You're getting the cause and effect backwards. Private equity generally buys companies that are already in rough shape and tries to turn them into something profitable (which often means a lot of cost cutting). That's an important part of the ecosystem. If anyone's harming society it's the VC ecosystem that gets companies hooked on free money and encourages them to burn it as fast as possible, blocking sustainable businesses from playing in that space.
> If anyone's harming society it's the VC ecosystem that gets companies hooked on free money and encourages them to burn it as fast as possible, blocking sustainable businesses from playing in that space.
It's even worse: VC "burn money" is way too often actively destroying and undercutting existing businesses in the guise of "disruption", and then once the competition is dead, prices rise to way higher than they ever were before.
Cases in point: Uber (destroying local taxis and then milking the customers dry with "surge fees"), AirBnB (literally "disrupting" all the neighbors around the illegal hotels), Facebook/Twitter (which competed with sustainable, moderated alternatives and now "disrupt" entire elections by allowing propaganda and lies unchecked), Doordash/Grubhub/whatever, they're all bad by actively MITMing and otherwise extorting restaurants, Yelp (again, extorting small businesses), Amazon (even though they're not using VC money, they're still burning down physical stores).
> and then once the competition is dead, prices rise to way higher than they ever were before
Though it hurts the current businesses, the high prices won't last long. New competitors will see the chance in same services with lower prices and they'll go in. The problem is actually regulation and lobbying, which making new players harder to emerge.
> The problem is actually regulation and lobbying, which making new players harder to emerge.
Regulation in many cases, especially in those I mentioned, makes sense:
- Taxis should not be allowed to discriminate for anything, especially not skin color. Also, at least in Germany the fares are regulated to ensure people are not ripped off in "hot times".
- Hotels, and most AirBnBs are de facto hotels, are regulated to prevent issues with fire safety, theft, privacy, noise complaints (it's illegal to build hotels in residential zones for a reason) and many others.
- Something like Grubhub putting their own intercepting phone number in Google results via shady SEO tactics and charging people for any call is just ripe for abuse by competitors, additionally it's extremely unfair.
I don't mean those kinds of regulation, some regulation are definitely needed for the better.
However there are some regulation that are made for the sole purpose of defending the existing players and keeping new players from coming into the market.
Some licenses have requirements like that, such as requiring some documents or certification before operating, meanwhile the existing players may not have them.
At the same time some of those market disruptions need to happen and the incumbents were probably never going to get there.
A single, open source, interface app needs to exist for co-coordinating 'radio cabs' and it needs to work for _all_ cities. Ubur/Lyft are somewhat close, but that market platform and co-ordination would never have happened without them.
Hotels / housing are an issue because of predatory monetary practices. As a society (at least in the US) we don't have planned community retirement, so anything expensive becomes a defacto investment vehicle. This leads to a preference for any policy that inflates the cost of housing, which directly leads to NIMBY and combines with anti-sprawl measures to constrain supply. At that point basic econ101 applies and prices just keep going up without ever correcting (anywhere jobs exist).
Social media and the other MITM attacks are probably symptoms of the same issue; yet I'm not quite sure what a true root cause and solution are. It might require personal AI secretaries or something similar that are interest aligned with the individual users, rather than any corporation or government. (To facilitate schedule arrangements that are optimal.)
> At the same time some of those market disruptions need to happen and the incumbents were probably never going to get there.
It is always a question: is this "disruption" worth the cost - minorities and the poor cut off from taxis, illegal hotel operations robbing people (again, in many cases poor and working class) of their sleep, and trust in democracy as a whole?
Disruption was necessary, these markets were already broken. The (current disruptions) listed (in what I replied to) weren't the correct form of disruption.
^^^ The correct short version of my statement above.
The PE firm that had a take in a company I worked for wasn't hostile. They held a pretty long term stake too from what I know about the history of the business.
