Sunday, January 19, 2025

Disrupting The Narrative

It is interesting that entrepreneurs have "disrupted" so many industries that don't really need disrupting while car dealerships just carry on as always.
He’s commenting on this:*
I just have to say: it remains *insane* that, in the year of our lord 2025, you can't just go on the internet, customize the car you want, and order it delivered to your door. There is zero practical reason not to do this, but auto dealers have written the shitty dealership experience into law.
That guy seems to unironically think this is a great populist issue. 

I special ordered a car once. Set it up just the way I wanted. It took so long to deliver I finally bought another one from the dealership. I gave up and made a better deal for a car on their lot. 

I have a passing familiarity with the business of car dealerships. They buy the cars on “floor loans” from the factory, which keeps the factory filling orders (and the dealerships selling cars to keep up payments on the loan). This is why Tesla has Cybertrucks in the parking lot outside the Austin factory. No orders from individuals, no dealerships to take them. Not the way GM and Ford, etc,, want to do business. (They make a lot more cars than Tesla, who really isn’t “disrupting” the car industry.  There’s a market reason for that.) Tesla is proving to manufacturers and dealers that their system works just fine.

Now, if you want to “customize” your car, you can. Hire a mechanic and a body shop and go to town. You want the factory to do that for you? You can do that, too: if you’ve got the coin.  Here’s where I point out that cars in transit from factories to dealers used to be sheathed in white plastic (maybe still are?). This started because some guy ordered his car with a special paint job that was damaged in shipping. I. e., the condition it arrived in was not to his satisfaction. Lawsuits followed. and cars were more carefully protected after that. Probably raising prices for all of us, to boot.

So if you want your car customized to you from the factory, you’re gonna pay for that. And ordering it on the internet won’t make it any cheaper (Henry Ford made cars cheaper by mass production. What makes people think the internet reversed that basic rule?). Or make it any cheaper for Joe Average Guy, who already pays too much for his car. (The symbol of oil field economics was the expensive pickups oil field workers bought, then lost, as the boom and bust of oil field economics prevailed. Some of the people who can afford a new car, can’t afford a new car.) So this is a remarkably stupid idea.

And one reason tech bros haven’t really disrupted that many markets/industries. Football now regularly touts what technology has done for the game (or the people selling that technology do, in ads). But football remains football; just as education remains education. Computers are useful tools in business and education. But business still follows the market, and education is still the work of students and teachers.

Aside from the industries that are heavily regulated and so hard to “disrupt.” I still remember when “Ma Bell” controlled the phone lines.  MCI “disrupted” that with technology, but actually did it through the courts. Ma Bell was broken up by law, not by the market. That legal action changed the market, which allowed new technology, decades later, to reshape it. Sort of like TV replaced radio, which begat cable TV, which begat VHS and BetaMax, which begat video stores, which begat Netflix shipping DVD’s, which begat streaming services, first via Netflix. Except MCI had to legally change the market first.

And if you’re paying attention: MCI is barely a footnote in history (I still remember the “convenience” of dialing a local number, then entering my code and the number I was calling, all to save money and avoid using a long-distance operator. And then came “1-plus” dialing. Yeah, you don’t know what you missed.).  Blockbuster Video? Your own children won’t believe you. Cable TV is hanging on by its aging Boomer fingernails. Most of what got us here is now forgotten to all but history. This is the way it works. Disruption has a lot more to do with market acceptance of technology than with the genius of tech bros.

And the internet has no more made custom cars available to all of us than Amazon has given me access to books custom bound to my order.

*Having said all this, I have to note that post begins with his complaint that his wife wants a new car, and he always thought only rich people bought new cars. So…

And: what MarkS said. All three times.

3 comments:

  1. I think the overlooked function of the dealer network is to act as a buffer between supply and demand, mitigating under and oversupplies. This is somewhat contradicted by the 2008 defenestration of many dealers by the manufacturers after they got bailed out. Personal enmity works as an explanation, as well.

    ReplyDelete
  2. Also,I have to take issue with"disrupting" being conflated with"beneficial". If all it accomplishes is redirecting cash flows from asshole A to asshole B I'm missing the benefit.

    ReplyDelete
  3. Which, in retrospect, was the whole point right from the git.

    ReplyDelete