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Anil Dash's article discusses how the internet has enabled and encouraged the formation of what he calls "Fake Markets." These Fake Markets have the appearance of a more ordinary free market, but the choices allowed therein are either illusory or can be arbitrarily shuffled or removed without knowledge of any of the parties to the transaction. He traces the changes in business plans of companies such as Uber, Google, and eBay to show how they have evolved from creating new markets to strangling them.
But unlike competitive sellers on eBay, Uber drivers can't set their prices. In fact, prices can be (and regularly have been) changed unilaterally by Uber. And passengers can't make informed choices about selecting a driver: The algorithm by which a passenger and driver are matched is opaque—to both the passenger and driver. In fact, as Data & Society's research has shown, Uber has at times deliberately misrepresented the market of available cars by showing "ghost" cars to users in the Uber app.
It seems this "market" has some awfully weird traits.
- Consumers can't trust the information they're being provided to make a purchasing decision.
- A single opaque algorithm defines which buyers are matched with which sellers.
- Sellers have no control over their own pricing or profit margins.
- Regulators see the genuine short-term consumer benefit but don't realize the long-term harms that can arise.
This is, by any reasonable definition, no market at all. One might even call Uber a "Fake Market". Yet, by carefully describing drivers in their system as "entrepreneurs" and appropriating the language of true markets, Uber has been welcomed by communities and policymakers as if they were creating a new marketplace. That has serious implications for policy, regulation and even civil rights. For example, we can sincerely laud Uber for making it easier for African American passengers to reliably hail a car when they need a ride, but if persistent patterns of bias from drivers arise again in the Uber era, we'll have a harder time regulating those abuses because Uber doesn't usually follow the same policies as licensed taxis.
(Score: 3, Interesting) by Runaway1956 on Monday February 27 2017, @04:53PM (2 children)
When I was a little kid, late night television was populated by advertisements for junk that nobody needed. "For just 19.99, you can get NOT ONE, but TWO blabbityblabs, and if you act IMMEDIATELY, we'll throw in a third one FREE! That's right, for the outrageous price of 19.99, you get TWO ZILLION DOLLARS WORTH OF BLABBITYBLABS!"
Then came the infomercials. 30, or even 60 minutes of overly buxom women showing off some kind of goods in an overly enthusiastic manner. Mostly worthless, or near worthless, and always overpriced.
Later came the sales channels. More of the same, as near as I could tell. More junk that nobody ever needed or wanted, advertised at unbelievable prices, and you can only get it through this channel.
So, now we have the internet. More fake advertising for bullshit goods.
But wait - all of this is being compared to some illusory "free marked"? Where, exactly, does the "free market" exist? If nothing else, the free market was quashed when insurance companies began dictating what all businesses are permitted to do. Add in the fact that no business can even DO business without insurance, and the entire market is fokked. Regulatory agencies for regulations on companies, some of which make sense, while others are bogus bullshit. (EPA for example, seems to be about 60 to 70% good sense, and most of the remainder is bogus.) All the while, these businesses, small and large, have to compete with foreign based operations, that have no regulation, no worker protection, no unions, nothing.
There ain't no free market with which to compare these fake markets.
(Score: 1) by khallow on Monday February 27 2017, @05:47PM (1 child)
We've always had fake markets
Another example is retail trading stamps [wikipedia.org] which have been kicking around since 1891.
(Score: 3, Interesting) by Runaway1956 on Monday February 27 2017, @06:00PM
Agreed with the fake market in trading stamps. Our local grocer has a bit of a twist on those, though. You get a stamp for every ten dollars spent, you fill up a single paper page with the stamps, bring the page in, and use the stamps as cash for your purchase. They actually make a little sense, in that, you're coming there with a specific goal in mind, and those stamps actually go toward that goal. From his point of view, the stamps help to encourage repeat customers. All in all, it's still "fake" in a way. He had to raise his prices some miniscule amount to cover the cost of the stamps. But, the stamps defray that additional cost, from the customer's point of view.
I guess if you're going to do trading stamps, then this is the way to do it.
I've noticed that WalMart doesn't offer stamps. They cut costs at every opportunity, and they know that the stamps cost.