Apple execs: Let's take a 30% cut of Uber and Lyft's membership programs (2018)

https://twitter.com/TechEmails/status/1481339345822879745

by mdoms • 5 years ago

690 717 5 years ago

twitter.com

nabla92• 5 years ago

Many don't know this, but monopoly is not illegal in the US.

Misusing monopoly power is.

r00fus3• 5 years ago

Please explain to me how Apple is a monopoly.

timmg2• 5 years ago

AppStore is the only way to sell/put apps on an iPhones.

marricks• 5 years ago

It definitely seems like a vertical monopoly, which people seem to forget exists.

deadmutex• 5 years ago

Not OP, but maybe they were alluding to the fact that App Store is the only store a user can use on an iOS device.

nl• 5 years ago

https://academic.oup.com/jcle/article-abstract/17/3/503/6210...

YetAnotherNick• 5 years ago

They are not a monopoly from user's perspective, but for iPhone apps they are monopoly as the only way to reach iPhone users is by their approval.

tyingq• 5 years ago

Depends if you consider the ~$80 billion / year gross flowing through the app store for iOS apps a market or not.

DrBenCarson5• 5 years ago

In fairness, they're a monopoly in a market they invented--the iOS "ecosystem."

This includes:

* the app store

* subscription management

* payments

* any sort of digital media (music, movies, tv shows)

* browser engines...there literally is no way to release a different browser on iOS, even iOS "Firefox" and "Chrome" have to use Apple's WebKit binary

nabla92• 5 years ago

I assume that you are thinking of a pure monopoly - a single supplier.

When we are talking about monopolies in this context, we mean monopoly power, monopsony etc. For example, when a firm’s ability to charge a price higher than its marginal cost with very little change in demand of their product, it has monopoly power.

When deciding if a company is a monopoly, the first thing to do is 'market definition' - defining the relevant market. Is the whole mobile phone market? Can companies realistically compete if they produce only Android apps? It is in any way practical to assume that people carry two phones? Obliviously not.

righttoolforjob12• 5 years ago

Seems pretty obvious to me at least. I doubt your claim that not many would know this. Violence isn't illegal, but misusing violence is. Using the toilet isn't against the rules, but misusing it is.

DrBenCarson5• 5 years ago

Guns are not illegal but misusing them is

spiderice• 5 years ago

Um.. yes? What’s your point?

cblconfederate4• 5 years ago

It's not a monopoly, it's a vertically integrated business that is using its cash and marketing to lure in and lock in more developers, who in turn end up being working as unpaid labor for them, increasing the value of their app store, and the virtuous cycle continues. Noone else had pulled that before, apple could do it because phones peaked usability-wise and ended up becoming a fashion item. As long as developers keep being on apple's train, she calls the shots. There is no way to win this game, only to bail.

mindwok• 5 years ago

I feel like these marketplaces could maybe justify 30% on the purchase of an app up front, where there are clear benefits to the exposure and platform offered by them. But ongoing revenue is really attributable to the app itself and feels to me much harder to justify.

At this point I’d be happy if Apple just let me install apps outside their ecosystem, then they could at least defend themselves by saying if the developers aren’t happy with the terms of the App Store they can offer alternative methods.

zndr• 5 years ago

It's more than that: it's the fact that all of the payment info is there. Every step, field entry, hurdle you put infront of a consumer is usually associated a significant increase in "cart abandonment". By apple allowing you to just apple pay straight in and avoid CC, and billing address etc, they are decreasing the hurdles and increasing the conversion.

Is it worth 30%? In 2013? Maybe In 2021? Definitely not. It should be closer to 5%.

That being said I do like using Apple subscriptions because they make it REALLY easy to cancel them, all in one place, something that can't be said for a lot of other services.

Drew_2• 5 years ago

Apple Pay isn't the only payment processor that's convenient like this. But of course, Apple has created a market where their processor is the only one allowed.

pcthrowaway• 5 years ago

If it's anything like Google Subscriptions, there's the danger of disputing charges leading to your Apple account being banned, so it's probably in the users' interests to avoid it.

But of course, when you've just come off of a plane at 2 AM and want to get a ride to your hotel so you can get a few hours of sleep before checkout time, this is probably not something users will think about.

onphonenow6• 5 years ago

Yeah, one MAJOR issue I have with the folks complaining about apple. Many of them have HORRIBLE cancellation policies.

I had to fight NY Times like crazy (it was sign up online, call to cancel kind of thing).

Match is also in the "alliance" fighting apple with Facebook. They also have scummy practices (either tracking you or again duping you).

The other thing I like with Apple, the trial periods are REALLY clear. When you sign up with comcast it's like $29/month (and then in tiny tiny print 10 pages later you find out that after 6 months it's $69/month or whatever).

So until these folks clean things up where they ALREADY have full control (on the web) I'm willing to cut apple a ton of slack.

Apple will remind you to cancel a subscription when you delete a related app. It reminds you if a subscription will renew and you can cancel then. I willing spend money through the app store I'd not spend ANYWHERE else. For folks willing to spend money but who don't want to f'ed around with constantly apple is the place to be. And it is super easy these days. Double tap or touch and done.

Gigachad15• 5 years ago

Apple should be forced to allow other payment processors store a platform wide login like you can with a Google account. So none of the payments run through Apples infrastructure, but there is no extra friction over their provider.

viscanti• 5 years ago

It's more than that: it's the fact that all of the payment info is there.

Haven't Lyft and Uber already collected that payment information to charge per ride today? Is there even any friction savings here? What justifies the 30% cut when these companies seem to have done just fine not using the Apple Payment infrastructure?

funstuff007• 5 years ago

Every step, field entry, hurdle you put infront of a consumer is usually associated a significant increase in "cart abandonment".

Yeah, that's annoying, but for new vendors I just use Paypal.

threatofrain• 5 years ago

Apple Pay is different from App Store fees. Apple Pay is a payment process where the store doesn’t get your credit card number. Apple Store fees are a matter of business agreements between software companies and Apple.

Using PayPal won’t help an app company escape its agreements with Apple.

V__• 5 years ago

I wholeheartedly agree. 30% ongoing is criminal in my opinion.

rekoil10• 5 years ago

Even 15% ongoing is criminal in my opinion. Other payment processors take <5%.

jiggawatts4• 5 years ago

Not charging 30% for ongoing revenue would immediately result in all apps being “free” with an in—app subscription.

Like… within months.

Why do people not get this?

Apple wants their cut. This is the only way for them to get any cut at all. It’s either this rule or $0 revenue.

bitexploder• 5 years ago

No possible percentages in between 0 and 30%?

tomxor5• 5 years ago

Apple wants their cut. This is the only way for them to get any cut at all. It’s either this rule or $0 revenue.

Why do they deserve a cut?

Uber and Lyft, deliver a material service, Apple have not contributed to that in any way beyond existing as a general purpose computer manufacturer.

Take an alternative, food delivery service, you pay a monthly subscription for a set selection of fruit and veg delivered every week. The cost is made up of food cost and delivery cost... You could sign up through a website, or you could sign up through an app on Apple's app store, in the later case the only option would be to increase the price by 30%, because there is no where near 30% profit left over.

Not convinced? Ok lets go to an extreme, what about a mortgage monthly repayment app, that's essentially a subscription to your home right? Do you think Apple deserve to have almost 30% of the value of your house for the privilege of letting you use an app to pay? Does their App store really deliver that much value?

Before, it was sort of justifiable when people were trying their get rich quick schemes with flappy bird clones... because the argument from the other side was a weak "but that's my get rich quick scheme", Apple's platform and what they shove in front of users faces made a real difference to the almost pure profit of those Apps, the apps simply would not be popular without Apple... but as soon as we start talking about apps that deliver material services and other significant value it makes no sense to argue that Apple deserve even 1 penny. Apple have gone completely fucking mental with their own greed, they think they deserve a slice of the entire world.

judge202010• 5 years ago

Maybe Apple forces Uber and Lyft to cost $3 upfront then.

amelius2• 5 years ago

There is a mutual benefit. More apps means that Apple benefits from a stronger platform (and can sell more copies of iDevices/iOS). That's why Microsoft never charged 30% for the privilege of selling an app on MSWindows, back in the old days.

A platform is largely "made" by external developers who contribute to the platform. It is unfair to start charging them (or anyone who comes later) for being on the platform.

Of course, Apple execs, who have no pride in making things but only in extracting money out of things, will have a different opinion on this.

ASalazarMX• 5 years ago

A platform is largely "made" by external developers who contribute to the platform. It is unfair to start charging them (or anyone who comes later) for being on the platform.
Of course, Apple execs, who have no pride in making things but only in extracting money out of things, will have a different opinion on this.

I think they've always known, that's why they created an artificial ecosystem where this equation is backwards. No developer can harm Apple, but Apple can harm the biggest of developers on a whim.

zmmmmm4• 5 years ago

Even with the 30% up front - if it is such a great deal, why don't they allow alternatives?

It's clear as day they know the minute they allowed alternatives, a giant fraction of the App Store would depart because they can get a better deal either elsewhere.

lwkl• 5 years ago

It's clear as day they know the minute they allowed alternatives, a giant fraction of the App Store would depart because they can get a better deal either elsewhere.

As an user of an iPhone I don't want this. I bought an iPhone because I deal with enough technology in my day to day job and I want a phone that's straightforward to use and doesn't need any attention. So no I don't want to install three app stores on my iPhone and have to deal with 20 different payment providers.

In the end it's important to make the distinction between consumer interests and the interest of businesses that want to sell their product on the iOS platform. I get that this sucks for developers because iOS is from what I've heard much more profitable than Android. In my opinion consumers interests should be weighed higher here and Apple's policies for the App store are mostly pro consumer, at least compared with the situation on different platforms.

Consumers that want a more open platform can always choose Android or Linux phones.

chaosbutters314• 5 years ago

maybe stop supporting apple's exploitive practices then and not buy their products. At this point, they're second tier on phones and laptops and dead last in desktop PC. I guess they're still first in watch and earbuds but that isn't saying much.

rekoil10• 5 years ago

If you're talking about hardware capabilities you are so wrong. They are only in the market position that they are in because their stuff is expensive, and people think they need to buy new stuff so often that Apples stuff becomes prohibitively expensive for them.

Their tech is solid. M1 completely obliterates the competition for laptops, and is getting there for desktop. Their desktop positioning is mostly self-made to be honest, they haven't really focused on it.

Phones are so overpowered these days that the only thing that really matters is battery life, and Apples chips accomplish so much more than the competition with a lot less battery.

newsclues2• 5 years ago

Apple wants 30%

Developers want less

Customer don’t care, and want what Apple is selling.

Developers feel it’s not fair because they think they are losing money but customers seem happy to pay for Apple’s premium service.

lotsofpulp3• 5 years ago

Yes, the premium does not matter to me because it saves so much time and convenience in being able to cancel subscriptions.

If I want it cheaper in exchange for having to deal with onerous cancellation methods, I can just go direct to the developer’s website and buy it.

asvitkine3• 5 years ago

I think you meant "Customers don't know".

I suspect if the UI offered customers to pay now using Apple's thing, or have a button to get 30% off by going to some more convoluted flow, a lot of people would choose the rebate.

eru3• 5 years ago

At this point I’d be happy if Apple just let me install apps outside their ecosystem, then they could at least defend themselves by saying if the developers aren’t happy with the terms of the App Store they can offer alternative methods.

And, of course, you can also use a different smart phone ecosystem. Android makes it comparatively easier to sideload apps and mess with stuff.

JimDabell4• 5 years ago

I feel like these marketplaces could maybe justify 30% on the purchase of an app up front, where there are clear benefits to the exposure and platform offered by them. But ongoing revenue is really attributable to the app itself and feels to me much harder to justify.

It’s not 30% of ongoing revenue though. You only have to pay 30% in one situation: you are already earning millions of dollars in the App Store AND it’s the first year of the subscription.

If you earn less than a million dollars, you qualify for the small business program and the rate is 15%:

https://www.apple.com/newsroom/2020/11/apple-announces-app-s...

If your subscriber has been subscribed for a year or more, the rate is 15%:

https://developer.apple.com/app-store/subscriptions/#revenue...

majani• 5 years ago

The overwhelming majority of apps can be turned into websites instead, unshackled by store regulations. Devs should vote with their feet if app store costs outweigh the benefits

rekoil10• 5 years ago

But a lot of app classes can't. Browsers being the obvious one, but generally anything that requires optimised code, heavy computation, multi-threadedness, or access to certain sensors. Anything that fits any of those requirements has to be a real app and must then adhere to Apples rules.

charles_f• 5 years ago

I’d be happy if Apple just let me install apps outside their ecosystem

Android allows it, usage of alt stores is marginal.

joebob42• 5 years ago

I still don't think they deserve the 30%, but it's interesting that there doesn't seem to be any concern in that direction mentioned here. They mention in passing that the 30% may be a concern for partners but they seem basically unfased by it and don't mentioned that it might not be reasonable.

yua_mikami• 5 years ago

This is good because the more large companies that Apple pisses off, the sooner the App Store garden walls will come down.

quickthrower2• 5 years ago

They could have a union to represent {!apple} and negotiate fees down. The threat could be uber and others chuck in a free android phone loaded with their app with their subscriptions!

Kyragem• 5 years ago

I was going to comment that Steve Jobs would be turning in his grave if he would hear about this, but unfortunately Apple was already the money grabbing company today that it was back then as well.

Andrew_nenakhov3• 5 years ago

How come some people still don't consider Apple a monopoly is beyond me.

prepend5• 5 years ago

Because they have tons of competition and don’t dominate the market. By revenue, android is way higher.

Monopolies have a few characteristics like barriers to entry and competition. Apple doesn’t command this because the market is mostly not Apple.

partiallypro2• 5 years ago

In the US, it is in fact mostly Apple.

heavyset_go14• 5 years ago

Because they have tons of competition and don’t dominate the market. By revenue, android is way higher.

Apple has 60% of the mobile market in the US[1], and the App Store is responsible for more than 100% more revenue than the Play Store, too[2].

Regulatory bodies aren't concerned with layman definitions of monopoly[3]:

Courts do not require a literal monopoly before applying rules for single firm conduct; that term is used as shorthand for a firm with significant and durable market power — that is, the long term ability to raise price or exclude competitors. That is how that term is used here: a "monopolist" is a firm with significant and durable market power.

[1] https://www.pcmag.com/news/ios-more-popular-in-japan-and-us-...

[2] https://www.businessofapps.com/data/app-revenues/

[3] https://www.ftc.gov/tips-advice/competition-guidance/guide-a...

wvenable3• 5 years ago

They absolutely dominate the market. If you wanted to create a successful service today and don't support iOS you have no chance. If that's not domination, what is?

DrBenCarson5• 5 years ago

In fairness, they're a monopoly in a market they invented--the iOS "ecosystem."

This includes:

* the app store

* subscription management

* payments

* any sort of digital media (music, movies, tv shows)

* browser engines...there literally is no way to release a different browser on iOS, even iOS "Firefox" and "Chrome" have to use Apple's WebKit binary

From myself in a lower thread

Andrew_nenakhov3• 5 years ago

They absolutely dominate the market of iOS apps. Imagine the uproar you would be able to install windows apps only via MicrosoftStore? The uproar would be deafening, and yet the impact on users would be far less severe than Apple's tyranny, because you can install other OS on PCs, but you can't install other OSs on iPhones.

atty• 5 years ago

I’m as concerned as anyone about apples behavior with services in general, and the App Store in particular. But it’s also true that the market is not iPhones, it’s smart phones. And Apple is most certainly not a monopoly in smart phones or smart phone apps. They’ve very carefully built up an ecosystem that attracts the best app dev talent and the most lucrative app customers, but that does not make them a monopoly.

heavyset_go14• 5 years ago

But it’s also true that the market is not iPhones, it’s smart phones. And Apple is most certainly not a monopoly in smart phones or smart phone apps.

Apple certainly has a duopoly with Google in the mobile device market, mobile operating systems market, mobile app distribution market and the mobile app payments market.

mikl4• 5 years ago

Apple execs might have convinced themselves that they are entitled to a huge cut of pretty much everything that goes on an iPhone/iPad/etc.

To everyone else, this just looks like mustachio-twirling, cackling evil and unfathomable greed from a company that’s already the world’s richest and sitting on a mountainous pile of cash.

outside1234• 5 years ago

Yes, not sure about the evil part (lots of industries rent seek like this), but am sure of the greed part.

toss12• 5 years ago

Since the Venn diagram of this is concentric circles, with the Greed circle on the inside, you can also be sure about the Evil part (greed being a subset of types of evil) ...

Gigachad15• 5 years ago

There are lots of conflicting opinions on this. Personally I think its fine that apple provides payment processing but not fine that it forces developers to use their payment processor. A more fair system would allow the developer to present the devs own choice as well as the apple payments and allow the developer to explain there is a 30% charge on using apples payment processor.

kzrdude• 5 years ago

good example, that would certainly force them to have more competitive rates. Probably a premium, but still under competition. With how they control the app store though, how could it ever be a fair competition, there's always the risk of being unfairly treated?

bradyo• 5 years ago

Part of the problem is that the in-app purchase cut isn't just for payments infra, it also includes the rest of the infrastructure and value prop for the app store(s), which is otherwise only $100/year, which is nothing for huge companies. The problem is they also force users to use the official app store. tbf this is all less true on Android. I feel like a competitive market would have decoupled these costs.

mikl4• 5 years ago

There’s some nuance to be had, to be sure.

But I think we should be able to agree that demanding 30% of nearly everything and completely banning any sort of alternatives is extremely overbearing and ends up taking a lot of money out of the pockets of people struggling to get by.

MBCook• 5 years ago

At this point, I think the way this will all end up (and would be fair) is for Apple’s payment system to remain, but you can choose to use another one. Apple’s take will probably fall in line (otherwise no one would use it).

I also kind of like the idea that something like that happens, except games all caps must use Apple‘s system and pay the 30%. That’s not as fair, but might be workable.

If I had my way over all of this? Do you know what I really want?

No consumable in-app purchases. Period. Outlawed.

One of my favorite things about the early iPhone was the incredible games that you could get. Now there’s almost none of them, the developers of practically abandoned the platform. The only ways to make money are ads and consumable in app purchases which are just complete scams. Like $1000 buckets of Smurfberries.

That’ll never happen. But I wish it would, because it would bring back the great games.

not2b2• 5 years ago

A charge for payment processing should be closer to what Visa or Mastercard charges, something more in line with the cost for providing the service. They charge on the order of 1.5% to 3.5%, depending. 30% is extortionate.

wruza4• 5 years ago

Developers would be interested in taking 30% and not interested in even trying Apple appstore, which btw sets product quality level guidelines. As a result, user experience will suffer. Those who prefer apple as it is will seek apple-level quality but wouldn't find one, because apple format is now equal to a regular one, and there is no superapple. Apple instead implicitly suggests to just charge apple users more in IAPs and for apps, when a charge is related to some electronic type of value. Whatever price developers see fit, there is no practical limit.

What you are basically trying to do is visiting a vip club (user-value wise) and then making it open to every crap dj out there, because otherwise it's "unfair". Why don't you just go to a regular one then? It is the same as this vip would turn into in a heartbeat. And where should other members who liked it go after that?

mbesto• 5 years ago

Consumers don't pay for:

- SDK / iOS updates

- Bandwidth to upload the compiled app to their phone

- Support from Apple

- Hosting / security of aforementioned

- etc. etc.

Who pays for all of the infrastructure of the App Store and the Apple SDK then?

ehsankia• 5 years ago

It is a weird situation because it's hard to decide where to draw the line. Even right now the exceptions are weird and semi-arbitrary. Everyone paying 30% doesn't work, but neither does no one paying 30%, since every app would just switch to subscription model to avoid paying Apple.

It's also tricky to change the status quo since at this point a huge chunk of their revenue is the AppStore, and any serious change in the 30% will impact that greatly, upsetting investors. Once you take the step forward, it's very hard to take a step back.

bostonsre• 5 years ago

They have to know their cash cow is under threat from legislation though don't they? Or maybe they are confident that no legislation will get through somehow... They could try to keep cutting that percentage until the majority of people aren't pissed anymore. A 15%-5% annuity forever is better than 30% bond that lasts a few more years.

Clubber• 5 years ago

The 30% cut was worth it to me early on when there weren't a bazillion apps and they handled payment processing, return processing and gave you some decent visibility. Now it's just payment processing and return processing, which typically is around 3-4% using a credit card, not 30%.

KarlKemp2• 5 years ago

I’m pretty sure the average spending of consumers on software today is far more than just a 30% increase from the times before the App Store. Realistically, the market easily tripled with its introduction.

From that angle, it’s easily worth a 30 % fee. Not because it costs that much to run it, but because it creates that value.

huffmsa• 5 years ago

Scuzzy rent seekers

root_axis3• 5 years ago

This is business. I don't see the mustachio-twirling evil here unless you're coming from an anti-capitalist perspective. I won't won't debate the merits of that perspective, but this seems pretty mundane strategic business planning by today's standards.

Edit: To clarify further, I'm not saying "the status quo is fine", I would be in favor of legislation that would force Apple and Google to allow alternative app stores as first class citizens, but in the world we live in, I don't think trying to extract profit out of the platform you built is that crazy, this is what every big corp does.

gkoberger• 5 years ago

If they allowed 3rd party app stores or let users install apps directly on their phone, sure. But why should Apple get 30% of a subscription between me and a company?

You could almost argue that it's worth 30% for the initial discovery in their app store (meh), but I just don't get how anyone could think it's fair for Apple to take 30% of a subscription, when developers don't have a choice but to use the platform.

righttoolforjob12• 5 years ago

I don't think you need to be 100% anti-capitalist to see the harm. It's a bit of a false dichotomy. A purely liberal capitalist market is bad, so is communism, so what? A market is a highly dynamic non-linear system that nobody fully grasps. We are thousands and thousands of years from having a fair world. We need to keep trying to make it better, by talking about it, exploring it, trying to come up with ways to fix it.

stefan_3• 5 years ago

The most absurd take yet must be that being against forced middlemen is anti-capitalist.

paulgb3• 5 years ago

This is Hacker News after all, a lot of us owe our careers to the fact that computers have trended towards open platforms without gatekeepers collecting rent. “Just business” or not, it's sad to see that innovation in commerce has shifted from the relatively open platform of the web to the relatively controlled platform of App Stores.

ProAm• 5 years ago

This is business.

Sort of, it would be just business if developers were allowed to release and install apps from somewhere else other than the App Store, and if there were allowed to use any type of payment system they wanted to, or even the mere fact if there were allowed to tell users to go somewhere else besides Apples IAP system to make a payment. It's monopolistic and anti-capitalist if you compound all the facts together.

fancymcpoopoo• 5 years ago

30% is assholeish, no doubt

kasey_junk• 5 years ago

Apple subscriptions provide me an extremely valuable service. They are easy to track, cancel & pay for. To the point I will not use an a subscription on my phone that doesn’t go through their mechanism.

Is that valuable enough to charge 30%? I don’t know but it’s certainly not outside what seems reasonable by orders of magnitude to me.

I’m sympathetic to the argument that they are a monopoly and should be forced to allow alternate app stores or payment processors but it’s not what they are charging that puts me over the line.

Guest42• 5 years ago

I can’t imagine willingly paying more than 5 percent for the ability to manage these subscriptions.

adam_arthur8• 5 years ago

So allow for both Apple subscriptions and alternative mechanisms.

Most likely the non-Apple route would be cheaper to the consumer and get 90% of the traffic for that reason alone. If that's the reality, does that not imply that Apple's practices harm most consumers? Seems self evident to me that they do.

Besides, there really should be some common spec/mechanism to manage subscriptions from any vendor.

mdoms• 5 years ago

To the point I will not use an a subscription on my phone that doesn’t go through their mechanism.

Well then I have good news for you: Apple forbids you that option.

t-writescode• 5 years ago

Doesn't PayPal provide a similar list of services? How much of a cut do they take?

rvz2• 5 years ago

Apple execs might have convinced themselves that they are entitled to a huge cut of pretty much everything that goes on an iPhone/iPad/etc.

Why would Apple agree to having its intellectual property being used for free? As long as you have an app on the App Store taking payments, Apple is still entitled to take a commission out of that regardless even if IAP is optional.

Even after the Epic v Apple court case, Apple unfortunately still wins. Don't like it?, Maybe use PWAs or failing that build an alternative. Good luck.

PragmaticPulp• 5 years ago

To everyone else, this just looks like mustachio-twirling, cackling evil and unfathomable greed from a company that’s already the world’s richest and sitting on a mountainous pile of cash.

What’s really interesting to me is that moves like this are the embodiment of the “charge more” mantra that is (or at least was) extremely popular on Hacker News for years. For a long time it felt like every HN thread about pricing or salary negotiation was full of people insisting that you needed to “charge more” in every conceivable situation.

If you made a thing that was producing a lot of money for your clients, you needed to “charge more”! If your customers weren’t complaining and leaving, you needed to “charge more”!

Yet every time a company actually does a “charge more” type move, HN reaches for the pitchforks.

It’s interesting to see how clear-cut this dichotomy is depending on who the reader thinks is being charged more.

nickff2• 5 years ago

HN is full of these cognitive dissonances; another example is the generally pro-immigration stance when it comes to low-wage workers, which is contrasted with the anti-tech immigration stance. I used to think it was different groups of people on different threads, but I have come to believe that many maintain diametrically opposed views.

ramphastidae• 5 years ago

Agreed. HN cheers in the name of disruption and competition when rideshare apps gouge taxi drivers and when delivery apps gouge restaurants and couriers. But when it’s developers being gouged …

lhorie6• 5 years ago

For startups, the advice is specifically given in the context that cheap customers are often "high maintenance", whereas deep-pocketed customers w/ accounts payable budgets provide more reliable income streams with less drama.

scoot• 5 years ago

the “charge more” mantra that is (or at least was) extremely popular on Hacker News

You'll need to ask patio11 for comment. He might have had some disciples regurgitating it, but he's ultimately responsible for this viewpoint. (Not saying I entirely disagree...)

znpy• 5 years ago

You can do something good, bring it to an extreme exaggeration and turn it into something bad, you know?

howdydoo• 5 years ago

I think the difference is the rent-seeking.

Imagine a web developer gets hired to build a landing page for a product. Yes please, charge twice as much for your work, sure. But say they tried to charge an ongoing 30% of all future revenue for that product. Do you think HN would be behind that?

cblconfederate4• 5 years ago

Are we supposed to be rooting for monopolies now? Of course not.

But you are right, HN used to be about the little David entrepreneur. Since ~2012 it's all about "fuck making a startup and go work for The Man"

eloisius• 5 years ago

HN isn’t one entity with a set of consistent beliefs.

trustfundbaby• 5 years ago

No Dichotomy there, its one thing to 'charge more' for your services, its another thing to ask for 30% of your client's SaaS subscription revenue, because you built them a website.

gknoy• 5 years ago

The "charge more" advice I've seen, e.g. from patio11, seems to be aimed at charging _new clients_ or for _new contracts_, and in almost all cases has the caveat that one should almost never up-charge existing clients for the same service that they already have. You can add a new higher-price service tier, or grandfather them in _forever_ at the original price, etc, or quote them a larger price for the next consultation ("My fee is now X"), but in every case they have the option to walk away.

mikl4• 5 years ago

Everything can be taken to unhealthy extremes. It’s one thing to “charge more”, when people can actually take their business elsewhere.

It’s a different thing entirely when you’re the sole gatekeeper between hundreds of millions of customers and anyone wanting to sell them apps and digital services.

It might not qualify as monopoly in the legal sense, but you’re still being a bully, abusing a position of power in the market.

zmix• 5 years ago

I wonder how many of these "Execs" are Libertarians, who oppose any form of tax.

ynx• 5 years ago

Yet every time a company actually does a “charge more” type move

"Charge your customer more for your work" is VERY meaningfully different from "Charge someone else's customer more for someone else's work, because you own the storefront for someone else's business".

Sure, building the storefront is hard and high leverage. But figuring out the moral answer to "who reaps the rewards" is an entirely different journey.

darksaints• 5 years ago

The only thing that is interesting to me is that you somehow have no idea how to mentally differentiate between a solo developer trying to find a way to be successful on their own, and the world's biggest company with cash reserves large enough to purchase entire countries. It's almost as if advice is naturally context dependent!

random314• 5 years ago

Context matters. Nobody here would complain about Apple charging more for an iPhone or iPad.

There is a difference between a pricey product and a high taxes.

canadaduane• 5 years ago

Groups tend to look homogeneous from a distance until you zoom in like this. And when you find a dichotomy, it isn't necessarily that the group is a hypocritical entity, it's that it consists of sub-groups with differing opinions.

throwaway0a5e• 5 years ago

Yet every time a company actually does a “charge more” type move, HN reaches for the pitchforks.

This sort of cognitive dissonance is pretty par for the course for communities like this.

zzyzxd• 5 years ago

Charging less sometimes can give you interesting advantages. For instance, Xiaomi effectively crushes their competitors by purposely cutting their profit margin[1], such that:

- If you are to build a product with similar quality to Xiaomi's, it has to be priced higher than Xiaom's, because unless your production/sales volume is on par with Xiaomi, your production cost is very likely higher than Xiaomi's. Customers will prefer Xiaomi's product because it is cheaper.

- If you cut down production cost by bringing down quality, you might be able to price the product in Xiaomi's price range. But customers will still prefer Xiaomi because it has better quality for the same price range.

1: https://www.gizmochina.com/2019/11/28/xiaomi-ceo-says-that-g...

maerF0x03• 5 years ago

Apple execs might have convinced themselves that they are entitled to ... pretty much everything

Here I fixed your quote.

Including in everything is the $750M bonus Tim Cook received[1]. We've seen that exec comp is inversely correlated with performance[2] and buy backs only cause greater equity packages to be issued (doesn't reduce the dilution)

[1] https://www.voanews.com/a/usa_apple-ceo-brings-home-750-mill...

[2] https://archive.fo/uSTWs - https://www.nytimes.com/2015/06/07/business/stock-buybacks-t...

[3] https://cooleypubco.com/2016/07/25/new-study-shows-inverse-c...

arcticbull2• 5 years ago

... sitting on a mountainous pile of cash.

And distributing a mountainous pile of cash to shareholders. In FY2021 alone, Apple repurchased $85.5 billion dollars worth of shares and spent $14.5 billion dollars on dividend issuance. That's 1/10th of a trillion dollars per year in distributions. [1]

Buffet alone collected almost $1B in dividends since taking his position. [2]

[1] https://www.cnbc.com/2022/01/03/apples-3-trillion-market-cap...

[2] https://markets.businessinsider.com/news/stocks/warren-buffe...

jliptzin• 5 years ago

What bothered me as an app developer over a decade ago when Apple Facebook and Google all started taking a cut of app revenues is that they all magically decided that 30% was going to be the number. They didn’t even bother pretending to compete to undercut each other, it was as if they all decided together behind closed doors that 30% was the number and that was it. After that I realized I didn’t want to be developing apps for these platforms anymore.

gonehome• 5 years ago

I think the worst outcome of their attempts to tax others this way is that it'll blow up in their face and they'll lose leverage over the app store.

I'm okay with them enforcing app store policy guidelines etc. I think what they're doing here though is just a racket.

They may have deluded themselves about this (seems that way from their comments about it), but I think most people outside of Apple see it for what it is. You can make a good argument about app store rules being in the interest of customers and chosen by customers. You can't really make a good argument for the profit grab they're doing here, it's just abuse.

ksec3• 5 years ago

They need to collect the 30% fees, how else are they going to invest and purchase $280B from Chinese Supply Chain. While offering iPhone at a discounted whole sale price in China.

taurath2• 5 years ago

TBH, they've basically gotten away with it for years because consumers aren't effected in a way you can see, because the blackmail of the app store platform lock in is so effective. Its absolutely extortion since you literally won't be allowed to do patches on your app until you cow to whatever policy they put in place that month.

mehrdada• 5 years ago

Is it fundamentally any different from Google charging for clicks that direct traffic to other commercial activity on the internet? You enable some commerce through your platform and take a cut in both cases.

dang• 5 years ago

Ok, but please don't post this sort of shallow riler-upper to HN. We're trying for something more interesting and less repetitive here, and subthreads like this end up choking that out.

Edit: for example, after I downweighted the current subthread, https://news.ycombinator.com/item?id=29914127 became the top subthread. Talk about from one extreme to the other...

https://news.ycombinator.com/newsguidelines.html

tech-no-logical9• 5 years ago

maybe I'm a cynic, but why should I care that Evil Corp A tries to rip off Evil Corp B and Evil Corp C ?

righttoolforjob12• 5 years ago

At the end of the day the consumers also hurt, so you should care. If basic economic theory puts the optimal price for this service at 10$ without the middleman, then perhaps it becomes 12$ with the middleman.

tech-no-logical9• 5 years ago

that's implied by every Evil Corp, but yes, you are correct. still, to the consumer it does not really matter which of the Evil Corp gets the money since they will pay it anyway. I don't, for a minute, think that the 30% would not be paid by the end-user if Evil Corp A was not in play. B and C would just raise prices.

HWR_1414• 5 years ago

I doubt the customer's cost goes up by 20%. That seems pretty extreme. In fact, I'm not sure of the mechanism that makes that costs go up by that much. I guess it depends on the number of Uber drivers around, maybe? In economic theory, it would primarily come out of Uber's profit margin.

walrus01• 5 years ago

It's like the model of the world of a turtle resting on another turtle's back, which is itself atop another turtle, but instead composed of FAANG C-levels doing dickish things to each other (and by follow on effect, the end user)

https://en.wikipedia.org/wiki/Turtles_all_the_way_down

yowlingcat2• 5 years ago

If you think that every corporation is an Evil Corp and actions are evil because evil entities do them then there's no reason you should care.

But if you ascribe the degree of evilness to the action rather than the actor, then you absolutely should care because it's anti-competitive and poisons the general health of the market.

tech-no-logical9• 5 years ago

true. in general I would agree any party taking a 30% cut (whether app store or play store or whatever) would be the supreme evil. but since all three parties involved in this instance are of the same caliber, I don't care, and I choose to use none of them.

ForgotMyPwOops• 5 years ago

Because monopolistic business practices tangibly hurt consumers by reducing incentives to produce a good product and by artificially raising prices that get passed to the consumer

yifanl• 5 years ago

If MegaMegaCo forces MegaCo to give up X dollars, MegaCo isn't going to declare instant bankruptcy, it's going to use that as justification to raise its prices to you.

sumedh• 5 years ago

Evil Corp B and Evil Corp C

Because Evil Corp B and Evil Corp C will pass the 30% commission on the consumer.

asteroidbelt• 5 years ago

But also because Good Small Corp D and Good Small Corp E would have to follow the same rules.

obmelvin2• 5 years ago

Beyond caring about the larger issues at play here, the way it can effect you is if you have to pay 30% more for every subscription because companies need to account for paying Apple so much

This is not theoretical. In 2018 Netflix would've paid Apple around 256m [0] and Netflix also had a fair number of price raises in the past few years. Obviously the app store commission was not the only factor in these price raises, but it's clearly a factor the tune of about 250 million per year.

[0] https://techcrunch.com/2018/12/31/netflix-stops-paying-the-a...

tech-no-logical9• 5 years ago

personally, knowing the cuts that either app/play store take, I would _never_ subscribe to a service through either of them, that's luckily still an option. netflix raising prices _because_ of a store tax, even for users subscribing outside of them, would be worrying, but your link has no evidence of that, right ?

heavyset_go14• 5 years ago

A 15% to 30% cut of all revenue punishes small businesses and makes many businesses infeasible, especially low margin businesses, as that 30% cut cuts into margins. Loss of competition hurts entire markets, including consumers.

tech-no-logical9• 5 years ago

agreed. but neither Lyft nor Uber are not small businesses. they also just exploit their workers.

wvenable3• 5 years ago

What's missing is that companies don't pay the 30% -- it's the end-users that do. Every user of iOS pays 30% of every app and IAP to Apple. The other company never even sees this money.

DrBenCarson5• 5 years ago

"Unfortunately, IAP being 'optional' means that no one will ever use it," writes App Store VP Matt Fischer

Um...yeah, that's pretty damning.

wraptile2• 5 years ago

Can you imagine saying "no one would use our product if they weren't forced to" and still winning the case against you?

kevincox2• 5 years ago

To be fair their argument is it is better for the users. This comment is talking about the price bring too high for apps.

Of course it is a good indication that it is overpriced.

DrBenCarson5• 5 years ago

Not saying I agree with what I'm about to respond with, but nonetheless:

If not using IAP is worse for users, wouldn't users then immediately gravitate to apps that do use IAP? Meaning not using IAP would be a competitive disadvantage and tada, capitalism magic--especially given iOS users are the most valuable segment in the world (typically wealthier and much more willing to spend $1.99 on an app than their Android counterparts)

The counter-argument is it is better for users in ways they are oblivious to (i.e. security), but even that should eventually make its way to the user. If eventually all but IAP cards are compromised or abused, users will eventually change their behavior, especially iOS users (typically more educated).

* all iOS user characterizations are based on 3rd party research and not my own opinions

friedman235• 5 years ago

Someone give me a good argument for why Apple deserves a THIRD of revenue generated from apps on their platform? Apple's app store is pure rent seeking. Even the supposed curation everyone is paying for is lackluster. People are scammed left and right.

Funnily enough, this applies to Uber and Lyft too. These middlemen companies have too much power to unilaterally dictate what cut they get from their service.

908B64B197• 5 years ago

Because they provide the ecosystem?

If you look at demographics, iOS devices are the gateway to the most affluent and lucrative market segment. That's the value proposition of Apple, and also why app always ship first on iOS then get ported to Android.

wvenable3• 5 years ago

I say let them do it. But we need some anti-competitive regulations in place to prevent Apple for penalizing companies that want to offer a cheaper alternative elsewhere.

xpressvideoz• 5 years ago

That's just the characteristics of your region. In my country, apps go to Android first and then to iOS. It all depends on the market.

prepend5• 5 years ago

I think it’s similar to why Walmart deserves a third (or more) from manufacturers selling stuff in their store. Or Amazon. Or any store.

Physical goods have about a 100% markup between manufacturer and what a customer pays.

I think it should be less for digital goods, but you wanted a good argument. Apple charges because they are between you and the app makers, like Walmart and target and stuff.

austinheap16• 5 years ago

Great example! In retail it’s bad if there isn’t a 300%+ markup.

The fascination with making Apple a boogey man on this is bizarre. Your local corner store — which you should very much support! — has a markup that makes Apple look lazy.

ldiracdelta• 5 years ago

Walmart does have competition across town, unlike apple store. I can got to Target, Costco, Safeway, et c. Unless they collude to price fix, they will indeed have to compete by driving down their margin.

Moving "across town" from the apple store involves an IT project and hundreds of dollars in order to save dozens of dollars.

Gigachad15• 5 years ago

Products sold in wallmart can then provide extra external services which walmart gets no cut of. If I buy an air purifier in Walmart, they get a cut on that initial sale. But the purifier company can tell me they sell filters on their website, Walmart gets no cut of that. On mobile, Apple does get a cut on that sale which they did not facilitate.

heavyset_go14• 5 years ago

If I buy a bread maker from Walmart, they aren't entitled to a cut of my revenue should I sell the bread I make. Similarly, if I buy a tablet at Walmart, that doesn't mean they're entitled to a cut of all the purchases I make using it.

lovich• 5 years ago

… deserves …

That’s your problem right there. We don’t allocate resources or make business deals based on how deserving a group or person is. They can charge it right now so they are

pilate• 5 years ago

Both apps still exist on the App Store. That’s really all you need to know. If this was untenable for Uber and Lyft they could pull the apps any time.

Gigachad15• 5 years ago

We can choose to have a legal system where this is OK. Or we can chose to have a legal system which busts anti competitive practices like this. Both are possible and I know which one I would vote for.

passivate7• 5 years ago

The situation is untenable, and as you can see, businesses who aren't scared of Apple are fighting back. Unfortunately, the smaller ones will easily get crushed by Apple and can't finance this sort of push-back without some grass-roots pressure.

mikl4• 5 years ago

They might have a point when it comes upfront sales of apps and games. Steam also charges 30%, and the Xbox, Playstation and Nintendo Switch stores also charge similar if not higher premiums, as does other comparable app stores.

Where it get’s ugly is when Apple wants a cut of everything that happens after the sale of the app, too, like wanting a cut when I buy a new book in the Kindle app (and Amazon refusing, instead making it impossible to buy books in the app).

Gigachad15• 5 years ago

Yeah % cuts for products sold in stores is nothing new or unreasonable. But once the user has the app on their device, the "store" is now the app and there should be no cut of fees for things sold inside the apps own store.

cma• 5 years ago

Steam charges 20% to games that sell over $50 million, and 25% over $10 million. Even though those games tend to be bigger and use more bandwidth, they were running into the problem that some of those companies were managing to get bargaining power (Valve announced the change around two days before the launch of the Epic Games store with a 12% cut). Bandwidth isn't actually much of a significant cost.

freediver6• 5 years ago

What makes it fair is not that that other companies as you list have similar practices.

What makes it fair is that Apple is a private company, entitled to these kind of business decisions. As such, free market forces should then determine if the true cost of distribution (which is basically what App store provides) is more or less than what Apple charges for it. It does seem that this is still one of the most efficient ways to distribute an app to the end user, as witnessed by the sheer number of developers (silent majority) willing to take the 30% cut vs a loud minority (usually big companies on their own) that isn't.

kmonsen• 5 years ago

Someone once told me this joke, why does the dog suck his genitals? Because he can.

Same with Apple, of course they will do this as long as they can. There is no moral or ethical reason why they are doing this, simply they can get away with it.

I mean if you found a hack where you could get 1% of all the world's transactions, would you really say no to that, or try to find out why you deserve it?

lhorie6• 5 years ago

from apps on their platform

More like apps that also happen to use iOS as a frontend in addition to other funnels/marketplaces. Costco is one of the examples cited, and I frankly didn't even know that they had an app even though I have a membership. How exactly Apple is planning on justifying taking a cut of this membership fee is completely beyond me.

burrows• 5 years ago

Someone give me a good argument for why Apple deserves a THIRD of revenue generated from apps on their platform?

If you say “X doesn’t deserve Y”, then roughly I hear, “I don’t like that X is getting Y”. It’s like you’re asking, “Why should I like Apple’s revenue streams?” I don’t think I can answer that, but can you tell me why I should care about whether you like Apple’s revenue streams or not?

charcircuit5• 5 years ago

because if they didn't make iphones, ipod touches, and ipads you would get 0% revenue instead of 70%

AlexandrB2• 5 years ago

That's facile. If no one made apps for these platforms then they would not be nearly as popular. Remember the "There's an App For That" marketing campaign? That's not mentioning the fact that other phone/computing platforms exist where an app could capture some percentage of revenue you get from the App Store.

There's an element of symbiosis between Apple and app developers.

rvz2• 5 years ago

Someone give me a good argument for why Apple deserves a THIRD of revenue generated from apps on their platform?

You are using their intellectual property? As in the App Store? Thus, as long as you are using that to distribute your app, they are entitled to collect the commission from where-ever they want and it doesn't matter if it is IAP, Web, etc.

From [0] of page 66

Under all models, Apple would be entitled to a commission or licensing fee, even if IAP was optional.

From [0] of page 112 (b)

The Court agrees with the general proposition that Apple is entitled to be paid for its intellectual property. The inquiry though does not end with the bald conclusion. Apple provides evidence that it invests enormous sums into developing new tools and features for iOS.

If you don't like it, There's always PWAs.

[0] https://www.courtlistener.com/docket/17442392/812/epic-games...

dylan6043• 5 years ago

Apple's app store is pure rent seeking.

If you don't like the landlord, don't move into the building. It's not the only building in town, but just the one with the most lucrative customers. If you want them to be your customers, you gotta pay to play.

colinmhayes7• 5 years ago

I bought an iPhone before I knew about the fee. This is like the landlord telling me there's a 30% convenience fee on paying rent after I've signed the contract.

derriz• 5 years ago

The cost is mostly being passed on to the purchasers. The same app is nearly always more expensive in Apple's store than in Google's.

But the funny thing is that even with the premium, Apple users spend far more on app purchases than Android users. And in turn developers make more money on IOS app sales - which is why they flock to the platform.

To sum up: developers make more money on the platform, Apple makes lots of money from running the platform, and customers are indicating they are getting value on the platform (even if you personally don't see why) by spending more on the platform. I don't see grounds for outrage here.

ApolloFortyNine• 5 years ago

If Apple allowed installing other apps or appstores from outside sources it'd be one thing. That they've managed to go on this long without an antitrust is incredible. Microsoft got an antitrust case against them for simply installing a default browser. What Apple does is magnitudes worse.

gorbypark• 5 years ago

It really comes down to the definition of monopoly and how a market is defined. If Microsoft wasn't found to have a monopoly in desktop operating systems, what they did wouldn't be illegal. Microsoft had north of 90% desktop OS market share at the time of the anti-trust suits. Does Apple have a monopoly? It depends on how you look at it. If the market is defined as iOS market share, then they definitely do (obviously). If it's defined as mobile operating systems, then maybe not. Currently iOS has a 59% market share in the US and only about 16% worldwide.

ksec3• 5 years ago

It is not one THIRD, you have it wrong. [1]

It is Apple sharing more than TWO THIRD of those revenue back to you.

[1] https://news.ycombinator.com/item?id=29914525

hffftz• 5 years ago

Apple deserves a third of revenue generated from apps on their platform as much as credit card companies deserve a third of all credit card transactions...

passivate7• 5 years ago

Imagine paying Apple to show ads for your app/service to the end user, and then once it converts to a sale, Apple comes in and does a 30% money grab from all future sales to that customer. To me, that is super unethical.

starik36• 5 years ago

Why stop there? If I have money in my pocket and place the iPhone there as well, Apple should be entitled to 30% of it.

heavyset_go14• 5 years ago

Text your boss using iMessage? Then Apple is entitled to 30% of your paycheck, too.

shashashasha___• 5 years ago

or at least own 30% of the text message content.

pxtail• 5 years ago

Recently there was discussion[0] about Apple devices dominance amongst teenagers ~85% mobile devices in US. Apple is heading towards market domination in a couple of years - in US first but in some European countries trend seems to be catching as well.

With company's total control over locked down hardware, software, software delivery and browser (and other, fresh endeavors like identity management aka AppleId, payments etc) it will be very interesting time and quite a show to observe.

[0]https://news.ycombinator.com/item?id=29851317

2OEH8eoCRo02• 5 years ago

People will just work around that by choosing a different pocket, screwing Apple out of their fair cut.

Jleagle• 5 years ago

Does the electricity company take a cut from online payments too for allowing people to use their infrastructure.

londons_explore• 5 years ago

Maybe they should... "We charge $50/month extra for the iphone charging service. If we detect an iPhone in your house, the charge will be automatically applied to your bill".

MattGaiser• 5 years ago

The tweet seems to be gone. What did it say?

2OEH8eoCRo02• 5 years ago

30% is obscene. Apple obviously deserves to get paid. Either abolish app store fees (Apple gets paid by selling hardware) or force them to allow 3rd party stores on their own store with transparency reporting requirements to foster competition.

Barrin922• 5 years ago

Apple is a small country disguised as a company. This is nothing else but essentially a tax, collecting economic rent from their digital fiefdom. Of course unlike actual nation states, Apple's not really in the business of providing many public services in return.

Seems like we're kind of at the point where actual nation states should take that as a sign of peer competition and do something about it because I honestly have no idea why we're tolerating this.

thehappypm6• 5 years ago

They sell computers.. I think you’re reaching a bit.

appletrotter2• 5 years ago

Some people spend day and night on those computers (such as myself.)

yurishimo• 5 years ago

As an attempt to steelman their point, Apple has more employees than about 30 countries and has more CASH on hand than the GDP of over a 100 countries (220~ total worldwide).

As far as regulations go, I think those points could be an argument that more regulation could be warranted.

Barrin922• 5 years ago

that's like saying "standard oil just sells hydrocarbon". Computing underpins virtually every aspect of the economy, almost all communication, the national infrastructure, increasingly the military, and the public debate.

The tech industry (of which Apple is the largest representative) is, and increasingly becoming even more, the second largest center of power within any modern nation. As evidenced by the fact that they can and have removed elected representatives (most of which I'm not a fan of to make that clear) from public debate.

whiddershins• 5 years ago

The cut apple takes is too big, and, afaict the cut seamless and Instacart and probably Uber and Lyft take is way too big too.

Technology can increase ease while also lowering prices, but it’s just so easy for it to go the other way.

I think Uber and Seamless are most obvious to me in NYC. The overall cost of doing basic stuff was initially depressed and now has increased way over inflation.

Regulators have played their part.

Contrast with Amazon who we all like to hate on, and who may be abusive to retailers and manufacturers, but the savings is clearly passed on to the consumer.

No real ideas. Just an observation.

thehappypm6• 5 years ago

Why don’t these companies just drop Apple then? They can just make web sites and then users can order Uber’s and food from any browser on any device and pay nothing to anybody.

mrtksn• 5 years ago

I think, if they did not insist on the %30, which I believe is fine when it comes for stuff that scale with almost no cost increase(like crystals in a game), and came up with something reasonable to accommodate transactions with thin margins they would have actually provide a good service. Receiving payments via IAP is hugely valuable because it reduces friction big time, however it is unreasonable to ask %30 in businesses where margins are %10 or even lower.

I think Apple realised that to some degree as they have much lower commission for certain categories like 1:1 tutoring etcetera.

Anyway, I think Apple might have crossed a line on these commissions and we see rulings all over the world requiring Apple to allow alternate payment methods.

With my user hat put on, I'm not excited about that because it's actually much much pleasant experience to use IAP because you have all your subscriptions in one place and Apple is super good on refunds.

What I would like to see one day is some kind of "Universal payment protocol" that provides standardised UI for mobile payments. Imagine the IAP interface being able to accept any kind of payment(like paying with your card of choice with Apple Pay) and keeps track of these payments in your iDevice with a button for cancelling subscriptions that makes an API call to the payment provider.

heavyset_go14• 5 years ago

Both Apple and Google enforce using their payment methods on any app distributed on their app stores. That means that there's a 15% to 30% rent incurred on all revenue in the mobile app space. Just to participate in the mobile app market, you need to give up to 30% of your revenue to either company.

The entire mobile app market essentially has to pay either company a significant chunk of their revenue just to exist. That's insane.

hackerfromthefu2• 5 years ago

Its the troll under the bridge, the bandits on your way home from market - they are not fair, just violent bullying thieves that society once banded together to expel.

mjhagen3• 5 years ago

If that troll had built the bridge.

righttoolforjob12• 5 years ago

The argument against an app store being controlled by a private entity is to me similar to that of other infrastructure, like broadband, roads, utilities, access to the market itself, etc. It should be available to everyone at self-cost or less. Major and common infrastructure must abide under special rules.

thehappypm6• 5 years ago

How in the world is an App Store infrastructure? It’s a proprietary platform. We have the Web as the free open platform, anyone can use any device to visit any web site. The App Store is a premium alternative.

righttoolforjob12• 5 years ago

Millions of service users use it to interact with perhaps millions of service providers in an app market. That's infrastructure.

adam_arthur8• 5 years ago

Remember the fight for net neutrality? Well a lot of the infrastructure that makes up the internet is owned by private companies. e.g. Comcast, Verizon.

If Comcast (Google) and Verizon (Apple) both charged 30% markup on anything you bought on Amazon, would you think that's reasonable? Without them, you wouldn't be able to purchase anything at all, of course!

Electric, water utilities are private companies.

There will likely be a legal framework that develops to define a threshold and definition for when something constitutes a "platform" with sufficient market size such that competition within the platform be allowed.

bastian2• 5 years ago

Postmates founder here. I am subscriber to Internal Tech Emails and I couldn't help but smile reading these emails this morning. It was in 2017, around April 12th when we launched Postmates Unlimited - the subscription program that inspired all this. Now, we all know Postmates didn't win the space but some product decisions outlast a company and this was one one of them. I still remember the meeting when we decided to launch the subscription. No one had ever done it, the board thought it was nuts. It became the industry standard. ¯\_(ツ)_/¯

ImaCake• 5 years ago

Regardless of outcome, it must feel pretty good to know you and your company ended up being a keystone in corporate tech history. Very few people get to say they were at the meeting when these subscription models became the future. Historians 30 years down the road would love you if you wrote a book about your perspective on it.

CPLX• 5 years ago

Is this comment parody? I guess Poe’s Law applies, I’m genuinely mystified.

coldtea• 5 years ago

Very few people get to say they were at the meeting when these subscription models became the future.

Yeah, it's like being at the meeting where planned obsolelense was first invented, or when a telco devised the "jump through hoops to to cancel your service" concept...

bastian2• 5 years ago

I forgot to mention that I also remember when Apple called about a year later to tell us about their plan to charge us 30%! Amazing we prevailed.

11101010001100• 5 years ago

As long as you still need Apple, prevailing is a temporary state.

seneca• 5 years ago

Forgive my confusion, but wasn't Amazon Prime started a good 10 years before that? It seems like that'd the precedent. I'm guessing I'm missing some major detail.

what_ever• 5 years ago

May be I am too naive but even if you want to limit to apps/companies providing similar kind of services, I don't think this to be something Uber/Lyft wouldn't have tried to do eventually anyway? May be others just had bigger fish to fry?

slivanes• 5 years ago

I'm trying to figure out if you are proud of this decision or not?

sizzle• 5 years ago

who won this space? Uber eats?

Spivak7• 5 years ago

Depending on how bullish you are on the market it's either DoorDash or no one. Because DD is the frontrunner by a pretty solid margin but time will tell if the business ends up being sustainable med-term.

friedman235• 5 years ago

Uber eats has a fraud problem, Doordash is the superior service. That doesn't answer your question however.

jackson14422• 5 years ago

In this specific context, yes. Uber now owns Postmates and have rolled it into their Uber Eats offering.

asteroidp• 5 years ago

GrubHub hands down

toephu2• 5 years ago

In which country? There are dozens of food delivery companies all over the world. It's not a winner take all market.

miked85• 5 years ago

Postmates invented subscriptions?

msoad• 5 years ago

When you're a CEO and only hear "yes you're a genius sir!" that happens to you

cercatrova• 5 years ago

They had the first food delivery subscription service among the food delivery services, such as Uber Eats, DoorDash etc, is what I believe they mean to say, not that they literally invented subscriptions.

Aside, the sibling comments are quite uncharitable, I don't see why anyone would reasonably believe that the founder invented subscriptions. If one thinks for even a second, they know this isn't true, so why not think for another second about what they really mean? I don't see the need to complain and hem and haw about how the "world's gone crazy."

whoisburbansky• 5 years ago

It's pretty clear from the original thread and the reply that the implication is that Postmates was the first to offer subscriptions through iOS without going through IAP, therefore bypassing Apple's 30% cut, not that they "invented subscriptions."

onion2k2• 5 years ago

Postmates invented applying the subscription model to a pay-per-use 'gig economy' service business.

ilrwbwrkhv• 5 years ago

What is Postmates?

neom• 5 years ago

An early to market Delivery as a Service acquired by uber that delivers from a variety of retailers, not limited to food.

timbee• 5 years ago

This is the most peculiar comment that I've ever seen on HN. Weird enough that I will post my first comment ever just to say how weird it is.

dvt• 5 years ago

...I will post my first comment ever just to say how weird it is.

Your account is brand new, so this comment is doubly weird.

SixDouble5321• 5 years ago

Lurk more...

I am happy to hear from people with something apropos to add.

Being out of touch with the everyman isn't overly weird for a founder of a company.

richardburton• 5 years ago

most baller reply i have ever seen

restec-p

https://www.youtube.com/watch?v=YWLMnX8F45M

santoshalper2• 5 years ago

In a world with Amazon Prime, it seems hard to believe people couldn't understand subscribing to get discounts or upgraded service.

virgilp3• 5 years ago

No one had ever done it

WAT? Adobe launched "Creative Cloud" (which at the time was basically desktop-software-as-a-service) on July 17, 2013; if I recall correctly they had been trialing that for about 1year in Australia before deciding it's a good idea and doing the global launch. Not sure if Adobe was first, but they definitely preceded you by half a decade!

ViViDboarder2• 5 years ago

But Postmates, Uber, Lyft, etc are not really the same type of business. SaaS had been mainstream but memberships to a p2p app wasn’t really.

onion2k2• 5 years ago

I was at your presentation to Super Mondays at the end of the Difference Engine accelerator, when you demo'd Curatedby, many years ago. It's fantastic to see what you and the team you've built have achieved since then. :)

endisneigh2• 5 years ago

use web apps, pay 0%

upbeat_general4• 5 years ago

Web apps that must run on Safari since no other browser engines are allowed.

Safari has dragged it's feet for supporting common web app features and fixing bugs. To this day there are no push notifications on web.

endisneigh2• 5 years ago

Agreed, that's a problem, but most apps can be engineered regardless with just a web app and SMS/Email for notifications.

Fomite• 5 years ago

I'd be more sympathetic to this if Uber and Lyft hadn't built their businesses on the premise that regulations are for other people.

passivate7• 5 years ago

That's a very fair point, but the smaller businesses probably can't bankroll any legal pushback and Apple can de-platform their App/Service with ease.

kache_• 5 years ago

I seriously don't understand why people purchase apple devices.

SWEs too, just use linux.

andbberger• 5 years ago

they're very good?

neop1x• 5 years ago

App ecosystem (great apps, often good UX/usability and lots of small "details"), interoperability between devices and to show their social status.

Why do some people buy an expensive Mercedes if basically any car can drive you from A to B?

I am a Linux user and I love FOSS, GNU CLI tools, etc. But it takes more time, crashes and nerves to edit a video using Kdenlive than it would by using iMovie. FOSS software is awesome but it is hard for their authors to compete with commercial SW made by highly-paid full-time professionals. And commercial software on Linux is often non-existent or problematic (mainly due to ensuring support for so many distributions).

onphonenow6• 5 years ago

Folks here seem fixated on companies being able to make money when using Apple. Why is that such a policy priority? Most of these companies are scammers.

I really wish politicians and everyone would focus on USER experience here.

Apple benefits because there is a ton of crap and user harm in the marketplace that goes COMPLETELY unaddressed. We are just getting around to rules on subscription cancellation practices on the web more generally. Apple has this solved.

Additionally, with a lot of these big players, only apple has negotiating leverage, no individual user could EVER force them to accept things like hide my email or clear trial periods or non-scam cancellation policies. So USERS benefit from the power apple has in some cases.

Is it worth the apple tax? For some it is worth it even though apple has relatively small smartphone marketshare.

tylerchilds2• 5 years ago

You know who would love a 30% cut of Uber and Lyft's membership programs?

Drivers.

jsnell• 5 years ago

In Q3 2021 (the latest earnings release), Uber's gross bookings were $23 billion while their revenue was $4.8 billion. I.e. 79% of the bookings were being paid out to the drivers, Uber's cut was 21%. I suspect the drivers are much happier with that than you suggestion of 30%...

tylerchilds2• 5 years ago

I'm not advocating that drivers only be paid 30%. Just that Apple is over exaggerating their value add to the ecosystem.

Netflix ran a global quasi experiment[1] to see if it was worth dropping IAP with Apple's rates. Consumers want to watch a movie and are willing to pay for it. The same as they just want to get home safe after a bar session and are willing to pay for it.

Netflix was able to drop IAP because the web is a viable platform. Apple's platform is their justification for their slice of the pie, but it pales into comparison to what drivers and filmmakers actually do day in and day out to actually add value to the economy.

1: https://www.theverge.com/2018/8/21/17764424/netflix-feature-...

wolverine8763• 5 years ago

In Q3 2021 (the latest earnings release), Uber's gross bookings were $23 billion while their revenue was $4.8 billion. I.e. 79% of the bookings were being paid out to the drivers

I don't see that follows. Does Uber provide that number explicitly? And what is the net for driver/hour?

mabbo• 5 years ago

This is just textbook rent-seeking.

Like the classic example is someone setting up a barrier on the river and charging boats that want to pass through. There's no value being added by the person blocking the river.

Just the same, when Apple says "Let's charge for this", what value are they adding for doing so? They make money off the current system. They just want to make more money while providing zero additional value to consumers or to app makers.

All I can ask is "How do you sleep at night?" but I'm sure I'll get the Rainier Wolfcastle's answer.[0]

[0]https://www.youtube.com/watch?v=GO0JaecRWy0

righttoolforjob12• 5 years ago

That doesn't seem entirely fair of a comparison. If you built the canal, filled it with water, made sure it's wide enough for the boats that need to travel, etc, etc, then you are doing a useful service right. Apple has built something useful and yet we can all see it's wrong to take advantage of it to this extent, but we're having a hard time explaining why.

I think fundamentally corporations should only exist for the purpose of the public good. That is what's wrong with America and capitalism in many ways. It's not the shareholders but the public that they should answer to. If it does not serve the public good to take a 30% cut, then they should not be allowed to do so. As easy as that.

miguelazo• 5 years ago

Unbelievable level of hubris. Another shining example of why we need massive antitrust actions across the tech industry.

bsaul• 5 years ago

what happened to the pressure US senate was supposed to put on those platforms to stop behaving like the mafia ?

Apple lowered its fees to 15% but that can't be the end of the story, right ?

cardosof• 5 years ago

I just wonder how history would be if in the 90s the Microsoft suits tried to get a cut of everything running on Windows. "Oh you used Windows and Internet Explorer to buy AutoCAD?"

cablexl• 5 years ago

Microsoft did not control the entire ecosystem. They would have locked the entire ecosystem down in a heartbeat if they had full control over hardware and software. You can look at Xbox as an example, they do exactly that.

giantrobot2• 5 years ago

You mean by charging money for Windows which was required to run Windows software? Yeah if only they had figured that one out.

xyst• 5 years ago

Greedy fucks get 30% for doing nothing. You already got your massive nut [from iDevice sales and first party subscriptions] and now they want a piece of everybody's smaller nut [from the developers via "IAPs" shares].

Not to mention the yearly fees you pay to apple if you want to publish to the App Store. I really hope the anti-trust laws come down heavy on Apple, Google, and et al.

stanmancan2• 5 years ago

I love that Apple forces subscriptions on their platform through Apple Pay. As a consumer, it's incredibly easy for me to view and cancel subscriptions in one central location. I've signed up for tons of services in the past and all to often they decide to make it a nightmare to try and cancel.

The 30% might suck as a developer, but then just charge more for Apple customers. As long as the rule is applied to all apps on the platform then everyone is playing by the same rules. Nobody is forcing you to release your app on the Apple Ecosystem, you -want- to because it's a huge potential customer base. If you want to participate then play by their rules. If it's too expensive, then don't build your app there. If more developers refused to release their app on iOS they would start to re-evaluate their 30% fee.

My only qualm is the news that in certain situations they have lowered their fee's which isn't fair as it gives those companies a competitive advantage as they can charge less.

seabriez• 5 years ago

30% seems to imply that Apple somehow brings 1/3 of the value, simply by not allowing you to sell anywhere outside of the marketplace. It's extreme lockin.

Lamad1233• 5 years ago

The only solution is to drop regulators hammer on their ass!

imglorp• 5 years ago

Or offer a competing platform.

plandis3• 5 years ago

Couldn’t you just not use Apple devices?

DaveExeter4• 5 years ago

The answer is simple. Uber, Lyft, and everyone else, should have different pricing on Android and iPhone.

For something that costs $10 on Android, charge $13 for iPhone.

This is a win-win solution. The app companies get more money and Apple gets positioning as a premium brand.

post_break2• 5 years ago

I disagree. I think Apple should get nothing from them. The rent seeking has to stop. Anything with a service fee should be outside their grasp. The product isn’t the app, it’s the service.

DaveExeter4• 5 years ago

I tend to agree with you, but Apple doesn't want to leave that pile of Benjamins on the table! And AFAIK, what Apple is doing is legal.

There should be the iPhone price and the Android price. Just charge iPhone users more.

colinmhayes7• 5 years ago

Except that just means they'll get less subscribers. The margins on these things are razor thin. If people don't think they're getting a deal they won't sign up.

DaveExeter4• 5 years ago

The iPhone is a premium phone. I don't think most iPhone users would balk at paying 30% more.

upbeat_general4• 5 years ago

My understanding was that Apps aren't allowed to do this.

WHA8m• 5 years ago

To my knowledge you are allowed to do so, but aren't allowed to tell people that it's cheaper somewhere else. I don't know how this works in practice though

casion• 5 years ago

Math is off here.

It'd be $10 on android and $14.29 on iPhone to break even.

Ekaros• 5 years ago

Make it even 15$... For the real premium feel.

throw_m239339• 5 years ago

The answer is simple. Uber, Lyft, and everyone else, should have different pricing on Android and iPhone.

Apple will not let you do that at first place. It's against their guidelines and apps that do that and get caught get the boot.

Thorrez3• 5 years ago

Huh, do you have a reference to the guideline that says that?

perfectstorm• 5 years ago

actually you can do it as long as you don't mention about cheaper alternatives anywhere within the app.

benhurmarcel2• 5 years ago

Dropbox and Youtube Premium do it already.

gscott• 5 years ago

Apple ecosystem users are rich and can afford it.

benhurmarcel2• 5 years ago

Would be perfectly fine if they could inform the user about it.

OrangeMusic• 5 years ago

Apps on the Google Play Store also pay the 30% fee for subscriptions.

netcan• 5 years ago

Opinions/commentary on such things tend to focus on some detail, and judge it right or wrong. Is forced use of Apple's payment processor OK? Would X be ok if Apple provided some way of installing externally to the app store? Would 15% be OK.

I think these lines of thought miss the point. This discussion demonstrates, IMO, the mentality & reality of bigness/monopoly.

Mentality-wise, Sheree & Lindsey are expressing something more akin to "We feel that Apple is entitled to a 30% cut of this" than a business idea. Second it's obviously more about power than anything else. The "window of opportunity to set a precedent and claim this cut" is the reality.

Whether or not Apple adds value that reflects or justifies the revenue is irrelevant. That's not how they are making the revenue either way.

They get a big cut of Google's ad revenue on iphones via their default search deal. This is about getting a cut of ecommerce & such. Smaller developers are entirely exposed to their whims. It's too much power, and they are abusing it.

There are two levels to monopolism. One is simple prices. You own the only highway to MetroX. You charge truck drivers a high toll. They have to pay it, if they want to truck at all. The second level is when the highway owner wants a cut of all goods sold in MetroX stores. That's what's happening hered.

sub7• 5 years ago

Apart from being entirely unearned and unfair, these 30% cuts incentivize platforms to not weed out scams and bad actors.

There are an infinite supply of bullshit apps that have been scamming people with subscriptions that are impossible to cancel. Apple/Google both just send out lip service.

heavyset_go14• 5 years ago

See this HN submission if you haven't already: https://news.ycombinator.com/item?id=27413934

emsy• 5 years ago

Just now there’s also an ongoing coverage about scammy Wordle clones that currently haunt the App Store. Their whole protect the customer narrative is a sham when it comes to the App Store. I think the only upside are easily cancellable subscriptions, which, if you think about it, is actually a problem that is a result of their push for the subscription model and should be solved by regulation: mandatory reminders for subscriptions and easy cancellation. There, problem solved for all platforms not just Apple’s.

heavyset_go14• 5 years ago

Their whole protect the customer narrative is a sham when it comes to the App Store

It's about protecting Apple's ~80% profit margins on the App Store[1], not protecting customers.

[1] https://www.bloomberg.com/news/articles/2021-05-01/apple-s-a...

ksec3• 5 years ago

It is Apple's Devices, Apple's Software, Apple's Platform, Apple's user and Apple's Customer, everything belongs to Apple. But Apple is very generous and give "70%" of those revenue to developers and business partners.
These companies and developers are greedy. They want even more than 70%! Uber and Lyft should be kicked out of the App Store.
Laws and Regulations wants to fine Apple for Anti-Trust and Anti Competitive practice, Apple should pull out those market, that is the EU common market, Australia, Japan, South Korea, Russia, India!

I wish I made these sentiment up, except you will find many Apple apologist supporting Apple writing exactly that.

But none of these matters to the general public. Apple is Three Trillion Market Cap company, they are very successful, selling iPhone and Mac in record numbers. Tim Cook will continue to tell you Apple is making the world a better place. To enrich people's lives. And privacy is a fundamental human right. [ Subject to Terms and Condition ]. With a big smile on the face.

On another note it is interesting this isn't the first time Phil Schiller has been fighting the battle for users and developers. But now he is "promoted" ( cough ) to Apple Fellow. And Eddy Cue......

quantum_state• 5 years ago

This is yet another sign that we the people should have a good open source phone.

cblconfederate4• 5 years ago

It will be forever sabotaged by mountains of cash

cblconfederate4• 5 years ago

The companies that don't take their business out of app stores deserve all the pain in the world. I'm with apple on this

FpUser5• 5 years ago

I suggest those execs ask governments for a special Apple tax to make sure there is guaranteed cash flow.

softwarebeware• 5 years ago

Did anyone read the emails? That's not what they said at all. The reference to 30% was to an existing membership cut that predated these emails on their subscription platform. The language, "...would be a concern for them" indicates they're pointing out that they will have to adjust the 30% value.

librish• 5 years ago

"Unfortunately, IAP being 'optional' means that no one will ever use it"

I think one of the biggest issue is that Apple is trying to capture all of the revenue from the App eco system from a single function, the in app billing. Which is an extremely bad value prop for any large corporation, and also means a lot of big apps get to use the AppStore completely free.

I think Apple needs to do some shuffling in how they charge for the AppStore.

hatware• 5 years ago

I don't get the point of this. Am I supposed to feel bad for Uber and Lyft? Am I supposed to feel some need for justice against Apple?

What's the narrative?

maerF0x03• 5 years ago

I wonder how this model compares to things like videogame consoles where the device is (afaik) sold below cost but then made up in licensing fees and royalties on sales?

I think it's a good comparison and would give insight into how a similar scenario has played out in adjacent industries

phs318u13• 5 years ago

I think a lot of the takes on this are coming at it from the wrong angle - "Why does Apple deserve a third of app revenue?"

What if we flip it to: "Why do app developers deserve access to Apple's customers?"

30% is the price to access Apple's customers.

If you're a developer and don't like this, then don't build an iOS app. Build Android-only, or build a web app.

If you're a customer and don't like this, then don't buy an iPhone. Vote with your feet. Buy an Android. Or a Pinephone/Fairphone/Librem which are as close to a general purpose computer-as-a-phone outside of the Apple-Google duopoly that there is at the current time.

I understand that the value of the Apple ecosystem is not just what Apple bring to the table. It's the ecosphere of apps available. So there's definitely a symbiosis here. But Apple is like China here. No matter how ethically questionable, there will always be those for whom the market that Apple represents is too tempting to ignore. Even with a 30% cost of doing business. Meaning there will always be app developers building apps for iOS.

brokencode4• 5 years ago

This is way too charitable to the largest company in the world, one which enjoys a duopoly over the smartphone market in the United States. If you are Lyft and you don’t have an iOS app, then you probably go out of business.

expensive_news• 5 years ago

I realize that the only reason they don’t have an iOS app is because Apple didn’t let them, but OnlyFans is doing very well as a web based service. It’s certainly not iOS-or-nothing.

phs318u13• 5 years ago

Lyft would only go out of business (without an iOS app) because there are Lyft competitors who won't cede the Apple customer segment. If all those players stayed Android-only, not only would they survive, but they'd be turning Android into a more compelling alternative. But this would require two things - for them to collude to stay off iOS, and for no new competitors to write an iOS app.

If having access to the Apple customer segment is the difference between success or failure - even despite the 30% tariff - then why is it strange that access to that segment has a price? This is a market.

mjhagen3• 5 years ago

This is way too charitable to the largest company in the world

They weren't when they started the App Store, should they change their policies reflecting their current market worth?

AlexandrB2• 5 years ago

What if we flip it to: "Why do app developers deserve access to Apple's customers?"

As I posted in another comment, part of the reason Apple has so many customers is that their platform has so many apps. If all developers left the App Store overnight, would anyone go out and buy an iPhone the next day?

Apple benefits greatly from their app ecosystem, even ignoring the 30% App Store cut. They should be careful not to kill the goose that lays the golden eggs.

phs318u13• 5 years ago

I absolutely agree, however the point I made is that the temptation of the market share means there will always be app developers willing to step in to replace any that withdraw from the market.

If I'm an app developer, from a purely financial perspective, why would I forego a market of Apple's size, even with a 30% tariff? Sure, I may lobby for change, or even go to court to try to reduce that tariff. But while I'm doing that, I sure won't be leaving money on the table. And there's little chance I'll abandon that market in the interim, in order to maintain an ethical position.

weare138• 5 years ago

What if we flip it to: "Why do app developers deserve access to Apple's customers?"
30% is the price to access Apple's customers.

That goes both ways. Would Apple's products be as popular as they are without 3rd party apps? The apps are what is bringing in those users.

stale20028• 5 years ago

If you're a customer and don't like this, then don't buy an iPhone. Vote with your feet

Alright, so then if microsoft wanted to ban alternative web browsers, or engage in anti-competitive practices that are currently illegal, and they lost the court case for, your answer is "Yes, that should be allowed for microsoft to do"?

Most of society would agree that laws that outlaw anti-competitive behavior are a good thing.

And if you opinion is the naive "just vote with your feet, lol" position, then you need to bite the bullet and just straight up say that you think that anti-trust law is bad. Just say that you support the standard oil monopoly, or the microsoft monopoly and be honest about it.

phs318u13• 5 years ago

Microsoft's share of the desktop market at the time was very close to unity. You couldn't vote with your feet because there was nowhere to go. Even now, MS have about 75% of the PC OS market.

Apple's share of the smartphone market is around 15% globally, and 55% within the US. Under no definition can Apple be said to be in the same position that Microsoft was. You can indeed vote with your feet and many do (in both directions).

Anti-trust law is designed to do two things. Prevent companies from becoming monopolies in a market, and break up companies that are monopolies. By the numbers, Apple is not a monopoly, and there are plenty of healthy alternatives to Apple. Anti-trust law is just fine and dandy and I support it. It just does not apply here.

Yver• 5 years ago

Customers deserve access to all app providers.

phs318u13• 5 years ago

I assume you are implying "access to all app providers on the phone of their choice". What about those app developers that have chosen not to target a market? For example there are plenty of app developers that are iOS-only, and some that are Android-only. Do you then force them to target both systems? (since the customers deserve it). Would you enforce this on PC developers too? I'd love to have native Microsoft Office apps on my linux laptop. But I'm not holding my breath.

greggman3• 5 years ago

I don't understand this argument. Would it apply anywhere else? Could some company sell houses where they demand 30% of the price of every appliance you buy? You're the housing company's customer so they're bringing you their customers apparently. Could some car company demand 30% of all gas, tires, oil, and electricity? You're the car company's customer. Could a refrigerator company demand 30% of all groceries you put in it?

There have been laws that disallow you to limit customer choice. For one example, a company can't force you to buy 1st party parts for repairs

https://www.ftc.gov/news-events/blogs/business-blog/2018/04/...

You're position seems to be if they can prevent people from doing something with their device they don't like and people still buy it then that's ok. So if a sofa manufacture found a way to prevent people of color from sitting on it and people bought it that would be perfectly fine by your position I guess. I could certain make a fridge that complained if you put something in it that had no RFID tag and that those tags must correspond to items they've licensed.

In any case, my position is, no company should have that kind of power, period. A house company shouldn't be able to decide who my guests are who what items I put in it. A fridge company shouldn't be able to decide what items I keep cold. A cabinet company shouldn't be able to to decide what I store in my cabinets. And a computer company should not be able to decide what I can run on my computer (smartphones are computers).

mulletbum• 5 years ago

I don't think your argument is the same thing.

Apple has to pay to keep your app hosted in the store. They have to pay to check your app for safety. They have to pay developers to maintain the store. Your fridge doesn't have that. Your fridge manufacturer made something to host your food. It costs them zero dollars to perform the hosting. In fact, you have to pay another company (the electric company) that hosting cost. If a fridge manufacturer decided to become the electrical company, then it would make more sense.

Apple has to pay costs to maintain the app store, the operating system for the app store, and the hosting costs in-between.

andruby• 5 years ago

That totally happens by the way. When we built our house, we had to use bathroom supplier X and the builder took a cut (might very well be 30%). Same for the kitchen.

The builder brings in the customers, and the bathroom and kitchen suppliers seem to be happy to share a ~30% commission for it.

(note: this is in Belgium, but I assume similar setups are commonplace in other places)

cryptonector• 5 years ago

or build a web app.

Huh, maybe there's an opportunity to make an app that appifies appfiable sites. Like a captive browser. That app could be free. But Apple would find a way to say it's not OK with their rules and boot it from the store.

30% is the price to access Apple's customers.

Perhaps, but you'll notice many people don't agree, and those people participate in politics, and some of them will say "company store!!" and demand statutory or judicial intervention, and who knows, they might get it. Lucky for Apple 99.9% of their customers aren't those people.

meribold4• 5 years ago

If you're a customer and don't like this, then don't buy an iPhone. Vote with your feet. Buy an Android.

That's a good option. At the same time I can also work together with other citizens of my country to force Apple to allow alternative app stores. Our reason would be that we think society stands to benefit from this. Whether or not Apple "deserves" [1] a third of app revenue doesn't matter.

Allowing alternative app stores would then be the price Apple has to pay to access our market. They might not like this, but they're free to ignore this market. Other companies will be happy to comply.

[1]: I'm not sure that it's meaningful to say a trillion-dollar company does or does not deserve something.

phs318u13• 5 years ago

I actually love this answer, but I will point out that any arguments relating to "deserving" - especially in relation to companies' profits - becomes a very different discussion. We live in a capitalist system and "deserves" = "can achieve within the law". I offer no assessment as to whether this is a good system or not, but its the one we have.

It's absolutely reasonable for a government to impose its own market rules - but even there, the government follows its own logic for what to impose. Either to benefit consumers, protect local industries or industry segments (e.g. smaller companies), or increase tax revenue. What's the logic behind such a restriction? Unless applied to all app stores, this would be unfair to Apple.

For both customers and app-developers, we make an assessment of value and decide which phone to buy or which phone to target with apps. For app developers this involves a contractual obligation they freely sign on to. Making an assessment of value that is based on not meeting the obligations you agreed to is an act of bad faith. You don't "deserve" to play on my turf if you're not following my rules. Go play in someone else's yard. I can see how it makes sense for a government to assess whether everyone's yards needs to be follow a basic set of rules. That currently exists in the sense that no contract or agreement can upend the laws of the land. Is new law required here? Perhaps, but then it won't be Apple specific. Depending on how its worded it may apply more broadly than to just app stores. In which case there's a whole raft of rent-seekers who may not want such laws.

Fundamentally, it boils down to this (in my view):

Are smartphone ecosystems private property upon which third parties are allowed to conduct commerce subject to the property owners rules?

Are smartphone ecosystems a public commons upon which third parties are free to conduct commerce as they wish?

alkonaut• 5 years ago

Why do app developers deserve access to Apple's customers?"

Because it’s better for customers if they do, than if they don’t.

kevincox2• 5 years ago

web app

Good luck! Safari is crippled. The examples are too numerous to list but even the UX around existing features that would bring Web apps closer to on-par with App Store apps is terrible. For example my friend was sad that Wordle wasn't an app because they wanted it on their home screen. No problem I said! I know you can add shortcuts on iOS. But they couldn't find the option. They even game me the phone and I couldn't find it in the 30s I looked! I'm sure it is there somewhere but it is clear that the UX is damanaged to keep the moat between native and web artificially high.

objektif• 5 years ago

This I believe is exactly how empires go down.

ameister142• 5 years ago

This would be a weird thing to do, which is obviously why they made it optional in the end - it's such a large amount of money that it creates a massive incentive to switch or undercut apple's business.

Most teenagers use an apple, but it's not impossible to switch. In the 90's, almost all computer users were on PC's, and a big problem for apple was a lack of software offerings on their OS to compete with windows. It seems like some executives are interested in short term profits to the point that they are comfortable creating an environment that would seriously disincentivize use of apple products and the math on that is nuts - if it's no longer profitable (and I can't imagine it is at a flat 30% increased costs) then you remove the service.

JoeJonathan• 5 years ago

Wow. You know you're in a weird echo chamber when you hear an outpouring of sympathy for such deeply reviled companies.

pookeh• 5 years ago

Imagine if all the malls around the world that lease a physical store to Apple say to Apple: 30% of everything you sell at the store in our mall belongs to us.

hamlsandwich• 5 years ago

Presumably they pay rent in those malls, and the bigger the store, the more rent they pay. The problem with that arrangement is that you need to be at a certain minimum scale in order to afford rent at all - you can't just occupy a free/basically free store to play around and make toys in. Taking a commission avoids that issue by making 'rent' scale with the amount of business you do, not how much floor space you need.

I'm not saying that 30% is the right amount - I really don't know. But the mall comparison doesn't seem like a cut-and-dry case to me at all.

evancoop• 5 years ago

Next week, on "lifestyles of the rich and rent-seeking," we'll speak to the folks from Apple, who have discovered how to extract copious sums from captive app developers and their downstream customers! You won't want to miss this episode!

(Of course, if you do, you can livestream from another app whose access they probably control)

stakkur• 5 years ago

Uber and Lyft execs: let’s take a 30% cut of every driver’s income while trying to classify them as contractors and avoid employee costs and other bothersome rules.

pyuser583• 5 years ago

I’d more interest in how Apple decided 30%. Why not 20%? 25%? 35%?

They can make up whatever number they want.

chii• 5 years ago

its likely that they chose the highest amount they believe the app developers would accept without trying to fight. Similarly at the time, steam and other platforms charged something like that too.

I couldn't find it, but i really want to know the margins of the app store compared to the revenue. How much ripping off are they doing? If the margins are 50%, it's way too high!

WisNorCan• 5 years ago

I am hoping that the same scrutiny is quickly applied to other platforms that are getting a pass.

Like Roblox which only pays developers 25%. But even that is better than Peloton where I can't even install any other apps.

cityzen• 5 years ago

Oh, you mean this Apple:

Ten former members of Apple's supplier responsibility team told The Information that Suyin wasn't an isolated incident, and that Apple had refused or was slow to stop doing business with suppliers that had repeatedly violated labor laws or failed to improve workplace safety when it would have cut into its profits.

https://www.businessinsider.com/apple-knowingly-used-child-l...

If you're going to use child labor, i don't see any issue with charging 30% for anything you can get your hands on.

andi999• 5 years ago

Since this is from 2018: how did it play out?

pabs3• 5 years ago

Apple should split up the 30% cut into different portions of their value add, and then let developers choose which portions they want to have access to. Dropping the Apply Pay stuff would be 5% or whatever. Access to the Apple Store would be 5% or whatever. They could even charge more over the 30% by offering additional stuff, like auctioning off "app of the week" on the Apple Store.

exabrial• 5 years ago

Apple need to be broken up into tiny tiny tiny companies.

skc• 5 years ago

I'm still looking in those emails for the oft quoted HN comment of "Apple does all the heavy lifting wrt payment processing and discovery so 30% is fair"

All I see there is talk of how to make even more money.

midjji• 5 years ago

Its astonishing that the sellers of branded small laptops get away with this shit at all. Its orders of magnitude higher than any other infrastructure provider gets alwat with.

account-5• 5 years ago

Can someone confirm that apple here are trying to get other companies to pay them if that other company offers its customers a subscription service?

What is apple offering the other companies for the pleasure of paying apple?

I feel like I'm missing something.

Mentlo• 5 years ago

Someone working on a subscription application here and quite intimiately know all data around our acquisition, retention, engagement - you can subscribe to us through apple or you can subscribe outside the apple ecosystem - and apple only takes the cut when through them.

Ultimately - it's the user choice where they're going to do it - and if the user wants to reward the company, they could subscribe through other means. Most users don't know this, obviously, but it is a possibility. And if we reach them through a different acquisition channel, the users won't subscribe through Apple, they will subscribe elsewhere.

However, the customers who subscribe through Apple are usually a lot more valuable to us (more affluent, stable payments, more engaged), and even with the 30% cut, having Apple as an acquisition channel is valuable. It is not worth it for us to go out of Apple's ecosystem.

Apple know this - and are just playing the economics. They are aware the added benefits to the user and the marketing pull they have in their store. The next step for App Store is going to be changing the 30% to fit the business model of whatever they're marketing - if they're rational. There was already suggestion that for streaming apps (very high operating cost, very low margin) they might drop to 15% - because they'll try matching the economics to the barely positive tradeoff for the businesses using the app store.

I see nothing wrong with the Apple model from a business standpoint of a multi-platform business. When something is specifically an app business it becomes more tricky because essentially in order to acquire the customer they have to install the app so the app store becomes your main acquisition channel. But even there you could argue that your business model wouldn't exist if Apple wasn't providing the customers, OS, app store and marketing. So it makes sense for Apple to take a larger cut (in relative terms per acquisition volumes).

krisdigital• 5 years ago

Nice read after my app update got rejected some weeks ago for not using in app purchases, even though it was already on the store for a year. It is a news reader app, but they said it does not fall under the "reader" category where they make an exception. I did not even want to make an app, but basically all the feedback from users I got was: is there an app out yet? Sadly progressive web apps are bullied, for example you cannot play audio in the background as I do for podcasts. But there is no way I will add IAP, I am not even trying to sell anything, it just for existing users. Kind of sad you cannot just provide an app even though you pay a fee for the store as developer.

The second problem I have as someone who is offering subscriptions himself, is how Apple earns money with scam subscriptions. I could have justified the closed Appstore in the past by saying that they take care that you do not get trash on your phone, but - the App Store is full of trash. Check the top two guitar tuners, they are free. Open them up and you will see a 8$/week subscription, that you accidentally agree to with the finger on your home button. The ratings are full of people complaining, but Apple puts them at the top. There is no way they don't see this shady business. Wonder how much of their revenue comes from shitty scam apps.

People who suggest to just not be present on the app store, it is just not an option for many businesses, as the App Store is basically a monopoly.

jokoon• 5 years ago

It's strange how I remember that there was a time where microsoft was the evil corporation and Apple was the cool underdog.

I mean microsoft didn't sell hardware, and now Apple sells hardware and software and takes a cut from software sales.

Apple execs: Let's take a 30% cut of Uber and Lyft's membership programs (2018)

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