Stop The JerkTech

http://techcrunch.com/2014/07/03/go-disrupt-yourself/

by minimaxir • 12 years ago

243 199 12 years ago

nness• 12 years ago

I wonder if this is conceptually similar to "Tragedy of The Commons." (http://en.wikipedia.org/wiki/Tragedy_of_the_commons)

I can't really see how these services are not just the exploitation of services for the public good. Pretty disgusting behaviour.

crapshoot1012• 12 years ago

Not really - the tragedy of the commons is the examples of oceans fisheries or trash on the street, where any one person doesn't have enough ownership to care enough to ensure continual sustainability. Ironically, this is if anything, a counter to the tragedy of the commons (albeit an awkward fit) - they're trying to price something that has an assumed value people took for granted. Again, I'm not saying its something great, but its not this concept.

endgovernment• 12 years ago

No, unpriced public parking is a GREAT example of a tragedy of the commons situation. Un-owned property is used inefficiently. This is a fundamental economic principle.

ChristianMarks• 12 years ago

That's one reason I use unexploitable public goods, like public tranportion, and go to salad bars not trendy enough for some kid to want to scalp.

ChuckFrank• 12 years ago

That in and of itself is a good reason for great public goods. They are, or should be, by definition 'unexploitable'.

MBlume2• 12 years ago

Thankfully the city of San Francisco is fighting Sweetch and Monkey Parking with cease-and-desist orders.

The city of San Francisco should be fighting Sweetch and Monkey Parking by cutting out the middleman and drastically raising their parking fees.

vellum• 12 years ago

They could also use sensors that detect when a parking spot is free, and upload that information to an app or the web.

zevyoura• 12 years ago

They're actually doing both of those things, though not on a spot-by-spot basis: http://sfpark.org/

wpietri28• 12 years ago

They're doing some of that. But there's a problem with that: plenty of people who live here can't afford a sudden major bump in living expenses. In the long term, correct pricing is part of the solution. But in the short term, it'd be unfortunate to solve the problem by screwing poorer people.

And anyway, this could be a temporary spike in demand. Once places like ZipCar and Uber get ahold of self-driving cars, I expect there will be a big decrease in car ownership.

rahimnathwani5• 12 years ago

You could do it in a revenue-neutral way by distributing the additional parking fees directly to poorer people. This could make allocation more efficient whilst redistributing money from richer drivers to poorer non-drivers, whilst being neutral for poorer drivers and richer non-drivers.

MBlume2• 12 years ago

Politically impossible, but my blanket response to "how will this affect poor people" arguments is "give them money" http://en.wikipedia.org/wiki/Basic_income

icebraining8• 12 years ago

plenty of people who live here can't afford a sudden major bump in living expenses.

Where I live, residents can get a small sign from the municipality that they can put in their car to avoid parking fees (when parked near their home). Seems like a simple solution.

bunkat• 12 years ago

Whenever I hear about these I always wonder what the people that found them are thinking. I mean, what type of person would you have to be to decide to try and screw over the restaurant industry (which already has historically low margins) just to make a buck? I can't even imagine how many fake reservations they would need to create to make that idea worthwhile for them. And what investors would give them money to do so?

wpietri28• 12 years ago

I mentor at startup events, so I know exactly what kind of people they are.

The good ones are people who just haven't thought it through. They've found some sort of demand, and they're doing the standard hack-the-system thing that the startup culture trains them to do. Once it's rolling, it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."

The bad ones are the sort of entitled douchebags that would have previously gone into investment banking or some other industry where the money's great and ethics aren't emphasized. But now startups are the high-status, high-money thing, so that's what they're after.

eevilspock9• 12 years ago

"It is difficult to get a man to understand something when his salary depends upon his not understanding it."

Because nearly every internet business gets it's revenue from advertising, a lot of good people jump through hoops to convince themselves that they have not made a deal with the devil. The downvotes[1] come fast when I point out this moral and cognitive dissonance, usually without any counter argument since they just want me to go away.

When I talk to anyone who's livelihood doesn't rely on advertising or marketing, there is near unanimous agreement that advertising is fundamentally manipulative and dishonest.

Besides the social cost of Advertising, there many other costs[2]. The idea that advertising gives us free web content and services is utter bullshit.

[1] The cowardly downvotes with no counter argument have already started. Upton Sinclair is the actual source of the quote at the top. A wise man who got a bunch of downvotes in his time.

[2] https://news.ycombinator.com/item?id=7767811

bhauer• 12 years ago

it's like Mencken said: "It is difficult to get a man to understand something when his salary depends upon his not understanding it."

H.L. Mencken?

The Internet appears to ascribe that quote to Upton Sinclair.

codezero• 12 years ago

This is exactly right, from the creator of ReservationHop:

"To be honest, I haven’t spent a lot of time thinking through these questions." http://brianmayer.com/2014/07/how-i-became-the-most-hated-pe...

crapshoot1012• 12 years ago

I'm going to disagree some here. When people claim starups aren't creating value, I always push back - just because they aren't creating value to you does not mean that they are't creating value to someone else. In this case, people value reservations; its the same thing with concerts or sporting events with scalpers - the price does not reflect market value - that value is being allocated already to people who may not perceive it as such. Now, artists can choose to counter this in obvious ways (Louis CK had a great approach by requiring ID's to limit scalping potential), but if they choose to ignore it, I think there's a reasonable business opportunity. Now if a restaurant chose to counter this TOS by say , requiring a credit card for each reservation, they are well within their rights.

wpietri28• 12 years ago

Scalpers do not create value. At a concert the value is being created by the performers, and it's not like scalpers create seats or make the show longer. They just shift value around to people with more money.

neumann3• 12 years ago

just because they aren't creating value to you does not mean that they are't creating value to someone else.

True, but follow that logic, and replace 'create' with 'revoke/destroy'. These apps are proposing a tiering system that favours people willing to trade money for convenience, and _simultaneously depriving those how aren't willing or can't_. So this pay to use system is scalping limited resources at a cost to others, and profiting middle men piggybacking of existing infrastructure. I think the article made a clear argument for why this is not okay.

The proposal that you can require a credit card for each reservation escalates the situation, because now in order to stop scalpers from operating, the bar for entry is raised. If people are independently abusing the system, then this is the logical way to combat the problem. But if it is a parasitic entity then regulation is sensible way to protect the business and its customers (eg. some who might not have credit cards).

Often when these arguments are raised people argue as back and forth as if economics and law are the only considerations. What about considerations towards decency?

How annoyed would you be if you tried going to a restaurant, saw empty car spaces installed by your local council, but people standing in them holding signs saying "Reserved. Yours for $4". Finally, you arrive at the restaurant but get told that is is full. A guy out the front waves you down, 'psst. I have 10 reservations - want one? $5 bucks.' Not only that, the guy is part of an organization that has done it to all the other restaurants in the area.

Andys2• 12 years ago

Maybe the restaurants could enjoy higher margins if they made great websites which let you bid for last-minute reservations?

usefulcat• 12 years ago

Because talking to a human for 30 seconds is that much of a chore when making a reservation?

And how, exactly, would that do anything to prevent reservation scalping without adversely affecting the user experience of making a reservation or making life even easier for reservation scalpers? Probably it will be easy to use and easy for scalpers to screen scrape, or the UX will be a some kind of CAPTCHA-filled monstrosity.

Now that I think about it, forget about restaurants and reservation scalpers; if you could develop a truly superior CAPTCHA replacement, that would be orders of magnitude more valuable.

onewaystreet2• 12 years ago

Right now they are taking all of the money for themselves, but in the future, if the service becomes popular, you will likely see them work directly with restaurants and share the revenue. The whole point of this service is to make reservations into something that can be bought. This obviously works best with the cooperation of the restaurants.

lotharbot2• 12 years ago

"you will likely see them work directly with restaurants and share the revenue"

Why wait for the future?

If some startup thinks that selling reservations at restaurant X is profitable, they should be partnering with restaurant X right now to sell their reservations. They should be sharing in the potential downside with the restaurant -- if they book reservations they don't sell, and the restaurant has to turn down paying customers, the startup should pay some cost for that.

benatkin2• 12 years ago

The restaurant probably gets about the same amount of money on average, if not slightly more. It's easy to say that the jerk that uses this kind of app leaves less of a tip or takes up table space longer without spending more but on closer examination I don't see why this would be the case. They likely just pay more overall, and the app gets the extra.

saurik• 12 years ago

You missed the part where these reservations are being held with risk of not succeeding in selling the spots: it isn't that the person who is sitting at the table is less profitable for the restaurant, but that a bunch of reservations are made that might in the end not ever succeed in being sold by the website. Assume for a second that the restaurant also charged for reservations and had cancellation fees for no-shows (which arguably they should, but the economics and expectations works out that most normal customers would be turned off by this): then the risk of the no-show transfers from the restaurant to this website, and it is more clear why this business is just a parasite.

EdwardDiego2• 12 years ago

And what kind of customer wants to give a fake name to dine? The feeling of dishonesty aside, I can imagine it going hilariously wrong if automatically generated.

"Yes, my name is Eduardo ArrayIndexOutOfBoundsException, it is a proud family name, we are far better than the scum of House Segmentation Fault".

walshemj4• 12 years ago

Restaurants are not exactly Lilly white they have huge mark-ups of drink and food, deserts especially.

They also take advantage by paying staff less the minimum wage and relying on tips to make a living - a campaign for a living wage for restaurant workers would be a better use of "josh" and those like him time.

If foxcon treated their staff in the way the average restaurants did there would be an outcry

wpietri28• 12 years ago

God yes. The whole point of commerce is the creation and exchange of value. The great startups have been great because they create massive amounts of value in the world.

Startups like this don't create value. They just shift the value around. In the case of these startups, they shift the value to rich people while pocketing the cash. They are essentially parasitic.

Not only is that a dick move, it's dumb for a startup. Google can earn $60 billion in revenue per year because they create even more value than that for its users and customers. Startups that don't create much value have very limited opportunities for capturing value. As the parking app show, regulators are perfectly happy to ban things that don't create value, especially when they have obvious negative externalities. That's what happened to the entire telemarketing industry for example.

So please, people: focus on creating value, not just on whatever bullshit will bring a few dollars through the door.

NhanH2• 12 years ago

Just to be clear: I agree with your point on focusing on creating value. And after I read your comment, I agree that none of the startups in the articles are truly creating that much value.

However, is it that simple to qualify when you're creating value? If I had read the article before HN's comments, I'd have thought the startup is cool (admittedly trivial and silly, but we have a lot of those nowadays), rather than parasitic. I'd have thought it's just a clever hack in helping more efficient distribution - in the true spirit of capitalism. Yes, while it would shift the value to rich people, it also free up the rich people's time, so they (rich people) can create more value. Assuming that rich people is richer because society decides that their time is more valuable, they can create more value in the same amount of times of some other poorer people.

Of course, that might be not morally justifiable. But creating value and being morally correct is orthogonal.

I'm not living in SF the SV area, but I've a few friends there. Every time they talked to me about startup ideas, I've always felt off about those ideas. I kept telling myself that trivial value is still value, and potentially if it can help many people, the net gain would still be large. How do I know where to draw the line?

Edit: it seems like quite a few people have problem with my post, so let me rephrase the middle paragraph a bit:

Ignoring the mentioning of rich/ poor, parking spot is a commodity. And just like other commodity in life, everyone values it differently. What's wrong in letting people paying for what they think it's worth for? The rich will always have advantage in buying commodity, and that's a fundamental issue in our society, but that's an entirely separate problem to fix, and the solution isn't telling people to stop producing commodity, or distributing them. In this specific case of parking lot, it's bad either way because a private company is skimming profit from public space.

wpietri28• 12 years ago

Not sure why you were downvoted; I think it's a great question.

I don't think it's that hard if you look at it systemically. If the problem is parking, none of the JerkTech startups are solving the problem, they're just shifting the burden. And they're probably making the problem worse, as now they've created a financial incentive for people to occupy hot parking spaces so they can get paid to leave.

On the other hand, if the problem is "rich people don't have enough time", then there are plenty of ways to solve that. Indeed, Uber basically set out to solve the problem of "rich people don't have enough time and/or feel important enough". Thus the fleet of fancy cars. That created value.

I think solving small problems across a large number of people is fine. Look at entertainment. There are plenty of video games that created value one quarter at a time. Or today, $0.99 per. It's not like it cures cancer, but as long as people end up having fun and are happier, that seems fine to me. However, in my view that excludes operations like Las Vegas and Zynga, which create very little fun and a lot of compulsion, which they then use to extract cash.

I think the hypothesis that rich people generate more value given more time is... unproven. There are plenty of people who are rich because of their cash-extraction skills, not their value-generation skills. Many of them do it in ways that are negative sum. For those people, the best thing you could do for the world is to waste their time.

metaphorm3• 12 years ago

"Assuming that rich people is richer because society decides that their time is more valuable, they can create more value in the same amount of times of some other poorer people."

are you fucking kidding me? why would you assume that?

RodericDay• 12 years ago

"in the true spirit of capitalism. Yes, while it would shift the value to rich people, it also free up the rich people's time, so they (rich people) can create more value."

this is embarrassing.

7Figures2Commas2• 12 years ago

How do I know where to draw the line?

Considering legality is a good start.

Sweetch and Money Parking induce their users to violate San Francisco's Police Code, which forbids the buying and selling of public on-street parking. The city says it will pursue Sweetch and Money Parking under California's Unfair Competition Law for facilitating these violations.

In the case of ReservationHop, I'm not an attorney but I'd venture a guess that there are a number of potential causes of action that a restaurant might be able to claim, including violations of unfair competition law.

Now, a lot of folks will complain that many of these laws and regulations are counterproductive and stifle innovation. They may be right, but a point that is often overlooked in discussions about startups that are intentionally violating the law is that you can be against foolish laws and regulations without being for the willful violation of them.

untog2• 12 years ago

Yes, while it would shift the value to rich people, it also free up the rich people's time, so they (rich people) can create more value.

Have trickle down economics ever been proven to actually work?

Either way, my problem is this: millionaires don't care about running one-off, unique restaurants. They'd want to set up a chain, or something similarly profitable. So if we go with this "redirecting money to rich people" idea, all the restaurants that struggle to get by close and get replaced with McDonalds. Great.

Mandatum2• 12 years ago

They're just clipping the ticket for bribery. This same thing exists in the underworld, however tech has made this sort of thing a "legitimate" business. I don't see much of a difference between this, and say, high frequency trading. Different areas, but same concept.

Tominator0• 12 years ago

You seem to accept the media's sensationalist take on HFT which was provided to them solely by Michael Lewis. While HFT isn't exactly kosher, it's not as bad as you may like to think. Here's a video explaining some advantages of HFT: https://www.youtube.com/watch?v=e9aYZYSwCLo

grey-area3• 12 years ago

Startups like this don't create value.

This is a very old hypothesis, and you are shadowing Marx in decrying parasitic middlemen. Value is such a indeterminate notion that anyone could be said to be creating it, but so many activities we take for granted (and which render us service) are parasitic in some sense - taking rent, opening a store of any kind, transporting goods, paying interest, manufacturing goods are all based on taking advantage of a gap between buyer/seller or taking advantage of an inherent advantage of scale/capital (ownership of the means of production if you like). I think it's ok not to add any value other than getting a service/product to someone who wants it and doesn't want to spend energy looking for it. That's not what makes these companies regrettable.

Google can earn $60 billion in revenue per year because they create even more value than that for its users and customers.

Google is, strictly speaking, a middleman just like the companies above, it doesn't create significant value for end users with advertising (its primary source of revenue), that might even be a negative for customers. Google lives in the interstices between customers/customer data and advertisers and the value they create is mostly incidental to their main revenue stream (it is in services like gmail, gmaps, android etc), and designed carefully to ring-fence customers or guide them toward being the end product of advertising streams. Again, I don't think that's bad, but it's important to recognise that and its similarity to the activities of these other companies or others like Amazon or Apple which provide useful services at the same time as making money as middlemen. They could easily earn $60 billion a year by being evil, and we might not even notice if they were at first because we're too busy enjoying the nice free presents.

The problem with the companies in this article I think, and any other company gone bad, is that the interests of consumer and customer become misaligned to such an extent that the company no longer serves its customers in the sense of seeing to their needs, but in the sense of serving them up to others.

7Figures2Commas2• 12 years ago

This isn't an issue of middlemen, value or the alignment of interests between customer and company. It's an issue of legality.

Google operates a legal business. It sells advertising on a service that it owns. Period.

The parking companies in the article are knowingly inducing their "customers" to violate local laws that forbid the buying and selling of on-street public parking. These companies seek to profit from this and as a result are now in legal hot water themselves. As for ReservationHop, I believe restaurants may have legal recourse. California's unfair competition laws are fairly broad and I think an argument could be made that intentionally booking fake reservations for the purpose of advertising and reselling them would constitute an unfair and perhaps even fraudulent business practice.

cromwellian• 12 years ago

it doesn't create significant value for end users with advertising

It doesn't? Google ads fund YouTube, Gmail, Docs, Chrome, Android, and lots of other hit Google services that are Google produced products/content, not a middle-man service between content producer and advertiser.

wpietri28• 12 years ago

I don't think all middlemen are parasitic. The guy at my corner store, for example, creates value by stocking a carefully chosen set of products very near to my house and having them available at all hours. He's basically an L1 cache. And in being that, he's not making the problem of goods-getting worse for other people.

I think you're wrong about Google. They create enormous value through the services they provide. They then monetize that mainly through advertising. They could monetize it other ways; if advertising were illegal, Google would still be raking in cash.

But their search-related advertising, unlike traditional display advertising, actually creates value for both advertiser and viewer because it's relevant to what people are searching for. In user tests, a former colleague was having people do Google searches related to shopping. One guy, unprompted, said, "Hey, you want to know the secret for Google? ignore the stuff in the middle. The really good links are over here on the right." That is, he found the ads more valuable than the normal web content.

Turning back to the companies mentioned, I think they are serving their customers well. The problem is that they are all creating negative externalities by forcing other parties to become unwitting free suppliers of goods they are selling. For the parking apps, it's the cities providing the public parking. For the reservation app, it's the restaurants.

namocat• 12 years ago

I completely agree with this article, but wonder if it's inevitable for someone to jump in and try to make profit off of services for the public good if there are people out there willing to pay for it.

For example, if we had sufficient parking in the city, these startups would never even cause a blip. Someone must have been driving around for half an hour looking for parking and then thought to themselves that, at that point, they would pay someone good money to just be able to find a spot - and suddenly the idea for a business was born...

wpietri28• 12 years ago

I think it's great that people want to solve problems, but this isn't actually solving the problem. It's shifting the problem from rich people to poor people.

In contrast, there are plenty of startups that are actually making the parking problem better. City CarShare and ZipCar are reducing the number of cars in the city by having cars available on demand. GetAround and RelayRides are upping the number of drivers per car. Uber and Lyft (and taxis and transit) let you get somewhere without having to park at all. Parking Panda and Park Circa are turning unused private parking spaces into publicly available inventory. Even Amazon is helping: part of what makes happy to do without a car is the fact that they will make almost anything I want show up in a couple of days.

aiiane2• 12 years ago

Yeah. The real solution to parking in SF is to have fewer people driving, which would involve improving the public transit options.

oh_sigh2• 12 years ago

The reservation is obvious bullshit, but I just don't see a problem with selling your parking spot.

ar7hur• 12 years ago

The problem is it's not your parking spot, but public property.

chatmasta• 12 years ago

Possession is 9/10 of the law. ;)

EDIT: Probably down voted because of length, but I'm pointing out that this is an opinion lots of people have, and there's a reason it exists as a truism. If you pass a law against apps like this, how could you possibly enforce it? The seller's car is already in the spot, and police can't get a real time notification that he's using the app. By the time they realize what happened (if ever) the spot has been sold.

oh_sigh2• 12 years ago

Right, and you're allowed to occupy it as long as you want. If your friend gives you $5 to let him take it over, I don't see a problem.

This could only be a problem if people start parking cars they would never use in the city, just to profit from these services.

aosmith• 12 years ago

Seems like reservation hop is engaging in deceptive practices. I bought tablesniper.com ~5 years ago with the same idea but didn't proceed after talking to attorneys.

tyoma• 12 years ago

The restaurant issue I'm somewhat conflicted about -- I don't know enough about the business so some of my thoughts maybe impossible for various reasons. If people are willing to buy reservations, why not just charge more for the food until there is no waiting list? Or just charge for reservations (or at least those at preferred times) and keep the money for the restaurant? Whats the inherent reason that reservations have to be free with no charge to cancel?

As for parking, the sooner cities get rid of hidden car subsidies the better. Artificially low priced street parking and building codes mandating garages are some of the more insidious subsidies that make everyone pay for those who drive. If the spots went for market rate, these apps wouldn't exist and the extra money could be used to improve public transit.

fidotron2• 12 years ago

Right - what I get from the parking stuff is just how undervalued parking actually is, and just how poorly cities deal with it.

The restaurant one is dodgy though. I could approve of a system where they've paid the restaurant in order to sell on a reservation (so the restaurant gets something even if there are no takers) but as it stands it's just a con.

wpietri28• 12 years ago

Parking isn't undervalued. People just pay in time, not money. Better to say that it's inefficiently priced. Shoup's "The High Cost of Free Parking" is the bible on that: http://www.amazon.com/High-Cost-Parking-Updated-Edition/dp/1...

bane• 12 years ago

If people are willing to buy reservations, why not just charge more for the food until there is no waiting list?

Because a restaurant with a long waiting list for reservations gives the place a cachet of popularity, which can be more important than optimizing available reservations.

mraison• 12 years ago

If people are willing to buy reservations, why not just charge more for the food until there is no waiting list?

I don't really like the idea that restaurant owners should be forced to raise their prices just to avoid being screwed by clever startups. What if you just want to keep your prices affordable even though you have a lot of success? I guess you can always ask for an ID and check if it matches the reservation, but I'm not a great fan of that either.

couchand2• 12 years ago

That restaurants very well might have to start doing this should be an indicator that this startup is making jerkware.

nl2• 12 years ago

Just wait someone realizes that it costs less for a driverless, electric car to sit in a traffic jam than a car park.

aaronwall• 12 years ago

Then they can have a fleet of them which go into traffic at peak hours & allow people to bid to have them removed from traffic. ;)

ivanca• 12 years ago

"What is your business model?"

"Extortion"

"Well, it is a time-proven way of making money; and you may go to jail, so I can see you are not afraid of risk... like a true entrepreneur!"

nl2• 12 years ago

It's more serious than that. Car owners (or co-ops) can send their cars to loiter in deliberately created traffic jams and have them wait there all day, because it is cheaper than paying for parking. Then you press a button when you want your car, and it turns out of the traffic jam and comes and gets you.

If you actually want to go down the road that has been selected as the most appropriate place to loiter... too bad for you.

randallsquared• 12 years ago

People keep using the phrases "the rich" and "the wealthy" in connection with this parking app (I heard this same phrasing on the NPR story about it last night), as though having a smartphone in the US and using it for parking is a sign of wealth.

Firstly, a Virgin Mobile (no contract) Android phone is $30. Gas is well over $3 a gallon near SF. If you can afford to drive a car (even assuming it was given to you and you therefore have no payments), you can definitely afford a smartphone.

Secondly, the company rep was quoted as saying that the highest price ever paid for a spot was $15. Is this is steep price to pay for a couple hours parking? Sure. Is it only for the wealthy? No, I'm thinking not.

The reservation thing is much more of a "jerktech" startup because of the potential harm to the restaurant[1], but the parking startup seems like a win, all considered: people who care more can purchase certainty, and people who don't care as much couldn't be certain of getting a parking spot even before this, so...

[1] though they could just require showing photo ID in the reserved name to effectively combat this, at least for a while.

clay_to_n• 12 years ago

I see your distinction between the two, and agree that the restaurant app clearly hurts the restaurants. But the parking app hurts every other driver in the city who doesn't take part. I really don't see how using auctions for every parking space is better for the whole than keeping public parking what it is now (public).

Untit1ed• 12 years ago

$15 worth of $3/gallon gas can take an efficient car a long way - there's a pretty big gap between paying that to travel 100 miles and paying it just to not drive anywhere for a few hours. It makes little difference to the wealthy, but for those who can barely afford to drive as it is it makes the situation even worse.

But that's not the reason it's jerktech, it's because the parking space was already paid for with taxes. What monkey parking's doing isn't much better than brigands setting up in front of a bridge and demanding a toll from anyone who wants to cross it.

(edited for grammar)

fudgekludge• 12 years ago

Just wanted to chime in to say that in SF if you have a parking permit you can park in some spaces for up to a week until street cleaning. When I had a car I would have gladly paid someone $15 to get a spot on my street on a Thursday knowing I could leave it there until Wednesday. Spots open up all the time but are filled quickly. I'm not defending the app, but there's definitely a (small?) market for something like that here.

jbackus2• 12 years ago

Don’t concert ticket re-sale sites like StubHub encourage and take a cut from scalping? Yes, and I’m not a big fan of them for that reason. If the demand for a band’s ticket is high, they’re the ones that should be making the mark-up, not some sleazy guy with 20 computers who bought 40 tickets the second they went on sale to turn around and flip them. But at least that guy has to bet his own money that he can resell a private commodity he bought.

This is a weird opinion. This kind of resale is common in markets where producers would rather guarantee selling their entire product at a certain price as opposed to risking overpricing. Same reason many farmers sell off crops immediately to middlemen instead of trying to maximize price selling directly. They aren't being exploited, they're hedging risk. I would imagine that centralized ticket websites like StubHub also improve the venue's distribution in this case. If venues don't like resellers, they can follow Louis CK's actions[1].

[1] http://thenextweb.com/media/2012/07/03/louis-c-k-sees-ticket...

jasonlotito• 12 years ago

The author isn't linking StubHub to these other startups, rather, they're saying "at least that guy has to bet his own money that he can resell a private commodity he bought."

jbackus2• 12 years ago

Yes, I'm glad he isn't dismissing them. I'm just saying that it isn't as simple as returning profits to the producer.

Nursie• 12 years ago

Some venues and some acts think this behaviour is scummy too, and go to great lengths to stamp it out.

It's pretty antisocial to snap up as many tickets as possible and then relist them at double the price within seconds. If you can't go, fine, but if you're just profiteering then you're inserting yourself into a transaction where you're not wanted.

It's the shows that sell out in seconds that these guys try to get in on, so there's no risk to the venue or the act anyway, scalpers are just basically extortionists at that point.

Mikeb85• 12 years ago

The good news is that while markets can be irrational in the short run, eventually things that create no value ARE weeded out.

And the restaurant industry for one, while very competitive, is also a fairly tight-knit community (due to the rigours and stress involved in the business), and word gets around fast. I'm sure cities will also crack down on auctioning public parking spots, to the extent that it will be an unprofitable exercise.

icambron4• 12 years ago

I dislike all of these companies, but I'd have put it all differently:

The first one, Reservation Hop, is simply indefensible because it relies on fraud. It's deceiving restaurants into thinking the person asking for a reservation is a real person. Not only does it involve lying, but it's fundamentally different from scalping a ticket because if no one "buys" the reservation, the restaurant gets nothing and was perhaps force to turn down legit customers, whereas the scalper actually paid for the ticket (though it may have been inefficiently priced, see below for more on that). It also creates no-value-added intermediary in the process. It's just a dick move all around. I do suspect that a trade group for the restaurants could get Reservation Hop cease-and-desisted, but the general solution here is for restaurants to take a credit card as part of the reservation process.

The parking ones are a bit different, in that they're taking advantage of inefficiently priced parking. Ever notice how it's really hard to find a spot on a street full of first-come-first-serve, inexpensive parking? It's for the same reason there are long lines and empty gas pumps before a storm with anti-gouging rules in effect, or in stories about the Soviet Union. You can park there for long periods of time even though you may not have a pressing need for the spot, whereas people who have such a need can't get one. Normally we manage such supply and demand issues through prices, so if you need a spot badly enough you might be willing to pay for it and one will be available because most people aren't. [1] What happens almost inevitably when you have an inefficiently distributed good is a secondary market or some sort of cultural mos, both of which are usually ethically dubious. In Boston, people "reserve" spots by putting cones or lawn chairs in "their" spots and expect you to respect it less you get your car keyed, thus compounding the inefficiency. There are places where you can pay for people to "hold" your spot, and I've had someone try to sell me theirs once. These companies are filling in exactly there, except with technology. To be clear, I think these companies are pretty crummy. But my point is that they're the almost inevitable consequence of a pretty terrible system for allocating resources. I.e. if we want to fix this, the best way to do it is to fix the underlying problem rather than shaming businesses like this. EDIT: to be clear, I'm not against shaming them if it makes you feel good; I just think it's not the solution to the problem.

Even though that description overlaps in places with the article, I like my framing a lot better. The article is coming from this place where entrepreneurs are expected to be these angels descended to Earth to fix all the "common man's" problem through innovation. Then we immolate ourselves because the community/scene turns out to be full of non-special people who are sometimes kinda shady and take advantage of bad policy and lax enforcement to make money, just like people in all other walks of life. (In an age where so much relies on technology, I don't even think it's reasonable to think of "startup tech stuff" as a scene or a space or a community at all.) Maybe it's fun to wring your hands about it and I can see a publication like TC likes to see things through that lens, but I don't think it's a very helpful way of approaching these problems if your real goal is to solve them.

[1] An important question here, given the context, is doesn't this just help the rich get parking at the expense of poor people? Well, yes, it kind of does. On the other hand, if you can't find a spot, it doesn't help poor people much, except insomuch as poor people may be willing to spend a longer time trying to park (in which case, we're making them pay for it with their time, which doesn't seem good either). But more importantly, if we want to make things easier for poor people, we should give them money so that they can do what they want with it (including parking!). That's way better than making parking artificially cheap, because a) it's a lot more flexible from the poor person's perspective and b) it distorts the allocation of resources way less.

jgh2• 12 years ago

The parking ones won't last long if cities follow Santa Monica's lead:

http://latimesblogs.latimes.com/lanow/2012/05/smart-parking-...

edit: tl;dr the extra time gets wiped out when your car leaves the spot.

bronson• 12 years ago

Sure they will. The whole point is paying for an empty spot. Who cares if there's 20 minutes left on the meter?

icambron4• 12 years ago

As I understand it, the issue isn't the leftover meter money at all; it's just access to the spot. There are no meters (or there's a meter and it's trivially cheap) but there's a chronic shortage of parking spaces. So by occupying one, you claim it. That opens up the market for buying and selling spots, where the only good changing hands is the "right" to put a vehicle in a particular box of space.

silencio5• 12 years ago

inefficiently priced parking

This is not really relevant in the context of San Francisco. The city has been running a pilot program since 2010 to change meter pricing based on demand. Interested startups could have worked within this program and with SFMTA to help. All Monkey Parking et al. have been doing is screwing with this program which has been actively adjusting prices and rolling out to more areas.

http://sfpark.org/how-it-works/pricing/

icambron4• 12 years ago

I'll admit it's been a few years since I parked in SF. But I guess I don't understand how that program could be working but still give these guys a market. If the meters are setting the prices at market-clearing levels, then it would be prohibitively expensive to hold onto a spot you didn't need, and there'd be an equally priced spot available nearby anyway. I don't know if it's that the pricing doesn't work that well or the program isn't in enough areas yet or what, but it definitely sounds like the kind of solution that should squash these guys' business. I hope it does.

Patrick_Devine• 12 years ago

Completely agree. Hats off to the city as SFPark is absolutely brilliant.

Are people actually using these "jerkTech" services though? If you've got the SFPark app, why would you bother with Monkey Parking? I get the feeling that they're all enjoying the free hype/hate which is being doled out right now as it's probably steering more users their way.

Ultimately though there is no way any of these services will be viable. If you face a $300 fine for renting out your parking space (as is the case in SF) and Monkey Parking makes it easy for law enforcement to track you down with their app, not a lot of people are going to want to bother.

It's a similar thing for making restaurant reservations. If restaurants start getting hit with a ton of no shows to the point where they're losing money, it doesn't take long to figure out that it's listed and file a cease-and-desist order.

enraged_camel2• 12 years ago

>The parking ones are a bit different, in that they're taking advantage of inefficiently priced parking.

The reason parking is priced the way it is is because it is a public good. The only thing "efficient" pricing would do is give wealthy people a massive advantage over the consumption of that good. You might like to live in a world where only rich people can afford public parking - I don't.

That's exactly why the SF government is taking an issue with these startups: they skew the game in favor of those who have money. For the usage of private property, such as houses, this may not be a huge deal. But public parking by definition belongs to the public: everyone should have an equal chance at consuming it. Fairness trumps inefficiency.

gfodor6• 12 years ago

Even for public goods, there should be some way of fairly allocating them. The randomness of driving around looking for parking is not a good way in 2014. It would be nice if some subset of spots used an automated system where people paid with their time, where drivers could sit in a queue to be notified when a spot frees up, and the spot becomes reserved for a short period until they park in it. (You snooze, you lose.)

jl6• 12 years ago

I think the point re rich-vs-poor is that efficient pricing should be decoupled from wealth redistribution initiatives. An inefficient allocation of resources only has the side-effect of kind-of sort-of assisting the poor. The real solution is to efficiently allocate resources, and then separately take action to correct economic injustice.

icebraining8• 12 years ago

What about us, the people who take public transportation instead - definitively poorer on average than car drivers - and would rather breathe less fumes from cars driving around trying to find parking spots?

theforgottenone• 12 years ago

reservation bailing, like scalping can be solved through new business models: for reservation fraud, start by taking a creditcard and charge a 5$ reservation fee that is deducted from your bill. For scalping, there are a lot of various approaches that work.

bausson• 12 years ago

Saying that "It's easy to solve, so if the restaurants haven't yet, it's probably not a problem" is pretty bad as excuses go.

The point isn't that it can't be solved, the point is that if it need solving, it's probably a problem, and companies are supposed to solve problem, not to deport them from their paying customers to non-paying third-party.

aaron695• 12 years ago

How about stop the circle jerk.

They are parasitic, arguable, but so what if they are? People dislike that, so what?

What is the story here exactly? It seems to me it's just link bait with everyone agreeing they dislike these apps.

It's an article saying being rude is bad. I don't see why people think this article has value other than they get to throw in a me too.

And at the end of the day, I'd imaging most people here are also working for parasitic companies who just hide it a bit better. i.e. Advertising including SEO. This to me is more of a real story.

funkyy• 12 years ago

It seems that the part of young generation is extremely demanding. So demanding that they misunderstand "communal" with "my". I am part of generation that is happy to destroy public property just because they can. Generation that sells what is rightfully owned by all. Its sad that mentioned startups are more like vultures rather than tigers.

Good that someone finally publicly named those companies.

icebraining8• 12 years ago

Oh, please. Every generation had people selling common goods. The "tragedy of the commons" wasn't exactly coined last year.

The reason these companies are made of young people is because they're tech startups.

trysomething• 12 years ago

Frankly there is no need to keep beating the drum about these startups. This is at least the 4th article about the parking apps on HN's front page in the last couple weeks. It's also been on TV.

This is not not deeply interesting anymore, and as such I am flagging it. I hope others will do the same.

gfodor6• 12 years ago

I'm going to go out on a limb here and say that the reservation thing, while being a bit sketchy in that the guy uses a fake name, doesn't seem as abhorrent as people seem to be making it out to be. If the guy was printing money hand over fist like an evil villain that'd be one thing, but it sounds like a weekend hack. An experiment. You know, the type of thing we encourage here so as to learn something. He cancels the reservation if nobody buys it. He's focusing on restaurants where demand outstrips supply (by definition.) My guess is the net effect of this experiment is probably increased revenue for the restaurants involved. It would be interesting if he presented numbers.

It's an interesting experiment. Should it be literally turned into a business, as-is? No, because it requires a) lying on the phone and b) leaves the possibility open that restaurants are going to leave money on the table, so beyond being unethical you probably don't want to make enemies of the people who are providing the service your customers are paying for. It's not viable, and it's both dumb and unethical to form a serious venture around as-is. But let's admit it, he's found something interesting that perhaps with some tweaks could be turned into something disruptive. In the startups I've worked stuff we ran small stuff like this all the time: things that we'd never try to scale since we were breaking the rules a bit, but we were trying to learn something and knew the way we were executing on it "in the small" did not cause any real harm.

But if we are going to just hang people out to dry immediately for releasing small experiments to test gaps in the market or test boundaries, then we've lost what it means to be a hacker. I don't like the idea that my entire reputation can be ruined if I launch a weekend hack that ends up on valleywag and starts a hate train fueled by wider hatred around the tech industry. Part of the reason startups work is because you can bend the rules a bit while you are small and under the radar while you look around at the edges for the opportunity for a real business you can stand behind. But with Twitter and the tech press even single individuals no longer seem to be able to stay off the radar if their experiment will drive clicks from angry readers and re-enforce their stereotypes about the tech scene.

ipsin• 12 years ago

Drivers selling parking spaces in San Francisco are potentially open to fines of $300 according to the city attorney.

It seems very polite that they're going after sites like Monkey Parking instead of simply reserving spots for $5 or $10 and then busting the sellers at $300 a pop.

I suppose that in that case, Monkey Parking would just become a component in an entirely different sort of ecology.

ynniv• 12 years ago

Regulate or save your breath. Jerks don't care whether people think that they're jerks or not.

Ihaveagreatapp• 12 years ago

Early squatting on parking spots - like when a company is early to offer people social networking or online video, and they can then charge people endlessly based on their proprietary spot for activities that should remain free - public domain video and human interaction? Yeah, the parking guys are the only exploitative, piggybacking guys around on the web.

neurobro2• 12 years ago

There is certainly a high level of jerkiness in making fake reservations, but I think it's overblown in the article. If a restaurant is exclusive and popular enough to require reservations, and people are willing to pay $5-10 for a reservation, why don't they just charge $5-10 for reservations themselves, or require a small membership fee to make reservations, or start rejecting customers who can't prove they are the "Dick Jerkson" who made the reservation, etc? (That last one would only need to be a temporary measure, as most people are going to ditch the app after being turned away once or twice.)

neilk• 12 years ago

I don't understand your logic. Just because countermeasures could exist, it doesn't mean that the original offenders aren't so bad. Nor does that place any new responsibilities on the restaurant, to piss off their customers who by now might have been going to the same restaurants for decades, with the informal system.

Furthermore, an ID check isn't as painless and easy to implement as you say. Often, other guests arrive before the person who made the reservation. Public figures make reservations under assumed names. And the name on someone's ID may not match the name they typically use (read patio11's brilliant piece http://www.kalzumeus.com/2010/06/17/falsehoods-programmers-b...).

And then there's just the offensiveness of requiring people to carry ID in the first place.

neurobro2• 12 years ago

I'm not saying the app is less bad because countermeasures exist, only that the app is not as bad as the article makes it out to be, and countermeasures exist. Restaurants constantly have to adapt to changing conditions, which is how they end up with reservation policies in the first place.

The point of the ID suggestion (which was only one idea) would be to somehow identify users of the app, let them travel all the way to the restaurant with their date or client, and reject their reservation. This will kill the app faster than begging the developer to be less of a jerk.

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