Jacob Torrey on Nostr: It's strange how prevalent #enshittification has become, and how it warps the ...
It's strange how prevalent #enshittification has become, and how it warps the "standard" economic theories we all learned.
I think the two that stand out the most are:
- Economies of scale not resulting in consumer price cutting: As Netflix, Max, etc. have grown their user base, costs should be going down, they are better able to recoup their investments in initial infrastructure, platform engineering, and content outlays. Instead of seeing these costs decreasing, the streaming companies have been raising rates, adding ads, reducing features, etc. in an an attempt to reach profitability.
- There is a lot of economic theory/discussion on barriers to entry in a market, but the gig economy adds a 0-friction barrier to exit, which is a new and distorting option. Usually, there is some investment in a local market or area that invites the organization to stay there and respect the local customer base and play nice with the local officials. In the gig world, where the billion dollar unicorns have no assets and no employees in an area, they can arbitrarily geo-fence and walk away from a region overnight, leaving a distorted market behind as a way to exert pressure on that region. Uber was getting push back on their ability to self-regulate in Austin, TX [1], and then overnight they turned it off, leaving their drivers and riders in a lurch. Since they had demolished the local taxi market by operating at a loss, it was 4+ hr to get from the Austin airport to downtown. Quickly the city changed their tune to get them back.
Thinking about how to disincentivize these anti-consumer practices through development of common-good alternatives is important and timely, I know I have been thinking about this a lot lately.
[1] https://www.cbsnews.com/video/uber-lyft-leave-austin-after-fingerprint-vote/
cc npub1hykucplphuhelaxutcw4jw3vuu7gcg42czhqmk7jhchs8vdga4fsj73p33 (npub1hyk…3p33)
#gigeconomy #streaming #ridesharing
I think the two that stand out the most are:
- Economies of scale not resulting in consumer price cutting: As Netflix, Max, etc. have grown their user base, costs should be going down, they are better able to recoup their investments in initial infrastructure, platform engineering, and content outlays. Instead of seeing these costs decreasing, the streaming companies have been raising rates, adding ads, reducing features, etc. in an an attempt to reach profitability.
- There is a lot of economic theory/discussion on barriers to entry in a market, but the gig economy adds a 0-friction barrier to exit, which is a new and distorting option. Usually, there is some investment in a local market or area that invites the organization to stay there and respect the local customer base and play nice with the local officials. In the gig world, where the billion dollar unicorns have no assets and no employees in an area, they can arbitrarily geo-fence and walk away from a region overnight, leaving a distorted market behind as a way to exert pressure on that region. Uber was getting push back on their ability to self-regulate in Austin, TX [1], and then overnight they turned it off, leaving their drivers and riders in a lurch. Since they had demolished the local taxi market by operating at a loss, it was 4+ hr to get from the Austin airport to downtown. Quickly the city changed their tune to get them back.
Thinking about how to disincentivize these anti-consumer practices through development of common-good alternatives is important and timely, I know I have been thinking about this a lot lately.
[1] https://www.cbsnews.com/video/uber-lyft-leave-austin-after-fingerprint-vote/
cc npub1hykucplphuhelaxutcw4jw3vuu7gcg42czhqmk7jhchs8vdga4fsj73p33 (npub1hyk…3p33)
#gigeconomy #streaming #ridesharing