Stop The JerkTech

They're emblematic of a compassionless new wave of self-serving startups that exploit small businesses and public infrastructure to make a buck and aid the wealthy. Let's call these parasites #JerkTech. It's one thing to outcompete a big, stagnant company with new technology. It's another to screw over the little guys just because you can sell what's usually free. [...]

All of these apps are essentially tools for scalping a public good or open resource. They don't deserve to take something that's supposed to be free and first-come-first-serve so they can sell it.

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

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19 Responses:

  1. nooj says:

    They don't deserve to take something that's supposed to be free and first-come-first-serve so they can sell it.

    While I agree wholeheartedly with the article, there's a well-accepted economic theory of selling public resources simply because you were the one who gathered them. (I forget who it was or when; maybe British or American in the 1600's or 1700's.)

    How is this a "new wave" of self-serving startups? JerkTech has been around since time immemorial. Domain name squatting, estimating the male/female ratio in a bar, even Priceline profits off their greater ability to search and find otherwise-available resources. Gathering and sequestering information isn't new.

    I don't see a way to stop it.

    • Nick Lamb says:

      We're specifically talking about corporations being jerks here, right? So you mostly need somebody with the guts to stand up to them. That part could be a problem in the US, but the technical aspects are well understood. Even relatively small jerky things can be eliminated if you ban them and then enforce the bans through cultural changes (so nobody will tolerate dodges) and harsh sanctions (fine corporations a fraction of their turnover for example, not notional "profits").

      This year people with guts in Brussels stopped my employer from charging people to sit on hold waiting for customer services (it gets a slice of the money from the higher toll for the "convenient" number it used to advertise but now it's obliged to offer a normal phone number that doesn't offer revenue sharing and, not coincidentally, is cheaper for most people to call). Charging people to complain is exactly the sort of thing a jerk would do and now it's illegal.

      Also coming down the pipeline in the EU is a prohibition of "free" trials that oblige you to hand over payment details. If the trial is really free, and you're not a jerk, you don't need any payment details, you can collect those if the person signs up to the full service. If, as seems more likely, the idea was never to offer a free trial but only to ensnare people in paying for a service, then you can't call that "free" but must advertise the full price because to do otherwise is to be a jerk.

  2. DaveL says:

    A lot of high end popular restaurants won't take a reservation without a credit card number. If you don't show, you pay a penalty fee. Not to mention they run the card for validity (no "Dick Jerkov").

    Maybe that hasn't spread everywhere yet, but it's common on the East Coast.

    • nooj says:

      One solution is for "Dick Jerkov" to use a valid credit card, and raise their table resale rates to cover the cancellation fees. But if the restaurant then charges the dinner to that credit card, hilarity will ensue.

      (At least for a day. ish. Mr. Jerkov will simply to pass that payment to the client. With a fee.)

      I think the easiest distinction is that normals will know the actual name of a person dining at the time of the initial reservation, but Dick Jerkov won't.

  3. volk007 says:

    BTW, scalpers perform important function - without them I would never get to the concerts I want. While it's not going to work out for restaurants (less seats, easy to detect/cancel), it's not such a bad idea - why it should be a lottery and not an auction?

    As for parking spots - just remove free parking from the city.

    • James says:

      In an ideal world, tickets would be part lottery and part auction based on the desires and needs of the artists and their support staff.

    • Scalpers are a big part of the reason you can't get tickets from the venue directly in the first place. (Also, Ticketmaster, frequently. In a distant third, actual demand for seats.) Successful scalpers regularly buy up large blocks of tickets the moment they go on sale, using botnets and automation to work around venue-imposed per-sale ticket limits as quickly as possible. The risk to the scalper is quite low, because the very process of acquiring tickets in bulk also ensures there will be additional scarcity to drive the price of tickets up when they resell them onwards.

      There are plenty of problems with either first-come-first-serve access to tickets or highest-bidder access to tickets, but scalpers don't solve any of them: they only drive the price floor up for their own benefit.

      • nooj says:

        Aren't there also laws and the ticket's own Terms of Service prohibiting scalping? Which is why many places have to sell them as "novelties" or "souvenirs", like dildos and brass knuckles.

        • There are. As our gracious host can tell you, the people who are most impacted by those restrictions are not the scalpers themselves, but scalpers' customers, who purchase a ticket they're then unable to use. (Good luck getting a refund on that ticket, too; the scalper in question usually ends up keeping the money.) That doesn't appear to happen often enough or reliably enough to stop people from buying scalped tickets, so scalpers continue to ignore that clause.

          • volk007 says:

            >Good luck getting a refund on that ticket, too
            Just cancel credit card transaction.

      • volk007 says:

        This is the thing, while scalpers are reprehensible, they do solve the problem - they enable access to otherwise unavailable resource for the market price. And they do lose money sometimes: I showed up to Formula 1 (at Indianapolis back then) without a ticket and bought tickets to premium seats 30 minutes before the race for 30% below original price from the scalper. Maybe sometimes they manage to drive up price floor, but relatively often I see scalped tickets available for just a little bit above of the original price, indicating that market forces are at work.

        I used to stress out about these things, now if there is a show I want to see and tickets are gone I just buys from the scalpers.

        • James says:

          That seems like a rationally self-interested choice, but amazingly self-interest does not produce the best art. However, a lot of people feel okay about it when the see the kind of art irrational self disinterest comes up with, which usually isn't very good unless it's bad because of the spectacle. Meanwhile, rational non-zero sum balanced interest-based art struggles to keep from falling through the cracks.

        • Tim says:

          "they do solve the problem" - What problem was that, again? Scalpers solve nobody's problems except their own.

          Stop being so eager to pat yourself on the back over how cool you are for learning to stop worrying and love the scalpers. Congrats, you got cheap tickets to a race, you must feel proud! You seem oblivious to the fact that there's no reason why a venue wouldn't also fire-sale leftover tickets right before the start of an event, if they had any left to sell. And if there weren't scalpers in the picture, you would have a much easier time getting tickets normally.

        • hattifattener says:

          What problem do you think they're solving? Do you think that if scalpers didn't exist those seats would have just stayed empty?

          • Nathan Roberts says:

            Maybe I'm missing something, but it sounds like scalping is the art of creating a problem, then charging you a fee to solve it.

  4. reboots says:

    This sort of parasite cries the loudest when their own business model is "disrupted". See the approbrium historically aimed at Craigslist: "They won't let me use their API, and they're LEAVING MONEY ON THE TABLE!"

  5. From the twitter:
    [mat (03Jul2014 20:48):
    My new startup stands in front of you at movies until you pay me to sit down]