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From Commune To Sharing Economy Startup
gthuang88 writes: Willy Schlacks grew up in a conservative commune in Missouri without technology like phones or computers. At age 27, he and his brother left and started a construction business. That led to their founding a Web startup called EquipmentShare that helps contractors rent and share construction machinery. The startup went through the Y Combinator program and just raised $2 million from venture capitalists. The Schlacks worldview, coming from a communal society where they never owned property, fits in an interesting way with the digital sharing economy of Uber and Airbnb that's seeping into other industries. But there's one big difference. "I appreciate capitalism," Schlacks says. "I definitely prefer it."
As nice as communism sounds, there's an inherent problem with rentals.
Anyone who's been a landlord knows that people don't take care stuff they don't own. Rental cars are abused, apartments are damaged and left uncleaned, taxis are smelly, public toilets are filthy and broken down.
I can't think of any rental system off the top that consistently presents clean and well-maintained equipment without enormous amounts of time and effort.
There's a thing in economics called "unequal knowledge" which explains why used cars have little value. The seller knows whether the vehicle is robust, but the buyer has no realistic way to tell. You can't tell whether the transmission needs replacing or the engine oil was ever changed or if other expensive repairs are needed. Because the buyer can't verify whether the vehicle is good, he will only pay "average" price. Because buyers will only pay average price, sellers won't sell vehicles which have above-average value. This in turn drives down the average price and eventually the expectation drops to zero.
Rentals are the same. You can never know whether someone damaged the rental until it's too late, and renters have no incentive to tell.
Construction equipment costs upwards of hundreds of thousands of dollars. I can't see someone renting out a bulldozer and taking a chance that the renter didn't run it without oil for a weekend.
This EXACT business model was attempted by dirtpile.com 20 years ago
Any patents on this sort of thing have expired long ago
It's a CRAPPY business model, that's what to be afraid of. People don't want to rent equipment, they want to pay for the service that the equipment provides. Joe the scumbag real estate developer doesn't want to rent a bulldozer to level his lot, he wants to contract with an earth moving company to get the dirt moved. He doesn't want to hire a grunt to drive the bulldozer. He doesn't want to deal with topping off the oil and the hydraulic fluid. He wants a flat piece of land so he can call in the next set of contractors to build houses made out of ticky-tacky.
Ever since someone realized they can make money from patent trolling. "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."
You don't get to pick and choose only the positive results of profit motive as representing "real" capitalism. The system works great at finding the local optimum; it's flaw is that it both calls for but can't handle clever pyschopaths. And that flaw turns to a fatal one when people fall in love with capitalism and refuse any attempts to mitigate less desirable effects in the name of economic efficiency - or religious orthodoxy, which is what I suspect it really is for a lot of people.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.