Can you tell me why you think PG is off the mark ? Tesla is a company marketing a product that people want. If people want Tesla their elected representatives should not and cannot stop them from exercising their choice. Passing laws to prohibit people from buying something available in the market is an index of corporate interests using money to buy favors from elected representatives i.e. an index of corruption. Do you have any claim to support your argument other than a blanket statement "PG is off the mark here" ?
Because the rules for cab companies actually serve a purpose--they actually ensure that there is some minimum level of service that the consumer can count on in terms of service, fares, non-discrimination, insurance liability, etc.
If services like Uber and Lyft simply decided to be a cab company with excellent technological underpinnings, people would have been quite happy with them and they would have been quite profitable. And they could have blown most cab companies out of the water. Buying up inefficient operators, consolidating them, and bringing them into the modern world of technology is a really good business plan.
Uber and Lyft are in trouble because they wanted to be exit strategy profitable rather than simply profitable. And they decided to do this by ignoring all of that icky stuff like liability insurance, commercial licensing, and following the law. In addition, Uber and Lyft tend to want to ply their trade in areas which are already profitable to cab companies rather than taking over areas that are underserved. If they were brokering rides in areas that can't get cabs easily, they would have lots of defenders.
There is a big difference between laws that actually protect consumers vs. laws that protect middlemen. The fact that pg can't see the difference is a pretty big issue.
The poster is speaking to pg being off the mark about uber because uber has been ignoring and flouting existing laws. Where as Tesla is victim of a new interpretation of the law.
Graham is exactly on the mark. The distinction between a law [previously existing for a long time, just recently existing, or about to exist] is laughably trivial. It is a worthless distinction to a person's opinion of a law or system's corruption.
You missed the point entirely: there is a profound difference between
A) Starting a business explicitly profiting from "efficiencies" created by breaking existing laws (Uber)
B) Starting a business that takes advantages of loopholes in the law and failing to take steps to ensure that customers follow the law (Amazon and Use Taxes)
C) Starting a business profiting from certain efficiencies without violating the laws on the books at the time (Tesla)
A) Some places have laws to ban unlicensed taxis, while others do not.
C) Some states have laws to ban auto-makers from making direct sales to consumers, while others do not.
You have attempted to make a distinction, but not a principled distinction. There is no reason (that I have seen) which explains why unlicensed car dealers are less harmful to the public than unlicensed taxi drivers.
There is no profound difference. No one is stating that the laws are perfectly paralleled. Nothing of this nature is perfectly paralleled. You're failing to appreciate that law is entirely arbitrary and worthless compared to an individual's opinion of the level of corruption surrounding that law. Your points A, B, C are meaningless to a person's opinion of the underlying validity and righteousness of those points.
I (and the GP) believe there's a profound difference in starting a company knowing that you'll be breaking laws (Uber) and running an established company that just had a law passed that negatively impacts your business (Tesla). You're failing to address that besides saying that all law is completely arbitrary.
The distinction of precedence has (or should have) no profound difference to a person's opinion of what constitutes validity or corruption, regardless of a status quo. That is my point.
There is only "profound difference" to the circular reasoning of law itself. There was no reason for me to address that. Legal frameworks are inherently rigid and without much individual conscience.
> "PG is off the mark here. Companies like Uber explicitly ignore the existing laws and regulations. In the case of Tesla, the ruling just passed."
This indicates to me that the "profound" differences to him/her regarding "validity" is whether a law previously exists. (...Seemingly completely oblivious to the notion that much of what is made into law is insidious, vile, and of a precedence worth objecting.) If the point was only about systemic inconsistencies, that wan't clear.
They're not equally quaint. There is a big difference between laws that regulate taxis and laws requiring cars to be sold only be third-party dealers.
Taxi laws in many cities exist to both protect consumers (with criminal background checks and additional vehicle requirements), ensure parts of the city get served equally (requiring taxis to accept fares), and establish clear chains of liability. I don't believe there are anywhere near comparable safety arguments you can make for only allowing third-party dealerships.
Here's my two cents (you don't have to buy into it) - taxicab laws and regulations are frequently imperfect, and there is certainly an element of protectionism and cronyism. On the other hand, I don't want to live in a place without them. There is a reason that when I previous lived in London you'd often see "Don't take unlicensed cabs at night" adverts up at bus shelters. These laws are imperfect, but also necessary.
Edit: As someone has pointed out, dealerships make a similar safety argument. That said, I would imagine most rational people are able to see the difference between the two. It is still possible to regulate the sale of cars and allow manufacturers to sell directly. Similarly, I think it's possibly to have taxi laws that allow Uber to operate freely but also ensure the safety of those using the service.
Regulated taxi systems are worthwhile - if you don't think they are, try living somewhere with significant crime. Last year I ended up getting posted to Medellin, Colombia for a month - a city with one of the highest murder and violent crime rates in the world. However, it is also a city with a highly regulated taxi system, with criminal background checks and vehicle restrictions. I would happily get into a cab there at 1AM. I would not have considered it if there were zero regulations and restrictions on who could drive a cab, and what cars they could use.
Auto dealers make almost the same argument; that the laws which require cars to be sold through them are there to protect the public from thieves, liars, and cheats. Both taxi regulations and dealer laws are similar, in that they involve 'bootleggers and baptists' type restrictions.[1]
Well, pretty much any law with any bootlegger support at all will present a 'baptist' face to the world; very few campaigns take the stand "I like to roll the dice, so I think it's better for everyone if we criminalize this service, prices go way up, profit margins go way up, and occasionally providers go to jail. What's life without adventure?".
I respect your ability to have an opinion on the positions you personally feel are worth backing by violence (i.e. the nature of law). However, in turn, please respect the fact that nothing is literally "necessary," especially with such conflicted notions, beyond the word's use in hyperbole. Your respect of this point will allow for more respect and tolerance of opinions that differ from your own.
Even 99.9% of the planet agreeing on one issue does not necessarily make that issue necessary. It depends on the actual threat. This is especially the case when that one issue begins to directly impose violence on the 0.1% who disagree and who want to live nonviolently but differently from your own lifestyle.
It's very healthy to focus on solutions that improve awareness in matters where safety is significant. By all means, warn people. By all means, give people more access to the feedback of transparent information: e.g. transmitting knowledge to people about whether or not an entity is regulated by whichever particular system/regulator. But if you advocate the prohibition of a person trying to have a consensual relationship -- such as a person to Uber's service, a person willing to take that "risk" -- then you quickly tread into unethical territory. However small of a law it is in your perspective, it may be a large form of tyranny to the perspective of the people and entities you're directly willing to undermine or criminalize.
No, actually there's no difference - both serve special interests. The fact that you like one special interest but not the other is your personal preference, but the nature of these laws does not differ - they benefit one set of citizens at the cost of limiting consumer choice and freedom to conduct voluntary transactions. The fact that you enjoy the services of one special interest groups changes nothing.
Presence of law does not mean absence of corruption. On the contrary, corruption usually results in passing laws that serve special interests of those that corrupt the lawmakers. So "existing laws and regulations" in this case is not the reason to dismiss the charge of corruption, they are the corruption.
The difference isn't so clear cut (or at least wasn't initially) for "ridesharing" services like Lyft, Sidecar, and Uber's Uber X (I'm not exactly sure how Uber's black car service works so I'll omit it). Presumably the regulations that these services "ignore" concern the concept of "commercial driving," which is not a clear dichotomy when you really think about it. Is it legal to split the cost of gas on a road trip with a friend? Surely so. Is it legal to split the cost of gas with a friend of a friend who does not actually know the driver? Presumably so. At what point does this become "commercial driving"? The answer, of course, is when it becomes disruptive to the agencies currently enjoying regulatory capture, namely taxi companies and drivers.
If you want to find a clear and mostly reasonable definition of the boundary between commercial driving private driving,
you could look to the definitions of things a commercial pilot can do, that a private pilot cannot.
Not that I expect city taxi commissions to apply the same standards.
This fails even as a sarcastic example of pandering. (Due to lack of creative effort)
I'm sure PG had something reasonable in mind when he wrote the line, but your shoddy irrationalisms passed as reasoning are basically trojan-horseing his position.
Are the laws designed solely to maximize levels of service to consumers? Are they amenable to change at all due to technological adaptation? Or have they morphed into protectionism?
Didn't see him complaining when the government was subsidizing Tesla's R&D with cheap loans and tax incentives [1]. The government giveth and the government taketh away. Not saying I agree with this decision by NJ, but its somewhat disingenuous to take a moralistic argument (corruption) at face value from a party that possibly stands to benefit financially from the alternative decision. (Yes I'm assuming that pg is a Tesla stockholder).
Help me understand. Are you arguing that PG (or anyone) cannot take the position that the federal government subsidizing the EV sector is good, while simultaneously taking the position that a state government caving to incumbent political pressure to pass an anti-consumer ruling is bad?
Are those two beliefs internally inconsistent in some way? Are you basically arguing that you can either believe in no government involvement, or accept government's involvement on the condition that one must abrogate the moral right to complain about its anti-consumer behavior; that there is no other consistent position to take?
Maybe I'm not understanding what exactly you are saying.
The second portion of your argument appears to be an ad hominem claim that we should disclaim PG's statements because of the possibility that he may own Tesla equity. Do you have an actual claim beyond that?
The OP asserting that the pg statement in question was "an astute observation" implies that pg is an impartial observer who is in no way biased by his ties to the startup ecosystem. I disagree with that assertion.
The pg quote that OP provides is very brief -- State/city govt ruling against Tesla/Uber == corruption -- and more an opinion than a true argument because no evidence/elaboration is provided. That Tesla's (very different) situation is equated with Uber's further points to a hastily voiced opinion rather than a reasoned argument. Hence, I would argue that an ad hominem approach is appropriate because there is not much else to go on. Pg voiced an opinion and I made a statement that mentioned some biases that he was likely to have that informed said opinion.
Yes, it is known that Tesla is only profitable because of government incentives. But such laws don't do much to correct it - if anything, they make the matter worse by making Tesla more dependent on government whim.
Or, alternately, Uber ignores local taxi regulations and then is surprised when cities fight back. I haven't been following the Tesla issue closely, but their attitude does not seem similar to Uber's, which, personally, makes all the difference.
The cynic says the more things you regulate, the more industries that can donate money to your political campaign and hire you when you retire.
Some regulation serves a purpose. All regulation can be justified with some sort of logic. That doesn't mean it is either necessary or a net benefit to society.
Proponents claim that cities need to regulate Uber to ensure passenger safety. Meanwhile an NYPost investigation found of the 16 fatalities caused by cab drivers since 2009, all but 2 kept driving cabs. ( http://nypost.com/2014/02/09/cabbies-who-kill-or-maim-in-nyc... ) May be its different in other cities. I haven't been kidnapped by a cab driver in NYC, yet at least.
The Tesla dealership issue is more erroneous and transparent to me than Uber. Car dealerships are a public nuisance. No one would argue we need more middle men for electronics, clothes, or food. Why for cars? The current structure makes it easy for dealers to get away with dishonest business practices. Mechanics are paid to do repairs as fast as possible, increasing the chance of future failures. Car companies are vulnerable to large class action lawsuits while a single dealership is hardly worth an expert lawyer's time.
Heavily regulated environments repel innovation. Regulations, both in Uber's case and Tesla's are written by the incumbents for the incumbents. Follow the letter of the law and instead of a sleek new structure you produce a disfigured chimera, which probably will piss money.
Perhaps one of the best things the internet provided us was a regulation minimal environment. You could put up a website and try new things with out having to worry about getting shaken down. I hope the future web won't be full of rampant EU-mandated privacy notices and DMCA federal government web site registries.
Uber and Tesla don't have a choice. If they want to provide high quality services, laws have to be broken. It is unfortunate that you need to be a large and well funded company to force much needed changes on state and local regulators.
I predict that cities and states which are friendly toward innovation will do better by leaps and bounds in the long run. Betting against change and efficiency tends to be hazardous.
What makes you think that Uber is surprised? Or did you mean that Uber is upset? Being upset at an occurrence is perfectly reasonable, even if you predicted it would occur.
Many states had pre-existing laws which barred auto-makers from selling directly to consumers, this is not significantly different from the many cities which have barred unlicensed taxi operators for a long time. The states are simply the ones 'fighting back' here.
We need a Congressional member to introduce a bill to allow direct sales between car manufacturers and consumers, pronto. If it passes, that would trump any state law that bans that practice.
It is not as simple as federal law 'trumping' state law - congress enacting a law specifically to override a state would be problematic, even if constitutionally solid.
You are not considering the implications of congress interfering in a relatively minor state matter when it refuses to legislate on more pressing state/federal issues (gay marriage, legalising cannabis, etc).
There would be no problem with Congress overriding the state laws. Federal laws always have precedence over state laws, and the federal congress has specific authorization to regulate trade among the several states in the commerce clause of the constitution.[1] Congress has the constitutional authority to ban substances such as cannabis, but not to compel states to allow them.[2] Congress has no authority to interfere with family law, which has always been a matter for the states.[3]
> Federal laws always have precedence over state laws
Be careful with the word 'always'. If a federal law were unconstitutional, and an equivalent state law were not, then clearly it would not trump the state law.
Similarly, despite the modern interpretations of the Commerce Clause, there are Constitutionally imposed limits on federal authority, and they're prescribed a very narrow set of privileges by the Constitution. Depending on the law and its execution, we could very well see a state exercising its rights trump the Commerce Clause. Gary Marbut has fairly carefully crafted such a challenge with his "Montana Buckeroo" rifle which is expressly designed, built and sold only within the confines of Montana, specifically to challenge the Commerce Clause's authority of its manufacture.
That said, he's got some 80-odd years of precedent to overcome, but there may be a quorum that much of that precedent is bad precedent, though it's still a gamble as to whether or not that matters.
The "always" comes from the fact that the federal law would have to be challenged, and it would "trump the state law" until the federal law is struck down (or at least until a preliminary injunction against the federal law has been granted).
While I personally agree with Mr. Marbut's interpretation of the commerce clause's limited scope, I think that the deck is stacked squarely against him, especially since Raich.[1]
"relatively minor state matter when it refuses to legislate when it refuses to legislate on more pressing state/federal issues (gay marriage, legalising cannabis, etc)."
I'm not sure if you're being serious or just completely ignorant about how bills are passed into law. Clearly, a Republican controlled House will not vote in favor of gay marriage or legalizing cannabis. Heck, almost every Democratic state hasn't even legalized cannabis and there are still a good number of Democratic states that haven't recognized gay marriage. Those won't pass the federal level any time soon.
"Minor" issues, by the way, are passed into law all the time because both houses can agree on the bill. Take the JOBS Act or the Pay Our Military Act for instance.
And that is a problem because...? The "reactionary" NSA bill that was introduced a few months ago to combat the NSA's practices almost passed. Do you have a problem with that too?
Couldn't agree more. It's amazing anything that isn't corrupt ever happens in New Jersey's government. Or, at least, I assume things that aren't corrupt do happen at least once in a blue moon. I suppose they got tired of selling kidneys and found a new victim.
2) Most cities have small tax bases, where car dealerships are a very large part of the tax base. City managers want a larger tax base to help fund their plans.
3) Thus, car dealerships & local politicians have aligned incentives.
4) So, local laws (zoning, advertising, etc) favor car dealerships.
5) Higher offices are filled from the pool of local politicians, as they move up the food chain.
6) Those politicians remember their contacts @ the dealers, who helped fund/launch their careers, & they remain aligned with them in passing laws empathetic to dealer's interests.
Of course, legitimately, car dealerships have HUGE capital investments (fast aging inventory, large chunks of prime real-estate, staffing costs). Would YC ever want to get into the traditional dealer space? No friggen way. Too risky & doesn't scale.
And, nobody really buys a car without a test drive/showroom. So, nearly any "online" sale is cannibalizing the dealer's investments.
So, we need to have some kind of online buying system where you MUST enter in a dealer showroom code before buying, & they get some commission, as they DO offer real value here folks.
IMO, the whole consumer retail system is going to evolve into "showroom + online buying" in a fair system soon.
So, nearly any "online" sale is cannibalizing the dealer's investments.
I suspect that Tesla would actually prefer to sell cars at dealers (that are owned and operated by Tesla); their online sales are just a hack to get around the fact that their dealerships are banned. So any concern about conflict of interest between the dealer and manufacturer seems like it does not apply to Tesla.
I'm not sure I understood your point. But..., HUGE capital investments does not seem like a valid reason to protect a company. Should we protect Walmart from Costco or Costco from Target?
To clarify: No. A businesses costs shouldn't become our costs.
I'm just saying that it's a fallacy to think that an online sale is wholly responsible for the sale. They do rely on those huge investments by showrooms/dealers.
So, in a "right evolution", I envision smaller showrooms, wide variety + low inventory per unit. (Yes, like an Apple store).
Similarly, if stores like Best Buy died, Amazon sales of consumer electronics would fall. So, Amazon would likely buy up 1/2 the brick & mortars, to create showrooms. But, until Best Buy dies, Amazon is happy that they provide free showrooms that everyone hates, but still uses & abuses.
Another aspect to consider is that big car manufacturers themselves probably support these laws, because even if they could more efficiently sell cars without the current dealership environment, mandating the dealerships vastly increases the barrier to entry from competing car manufacturers.
Lessig / rootstrikers are working on the meta issue of campaign financing. Direct crowdfunding is part of it, the other part is holding reps accountable for their votes.
Hmm, Apple does this just fine, but Apple isn't franchising the stores, they just comfortably run them at a loss. The fact that the dealerships have independent owners may make that more complicated. Your system seems reasonably sensible.
And you wouldn't have to enter a dealer showroom code, your dealer would just give you a code for a "special discount" -- this is how businesses already track which of their ad campaigns are paying off.
They don't run them at a loss. They're the most profitable retail stores in the US (on a per square foot basis). At least they were in 2012. Since sales haven't really gone down much, that's probably still true as Tiffany's (next best) was about half of Apple's.
Why do you think Apple runs their stores at a loss? In 2012, they were nearly double the profit/square foot that Tiffany's had (I haven't found more recent data on the profit/sq.ft metric) at around $6,000/square foot. In Q1 2013, they were well over $10 million (closer to 15) in average revenue per store.
I hate dealers, every time I buy a car it is always a stressful experience. Dealers are trying to cheat me on every my step.
Last time I was via PenFed Car Buying Service, got a "guaranteed" web quote:
Got the dealer:
Sure, we will honor the price. But all of our cars have door guards installed - that's $500 extra. We just don't sell the cars without door guards.
Got the contract for the car:
Some extra maintenance plans included for an another $900, forced to remove them. Oh and the dealer made an another mistake for $1000, couldn't add up two numbers together (damn liar). An hour later got a fixed contract.
Got to the financing guy who is trying to sell me extended warranty and gap insurance for about an hour.
And that's over 6-7 hours at the dealership... /vented
Last time I was at a dealership it was to buy a used car. As soon as we started talking numbers I found there was an additional $800 of work that had been done to the car (window tinting and some door guard thing) that I had to pay for. I started by telling him that the sticker price was disingenuous since this was was already done and they knew they had to charge for it.
I ended up negotiating something half-way decent, but that was a very annoying starting point.
If a dealer tells me "yes, we honor the price but..." and the "but" part is not an obvious add-on like insurance or pre-paid service or anything like that that I can refuse and still get a car - I'd just walk. These people are obviously liars, why would you want to spend so much money with liars? It's not like there's only one place where you can buy a car nowdays. Same for extended warranties, etc. - if the guys can't understand "no" there are always guys who can. I've seen both kinds and the best way to deal with liar kind is to just walk. It stings when you've already invested time with them, but it's just sunk costs fallacy - the sooner you cut your losses the better.
> I hate dealers, every time I buy a car it is always a stressful experience. Dealers are trying to cheat me on every my step.
I had the opposite last time I bought a car. I'm still a bit baffled by it.
The salesman said he could let me have the car for $X. I countered that if he could let me have it for $Y (which was the price a dealer an hour away was offering for people who bought online for pickup, and was the price that my research had said was quite good), I'd write a check right then and there. He said he'd have to talk to the manager about that.
When he came back from his talk, he said that the best he could do was $Z. The odd part: $Z was LESS THAN $Y, by something like $1-2k.
Buying a Toyota Scion a few years ago was great. They had fixed pricing and the options were all dealer-installed onto one of two base models containing either stick or automatic transmission. I told him I'd take one with no options, and he handed me the keys. The whole process took me roughly an hour.
I suspect that fixed pricing is the appropriate pattern for the low end. Dickering over a few bucks just annoys the customer, and isn't worth the salesman's time. Plus, the dealer-installed options schtick allowed the dealer to maintain a very small inventory.
Only logical - if you've got $60000 on BMW you've probably got more money to spend on stupid crap, so why not try to get it out of you? ;) They'll always try it, but the decent ones won't try it again after you say no.
You are completely wrong. I go to the dealer and pay whatever they ask without haggling. They make a lot of money off of me. I am "sophisticated" theoretically but I get completely taken advantage of. Why is that?
Holy crap. Is this for real? Dealers are one half of the rotten pie that is the car industry, just let the dealer industry die already. Much like the music business tried fighting digital music only for it to completely take over, the car industry eventually will change to a different model that isn't reliant on an industry lubed up in snake oil and shady business practices.
Extended warranties, sneaky extras and premiums added to your contract, the amount of crap you have to endure when buying a new car these days is horrendously deep. If only more car companies sold directly and allowed you to buy online like Tesla does, I know the lobbyist motor dealerships group would never let that happen though.
No wonder the car industry is in the toilet, it's killing itself and Elon Musk is one of few people trying to change things and he's met with resistance: typical.
The bans were initially put in place to protect the investments made by dealerships from being nullified by a manufacturer setting up shop and competing with them.
It has no purpose when the manufacturer has no dealership agreements to begin with.
Tesla has a showroom at Short Hills mall in NJ. You can go in, check it out, test drive the car, and then order online. While it's really telling about NJ's government, I don't think it'll impact Tesla or its customers.
Also, I love how the article title reads "New Jersey Votes", as if the citizens got a vote in the matter.
The article is a bit misleading. It makes it sound like direct sales were legal in NJ (and so presumably the only reason Ford and Chevy and Toyota and the rest did not do them is that they did not want to), and the politicians are now stepping in to make a new law to stop Tesla.
In fact, it looks like direct sales have been illegal for a long time, but the law is poorly worded, and can be read in a way that bans direct sales for Ford, Chevy, Toyota, and most other major car manufacturers, but does not apply to manufacturers like Tesla, who only sell direct.
What the new law is doing is saying that the old law is meant to apply to all car manufacturers, not just Ford, Chevy, and so on.
Whats to stop a NJ resident from going to NY to purchase a Tesla direct? Is their a a big financial penalty for doing so when registering? What is to stop a grey market of NY residents reselling them to NJ consumers if so? This makes no sense.
Nothing. Just as there's nothing stopping an NJ resident from buying a Tesla on the Internet from her home.
It's just to annoy people who don't know what they want. They can still do test drives in NJ, but can't talk about pricing, options, financing options etc.
> Just as there's nothing stopping an NJ resident from buying a Tesla on the Internet from her home.
And when Tesla creates a Oculus Rift based VR showroom? What if there was a fancy VR showroom in the mall where several different vendors could show there wares - would Tesla be the only company banned? It'd be fun watching that battle.
I was actually planning on setting up a landing page tomorrow to offer Tesla buyers an address (no charge) in an adjacent state to register the vehicle at when they can't purchase directly in their state (TX, NJ, etc).
You would take delivery at that address, and then re-register the vehicle in your home state after the title was in your name.
So Tesla simply can't have a presence in the state? If that's the case, Tesla should be fine with having showrooms in New York, as well as Philadelphia/Levittown/Allentown, PA. That would put the vast majority of NJ residences within a 30-45 minutes drive of a Tesla showroom.
As someone who purchased a car out of state and took it back to NJ the only thing is you have to pay NJ tax on the sale. So no "extra" penalty that I'm aware of unless they are doing that for electric vehicles which would be just downright horrible.
Why aren't auto manufacturers jumping on the idea of selling directly to the public? Do they get some benefit from middlemen that Tesla doesn't, or is it just because they are so established doing things one way they won't consider other ways?
It's for the same reason that movie distributors don't bypass theaters by selling directly to the public. Originally, it was hard to distribute cars, and car manufacturers didn't want to make the investment to open little retailers everywhere. So they offloaded the risk and capital requirements to third parties, who could customize themselves to the markets they were in (what inventory to carry, where to locate, how to advertise, etc). Then those dealerships became their main (only?) source of revenue. Now they're beholden to their main sales channel. If they started selling cars directly, the dealerships revolt (like a labor strike - what do they have lose here?) and cut them off from revenue for a month. Similarly, theaters very explicitly refuse to show movies that are directly release to the public, which means, for the moment, that those movies won't make any money, and thus movies aren't released that way.
That's a scenario no upstart car company would ever enter into willingly, so Tesla of course didn't. And eventually, companies like Tesla will increase the pressure on all car companies to sell directly, and the dealership cabal will collapse. But in the meantime, that's a lot of tied hands.
Adding legal barriers through lobbying makes all of that worse, of course.
It's for the same reason that movie distributors don't bypass theaters by selling directly to the public.
Your understanding of the history of movie distribution as it relates to theater ownership isn't quite right. You can read up more here: http://en.wikipedia.org/wiki/Block_booking
In a nutshell, distributors (i.e. movie studios) owned the major theater chains until 1948, when the Supreme Court demanded that theater production and distribution be separated from exhibition (i.e. theaters).
Thanks. I guess I didn't mean to suggest the history was the same (I know almost nothing about the history of theaters), just the current situation. So sorry for the poor paragraph organization. I will stand by my assessment of the status quo, though. I remember a few years ago, theaters refused to show a Soderbergh movie because it was being released simultaneously on DVD and the theaters.
Er, that Tesla sells electric cars is not the point at all. The point is that they have a different--and more attractive--distribution model. Any reason for creating a new car company would create another company that chooses not to build a dealer network.
There's no shortage of stories about government "health" departments cracking down on farmers' markets. I don't have any evidence of actual "grocery story lobbyists," but it's reasonable to assume that grocery store management approves.
I wonder what requirements are placed upon dealers. In theory, Elon Musk could just open up his own "Elon's Teslas" shop and voluntarily sell the cars for no additional markup. There'd be some additional overhead, but it'd still be a much nicer arrangement overall than the current one I bet.
I'm guessing the number of people that can afford to buy a Tesla in NJ and can't make it to NY to get it is very small - for the current slate of Tesla cars.
> Tesla has won recent legislative battles in states like Washington, Ohio, New York and Minnesota, but states such as Texas, Arizona and Virginia have retained or added laws limiting the company’s ability to operate stores.
Here we have a new industry everyone wants, a US product people want that gets high awards, innovative, inspirational and lawmakers go and block easier ways to sell it. Is this how we are going to compete on new industries and alternatives?
This is the same middle man battle going on in other industries, years of legacy middle men. Dealerships will still exist and Tesla won't kill them, let them play.
That's the state where it is considered too dangerous for you to fill up your own car with gas, right? So one's expectations of that place's lawmaking sanity should be already pretty low, and these expectations are now confirmed.
They should open up internet cafes next door. Who just happen to have computers that only go to the Tesla website, and are full of Tesla marketing materials and helpful staff who can assist you navigating the only website available.
I would do this just to create press and get people to come and see the free-internet-cafe-next-to-showroom that caused such a fuss.
Are you a time traveller from the 18th century or something? The good people in Congress have worked for centuries to not let free markets remain too free - otherwise where the good people in Congress would get the votes and the campaign funds, if they couldn't tweak free markets to benefit this or that interest group? Of course, the good citizens are universally (within tiny margin of error commonly called "those crazy libertarians") cheering this since they belong to one or other interest groups. The fact that while they are screwing others with one special interest law other screw them ten times with another ten special interest laws so at the end everybody ends up being screwed ten or eleven times eludes their attention and will probably continue to do so for many many years.
No, I am from Europe, and in Europe we are told, that the US is the holy grail of free market ... in the US, everything is better as in our countries, and that is the reason, we have to shape them by this role model of freedom and Democracy! That is also the reason, we constructed the EU with all its strictly democratic possibilities for corporations to screw up the European commission and don't have to deal with stupid local politicians that always have some doubts (European commission has never doubts, that corporations have the right thing to say ... as long as they are big enough and can afford it ...) -- btw. we also have the European parliament, but the constructors of the system had the foresight to give them no ability at all to come in between the right things and the commission -- the European parliament is somewhat for the EU what the Queen of England is for the British. Costly, but has nothing to say, that the Commission did not dictate.
But thank you for the little insight into the political system. Though I don't understand to much what this Congress, Senate and whatsoever are all about ...
>>> in Europe we are told, that the US is the holy grail of free market
The same forces opposing freedom in Europe exist in US. The US Constitution sometimes slows them down (esp. in regards like freedom of speech, which in Europe is commonly restricted) but they still claim many successes.
Then again, there's probably the difference in approaches in Europe and US. US constitution starts with "We the people" and the EU constitution project starts with [1] "HIS MAJESTY THE KING OF THE BELGIANS, /.../, HER MAJESTY THE QUEEN OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND" and so it goes on.
Then again, it was rejected, so maybe there's hope yet :)
My point was that the Model S is not a car for the poor huddled masses, and that if anyone could "afford" to purchase political power, it would be the people driving luxury auto-mobiles.
Tesla car costs under six figures, you need much more to buy even a local political power, and state-wide you probably need 3-4 orders of magnitude more.
Its surprising to see why Auto Manufacturers uniting against this , reaching directly to Customer without middle man must be really good for them too , isnt it ?
What is the conflict? Unless there's a federal law that says that auto manufacturers can sell direct to consumers in states, I don't see what conflict there could be.
It could also be because people are waking up to the irrational exuberance in the tesla stock. Imagine selling all these cars but not actually delivering them.
Banning Tesla is an index of the corruptness of state governments as banning Uber is of city governments. (https://twitter.com/paulg/status/443469758369767425)
A very astute observation, as usual.