Do we have a term for this phenomenon yet? Airbnb is a great example. Uber is another. Regulatory loopholes are the way that these companies actually make money, but they call it "technology" and everyone kind of shrugs.
Airbnb was a bit more then a regulatory loophole, it at least started out as a new way for private homeowners to monetize one of their greatest asset. So it was much more an unused potential that was being tapped in.
The regulation that came after has in my personal experience privatized airbnb and now it's hard to find a private renter, when I started using it that was the standard.
Once Airbnb became systemically harmful, regulation followed.
Nobody cares about small tech companies breaking the law for a few users.
Everyone cares about {insert bad outcome from mass regulatory avoidance}.
(Also, of the 3 airbnb founders, one has delusions of being the next Steve Jobs and turning it into an everything app (Chesky), another now works for DOGE (Gebbia), and the last is sucking up to Chinese government data requests (Blecharczyk)... so, yeah, not exactly the sort of folks that should be trusted with light regulation)
I know many many friends who were able to survive an expensive city because of it. Cities that are largely messed up due to the governments stupid games with taxes and interest
In my circles we have been calling it unregulated free market capitalism, or laissez faire capitalism.
More examples include Uber to bypass taxi regulation, and generative AI to bypass copyright regulation (as well as consumer protection regulation in both cases as well as labor protections).
In unregulated free market capitalism, there would be no free supply of unlimited land for roads for Uber & car companies to arbitrage into profit - they would have to have bought land & built infra all of which would make using vehicles for one person completely uneconomical. This would be much better than the status quo - freight & transit would be relatively unaffected by having to pay for land since they they both very efficient.
Similarly, in unregulated free market capitalism, there would be no copyright to bypass.
I am not trying to argue that either of these area panaceas but I feel like we are often in denial about how much collectivism is involved in the things we don't like about capitalism.
The claim (or rather the joke) isn’t that Uber was operating in unregulated free market capitalism, but that Uber is unregulated free market capitalism. A more accurate (and a non-joke) way to describe this is to observe that Uber’s only innovation was to find a way to operate in an unregulated marked while all their competitors remained regulated.
eh.. so long as Uber (or any other privately owned & operated vehicle) is getting free land & pavement, they are effectively operating in a collectivized, regulated market.
Yes ofc, on one specific aspect of regulation - the total qty of cars allowed - they did an end-run. But regulating the total # of taxis was always just a way of trying to limit land consumption by cars, rendered ineffective by only applying to cars used as taxis instead of all cars, all vehicles. So yeah, they benefited from a titch less regulation, but land in cities is so valuable that to give it away for free dwarfs the value gained from skirting any other regulation, so IMO it's still largely a collective non-market endeavour, just organized for the benefit of ppl in cars, rather than the public at large.
What we're talking about is a much more specific phenomenon than "unregulated free market capitalism". In fact, in an unregulated market, there would be no regulatory arbitrage opportunities, by definition (e.g. Uber would have no reason to exist since taxis would already be unregulated).
The idea of the argument (or more accurately the joke) is that Uber is unregulated free market capitalism. It is what happens to the taxi market if they would lift all regulations. Uber’s whole “innovation” was to find a way to be unregulated while most of their competitors were still regulated.
I need to clarify, parent asked how does a user use AI to bypass copyright. But I answered how an AI company uses AI to bypass copyright.
I am under no illusion that if a user of AI requests an image of Indiana Jones and uses it in their art, the rights holders will issue a takedown an would succeed. The AI company that owns the model that generated the model will however not face any consequences, and have therefor successfully have bypassed copyright protections.
Well, doesn't that specific meaning apply here? I mean, the lack of protection for end-users is at first compensated by investment money (low prices and huge effort on support). Once network effect is reached, the unregulated nature of the platform shows, end-users are wronged, only providers profit from the lack of regulation ...
Or maybe I don't understand the meaning of enshittification?
No. The whole point of enshittification is that it is an intentional process, a bait-and-switch. You get a cool free service, you become dependent on it, and then they start monetizing it and limiting it.
My understanding is it is more tied to crafting UX that maximizes profit. Many cases involve both enshittification and regulatory arbitrage (as a peer comment so eloquently put it)
Yes I know, which is why I looked up the Wikipedia definition to make sure I was using it correctly.
Stripe provides a trusted service to its users, has a great reputation, then implements changes that will degrade that service by avoiding regulations designed to protect the consumer.
