Of course vested interests in old industries will do whatever they can to block innovation. We're seeing it with all major industry disruptions. It used to be enough for the vested interests to write laws to block out, limit, or otherwise hinder additional traditional competitors (taxi medallions, ridiculous license requirements for florists[1], etc).
Now we're seeing these same groups try to initiate and bring in new laws to stop competition that is truly an innovative take on an industry. Such as the Uber amendment[2] that was to be written and voted on in less than 24 hours, or cease and desist notices being sent to Lyft and SideCar, telling them to shelve their business while they investigate whether or not they are doing something illegal[3].
Entrenched industries with connections to governments, and governments making tax revenue from these entrenched businesses both have a huge incentive to get old laws enforced past their original intent (which were often written for the sole purpose of protecting those entrenched businesses anyway) and new laws written and passed to shut this down.
However, these truly innovative companies are filling a need that the old ones don't. That's why there are more Uber black cars in SF than there were black cars in traditional services before Uber[4]. These companies that are pushing society forward have so much momentum and support from the communities using them that lawmakers are better served listening to the people than ignoring them.
I have no doubt that Elon Musk and Tesla will be able to disrupt the car-buying market by selling direct to customers. Maybe we'll see another startup come along and piggyback off of their success by selling other cars direct, blatantly ignoring the protectionist laws, and consumers rally behind them to get the laws changed.
I don't know where the future lies in the auto industry, but I do know that innovation and forward progress won't be stopped in the long run, no matter how many road blocks there are. I have huge respect for all of these companies that are not only working on doing the incredibly hard task of creating and trying to sustain a company, but having to fight much larger corporations at the same time.
It's an amusing sleight of hand to equate Tesla's run-in with franchise law to Uber's run-in with taxi licensing.
Franchise laws are the product of decades of overlapping private/public enforcement of contractual issues between dealers and manufacturers. It seems clear on the face of it that Tesla should in no way be encumbered by the arrangements made between General Motors and its dealers, because Tesla never had dealers to pull the rug out from under. And this is notwithstanding the fact that encoding and enforcing agreements between dealers and manufacturers should have been the province of contract law, not statutes.
Taxi regulations serve legitimate purposes beyond enforcing agreements. For instance: in many states, it's difficult to get a job driving taxis or even black cars with a suspension on your record, because the licenses are held by parent companies who are liable to lose them if a driver causes an incident.
Loud arguments declaiming the insanity of applying taxi regulations to a service as excellent as Uber also tend not to engage with the real argument, which is, "what do we do when there are 10 Ubers, and drivers can hop between them?"
You can believe that there are valid reasons to regulate cabs and black cars, or you can not believe that. But it's intellectually dishonest to lump that question in with franchise laws and licenses for florists.
The point of my post wasn't to say that types of laws that companies are using to litigate against Uber and Tesla are equal in every way, and I don't appreciate you insinuating that I'm intentionally misleading people.
My overall point is that vested interests in many industries are using old laws and regulations to litigate against disruptive companies in their respective industries with the intention of stopping the disruptive company, and where those laws aren't sufficient, they are trying to pass new ones. And that despite this effort from vested interests (often times, government included), I believe that the true innovators will persevere.
Is there something about that you disagree with? I'm not sure what the point of your reply is.
Incumbents in the automotive industry are trying to abuse existing laws to harm or extract rents from Tesla, but should and probably will ultimately fail to do that, because the purpose of those laws is orthogonal to what Tesla is doing.
Incumbents in the taxi/livery business are wielding their regulations against Uber. But their claims are not as specious. They are encumbered by legitimate regulation, and Uber is in part profiting from regulatory arbitrage. Even if they didn't want to throw up hurdles to Uber, they more or less have to lobby to have their regs enforced on Uber, or else be structurally disadvantaged.
This is a distinction you failed to draw in your comment, which drew a circle around "florist licenses", Uber, and franchise laws and claimed they were all part of the same phenomenon. No, they aren't.
"...the purpose of those laws is orthogonal..."
"...their claims are not as specious..."
Those claims aren't yours to make. How legitimate or illegitimate any given law is in a given circumstance is arguable and subjective. Thus the court system, lawyers, and the entire judicial branch.
Eric's point - that these cases are all part of the same phenomenon - makes complete sense. Incumbents trying to leverage power to stifle innovation from a new generation of companies. It's simple enough, I don't even see what there is to argue.
It's simple enough, I don't even see what there is to argue.
What there is to argue is that there are industries where regulation serves no purpose other than to stifle competition, and there are industries where regulation serves the purpose of actually protecting people.
Taxi licensing is an example of the latter.
And in general, as much as HN loves the narrative of "plucky disruptive hackers vs. evil entrenched interests", it is fundamentally not right for a company to "disrupt" by skirting laws and regulations that competitors are required to obey. It is also unsurprising that competitors raise an unholy stink when that happens, and you would do exactly the same if placed in that situation.
1. Your claim re: Taxi licensing... Without exception, every de facto law is in place to "protect people". Whether or not that's the case is for the lawyers to argue and for the court to decide.
2. I can't argue that I wouldn't complain if I was an entrenched incumbent. Luckily for me I guess that's not the case.
It's just my opinion, but as I see it, it's fair enough to classify all the aforementioned cases as examples of analog regulations in a digital world. New digital players taking advantage of the latest technology, and old players taking advantage of yesterday's laws.
Hackers can defeat these entrenched interests. Set up online websites that work through these problems in a structured manner (like a mechanical turk for anti-corruption).
Websites won't fix the problem, but may group some people around it and enable them to solve the issue.
I'm not saying that was your point, but in general I'm bewildered by this growing attitude that web-dev "hackers" can solve problems of humanity by just building a bunch of RoR websites. It managed to reach even at least one TED talk. Sounds to me mostly like front-end developers wanting to feel good that they're making difference when building cat-photo-sharing apps. But somehow it ended up as a global perception that "hackers" build websites and problems get solved.
I'm actually anti-ROR and not a frontend guy, but information systems can tackle all problems. If there is a problem that can be solvable, the critical step is designing the database (it's why ERP runs all big busineses).
Now we're seeing these same groups try to initiate and bring in new laws to stop competition that is truly an innovative take on an industry. Such as the Uber amendment[2] that was to be written and voted on in less than 24 hours, or cease and desist notices being sent to Lyft and SideCar, telling them to shelve their business while they investigate whether or not they are doing something illegal[3].
Entrenched industries with connections to governments, and governments making tax revenue from these entrenched businesses both have a huge incentive to get old laws enforced past their original intent (which were often written for the sole purpose of protecting those entrenched businesses anyway) and new laws written and passed to shut this down.
However, these truly innovative companies are filling a need that the old ones don't. That's why there are more Uber black cars in SF than there were black cars in traditional services before Uber[4]. These companies that are pushing society forward have so much momentum and support from the communities using them that lawmakers are better served listening to the people than ignoring them.
I have no doubt that Elon Musk and Tesla will be able to disrupt the car-buying market by selling direct to customers. Maybe we'll see another startup come along and piggyback off of their success by selling other cars direct, blatantly ignoring the protectionist laws, and consumers rally behind them to get the laws changed.
I don't know where the future lies in the auto industry, but I do know that innovation and forward progress won't be stopped in the long run, no matter how many road blocks there are. I have huge respect for all of these companies that are not only working on doing the incredibly hard task of creating and trying to sustain a company, but having to fight much larger corporations at the same time.
1. http://abcnews.go.com/WNT/story?id=131571&page=1
2. http://blog.uber.com/2012/07/09/strike-down-the-minimum-fare...
3. http://thesidecarblog.files.wordpress.com/2012/10/sidecar_cp...
4. From Travis Kalanick's talk at Startup School