lesser extent, in nearly every major city in the US) is how they effectively admit that they don't want competition, they don't want innovation. They want a protected market that is artificially inflated. Why would the people of DC accept this kind of thing?
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Business Models
by Mike Masnick
Thu, Feb 23rd 2012 1:18pm
Filed Under:
artificial scarcity, business models, economics, real scarcity, scarcity
Permalink.
Real Scarcity Is An Important Part Of A Business Model; Artificial Scarcity Is A Terrible Business Model
from the business-modeling-for-fun-and-for-profit dept
Partly in response to Rupert Murdoch whining about how it's too risky to make films if Congress doesn't set up protectionist plans that lock down the internet, venture capitalist Fred Wilson has a great post about how "scarcity is a shitty busines model." He focuses, mainly, on the windowing aspect of movie releases these days, and how many in the industry still insist that locking up content rather than making it widely available is the key to profiting. But Fred points out (as many people have for years), that this makes no sense:
Denying customers the films they want, on the devices they want to watch them, when they want to watch them is not a great business model. It leads to piracy, as we have discussed here many times, but more importantly it also leads to the loss of a transaction to a competing form of entertainment.He points out that this certainly will disrupt some players -- but for the studios, it will undoubtedly increase the pie. It may hurt the gatekeepers, but it helps pretty much everyone else.
[....]
I've argued this point many times with film executives. They insist that they need their windows. They argue they need to manage access to their films to extract every last dollar from the market. That just doesn't make sense to me. If they went direct to their customers, offered their films at a reasonable price (say $5/view net to them), and if they made their films available day one everywhere in the world, I can't see how they wouldn't make more money.
The one quibble I'd have with Fred's post is he keeps saying that scarcity is a bad business model. I think he's overstating his case a bit. Scarcity remains, and scarcity is still a key part of a smart business model these days. What is a bad business model is relying on artificial scarcities -- scarcities that are created by choice and by fiction -- rather than market realities. A seat in a movie theater is a real scarcity. Fred's attention is a real scarcity. Those are important parts of a real business model. Pretending an infinitely copyable video is not... is an artificial scarcity and it's a bad business model.
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Failures
by Mike Masnick
Fri, Feb 17th 2012 11:05am
Filed Under:
censorship, entrepreneurship, seizures, startups, takedowns
Companies:
jotform
Permalink.
Congrats, US Government: You're Scaring Web Businesses Into Moving Out Of The US
from the destroying-business dept
The federal government has been paying lip service to the idea that it wants to encourage new businesses and startups in the US. And this is truly important to the economy, as studies have shown that almost all of the net job growth in this country is coming from internet startups. Thankfully some politicians recognize this, but the federal government seems to be going in the other direction. With the JotForm situation unfolding, where the US government shut down an entire website with no notice or explanation, people are beginning to recognize that the US is not safe for internet startups.
Lots of folks have been passing around this rather reasonable list of activities for US-based websites:
Today's sysadmin todo list:What's amazing is the "what's the big deal?" attitude the government has taken to all of this. For most of us, this situation is shocking. The US government should never be able to flat out shut down a business with no notice or explanation, only to say "sorry" a couple days later. It's done this in the past and insisted that it would be more careful in the future. So far, it doesn't appear to be living up to that promise. While these may be "mistakes," the wider impact should be frightening to federal officials. They're now actively scaring startups away from US businesses at a time when they should be doing exactly the opposite.
0. Get corporate membership with EFF.
1. Identify all applications with user-generated content.
2. Move all associated domains to a non-US based registrar.
3. Migrate DNS, web serving and other critical services to non-US based servers.
4. Migrate yourself to a non-US controlled country.
I'm sorry for US sites and users. Your government is hell-bent on turning the internet into a read-only device like TV, easily regulated and controlled. The population will be required to sit quietly and keep their eyes glued on the screen so they don't miss the ads, with any infringers deemed terrorists and pedophiles and thus deserving of summary punishment by DHS squads.
Hopefully the internet will route around the damaged segment, and the rest of us can continue to enjoy the amazing interactivity it has brought our society.
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Free
by Glyn Moody
Tue, Feb 14th 2012 12:09am
Filed Under:
competition, free, open, text books
Permalink.
The World Of Open Textbooks Just Became A Little More Crowded -- And A Little More Open
from the sharing-the-knowledge dept
Open e-textbooks are hardly new: Techdirt has been reporting on the pioneer in this market, Flat World Knowledge, for several years now. But a new entrant called OpenStax College is noteworthy for a number of reasons:
OpenStax College is a nonprofit organization committed to improving student access to quality learning materials. Our free textbooks are developed and peer-reviewed by educators to ensure they are readable, accurate, and meet the scope and sequence requirements of your course. Through our partnerships with companies and foundations committed to reducing costs for students, OpenStax College is working to improve access to higher education for all. OpenStax College is an initiative of Rice University and is made possible through the generous support of several philanthropic foundations.
Those foundations include the William and Flora Hewlett Foundation, probably the leading philanthropic organization in the field of open education, and the Bill & Melinda Gates Foundation. But the Rice connection is just as important as the funding.
Although MIT is known as a pioneer of sharing its courses freely online through its OpenCourseWare project, arguably Rice University went even further with its highly-modular Connexions program, which offers what it calls "frictionless remixing". The use of small learning modules, together with a permissive cc-by license for everything, allows educators and publishers to create their own courses by drawing on Connexions' material.
Given that the founder of Connexions, Richard Baraniuk, is also the Director of OpenStax College, it's hardly a surprise that the same cc-by licensing applies to the latter's textbooks. Still, that's a step beyond Flat World Knowledge, which allows textbooks to be modified, but under the more restrictive cc by-nc-sa license. Even though OpenStax College is a non-profit, and Flat World Knowledge a company, both adopt the same business model: the e-textbooks are given away, while printed copies and supplementary materials require payment -- a classic example of using abundance to make money from associated scarcities.
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Business Models
by Mike Masnick
Fri, Nov 11th 2011 4:05pm
Filed Under:
advertising, advertising is content, content, content is advertising
Companies:
bonobos, notcot
Permalink.
Content As Advertising: Making Advertising An Easter Egg For People To Hunt Down
from the nicely-done dept
Over the years, we've talked a lot about how advertising is content (and how content is advertising), and it's always nice to see cool examples that really demonstrate that in practice. Our friends over at NOTCOT are doing a fun little experiment with Bonobos pants, in which they're hiding little Bonobos Easter Eggs throughout the site, and offering prizes for people who find them.
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