Amazon documents reveal company’s strategy to dodge India’s regulators(reuters.com)
reuters.com
Amazon documents reveal company’s strategy to dodge India’s regulators
https://www.reuters.com/investigates/special-report/amazon-india-operation/
79 comments
> Uber broke the back of your local city's taxi medallion scheme.
Posted it in an other thread [0] but do we really want to go back to the medallion system? Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid).
The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.
And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
[0] https://news.ycombinator.com/item?id=24225648
Posted it in an other thread [0] but do we really want to go back to the medallion system? Pre-Uber, either the driver rented the car to a middleman who rented the medallion from a rich owner, or said owner was selling and financing (most banks won't touch these medallions!) a medallion at a ridiculous interest rate to a driver that planned to use it as his retirement savings (an extremely volatile asset and not very liquid).
The more I spoke to cab drivers the more it seemed their industry was a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air: Someone could simply buy a car, calculate the depreciation and it's value on the market (since unlike medallions cars are relatively liquid assets!) do rideshare and calculate their profits or loss. They can get out of the game at anytime, and they know exactly how much they are going to get for the car they have should they sell it.
And I'm not even touching the usual pain points and often discriminatory practices of medallion drivers (refusing card payments, refusing rides to non-white passengers and to non-white neighborhoods...).
[0] https://news.ycombinator.com/item?id=24225648
Uber is just a different rent seeker, though. Over time the situation will likely just keep getting worse until it is as bad as the system it is replacing (many things about the ride-sharing ecosystem are already not great...)
While it's always nice to see a broken rent-seeking system in our world become eroded we should not laude the transfer to another fiat regency.
While it's always nice to see a broken rent-seeking system in our world become eroded we should not laude the transfer to another fiat regency.
Rent-seeking means, roughly, trying to extract wealth without creating any wealth.
Creating and maintaining software that connects a person with a device to a driver with a device and routes them from point A (driver) => A' (person) => B (destination) isn't some trivial nothing that you can just rent-seek into existence. I believe 'wealth' was added to the economy that did not previously exist when people had to deal with hailing cab drivers, not have a map of their route, and not know an approximation of their fare ahead of time.
Creating and maintaining software that connects a person with a device to a driver with a device and routes them from point A (driver) => A' (person) => B (destination) isn't some trivial nothing that you can just rent-seek into existence. I believe 'wealth' was added to the economy that did not previously exist when people had to deal with hailing cab drivers, not have a map of their route, and not know an approximation of their fare ahead of time.
And payment processing.
Remember the sign on cabs that said they accept all major cards, only to find out the "card reader doesn't work?".
Remember the sign on cabs that said they accept all major cards, only to find out the "card reader doesn't work?".
>Remember the sign on cabs that said they accept all major cards, only to find out the "card reader doesn't work?".
Do I?! It's still commonplace! I have lost every ounce of sympathy I ever held for taxi drivers.
Do I?! It's still commonplace! I have lost every ounce of sympathy I ever held for taxi drivers.
Even if we accept that claim, at least Uber has to compete with other VTC apps, which limits its rent-extracting capacity.
Uber and Lyft reworked the medallion system into mobile apps.
Instead of a physical medallion bolted on the car, it's a verified driver ID and rating in Uber/Lyft app.
Uber/Lyft are now collecting what the medallion owners were collecting previously from the drivers.
The apps are more convenient for riders and there are more efficiencies in the routes. But, it's still the same system. Meet the new boss, same as the old boss.
Instead of a physical medallion bolted on the car, it's a verified driver ID and rating in Uber/Lyft app.
Uber/Lyft are now collecting what the medallion owners were collecting previously from the drivers.
The apps are more convenient for riders and there are more efficiencies in the routes. But, it's still the same system. Meet the new boss, same as the old boss.
that not a good analogy or apt at all. The medallion system was basically a local monopoly or like a guild that only allowed themselves to say make candles in the city. It really didn't make any sense whether with uber or not why the cities should be restricting or handing out the medallions in the first place.
Sure perhaps there could have been a national taxi license like how truck drivers receive it if one is talking about safety and other regulations but per city never made any sense beyond rent-seeking by both the city and the taxi companies
Sure perhaps there could have been a national taxi license like how truck drivers receive it if one is talking about safety and other regulations but per city never made any sense beyond rent-seeking by both the city and the taxi companies
Sounds like the old system was pretty bad, but also sounds like you're looking at Uber through extremely rose-tinted lenses.
> a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air
In what way is Uber not a rent-seeker taking advantage of often poor new immigrants?
The fact that the old system was so poor just lowers our standards for anything that may seek to replace it, but that's no reason to throw all critical thinking out the window.
--
Europe is a really good example to look at. Uber entered the market in most (all) European countries, but they simply couldn't compete with what already existed. (speaking only of Uber taxis; Uber Eats is doing fine in Europe)
> a pyramid scheme aimed at helping established rent-seeker take advantage of often poor new immigrants. Uber brought a breeze of fresh air
In what way is Uber not a rent-seeker taking advantage of often poor new immigrants?
The fact that the old system was so poor just lowers our standards for anything that may seek to replace it, but that's no reason to throw all critical thinking out the window.
--
Europe is a really good example to look at. Uber entered the market in most (all) European countries, but they simply couldn't compete with what already existed. (speaking only of Uber taxis; Uber Eats is doing fine in Europe)
> In what way is Uber not a rent-seeker taking advantage of often poor new immigrants?
Doesn't trap them.
Used cars are a liquid market (with a lot of transactions) with well established pricing. It's easy to buy and sell at the blue book's price and get cheap financing. This makes it easy to get into Ubering and out of it, as at any point you know exactly how much money the car is still worth.
Compare that to a taxi medallion, often financed through "alternate means" (no banks will touch them), completely opaque pricing (there's no market place, transactions are often done privately) and at the mercy of regulators (tomorrow the city council might create 10x the current amount of medallions out of thin air, thus crushing the price of existing ones).
Doesn't trap them.
Used cars are a liquid market (with a lot of transactions) with well established pricing. It's easy to buy and sell at the blue book's price and get cheap financing. This makes it easy to get into Ubering and out of it, as at any point you know exactly how much money the car is still worth.
Compare that to a taxi medallion, often financed through "alternate means" (no banks will touch them), completely opaque pricing (there's no market place, transactions are often done privately) and at the mercy of regulators (tomorrow the city council might create 10x the current amount of medallions out of thin air, thus crushing the price of existing ones).
If it's so cheap and easy to enter and exit, why is Uber also in the (predatory) leasing game?
I'm not saying the old system was any better, I'm just saying that the winners of the tech industry were decided not just by what we traditionally think of as "disruption" (building a better mouse-trap) but also political disruption (finding a way to avoid traditional liabilities).
Uber in particular is interesting, as it's a vastly superior service built by somehow even more morally deficient individuals.
Uber in particular is interesting, as it's a vastly superior service built by somehow even more morally deficient individuals.
>defamation lawsuits
>copyright
>local city's taxi medallion scheme
Arguably the three areas of law where special protections & privilleges got expended so far, repeatedly and over decades, as to create ample opportunity for easy arbitration. Especially in case of copyright and taxi medallions, mafia-like structures were created through very one-sided markets; the only distinction from mafia being that those were gradually introduced through layers upon layers of legislation.
The fault, if any, lays with the legislators. The tangible result of tech businesses is cheaper music for the consumers and cheaper transportation for the consumers.
>special protections for local businesses online
Good luck with that./s France also tried similar legislation, targeted specifically at extracting more tax revenue from Amazon under the guise of "protecting local bookstores". That's neither moral nor productive.
>copyright
>local city's taxi medallion scheme
Arguably the three areas of law where special protections & privilleges got expended so far, repeatedly and over decades, as to create ample opportunity for easy arbitration. Especially in case of copyright and taxi medallions, mafia-like structures were created through very one-sided markets; the only distinction from mafia being that those were gradually introduced through layers upon layers of legislation.
The fault, if any, lays with the legislators. The tangible result of tech businesses is cheaper music for the consumers and cheaper transportation for the consumers.
>special protections for local businesses online
Good luck with that./s France also tried similar legislation, targeted specifically at extracting more tax revenue from Amazon under the guise of "protecting local bookstores". That's neither moral nor productive.
More tax revenue ? Anything's more than 0.
So the 'cheating' isn't cheating, but simply lobbying to maintain power. None of the points you made are inherit to illegal or even immortal acts, rather it's an issue of regulators and politicians not update all of the existing laws to account for the internet.
- Facebook doesn't have to deal with defamation lawsuits because they're not the ones making those defaming claims - it's the users posting them. With the scale of the world it literally isn't possible to have an anyone-can-post site that has to screen what its users write for legally risky text. That's bad for commerce and why section 230 exists.
- Google doesn't have to worry about copyright because businesses love to be able to take down content ID-detected content without involving legal resources.
- Amazon built its business on evading sales tax because sales tax didn't affect internet businesses for some reason. Governments had years to change their laws and impose it on them.
- Facebook doesn't have to deal with defamation lawsuits because they're not the ones making those defaming claims - it's the users posting them. With the scale of the world it literally isn't possible to have an anyone-can-post site that has to screen what its users write for legally risky text. That's bad for commerce and why section 230 exists.
- Google doesn't have to worry about copyright because businesses love to be able to take down content ID-detected content without involving legal resources.
- Amazon built its business on evading sales tax because sales tax didn't affect internet businesses for some reason. Governments had years to change their laws and impose it on them.
This isn't a webtech thing. Look at Superfund as one of many examples of the conventional wisdom that business winnby cheating. Most theft in USA is wage theft by employers. Corporations are constantly getting caught breaking the law and not getting punished, defrauding customers or polluting the environment. Sports stadiums being built my governments and given away to corporations.
"Most theft in USA is wage theft by employers"
This is something I hear repeated ad infinitum on the net, but has a calculation ever been done the other way? That is, workers stealing from employers by deliberately clocking out early/late, or by goofing off on HN while on the clock. I would hazard a guess that this number is an order of magnitude greater than seedy business owners short changing their staff.
This is something I hear repeated ad infinitum on the net, but has a calculation ever been done the other way? That is, workers stealing from employers by deliberately clocking out early/late, or by goofing off on HN while on the clock. I would hazard a guess that this number is an order of magnitude greater than seedy business owners short changing their staff.
Yes, calculations have been done. Search for "wage theft" and there is bunch of research about this. The US is not alone in this and it's also not a new problem, it's been like this for a while now.
Here's a good starting point: https://www.epi.org/publication/epidemic-wage-theft-costing-...
> If these findings in New York, Chicago, and Los Angeles are generalizable to the rest of the U.S. low-wage workforce of 30 million, wage theft is costing workers more than $50 billion a year.
> All of the robberies, burglaries, larcenies, and motor vehicle thefts in the nation cost their victims less than $14 billion in 2012, according to the FBI’s Uniform Crime Reports
> in the United States in 2012, there were 292,074 robberies of all kinds, including bank robberies, residential robberies, convenience store and gas station robberies, and street robberies.3 The total value of the property taken in those crimes was $340,850,358
Worth noting that that report is from 2012. Things are surely worse now.
Edit: Sorry, I misunderstood what you meant. I'm not sure if there is any research around employees slacking off on work time. If there is, it's probably conducted by companies themselves and therefore private.
Here's a good starting point: https://www.epi.org/publication/epidemic-wage-theft-costing-...
> If these findings in New York, Chicago, and Los Angeles are generalizable to the rest of the U.S. low-wage workforce of 30 million, wage theft is costing workers more than $50 billion a year.
> All of the robberies, burglaries, larcenies, and motor vehicle thefts in the nation cost their victims less than $14 billion in 2012, according to the FBI’s Uniform Crime Reports
> in the United States in 2012, there were 292,074 robberies of all kinds, including bank robberies, residential robberies, convenience store and gas station robberies, and street robberies.3 The total value of the property taken in those crimes was $340,850,358
Worth noting that that report is from 2012. Things are surely worse now.
Edit: Sorry, I misunderstood what you meant. I'm not sure if there is any research around employees slacking off on work time. If there is, it's probably conducted by companies themselves and therefore private.
> but has a calculation ever been done the other way?
The usual answer to something that is both an obvious question and clearly impactful is "yes, extensively". Which is separate from the question of how well the research has been done of course (in either direction).
> I would hazard a guess that this number is an order of magnitude greater than seedy business owners short changing their staff.
What broad data are you basing this on? I suspect this is one of those areas where (nearly) any one persons individual experience is basically useless, because of the inherent lack of breadth. Exceptions made for extremely unusual life/career paths that lead to better sampling by accident.
The usual answer to something that is both an obvious question and clearly impactful is "yes, extensively". Which is separate from the question of how well the research has been done of course (in either direction).
> I would hazard a guess that this number is an order of magnitude greater than seedy business owners short changing their staff.
What broad data are you basing this on? I suspect this is one of those areas where (nearly) any one persons individual experience is basically useless, because of the inherent lack of breadth. Exceptions made for extremely unusual life/career paths that lead to better sampling by accident.
Well there doesn't seem to be much data, hence my original comment. My assumptions are based primarily on my own anecdotal observation. I work a relatively low wage job with a lot of relatively low wage coworkers. Most of them make a deliberate effort every day to do as little work as possible, to the point that it occurred to me that they might be engaging in more effort than if they just did their jobs anyway.
I'm not minimizing wage theft. It's a real issue. I'm just casting some doubt on the claim that it's the biggest form of theft by bringing light to a viewpoint most people haven't even ever considered.
I'm not minimizing wage theft. It's a real issue. I'm just casting some doubt on the claim that it's the biggest form of theft by bringing light to a viewpoint most people haven't even ever considered.
> I work a relatively low wage job with a lot of relatively low wage coworkers. Most of them make a deliberate effort every day to do as little work as possible, to the point that it occurred to me that they might be engaging in more effort than if they just did their jobs anyway.
Do you work in a state government's IT department?
Do you work in a state government's IT department?
> bringing light to a viewpoint most people haven't even ever considered.
Why do you think this statement is true?
Why do you think this statement is true?
I mean there isn't even any research on it. No one talks about it. I've never heard or read anyone make the point aside from myself. What set of criterion do you regard as sufficient to deem some fact under-appreciated?
> I mean there isn't even any research on it. No one talks about it.
Neither of these statements can be true, as I've seen multiple examples of both. For what it's worth, one of the search terms you are looking for is "time theft" (as opposed to "wage theft"), the literature on this is also well developed as you might expect. And of course there are various types of related fraud (both in favor of employer and employee) which have been studied.
> I've never heard or read anyone make the point aside from myself.
This is plausible, but doesn't tell us much about anything but your own exposure.
Neither of these statements can be true, as I've seen multiple examples of both. For what it's worth, one of the search terms you are looking for is "time theft" (as opposed to "wage theft"), the literature on this is also well developed as you might expect. And of course there are various types of related fraud (both in favor of employer and employee) which have been studied.
> I've never heard or read anyone make the point aside from myself.
This is plausible, but doesn't tell us much about anything but your own exposure.
So if you take some studies on time theft, it looks like it amounts to $400 billion annually, which is far and away in excess of the figure that the original poster said was the largest type of theft. This proves my original point.
Maybe. There are lots of different figures and methodological issues. If a dig a bit more you’ll find it’s clear as mud.
Regardless , that wasn’t my point - far from being a novel idea there are lots of people looking at and arguing about it. Hell there is an industry around mitigations.
Regardless , that wasn’t my point - far from being a novel idea there are lots of people looking at and arguing about it. Hell there is an industry around mitigations.
Yeah, the guy mowing the lawn and getting dicked on overtime is totally goofing off on HN
It's easy to demonize groups you aren't a part of.
I make $15/hr
which group am I not a part of?
which group am I not a part of?
[deleted]
Spotted the guy who underpays their staff
> Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community.
> Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
> Please don't post shallow dismissals
https://news.ycombinator.com/newsguidelines.html
> Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
> Please don't post shallow dismissals
https://news.ycombinator.com/newsguidelines.html
Regulatory evasion and/or regulatory capture - I never thought about it being called evasion but it certainly fits: get big enough with a large amount of the population now depending/relying/using the service, and then it causes a problem for policy makers - who aren't skilled or knowledgable enough to understand the intricacies of the business models in order to safely adjust policy to benefit society, society more than the profits of the business anyhow - that business who is lobbying and manipulating regulators as well to get policy to fit their needs, and coining the narrative for the users who benefit from the lack of regulations as well (e.g. Airbnb hosts who side-step worrying or dealing about the externalities on society of rents going up further due to higher pressure and less supply).
On the flip side in India atleast they are competing against well known crony monopolists who own the govt. Nothing simple or obvious about the rules of that game.
As long as they are preoccupied with ruthlessly competing against each other things tend to head in positive directions for everyone. Its when they have no competition is when the the mindless ambition and ruthlessness causes the most damage.
As long as they are preoccupied with ruthlessly competing against each other things tend to head in positive directions for everyone. Its when they have no competition is when the the mindless ambition and ruthlessness causes the most damage.
Depending on which side of the bed I wake up on, I can lambast the US status quo as crony monopolists who own the government as well; yet I'm still nervous about the move "fast and break things" philosophy when it comes to real world markets, societies, and governments.
> I'm starting to think the reason why tech companies are so well-valued is purely due to regulatory evasion skills and a dash of political engineering.
And how exactly is that a bad thing?
You assume regulations are good, but as a customer this is incredibly short sighted.
> Facebook doesn't have to worry about defamation lawsuits. Google doesn't have to worry (as much) about copyright. Amazon built it's business on evading sales tax. Uber broke the back of your local city's taxi medallion scheme. And so on and so forth
So are you sad that you can use freedom of speech without fear of defamation lawsuits, read newspapers on google news without paying, have cheaper goods thanks to businesses forgetting to collect taxes, and better quality cabs that will come to you immediately?
> they know how to bend governments to their will.
That's one of the best points about tech :)
And how exactly is that a bad thing?
You assume regulations are good, but as a customer this is incredibly short sighted.
> Facebook doesn't have to worry about defamation lawsuits. Google doesn't have to worry (as much) about copyright. Amazon built it's business on evading sales tax. Uber broke the back of your local city's taxi medallion scheme. And so on and so forth
So are you sad that you can use freedom of speech without fear of defamation lawsuits, read newspapers on google news without paying, have cheaper goods thanks to businesses forgetting to collect taxes, and better quality cabs that will come to you immediately?
> they know how to bend governments to their will.
That's one of the best points about tech :)
> regulatory evasion skills
You will be surprised to know that from your corner store florist to Walmart and from Bank of America to your child's babysitter everyone is obstructed by regulators of all kinds and to some or large extent all businesses are successful because they have learned how to evade government regulation. I remember a lecture by Aetna CEO who said the only competitive advantage they have over competitors is that they have far better handle on the regulation.
If I were Amazon, I would do the same and as an Indian citizen I am greatly happy to see Amazon going so out of the way to help me get what I want.
> People in tech are being paid massively not because they're postdocs with good credentials and amazing skills, but because they know how to bend governments to their will.
It is other way around. The regulators in DC are confused as to how they will regulate the tech. They simply can not as the people are hooked to Instagram and Snapchat. If you give a free hand to DC people they would want every internet user to have a "internet license" and their search history be made available to every possible alphabet soup of government agency.
You will be surprised to know that from your corner store florist to Walmart and from Bank of America to your child's babysitter everyone is obstructed by regulators of all kinds and to some or large extent all businesses are successful because they have learned how to evade government regulation. I remember a lecture by Aetna CEO who said the only competitive advantage they have over competitors is that they have far better handle on the regulation.
If I were Amazon, I would do the same and as an Indian citizen I am greatly happy to see Amazon going so out of the way to help me get what I want.
> People in tech are being paid massively not because they're postdocs with good credentials and amazing skills, but because they know how to bend governments to their will.
It is other way around. The regulators in DC are confused as to how they will regulate the tech. They simply can not as the people are hooked to Instagram and Snapchat. If you give a free hand to DC people they would want every internet user to have a "internet license" and their search history be made available to every possible alphabet soup of government agency.
Somalia must be so nice without all these regulations. A godsend for all these business!
At least locally, breaking the taxi medallion cartel was a godsend if you lived in a poorer part of time / needed to get places on a weekend.
There had to have been some deals on backend to keep things the way they were - insane shortages of vehicles on weekends and no service to minority areas - with Uber you can get dropped and picked up most places I've found even dicey ones.
There had to have been some deals on backend to keep things the way they were - insane shortages of vehicles on weekends and no service to minority areas - with Uber you can get dropped and picked up most places I've found even dicey ones.
FB - Congress passed a law (before FB existed) exempting all companies that post user generated content. You may not like this law, but FB is not "evading" anything, and it is not a competitive advantage because section 230 applies to all companies in the industry.
Google - How does Google not have to worry about copyright? What exactly is their evasive behavior here?
Amazon - Until the rules changed in 2018, Amazon was following the same tax treatment that existed for mail order catalog sales decades prior to Amazon's existence. These same rules applied to other online retailers as well. They are not "evading" anything. https://www.nbcnews.com/politics/supreme-court/supreme-court...
Uber - OK you have a point here. I'm glad they did it, but that doesn't change the fact that they did evade regulations.
Google - How does Google not have to worry about copyright? What exactly is their evasive behavior here?
Amazon - Until the rules changed in 2018, Amazon was following the same tax treatment that existed for mail order catalog sales decades prior to Amazon's existence. These same rules applied to other online retailers as well. They are not "evading" anything. https://www.nbcnews.com/politics/supreme-court/supreme-court...
Uber - OK you have a point here. I'm glad they did it, but that doesn't change the fact that they did evade regulations.
This article looks at data without understanding the reason behind it.
Many educated Indians choose to buy from these 33 Amazon owned / equity linked sellers because of the experience they offer - odds of receiving wrong/damaged product is low, and in case where that happens the return / replacement process is hassle free.
Amazon has brought price discovery to many product categories in India. For expensive products I check Amazon's ClouldTail / Appario seller's price before making a purchase from even local vendors, keep that as a reference and negotiate.
Eg: Every computer component, laptop has a ridicules MRP (Maximum Retail Price) in India. A RAM module sold at INR 5500 has an MRP of INR 20,500.
The sad part is even companies like AMD collude with distributors in cheating end customers.
Instead of fixing problems which makes citizens flock to few sellers at Amazon every Indian government irrespective of political party chooses to appease the voting block of traders union - who are nothing but middle men making prices expensive to the end consumer.
A country grows when builders and innovators contribute to the economy, not leeches who don't even understand what they are selling. Everyday I lose a little hope of India ever becoming a developed country, we have our priorities backwards.
Many educated Indians choose to buy from these 33 Amazon owned / equity linked sellers because of the experience they offer - odds of receiving wrong/damaged product is low, and in case where that happens the return / replacement process is hassle free.
Amazon has brought price discovery to many product categories in India. For expensive products I check Amazon's ClouldTail / Appario seller's price before making a purchase from even local vendors, keep that as a reference and negotiate.
Eg: Every computer component, laptop has a ridicules MRP (Maximum Retail Price) in India. A RAM module sold at INR 5500 has an MRP of INR 20,500.
The sad part is even companies like AMD collude with distributors in cheating end customers.
Instead of fixing problems which makes citizens flock to few sellers at Amazon every Indian government irrespective of political party chooses to appease the voting block of traders union - who are nothing but middle men making prices expensive to the end consumer.
A country grows when builders and innovators contribute to the economy, not leeches who don't even understand what they are selling. Everyday I lose a little hope of India ever becoming a developed country, we have our priorities backwards.
[deleted]
I unerstood your frustration. But can bribe be fair based on it’s potential to offer better experience — just for educated people ?
The poor get swindled most by retailers. Small and large retailers bribe too, but with cartels, vote bank politics and threats of violence.
Should the end customer eternally pay for these middle men because they bribe politicians and use emotional language to hide their willful incompetence ?
Retail sells 10x Amazon yet refuse to organize or make use of efficiencies of scale.
India is a poor country yet pay more than many developed countries for the same products because of dumb short term policies and protectionism. Creative destruction is important.
Should the end customer eternally pay for these middle men because they bribe politicians and use emotional language to hide their willful incompetence ?
Retail sells 10x Amazon yet refuse to organize or make use of efficiencies of scale.
India is a poor country yet pay more than many developed countries for the same products because of dumb short term policies and protectionism. Creative destruction is important.
Yet more evidence to be used in the eventual US anti-trust case demonstrating a pattern of anti-competitive behavior. Prefering big sellers and lying about it is not "customer centric" in any market. Actions like this are going to eventually crush the stock value. When that happens senior employees will cash out and retail will be sold off to the highest bidding hedge fund. AWS is the money maker anyway and that will be protected at all costs.
>Yet more evidence to be used in the eventual US anti-trust case demonstrating a pattern of anti-competitive behavior
Little chance. Bezos has purchased his way into the class of decision makers in this country through acquisitions of media and integrating into the military industrial complex (in numerous ways). Amazon embodies the privatization of a centralized economy more than anything else. Needless to say: this is not good.
Little chance. Bezos has purchased his way into the class of decision makers in this country through acquisitions of media and integrating into the military industrial complex (in numerous ways). Amazon embodies the privatization of a centralized economy more than anything else. Needless to say: this is not good.
They should be careful not to cross into Icarus territory.
It disturbs me that with each day, it seems like the Great Chinese Firewall was a good solution.
You keep out the foreign competition letting internal competition foster and you stop a capital drain.
Imagine if the EU had it’s own Alibaba, Baidu or WeChat... That is a lot of taxpaying money...
You keep out the foreign competition letting internal competition foster and you stop a capital drain.
Imagine if the EU had it’s own Alibaba, Baidu or WeChat... That is a lot of taxpaying money...
Setting up economic protectionism props up the local industry, which usually results in consumers paying more for lower quality products.
If done well, protectionism can get a local industry started, and be relaxed over time as the local industry starts to become competitive with global industry.
Done poorly, protectionism results in a local market that is a decade behind the state of the art (like Brazil's video game industry was)
If done well, protectionism can get a local industry started, and be relaxed over time as the local industry starts to become competitive with global industry.
Done poorly, protectionism results in a local market that is a decade behind the state of the art (like Brazil's video game industry was)
This article focuses on Amazon, but the Indian native company Flipkart is facing the same challenges. As the article hints at, these regulations are set up specifically to prevent internal competition; the Indian government wants to protect traditional retail networks against competition from online stores.
> the Indian government wants to protect traditional retail networks against competition from online stores.
Nope, the government wants to protect Jio from global competition.
Nope, the government wants to protect Jio from global competition.
The regulation will also benefit other smaller players, no? For example, Tata Cliq, Snapdeal.
I wonder about this. China has its own app ecosystem, as does Russia. India is pushing towards having its own as well. What about Europe? Is it harder because you have to localize to so many languages?
It's not localization that's stopping European companies from taking over the entire EU market, it's competition from other companies.
If a French company wants to expand into the Spanish market, they can localize their app all they want; if their prospective customers in Spain are already using a different app that works just as well, they're going to have a hard time convincing them to switch.
The same dynamic also applies within countries, where two interchangeable apps might dominate in different areas or demographics of the same country, without either able to gain significant market share from the other, but it's a bit rarer because of network effects, where people start using an app because they know someone else using it and the app with the most users grows the fastest, eclipsing the competition.
Cross-border network effects in Europe are much weaker than within countries, and not much stronger than between European and non-European countries, so if a company manages to dominate their niche across all of Europe, they'll probably also win in much of the rest of the world.
If a French company wants to expand into the Spanish market, they can localize their app all they want; if their prospective customers in Spain are already using a different app that works just as well, they're going to have a hard time convincing them to switch.
The same dynamic also applies within countries, where two interchangeable apps might dominate in different areas or demographics of the same country, without either able to gain significant market share from the other, but it's a bit rarer because of network effects, where people start using an app because they know someone else using it and the app with the most users grows the fastest, eclipsing the competition.
Cross-border network effects in Europe are much weaker than within countries, and not much stronger than between European and non-European countries, so if a company manages to dominate their niche across all of Europe, they'll probably also win in much of the rest of the world.
>It's not localization that's stopping European companies from taking over the entire EU market
It very much is about localization - both language and to some extent also culture. Both are notable problems with b2c, and there are no "good enough" automated solutions.
My point of reference is the success of Polish domestic "Allegro" ecommerce platform, which was able to out-fox EBay, and later on Amazon, and still maintains dominant position on the local market. There were no significant technological advantages, nor any notable political connections. The platform won purely on being local.
In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic. And while it's possible to browse foreign offers, it's rather rare to do so - due to the language barrier.
It very much is about localization - both language and to some extent also culture. Both are notable problems with b2c, and there are no "good enough" automated solutions.
My point of reference is the success of Polish domestic "Allegro" ecommerce platform, which was able to out-fox EBay, and later on Amazon, and still maintains dominant position on the local market. There were no significant technological advantages, nor any notable political connections. The platform won purely on being local.
In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic. And while it's possible to browse foreign offers, it's rather rare to do so - due to the language barrier.
> My point of reference is the success of Polish domestic "Allegro" ecommerce platform, which was able to out-fox EBay, and later on Amazon, and still maintains dominant position on the local market.
Were eBay and Amazon unable to translate their websites into Polish quickly enough for some reason? I just checked https://ebay.pl and http://www.amazon.pl , the latter of which redirects to amazon.de with language set to pl_PL, but nonetheless appears fully translated into Polish.
> There were no significant technological advantages, nor any notable political connections. The platform won purely on being local.
To be clear, I'm not saying that being local doesn't matter. What I'm saying is that localization (in the sense of translating and adapting the website to local preferences) is the least hurdle in becoming local. The much bigger hurdle is acquiring local customers who are already used to local services. Either you have an obviously superior product that local competitors can't match (unlikely for run-of-the-mill online stores) or you're fighting an uphill battle.
> In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic.
My guess is that there are Czechs and Ukrainians in Poland who got familiar with Allegro there and spread it via word of mouth. (I could not find a Czech or Ukrainian version of allegro.pl, so are they using the Polish site?) On the other hand there are likely many more Poles in Germany than Germans in Poland, so Poles would be more familiar with German services than Germans with Polish services. (Case in point: the redirect from amazon.pl to .de)
Were eBay and Amazon unable to translate their websites into Polish quickly enough for some reason? I just checked https://ebay.pl and http://www.amazon.pl , the latter of which redirects to amazon.de with language set to pl_PL, but nonetheless appears fully translated into Polish.
> There were no significant technological advantages, nor any notable political connections. The platform won purely on being local.
To be clear, I'm not saying that being local doesn't matter. What I'm saying is that localization (in the sense of translating and adapting the website to local preferences) is the least hurdle in becoming local. The much bigger hurdle is acquiring local customers who are already used to local services. Either you have an obviously superior product that local competitors can't match (unlikely for run-of-the-mill online stores) or you're fighting an uphill battle.
> In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic.
My guess is that there are Czechs and Ukrainians in Poland who got familiar with Allegro there and spread it via word of mouth. (I could not find a Czech or Ukrainian version of allegro.pl, so are they using the Polish site?) On the other hand there are likely many more Poles in Germany than Germans in Poland, so Poles would be more familiar with German services than Germans with Polish services. (Case in point: the redirect from amazon.pl to .de)
> If a French company wants to expand into the Spanish market, they can localize their app all they want; if their prospective customers in Spain are already using a different app that works just as well, they're going to have a hard time convincing them to switch.
Then acquire it.
Then acquire it.
Like Uber acquired Lyft? Most companies don't have the money to acquire all their competitors and neither are their competitors able to acquire them.
no that doesn't seem like the reason, India has more languages than Europe and Europe has mainly two writing systems Cyrillic and Latin while India has a lot more. If India can do it with such low resources, so can Europe.
In my opinion, China and Russia have their own ecosystems because of the language barrier and the physical firewall that their respective governments have put in. India is able to build its own eco system because it has got the fundamentals right, it probably is the only country which broke the Master Card and Visa duopoly allowing local vendors to slash costs by a good margin. I already see a lot of Apps which might pose a threat to the likes of Google in the coming decade(if they are not bought over) but in the long run, I don't see India having a separate ecosystem, India and it's way of thinking is more like the west than it seems to be and it will eventually merge in with larger western ecosystem.
In my opinion, China and Russia have their own ecosystems because of the language barrier and the physical firewall that their respective governments have put in. India is able to build its own eco system because it has got the fundamentals right, it probably is the only country which broke the Master Card and Visa duopoly allowing local vendors to slash costs by a good margin. I already see a lot of Apps which might pose a threat to the likes of Google in the coming decade(if they are not bought over) but in the long run, I don't see India having a separate ecosystem, India and it's way of thinking is more like the west than it seems to be and it will eventually merge in with larger western ecosystem.
Actually English is the most common language across India. Majority of the app ecosystem in India is English only.
In Europe, majority of people can't read English at all. I mean atleast people from Germany, Spain, Italy and France.
In Europe, majority of people can't read English at all. I mean atleast people from Germany, Spain, Italy and France.
Yes the EU single market works well for goods, but not so much for services. Not just languages, there are significant law differences as well.
That, and the inter-cultural differences are certainly a large stumbling block.
These EU giants wouldn't pay anymore taxes than the current tech giants do.
If Europe wants to compete, why not simply create an ecosystem where Europeans companies can succeed?
If Europe wants to compete, why not simply create an ecosystem where Europeans companies can succeed?
Every corporation seeks, ultimately, to dodge regulations, dominate the government and establish a monopoly.
And we let these beasts run around willy-nilly.
And we let these beasts run around willy-nilly.
Amazon being shady with government what's new. It's a monopoly and only care about itself.
There is absolutely no evidence that Amazon is a monopoly in India, Flipkart is their main competitor and e-commerce is one of the hottest markets in India we increasing competition from all sides. There is no evidence that Amazon will make any profits either from India for foreseeable future.
Indian people should ask why Indian government is creating laws that need "evasion", that too from a massively successful, well respected and very innovative company, Amazon wants to invest in India and India needs to change its laws if needed to welcome more investment and more competition.
Perhaps it is the indian government that is wrong here?
Indian people should ask why Indian government is creating laws that need "evasion", that too from a massively successful, well respected and very innovative company, Amazon wants to invest in India and India needs to change its laws if needed to welcome more investment and more competition.
Perhaps it is the indian government that is wrong here?
But the question remains unanswered, is this behavior we should expect or reward when it is one of the world's largest and most influential actors?
I am not sure why Amazon should care about anyone other than itself. To make profits though they have to serve an ordinary blok like me.
we all know what happens when companies sacrifice everything for profit - not good!
None of that makes sense to me. Which company out there is not working for a profit ? Which company has to "sacrifice" anything for profits ?
Amazon is working hard to get things to our doorstep for real low prices, is that a sacrifice ?
Amazon is working hard to get things to our doorstep for real low prices, is that a sacrifice ?
Anyone who has purchased an electronic or smaller household appliance on Amazon.in would know Cloudtail made up a significant portion of over all sales.
The Govt didn’t needed a multi year report to know it wasn’t small sellers making most sales. Some in position of power benefited.
Side note, Even with Walmart’s purchase of Flipkart a couple years ago, Amazon.in always seems to be cheaper. Also there is huge gap in reviews and review quality between the sites. Walmart still playing catch up 3 years later
The Govt didn’t needed a multi year report to know it wasn’t small sellers making most sales. Some in position of power benefited.
Side note, Even with Walmart’s purchase of Flipkart a couple years ago, Amazon.in always seems to be cheaper. Also there is huge gap in reviews and review quality between the sites. Walmart still playing catch up 3 years later
Amazon's initial business advantage was avoiding state/local sales taxes.
Most of tech valuation advances are about avoiding/bypassing regulations and taxation. They simply call it innovation and efficiency.
Most of tech valuation advances are about avoiding/bypassing regulations and taxation. They simply call it innovation and efficiency.
Ooh this is going to ruffle some feathers in the Indian Traders lobby. Although more regulation here is almost certainly going to be bad for consumers.
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Here's the thing: the market really does not give two shits about "smarts". You can engineer the best mousetrap in the world and get it into everyone's homes, but the market won't care about the company that makes them... as much as they will care about a company that's found a way to break the rules. That's what they really want. People in tech are being paid massively not because they're postdocs with good credentials and amazing skills, but because they know how to bend governments to their will.