[grandalf]

Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread.

I mention this b/c I don't think it's a gradual accident... The dealers forced Ford to shut down factory stores in Oklahoma not too long ago. This is a turf battle.

[venning]

Absolutely. Regulatory capture is a real thing and a really bad thing. I'm certainly not defending the franchise protections. I would just like to be clear: people get hurt when we uproot the status quo quickly. That isn't to say we shouldn't do it. There aren't easy answers here, particularly for the legislators who have to make those decisions.

[maratd]

> There aren't easy answers here

I don't think the circumstances are as grim. Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show. They may need to apply for a job at the new factory store, but that's really the extent of the displacement. You're not eliminating an entire industry. You're re-organizing it to reduce friction.

[swatthatfly]

> Most of the personnel retained at a dealership do useful work. That same work will be required regardless of who runs the show.

Some people may benefit from this "service", but not me, nor any of the people I know. The only benefit I could see from my previous buying experiences is the act of handing out the key for a test drive. Everything else was simply designed to extract as much money from my pocket without giving me back anything in return. I had all the information I needed to make a purchase decision, the financing doesn't need to be done at the dealership, the car can be bought from a website, and delivered to the curb. A bunch of grown men sitting around all day and swarming people that enter the floor with the goal of "giving them a good deal" is not a value proposition. It's a complete misallocation of resources.

[maratd]

Salesmen aren't a substantial part of the workforce in a dealership. Mechanics, secretaries, service coordinators are. You still need those.

Finally, while you're OK dropping the equivalent of a year's pay on a website, most people are not. They need to talk to someone. So you're still going to need salespeople ... although they'll be far more pleasant to deal with, since there will just be one price that everyone pays and you won't have to be in constant fear of being ripped off.

[brandonmenc]

> Finally, while you're OK dropping the equivalent of a year's pay on a website, most people are not.

It seems to be mostly tech workers who pine for the "buy it now" experience for car shopping. They all seem to know exactly what make, model, and color they want, and they never buy used.

Everyone else has a budget, coupled with a wide range of what they consider an acceptable car - which is why test driving and "show me what else is on the lot" will always be a thing.

[swatthatfly]

> Salesmen aren't a substantial part of the workforce in a dealership. Mechanics, secretaries, service coordinators are

You're describing a regular garage here. We have those on most corners. Some also sell used cars btw. The argument is centered around the sales activities, hence the comment.

[maratd]

I'm describing a dealership. Most dealerships make very little money from car sales. They make their money from servicing vehicles that were purchased there. When you have a brand new car with a warranty, you will take it to the dealer so that you don't have to pay for the repair and they bill it back to the manufacturer. And after the warranty ends, you are now in the habit of going to the same place and continue going there, paying out of pocket.

And most dealerships strive to make the service part of the equation very pleasant to keep you coming back. You will get a work area, internet, coffee, snacks, TV, etc. while you wait. Or if you want a loaner, they'll make it happen too. Some even have shuttles that will drive you to the local mall.

Mind you, all of this would still be in place with a factory store, minus the hellish experience of buying a new vehicle.

[venning]

Agreed. And I didn't mean to sound grim.

Markets tend to be efficient in the long-term and inefficient in the short-term as it is still determining how to place capital and whatnot based on new information. I feel like our industry (software, and technology generally) understands that well, even if implicitly. It's just that those "inefficiencies" are often real people and the "short-term" means being unemployed or unemployable for a while.

It's important to innovate and to do so boldly, but to also not be cavalier with how that innovation affects a world that was spinning long before that innovation was conceived of. Not to say that you or anyone else on this thread is doing so, I just wish to point it out.

[ska]

  "short-term" means being unemployed or unemployable for a while.

If you add the caveat that "for a while" might in practice equal "several generations" for comparable employment, this is true. See for ex. industrial revolution.

The hard truth is that to the degree that these things do work as a simplistic free market model might predict (and that is clearly arguable) they may operate on time scales that will do nothing to alleviate to problems the changes cause.

[venning]

Very true and very scary. The sad thing is that regulatory protection often makes matters worse by insulating people from changing realities. That causes the inevitable collapse of that protection to create an even greater shock to those who had been protected.

[coryfklein]

> See for ex. industrial revolution.

I was not aware that the industrial revolution caused unemployment that lasted for generations. Can you provide a link for further study of this?

[newjersey]

It is one thing to provide short-term support for carriage drivers and ship cargo loaders when mechanization renders their jobs useless. It is a different matter when existing big businesses stand in the way of progress.

Would you support laws that would slow down the growth of digital cameras in the late nineties and early noughties so Kodak could continue to sell celluloid? I bet a lot of people were affected by that change. Where is the smooth transition for them?

[venning]

The interesting thing about the particular examples in this thread--local taxi companies, hotel franchises, dealer franchises--is that none of them are in fact "big businesses". If Uber and AirBnB and Tesla succeed, they will all be considerably larger than any other player in those spaces. They will be the big businesses.

Personally, I have no interest in protecting businesses. I have an interest in protecting competition. I like the disruption and I like the creating of new value that they bring. I just also feel for the individuals who often are so vigorously disrupted.

[newjersey]

I'd argue that dealership model does not necessarily promote competition. If I want a Ford Focus, Ford still dictates what kind of car I get. Sure, the dealership may try to make a few hundred dollars by (unnecessarily) adding "value" to the car with floor mats and halogen lamps but what kind of car I get and at what price is a decision Ford makes.

The problem I have with the dealerships is that they are saying Tesla can't sell cars directly. This is incredibly stupid. Sure, you could say Ford can't set up a store because that'd be like having a Starbucks corporate store right next door to a franchise they authorized. However, if I wanted to create New Jersey's Best Coffee (don't buy my coffee, although there is Best in the name it will be horrible) I should be able to open my own coffee shop with no regard to whatever agreements there have been about coffee shops before. I mean it is one thing to say that my coffee shop should meet health safety requirements (such as not lacing my coffee with poison) and other sensible requirements such as not selling anything with the label "USDA Organic" unless it is USDA Organic.

> I just also feel for the individuals who often are so vigorously disrupted.

Are you talking about the employees? I feel for the Rite Aid and Duane Reade employees more than I feel for the car salespeople. I honestly believe that successful car salespeople have the qualities that will help them land on their feet in any situation. So they will be alright. We will eventually have to seriously discuss the idea of a universal basic income but that is for another conversation.

[SilasX]

So there's an active, non-artificial market for scummy negotiating tactics and pressuring people to take deceptive financing deals?

[__jal]

I'm having trouble coming up with a meaning for "non-artificial market". Do you mean a market free of all forms of non-participant manipulation, coercion, information-assymetries, etc.? I don't think we make those on this planet.

[SilasX]

Right, I get it, there's no perfect/elegant/ideal/Platonic market anywhere.

But if you really can't tell the difference between "people use car dealerships because they all find them more convenient" vs "people use car dealerships because of a law that says they have to buy this way", then you're generalizing too far from the above point.

[JoshTriplett]

> Car dealers are among the biggest "small business owner" donors to political campaigns in the US. The National Auto Dealers Association is a big part of most dealers' lives, and they know who is buttering their bread.

Which makes me wonder how much it would change the US political landscape to eliminate the massive protections granted to car dealerships.

[grandalf]

> eliminate the massive protections

It would certainly change things a lot, but it would have to happen through the same democratic process that put the protections there in the first place.

[fineman]

That never works. You'd need those who benefit from the protectionism to stop lobbying. The issue is that it never was democratic, it was graft that made these regulations and it's graft that keeps them going.

The way to get rid of regulatory capture is to make it impossible to enforce and let the leeches die.

Uber may not win, but Taxi companies will die.