I kind of wish that there was a law against blatent rent-seeking, but honestly there are already too many examples that are pretty close to that to begin with, it would probably distroy the entire...
I kind of wish that there was a law against blatent rent-seeking, but honestly there are already too many examples that are pretty close to that to begin with, it would probably distroy the entire world's economy.
That $12/month heated steering wheel option costs more for one month than it originally cost them to add that feature to the steering wheel.
I’m not super familiar with the term, so I would love some more info on your thoughts. According to investopedia, “Rent Seeking is an economic concept that occurs when an entity seeks to gain...
I’m not super familiar with the term, so I would love some more info on your thoughts.
According to investopedia, “Rent Seeking is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity. Typically, it revolves around government funded social services and social service programs.”
To my reading, this subscription is absolutely rent seeking. The fact that rent seeking is typically government services doesn’t matter if the definition fits. BMW is not providing any contribution of productivity (not the best term for a luxury car, but I think it is still close enough, as the physical requirements for heating are included in all bmw cars).
Let's just back up for a second and examine what BMW is doing. Essentially, they are trying to cut down on SKUs by selling one vehicle with all the options and then charging people to unlock them....
Let's just back up for a second and examine what BMW is doing. Essentially, they are trying to cut down on SKUs by selling one vehicle with all the options and then charging people to unlock them. So instead of having a bunch of different trims you'll have one or two models instead. As someone who enjoys buying and driving older vehicles for longer periods of time, I don't particularly like that idea at all but economically it may make sense for many consumers. BMW can lower their costs and the user can turn on their heated seats in January for 18$ a year instead of 600$ for jumping up to the next trim model and when they trade in five years later they come out ahead.
Just because I don't see value in this doesn't mean there is no value in this.
As @stu2b50 said, rent seeking implies the creation or sustenance of some sort of market condition that allows someone to extract rent while providing no economic value at all, e.g. nimby landlords who help perpetuate zoning laws to extract rent from cities. Or if you want to get Georgist in here, all rent value derived from land rent.
I see how it can be argued either way, but I think at least some of us see the act of software-disabling a perfectly functional piece of hardware as creating that zero-economic-value condition.
rent seeking implies the creation or sustenance of some sort of market condition that allows someone to extract rent while providing no economic value at all
I see how it can be argued either way, but I think at least some of us see the act of software-disabling a perfectly functional piece of hardware as creating that zero-economic-value condition.
I think it's definitely something I won't be participating in and I hate the trend of everything being a service, but I also don't think you can say it creates zero value in this particular case....
I see how it can be argued either way, but I think at least some of us see the act of software-disabling a perfectly functional piece of hardware as creating that zero-economic-value condition.
I think it's definitely something I won't be participating in and I hate the trend of everything being a service, but I also don't think you can say it creates zero value in this particular case. Even ignoring the cost savings aspect and the small chance for those savings to be passed onto the customer -- the ability to rent heated seats on a stock BMW for 20$ in a cold snap sounds... pretty good?
Don't get me wrong, I still think this is anti-consumer because it's yet another case of undermining what it means to own something -- but I'm also not being forced to participate in this, at least for now. Which kind of prevents it from qualifying as rent-seeking. If I charge my friends $20 to park at the grocery store, that's rent-seeking. If I charge them $20 to use my front door, they just won't come over anymore.
My view on the value side of the question is that you’ve already paid for the seat heaters as part of the car purchase. Paying again to remove an artificial block on the use of something you...
My view on the value side of the question is that you’ve already paid for the seat heaters as part of the car purchase. Paying again to remove an artificial block on the use of something you already own strikes me as exactly the kind of profit extraction you were talking about. In practice, yes, it’s a relatively small number in the context of a luxury car - but in principle I stand by the assertion that no value is created because the block you’re paying to remove is purely arbitrary.
Whether or not that meets the formal definition of rent seeking is something I don’t know with confidence, and I’m happy to defer to you and others in the thread on that.
This is only true if you were going to buy a BMW with heated seats already. If you're buying a stock BMW anyways, it's virtually all upside for you. (Can you even get a BMW without heated seats...
Paying again to remove an artificial block on the use of something you already own strikes me as exactly the kind of profit extraction you were talking about.
This is only true if you were going to buy a BMW with heated seats already. If you're buying a stock BMW anyways, it's virtually all upside for you. (Can you even get a BMW without heated seats these days? No idea about that).
Not sure I follow? The stock BMW has the hardware cost rolled in, you’re paying extra for the on switch. My view is that the base model already has heated seats, but they’re blocking you from...
Not sure I follow? The stock BMW has the hardware cost rolled in, you’re paying extra for the on switch. My view is that the base model already has heated seats, but they’re blocking you from using them unless you pay extra.
Assuming that some BMW car with a specific trim costs, say, $80k base. Would you feel better or worse if in that trim they a) actually physically rip out the coils and circuitry in the steering...
Assuming that some BMW car with a specific trim costs, say, $80k base.
Would you feel better or worse if in that trim they
a) actually physically rip out the coils and circuitry in the steering wheel to prevent you from having heated steering wheels
b) block the heated functionality in software
Often due to economies of scale a) is more expensive to produce than b), which makes things a bit funky. Net result is the same, though - you’ve paid 80k and the car doesn’t have heated steering wheels.
My position is that both of those are counterproductive and equally unethical. If the $80k paid by the customer is funding the coils and circuitry, those coils and circuitry should be both present...
My position is that both of those are counterproductive and equally unethical. If the $80k paid by the customer is funding the coils and circuitry, those coils and circuitry should be both present and usable.
I totally understand that economies of scale, profit maximisation, and price discrimination all mean that it is optimal to disable them from a company's point of view. What I'm also saying is that this is an example of the market running directly counter to the consumer's interests, and that the removal of a feature that was originally built in (whether removed by physical or digital means) is an act that destroys value for the customer in pursuit of additional "artificial" profit to restore that value.
I accept that this is how things are, I just don't like it and don't consider it reasonable.
The thing is that economic rent is about the steady state of the market. Let's say a farmer produces apples for about $1/apple in terms of total opportunity cost (it doesn't necessarily come into...
The thing is that economic rent is about the steady state of the market. Let's say a farmer produces apples for about $1/apple in terms of total opportunity cost (it doesn't necessarily come into play but I would note that when people talk about "productivity", that's not just the bill of materials of the item). If he sells it for $100, is that an example of a $99 per unit economic rent?
Well, only if people are forced to buy his apples for $100 for some reason. A single producer overcharging is not economic rent - it's when, in the steady state, consumers must pay the additional delta for some reason.
For the BMW case, I'd say that because beemers are not particularly necessary it'd be hard to count as economic rent. A contrasting example are iPhones are Android phones, where the 30% processing fees are much closer to being economic rent, because smartphones are practically a necessity and Apple and Google are a duopoly in the space.
Rent seeking is kind of a poorly understood concept just because of its unfortunate name. Creating a subscription service isn't rent seeking, nor is actually literally seeking rent, ie; charging...
Rent seeking is kind of a poorly understood concept just because of its unfortunate name. Creating a subscription service isn't rent seeking, nor is actually literally seeking rent, ie; charging tenants to live in a property you own.
It refers to a situation where a company or person gets rewarded for changing the rules of the game in their favor. If a corporation pays a powerful lobbyist 500k a year who manages to convince a politician to ease regulations that save the company $10 billion a year, that's classic rent seeking. If a company donates a few thousand to a PAC which convinces people to vote for subsidies that net them billions, that's rent seeking.
It's basically hijacking a system that's supposed to be there for the greater good for personal gain. In this case, BMW isn't doing that. They're just being assholes.
It's even more broad than that, really. For example, something people often don't think of as a bad thing, but is one of the most common sources of supply side economic rent is... unions. Unions,...
It's basically hijacking a system that's supposed to be there for the greater good for personal gain. In this case, BMW isn't doing that. They're just being assholes.
It's even more broad than that, really. For example, something people often don't think of as a bad thing, but is one of the most common sources of supply side economic rent is... unions. Unions, by their very purpose, try to create economic rent. That's not a bad thing - it's just that economic rent is very, well, objective term. It's neither inherently good nor bad. Technically speaking, unions are rent-seeking.
This would have been an incredible April fool's joke. As it stands, it just shows that consumer protection laws need to be updated for the 21st century. If resource waste is going to disappear,...
This would have been an incredible April fool's joke.
As it stands, it just shows that consumer protection laws need to be updated for the 21st century. If resource waste is going to disappear, strict regulations are a necessity to stop wasteful nonsense like this.
It's a serious matter, but perversely funny at the same time.
Ars Technica reports that this is not the case. The reality seems to be that in some countries, BMW will give its customers the choice to either purchase the feature outright or let them have it...
The reality seems to be that in some countries, BMW will give its customers the choice to either purchase the feature outright or let them have it with a subscription.
I don’t think that contradicts either the headline or the Verge article itself? The fact that there’s an unlimited option (at least for now) doesn’t change the fact that “heated seat subscription”...
I don’t think that contradicts either the headline or the Verge article itself? The fact that there’s an unlimited option (at least for now) doesn’t change the fact that “heated seat subscription” is now a thing they’re offering.
No, it doesn't and I don't think I implied that it does. However, both titles and the article do imply with varying degrees that subscription is now the only option to have the feature. The Verge...
No, it doesn't and I don't think I implied that it does. However, both titles and the article do imply with varying degrees that subscription is now the only option to have the feature. The Verge mentions in passing that there's an "unlimited" option to be technically accurate, which it is, but to me it clearly comes across as an article more interested in creating outrage than an honest report.
I may have misinterpreted them, I'm not a native speaker, but I think most, if not all of the comments here would be of different nature if that were the case.
I interpreted "this is not the case" as you saying the Ars Technica article conflicted with the one we're discussing here, but maybe that was my misunderstanding. Either way, I honestly don't...
I interpreted "this is not the case" as you saying the Ars Technica article conflicted with the one we're discussing here, but maybe that was my misunderstanding.
Either way, I honestly don't think it's rage bait and I think the tone of discussion is absolutely appropriate to how bad this is. I agree that the headline is arguably a little ambiguous, but I wouldn't call it misleading - they are making it a subscription service, by putting a software interlock on a pure hardware feature that's physically present in the car, and they happen to be offering monthly, annual, and lifetime tiers to that subscription.
There's plenty of precedent for digital purchases being rescinded after the fact (Ubisoft most recently, but many others prior to that), so I'm inherently mistrustful of the lifetime tier even for existing owners, and there's no reason to believe they'll keep offering it to future customers it if they think for a second they can get away with removing it. Offering subscriptions to a static feature in any capacity is a very clear statement of intent, and needs to be shut down hard and fast by the consumer if we don't want it to become the standard. The fact they're smart enough to keep a tier for now that they can point to and say "we're just giving you the options" doesn't change any of that.
Nope, that's what I meant but after re-reading my message, I could've elaborated myself better. Like I said the Verge article isn't technically wrong. Where we differ is the way we interpret their...
I interpreted "this is not the case" as you saying the Ars Technica article conflicted with the one we're discussing here, but maybe that was my misunderstanding.
Nope, that's what I meant but after re-reading my message, I could've elaborated myself better. Like I said the Verge article isn't technically wrong. Where we differ is the way we interpret their tone and intent. And that's fine, this really is just semantics.
I do agree with your larger comment and the comments in this thread, though. Car manufacturers are clearly trying to dip their toes in the water to see how much they can get away with. The fact that they're expanding their subscription options, regardless of whether they're allowing you to buy the said features outright for now, doesn't change the fact that their end goal is probably a world in which you don't even own the car. I've never owned a car myself, nor do I have any plans to, but I do worry about the increasing pervasiveness of sharing economy where nobody owns anything.
Lots of people don't own their cars anyway, at least where I live. 90% of new cars bought in the UK are owned by finance firms. A lot of people effectively rent their cars, paying monthly, and...
their end goal is probably a world in which you don't even own the car.
Lots of people don't own their cars anyway, at least where I live. 90% of new cars bought in the UK are owned by finance firms. A lot of people effectively rent their cars, paying monthly, and replace them every 4-5 years. Which is the same as what BMW are doing here with features. Nothing new, really.
I'm not sure I buy the slippery slope arguments because all this is doing is expanding people's options. Car manufacturers likely don't care if you rent their cars or buy them outright, what they care about is you're driving their cars not someone else's. If I can buy a used BMW which doesn't have heated seats and pay to have heated seats enabled, that's better for me as a consumer than the current situation where if I want heated sears I have to find a used car where the original buyer paid for the option at purchase. Or I can not pay and not have them. Seems like quite a good idea to me.
My concern comes from the fact we've already seen all this play out with software and digital media. We moved from "ownership follows the disc and you can freely resell it" to "ownership is...
I'm not sure I buy the slippery slope arguments because all this is doing is expanding people's options.
My concern comes from the fact we've already seen all this play out with software and digital media. We moved from "ownership follows the disc and you can freely resell it" to "ownership is perpetual but tied to you specifically" to "ownership is temporary and contingent on your continued payment" in the course of a decade.
If consumers don't push back hard enough, I see no reason to believe that the manufacturers won't do the same. From a pure capitalist perspective it makes perfect sense: move a significant number of features to ongoing subscriptions over the coming years in order to capture a revenue stream from the secondary market as well as those who buy new.
It won't happen overnight, and I can envisage an interim stage where you buy the features at a one-off cost (perhaps even initially a little cheaper than they are now) but they all disable and need to be bought again when the car's "digital ownership" is transferred to a new user, but perpetual subscription is where every market seems to be heading given the opportunity.
I might have missed some because I don't really follow Windows/Mac software but I can only think of Adobe doing this exclusively and tbh from a business perspective it's pretty compelling. It's...
"ownership is temporary and contingent on your continued payment"
I might have missed some because I don't really follow Windows/Mac software but I can only think of Adobe doing this exclusively and tbh from a business perspective it's pretty compelling. It's not a lot of money, especially when you factor bulk discounts - and support, cloud storage, ongoing updates, all managed in-app? Hell yes please. Even 25+ years ago when I started working in IT that's how lots of companies (including Microsoft) was doing software for business. Subscription. It's just you got a case of CDs every few months with updates and had to manually put them all onto your PCs. Which was my first job! It was very boring.
Anyway, point is that just because some people are doing it doesn't mean everyone is. There's still plenty of software you can just buy, and software is unique in that there's FOSS too. If I could download a car... So just because one company is running a trial, I see no reason to assume that all car manufacturers will be doing the same thing, even in a decade. That's also ignoring the fact that it's not impossible that in 15-20 years most people won't even own cars, and car travel will be a subscription service much like how e-scooters are now.
Anyway, how do you imagine consumers can "push back"? Genuine question. I don't mean it to sound facetious, and I apologise if it does.
I don't want and will never buy a BMW already, so that's my contribution of nothing. I'm not reducing their sales numbers because I don't buy brand new cars and I don't want BMWs anyway. So I have made zero push back. I imagine many of us are in a similar situation (almost everyone in the UK didn't buy a BMW last year, they sold 116,600 cars in 2021)
My experience of people who do buy new BMWs, which is admittedly only 3-4 people, is they won't care about a few hundred quid to lifetime-enable an option they'd almost certainly be buying anyway. Chances are most buyers won't even know it's a "subscription", the sales person will say "heated seats?" and the buyer will say "of course" and £850 will go on the price, exactly like buying an option - because that's what it is. Or they won't buy it and won't know about it. BMW owners are well used to paying for stuff and have the money to do so.
fwiw I don't entirely disagree that making heated seats a subscription service is a bad idea (although I do think it has good aspects as well). I just don't think it's the tip of a disastrous iceberg either.
First thing I'll say is that I do sometimes get a bit wrapped up in frustration about things that go against my personal sense of fairness, so I do appreciate having a bit of a nudge to take a...
First thing I'll say is that I do sometimes get a bit wrapped up in frustration about things that go against my personal sense of fairness, so I do appreciate having a bit of a nudge to take a step back and look at it more dispassionately.
Adobe definitely makes for a good go-to example, particularly as they like to claim that it's cheaper than back when it was standalone (true if you felt the need to buy every revision, but no longer lets users choose to upgrade only when they see additional value, perhaps every 3-5 revisions).
There are a decent number of more niche desktop software examples, particularly those distributed through the MS and Apple app stores where recurring billing and authentication is built in - but more broadly it's a model that tends to be common in mobile apps and console gaming. All of my fitness apps (with the notable exception of Garmin Connect) charge a monthly fee, for example. The thing that muddies the water even more is that they do generally include some kind of ongoing cloud provision, which is indeed an ongoing cost, but they tie it in whether it's useful to you or not (and often even when you may actively prefer to keep all of your data local).
I don't inherently object to subscription models - I pay for a decent number of them, some (particularly streaming media) are totally justified in being an ongoing cost, and feel like I'm getting reasonable value out of maybe 70% of them - but I'm also cognisant of how much control they take out of the hands of the customer and give back to the distributors. Even video streaming, which is a legitimate ongoing cost, is now the only option to access media that could easily have been a dirt cheap second hand DVD ten years ago.
Combine all that with the fact that corporations are paperclip maximisers for profit, and that they have spent many decades shaping and often misusing copyright and patent legislation to cement their positions, and it seems totally reasonable to expect that they will act in a way that extracts more money from the end user as long as the technology allows it. We're already paying a bit more than we otherwise would in a broad range of situations as a result of that, and the nature of business strongly suggests to me that'll only get worse as the users accept it and as the ability to enforce that control increases.
That's also ignoring the fact that it's not impossible that in 15-20 years most people won't even own cars, and car travel will be a subscription service much like how e-scooters are now.
A perfect example of the kind of thing that concerns me! If I wanted to use an e-scooter as a semi-regular mode of transport, I'd end up spending more than the cost of buying one within six months. But in this case I literally can't legally use one I've bought outright, because only the subscription ones are approved for public use.
Anyway, how do you imagine consumers can "push back"? Genuine question. I don't mean it to sound facetious, and I apologise if it does.
Not at all! It'd take sufficient negative PR that it risks tarnishing the brand as a whole, along with a refusal to pay for the feature in question. If the revenue is low and the cost is high (likely in terms of potential customers considering the brand less luxurious), they'll drop it and go back to the existing model.
I agree that a lot of us probably won't personally be buying BMWs, but a sufficient number of people laughing at or disparaging them on social media for this is push back - if it's prevalent enough, it starts countering all those millions they spend on marketing, and that matters to any brand.
I just don't think it's the tip of a disastrous iceberg either.
Maybe it isn't, and perhaps I am catastrophising a bit, I honestly don't know. But I can think of very few situations where handing more control back to the corporations has been good for consumers, and plenty where it has been moderately to extremely bad. The fact that many of us are only debating the subscription part, and are tacitly accepting of "oh yeah, they'll sell you all the hardware but only turn it on if you pay extra" sounds like we've already slipped a good way down that slope. Restrictions on reselling come next, and then as you said yourself, making the whole car a subscription comes after that. I don't trust an organisation whose only purpose is profit maximisation with that level of control.
While annoying, this is only a mew monetization scheme for a long standing practice: shipping cars with disabled hardware that is activated on payment for the ‘option package’. My car has all the...
While annoying, this is only a mew monetization scheme for a long standing practice: shipping cars with disabled hardware that is activated on payment for the ‘option package’. My car has all the sensors for all the safety bells and whistles but I only get blind spot monitor activated becUse that’s all the prior owner opted for.
All this is nothing new. A layman’s understanding of ‘ownership’ usually is simplified to possession and full use. But ownership/property have always been purely creatures defined (and limited) by the state (or crown). There are no innate property rights. This is a good thing: it’s what allows the state to do things like regulate pollution.
I disagree that property rights are inherently a good thing. At it's core, property rights are about enforcing ownership of something that you personally do not possess. And that fuels all sorts...
There are now innate property rights. This is a good thing: it’s what allows the state to do things like regulate pollution.
I disagree that property rights are inherently a good thing. At it's core, property rights are about enforcing ownership of something that you personally do not possess. And that fuels all sorts of abusive behavior.
Pollution could easily be regulated by a government without the concept of private property.
While I disagree with this, BMW is not the first to charge a subscription for hardware that you own. AT&T, Verizon, etc do this with the radio in your phone - a WiFi network is not something that...
While I disagree with this, BMW is not the first to charge a subscription for hardware that you own. AT&T, Verizon, etc do this with the radio in your phone - a WiFi network is not something that is in any way dependent on their network being connected to your phone, but an iPhone will prevent you from starting one if it isn’t in your cellular plan. Yes, a connection to their network is needed for internet access, but a wireless router doesn’t need connection to the web to exist.
The whole “no tethering” concept annoys the hell out of me regardless - if I’ve paid for 50GB of mobile data then I should be able to use 50GB however I want - but I do think this is quite a...
The whole “no tethering” concept annoys the hell out of me regardless - if I’ve paid for 50GB of mobile data then I should be able to use 50GB however I want - but I do think this is quite a different thing. Blocking hotspot creation is a slightly heavy handed way of enforcing a policy on usage of their network, from what I understand here? It’s not something I’ve actually seen firsthand, since the last time I had a contract that blocked it they attempted to do so at the network level.
I find the policy on tethering itself unreasonable, but the basic concept is that they’re aiming to limit your interaction with the network rather than specifically your use of your own hardware - the bleed into the latter sounds like an oversight more than a goal.
There absolutely are other examples of local-only hardware being locked out in software, from binned GPUs and CPUs to IBM mainframes, but there’s still something that feels more egregious about putting a software interlock on a purely hardware component in a car compared to just soft-disabling features that depend on firmware to run either way.
I guess what I’m trying to say here is that I hate all of this, but I do find BMW’s latest move to be a new and unique kind of bad.
I'm confused...as you saying that certain smartphones won't access WiFi without an active plan? Or that they can't broadcast/hotspot without it being in the plan?
I'm confused...as you saying that certain smartphones won't access WiFi without an active plan? Or that they can't broadcast/hotspot without it being in the plan?
In the USA, the major carriers won't let you share your phone's data plan to another device via a wire or wireless hotspot, unless you pay an additional fee for tethering. So when I wanna browse...
In the USA, the major carriers won't let you share your phone's data plan to another device via a wire or wireless hotspot, unless you pay an additional fee for tethering.
So when I wanna browse the internet on my laptop instead of my phone, I have to pay $10/mo for them to remove the block they placed on my phone upon activation.
The reason the carriers (and apple/google) don't want you to have root is that it lets you easily bypass this bullshit.
They are saying that you cannot turn your phone into a wireless hotspot without an active service plan. I don't think this is particularly unreasonable. How many people are trying to use their...
They are saying that you cannot turn your phone into a wireless hotspot without an active service plan.
I don't think this is particularly unreasonable. How many people are trying to use their phones to run a mobile WLAN without internet access? Does the iPhone even allow clients to see eachother?
Who cares? The hardware and software have the capability to do that; it's unreasonable for Apple to put in extra effort to prevent users from using those existing features.
I don't think this is particularly unreasonable. How many people are trying to use their phones to run a mobile WLAN without internet access?
Who cares? The hardware and software have the capability to do that; it's unreasonable for Apple to put in extra effort to prevent users from using those existing features.
It's not like Apple makes money off your cell phone subscription plan. I was questioning GP's assumption that it was left out specifically to encourage people to buy cell phone plans. This is...
It's not like Apple makes money off your cell phone subscription plan. I was questioning GP's assumption that it was left out specifically to encourage people to buy cell phone plans.
This is exactly the kind of low-impact feature that gets put in the backlog and never gets dragged into a sprint because there are always higher priority bugs and features that need to be addressed. My own backlog is full of these kinds of features.
it's unreasonable for Apple to put in extra effort to prevent users from using those existing features.
iOS hotspot clients are isolated and cannot talk to eachother. I don't have access to their code but it seems a bit presumptuous to assume that Apple's software supports this feature and they went out of their way to disable it.
Not every missing feature in a given piece of software is some grand conspiracy to make you spend more money.
I'm pretty sure @Wulfsta is talking about charging to use the wireless hotspot feature of your phone, period. US phone carriers have been famous for charging extra to use features built into your...
I'm pretty sure @Wulfsta is talking about charging to use the wireless hotspot feature of your phone, period. US phone carriers have been famous for charging extra to use features built into your phone. But in more recent years I thought they were all following T-Mobile's lead of "Unlimited everything (but not really because we throttle certain pipes anyways)" and stopped doing that.
I've had cause to do this with my Android on a number of occasions, usually for p2p local file transfers in areas with no or limited service. It's often easier to make my phone into a hotspot with...
I've had cause to do this with my Android on a number of occasions, usually for p2p local file transfers in areas with no or limited service. It's often easier to make my phone into a hotspot with a short-lived web server than to rummage around trying to find the right combination of cables/sd cards/readers/adapters/system settings.
Services like AirDrop or whatever Google calls their "people nearby" sharing are getting better, but often still seem to need internet access or have other UX issues; everyone can connect to a hotspot and open their browser.
For what it’s worth, airdrop doesn’t need an internet connection. It uses Bluetooth to start an ad-hoc WiFi connection between the devices. This is also how macOS/iPad sidecar and continuity work....
For what it’s worth, airdrop doesn’t need an internet connection. It uses Bluetooth to start an ad-hoc WiFi connection between the devices. This is also how macOS/iPad sidecar and continuity work. Airplay can work this way also (it will use a common WiFi network if possible, but it will do it with ad-hoc WiFi if needed).
I have no idea if google/Microsoft/Samsung versions work this way.
I'm not saying there is no valid use case, just that it is uncommon enough that it probably never came up when the hotspot feature was being designed and implemented.
I'm not saying there is no valid use case, just that it is uncommon enough that it probably never came up when the hotspot feature was being designed and implemented.
It seems more likely to me that users trying to run an internet-less mobile WLAN from their iPhones were not even a consideration when the feature was designed.
It seems more likely to me that users trying to run an internet-less mobile WLAN from their iPhones were not even a consideration when the feature was designed.
I keep trying to play devil's advocate in my head, like maybe there is some fancy network-connected value-add to justify this. Like auto-activation based on local weather data? But no, that's...
I keep trying to play devil's advocate in my head, like maybe there is some fancy network-connected value-add to justify this. Like auto-activation based on local weather data? But no, that's completely stupid, and so is this whole anti-consumer stunt they're trying to pull. There is no justification.
I kind of wish that there was a law against blatent rent-seeking, but honestly there are already too many examples that are pretty close to that to begin with, it would probably distroy the entire world's economy.
That $12/month heated steering wheel option costs more for one month than it originally cost them to add that feature to the steering wheel.
Bingo. Blatant rent-seeking - in the form of, you know, actual rent-seeking landlords - is the basis of capitalism.
I don’t think this really qualifies as rent seeking, even if it’s grossly anti-consumer.
I’m not super familiar with the term, so I would love some more info on your thoughts.
According to investopedia, “Rent Seeking is an economic concept that occurs when an entity seeks to gain added wealth without any reciprocal contribution of productivity. Typically, it revolves around government funded social services and social service programs.”
To my reading, this subscription is absolutely rent seeking. The fact that rent seeking is typically government services doesn’t matter if the definition fits. BMW is not providing any contribution of productivity (not the best term for a luxury car, but I think it is still close enough, as the physical requirements for heating are included in all bmw cars).
Let's just back up for a second and examine what BMW is doing. Essentially, they are trying to cut down on SKUs by selling one vehicle with all the options and then charging people to unlock them. So instead of having a bunch of different trims you'll have one or two models instead. As someone who enjoys buying and driving older vehicles for longer periods of time, I don't particularly like that idea at all but economically it may make sense for many consumers. BMW can lower their costs and the user can turn on their heated seats in January for 18$ a year instead of 600$ for jumping up to the next trim model and when they trade in five years later they come out ahead.
Just because I don't see value in this doesn't mean there is no value in this.
As @stu2b50 said, rent seeking implies the creation or sustenance of some sort of market condition that allows someone to extract rent while providing no economic value at all, e.g. nimby landlords who help perpetuate zoning laws to extract rent from cities. Or if you want to get Georgist in here, all rent value derived from land rent.
I see how it can be argued either way, but I think at least some of us see the act of software-disabling a perfectly functional piece of hardware as creating that zero-economic-value condition.
I think it's definitely something I won't be participating in and I hate the trend of everything being a service, but I also don't think you can say it creates zero value in this particular case. Even ignoring the cost savings aspect and the small chance for those savings to be passed onto the customer -- the ability to rent heated seats on a stock BMW for 20$ in a cold snap sounds... pretty good?
Don't get me wrong, I still think this is anti-consumer because it's yet another case of undermining what it means to own something -- but I'm also not being forced to participate in this, at least for now. Which kind of prevents it from qualifying as rent-seeking. If I charge my friends $20 to park at the grocery store, that's rent-seeking. If I charge them $20 to use my front door, they just won't come over anymore.
My view on the value side of the question is that you’ve already paid for the seat heaters as part of the car purchase. Paying again to remove an artificial block on the use of something you already own strikes me as exactly the kind of profit extraction you were talking about. In practice, yes, it’s a relatively small number in the context of a luxury car - but in principle I stand by the assertion that no value is created because the block you’re paying to remove is purely arbitrary.
Whether or not that meets the formal definition of rent seeking is something I don’t know with confidence, and I’m happy to defer to you and others in the thread on that.
This is only true if you were going to buy a BMW with heated seats already. If you're buying a stock BMW anyways, it's virtually all upside for you. (Can you even get a BMW without heated seats these days? No idea about that).
Not sure I follow? The stock BMW has the hardware cost rolled in, you’re paying extra for the on switch. My view is that the base model already has heated seats, but they’re blocking you from using them unless you pay extra.
Assuming that some BMW car with a specific trim costs, say, $80k base.
Would you feel better or worse if in that trim they
a) actually physically rip out the coils and circuitry in the steering wheel to prevent you from having heated steering wheels
b) block the heated functionality in software
Often due to economies of scale a) is more expensive to produce than b), which makes things a bit funky. Net result is the same, though - you’ve paid 80k and the car doesn’t have heated steering wheels.
My position is that both of those are counterproductive and equally unethical. If the $80k paid by the customer is funding the coils and circuitry, those coils and circuitry should be both present and usable.
I totally understand that economies of scale, profit maximisation, and price discrimination all mean that it is optimal to disable them from a company's point of view. What I'm also saying is that this is an example of the market running directly counter to the consumer's interests, and that the removal of a feature that was originally built in (whether removed by physical or digital means) is an act that destroys value for the customer in pursuit of additional "artificial" profit to restore that value.
I accept that this is how things are, I just don't like it and don't consider it reasonable.
The thing is that economic rent is about the steady state of the market. Let's say a farmer produces apples for about $1/apple in terms of total opportunity cost (it doesn't necessarily come into play but I would note that when people talk about "productivity", that's not just the bill of materials of the item). If he sells it for $100, is that an example of a $99 per unit economic rent?
Well, only if people are forced to buy his apples for $100 for some reason. A single producer overcharging is not economic rent - it's when, in the steady state, consumers must pay the additional delta for some reason.
For the BMW case, I'd say that because beemers are not particularly necessary it'd be hard to count as economic rent. A contrasting example are iPhones are Android phones, where the 30% processing fees are much closer to being economic rent, because smartphones are practically a necessity and Apple and Google are a duopoly in the space.
Rent seeking is kind of a poorly understood concept just because of its unfortunate name. Creating a subscription service isn't rent seeking, nor is actually literally seeking rent, ie; charging tenants to live in a property you own.
It refers to a situation where a company or person gets rewarded for changing the rules of the game in their favor. If a corporation pays a powerful lobbyist 500k a year who manages to convince a politician to ease regulations that save the company $10 billion a year, that's classic rent seeking. If a company donates a few thousand to a PAC which convinces people to vote for subsidies that net them billions, that's rent seeking.
It's basically hijacking a system that's supposed to be there for the greater good for personal gain. In this case, BMW isn't doing that. They're just being assholes.
It's even more broad than that, really. For example, something people often don't think of as a bad thing, but is one of the most common sources of supply side economic rent is... unions. Unions, by their very purpose, try to create economic rent. That's not a bad thing - it's just that economic rent is very, well, objective term. It's neither inherently good nor bad. Technically speaking, unions are rent-seeking.
This would have been an incredible April fool's joke.
As it stands, it just shows that consumer protection laws need to be updated for the 21st century. If resource waste is going to disappear, strict regulations are a necessity to stop wasteful nonsense like this.
It's a serious matter, but perversely funny at the same time.
I agree, but what is worrying about it is that it might be a sign of things to come - and not just in high end consumer products.
Not that I was ever going to buy a BMW…but now I definitely won’t, even if I could afford to.
Ars Technica reports that this is not the case.
The reality seems to be that in some countries, BMW will give its customers the choice to either purchase the feature outright or let them have it with a subscription.
I don’t think that contradicts either the headline or the Verge article itself? The fact that there’s an unlimited option (at least for now) doesn’t change the fact that “heated seat subscription” is now a thing they’re offering.
No, it doesn't and I don't think I implied that it does. However, both titles and the article do imply with varying degrees that subscription is now the only option to have the feature. The Verge mentions in passing that there's an "unlimited" option to be technically accurate, which it is, but to me it clearly comes across as an article more interested in creating outrage than an honest report.
I may have misinterpreted them, I'm not a native speaker, but I think most, if not all of the comments here would be of different nature if that were the case.
I interpreted "this is not the case" as you saying the Ars Technica article conflicted with the one we're discussing here, but maybe that was my misunderstanding.
Either way, I honestly don't think it's rage bait and I think the tone of discussion is absolutely appropriate to how bad this is. I agree that the headline is arguably a little ambiguous, but I wouldn't call it misleading - they are making it a subscription service, by putting a software interlock on a pure hardware feature that's physically present in the car, and they happen to be offering monthly, annual, and lifetime tiers to that subscription.
There's plenty of precedent for digital purchases being rescinded after the fact (Ubisoft most recently, but many others prior to that), so I'm inherently mistrustful of the lifetime tier even for existing owners, and there's no reason to believe they'll keep offering it to future customers it if they think for a second they can get away with removing it. Offering subscriptions to a static feature in any capacity is a very clear statement of intent, and needs to be shut down hard and fast by the consumer if we don't want it to become the standard. The fact they're smart enough to keep a tier for now that they can point to and say "we're just giving you the options" doesn't change any of that.
Nope, that's what I meant but after re-reading my message, I could've elaborated myself better. Like I said the Verge article isn't technically wrong. Where we differ is the way we interpret their tone and intent. And that's fine, this really is just semantics.
I do agree with your larger comment and the comments in this thread, though. Car manufacturers are clearly trying to dip their toes in the water to see how much they can get away with. The fact that they're expanding their subscription options, regardless of whether they're allowing you to buy the said features outright for now, doesn't change the fact that their end goal is probably a world in which you don't even own the car. I've never owned a car myself, nor do I have any plans to, but I do worry about the increasing pervasiveness of sharing economy where nobody owns anything.
Lots of people don't own their cars anyway, at least where I live. 90% of new cars bought in the UK are owned by finance firms. A lot of people effectively rent their cars, paying monthly, and replace them every 4-5 years. Which is the same as what BMW are doing here with features. Nothing new, really.
I'm not sure I buy the slippery slope arguments because all this is doing is expanding people's options. Car manufacturers likely don't care if you rent their cars or buy them outright, what they care about is you're driving their cars not someone else's. If I can buy a used BMW which doesn't have heated seats and pay to have heated seats enabled, that's better for me as a consumer than the current situation where if I want heated sears I have to find a used car where the original buyer paid for the option at purchase. Or I can not pay and not have them. Seems like quite a good idea to me.
My concern comes from the fact we've already seen all this play out with software and digital media. We moved from "ownership follows the disc and you can freely resell it" to "ownership is perpetual but tied to you specifically" to "ownership is temporary and contingent on your continued payment" in the course of a decade.
If consumers don't push back hard enough, I see no reason to believe that the manufacturers won't do the same. From a pure capitalist perspective it makes perfect sense: move a significant number of features to ongoing subscriptions over the coming years in order to capture a revenue stream from the secondary market as well as those who buy new.
It won't happen overnight, and I can envisage an interim stage where you buy the features at a one-off cost (perhaps even initially a little cheaper than they are now) but they all disable and need to be bought again when the car's "digital ownership" is transferred to a new user, but perpetual subscription is where every market seems to be heading given the opportunity.
I might have missed some because I don't really follow Windows/Mac software but I can only think of Adobe doing this exclusively and tbh from a business perspective it's pretty compelling. It's not a lot of money, especially when you factor bulk discounts - and support, cloud storage, ongoing updates, all managed in-app? Hell yes please. Even 25+ years ago when I started working in IT that's how lots of companies (including Microsoft) was doing software for business. Subscription. It's just you got a case of CDs every few months with updates and had to manually put them all onto your PCs. Which was my first job! It was very boring.
Anyway, point is that just because some people are doing it doesn't mean everyone is. There's still plenty of software you can just buy, and software is unique in that there's FOSS too. If I could download a car... So just because one company is running a trial, I see no reason to assume that all car manufacturers will be doing the same thing, even in a decade. That's also ignoring the fact that it's not impossible that in 15-20 years most people won't even own cars, and car travel will be a subscription service much like how e-scooters are now.
Anyway, how do you imagine consumers can "push back"? Genuine question. I don't mean it to sound facetious, and I apologise if it does.
I don't want and will never buy a BMW already, so that's my contribution of nothing. I'm not reducing their sales numbers because I don't buy brand new cars and I don't want BMWs anyway. So I have made zero push back. I imagine many of us are in a similar situation (almost everyone in the UK didn't buy a BMW last year, they sold 116,600 cars in 2021)
My experience of people who do buy new BMWs, which is admittedly only 3-4 people, is they won't care about a few hundred quid to lifetime-enable an option they'd almost certainly be buying anyway. Chances are most buyers won't even know it's a "subscription", the sales person will say "heated seats?" and the buyer will say "of course" and £850 will go on the price, exactly like buying an option - because that's what it is. Or they won't buy it and won't know about it. BMW owners are well used to paying for stuff and have the money to do so.
fwiw I don't entirely disagree that making heated seats a subscription service is a bad idea (although I do think it has good aspects as well). I just don't think it's the tip of a disastrous iceberg either.
First thing I'll say is that I do sometimes get a bit wrapped up in frustration about things that go against my personal sense of fairness, so I do appreciate having a bit of a nudge to take a step back and look at it more dispassionately.
Adobe definitely makes for a good go-to example, particularly as they like to claim that it's cheaper than back when it was standalone (true if you felt the need to buy every revision, but no longer lets users choose to upgrade only when they see additional value, perhaps every 3-5 revisions).
There are a decent number of more niche desktop software examples, particularly those distributed through the MS and Apple app stores where recurring billing and authentication is built in - but more broadly it's a model that tends to be common in mobile apps and console gaming. All of my fitness apps (with the notable exception of Garmin Connect) charge a monthly fee, for example. The thing that muddies the water even more is that they do generally include some kind of ongoing cloud provision, which is indeed an ongoing cost, but they tie it in whether it's useful to you or not (and often even when you may actively prefer to keep all of your data local).
I don't inherently object to subscription models - I pay for a decent number of them, some (particularly streaming media) are totally justified in being an ongoing cost, and feel like I'm getting reasonable value out of maybe 70% of them - but I'm also cognisant of how much control they take out of the hands of the customer and give back to the distributors. Even video streaming, which is a legitimate ongoing cost, is now the only option to access media that could easily have been a dirt cheap second hand DVD ten years ago.
Combine all that with the fact that corporations are paperclip maximisers for profit, and that they have spent many decades shaping and often misusing copyright and patent legislation to cement their positions, and it seems totally reasonable to expect that they will act in a way that extracts more money from the end user as long as the technology allows it. We're already paying a bit more than we otherwise would in a broad range of situations as a result of that, and the nature of business strongly suggests to me that'll only get worse as the users accept it and as the ability to enforce that control increases.
A perfect example of the kind of thing that concerns me! If I wanted to use an e-scooter as a semi-regular mode of transport, I'd end up spending more than the cost of buying one within six months. But in this case I literally can't legally use one I've bought outright, because only the subscription ones are approved for public use.
Not at all! It'd take sufficient negative PR that it risks tarnishing the brand as a whole, along with a refusal to pay for the feature in question. If the revenue is low and the cost is high (likely in terms of potential customers considering the brand less luxurious), they'll drop it and go back to the existing model.
I agree that a lot of us probably won't personally be buying BMWs, but a sufficient number of people laughing at or disparaging them on social media for this is push back - if it's prevalent enough, it starts countering all those millions they spend on marketing, and that matters to any brand.
Maybe it isn't, and perhaps I am catastrophising a bit, I honestly don't know. But I can think of very few situations where handing more control back to the corporations has been good for consumers, and plenty where it has been moderately to extremely bad. The fact that many of us are only debating the subscription part, and are tacitly accepting of "oh yeah, they'll sell you all the hardware but only turn it on if you pay extra" sounds like we've already slipped a good way down that slope. Restrictions on reselling come next, and then as you said yourself, making the whole car a subscription comes after that. I don't trust an organisation whose only purpose is profit maximisation with that level of control.
While annoying, this is only a mew monetization scheme for a long standing practice: shipping cars with disabled hardware that is activated on payment for the ‘option package’. My car has all the sensors for all the safety bells and whistles but I only get blind spot monitor activated becUse that’s all the prior owner opted for.
All this is nothing new. A layman’s understanding of ‘ownership’ usually is simplified to possession and full use. But ownership/property have always been purely creatures defined (and limited) by the state (or crown). There are no innate property rights. This is a good thing: it’s what allows the state to do things like regulate pollution.
Edit: typo
I disagree that property rights are inherently a good thing. At it's core, property rights are about enforcing ownership of something that you personally do not possess. And that fuels all sorts of abusive behavior.
Pollution could easily be regulated by a government without the concept of private property.
Edit: This post now mostly irrelevant.
There is an unfortunate typo in my statement that obscures my meaning. That should read “no innate property rights“.
Hm yes. That does quite change the meaning.
While I disagree with this, BMW is not the first to charge a subscription for hardware that you own. AT&T, Verizon, etc do this with the radio in your phone - a WiFi network is not something that is in any way dependent on their network being connected to your phone, but an iPhone will prevent you from starting one if it isn’t in your cellular plan. Yes, a connection to their network is needed for internet access, but a wireless router doesn’t need connection to the web to exist.
The whole “no tethering” concept annoys the hell out of me regardless - if I’ve paid for 50GB of mobile data then I should be able to use 50GB however I want - but I do think this is quite a different thing. Blocking hotspot creation is a slightly heavy handed way of enforcing a policy on usage of their network, from what I understand here? It’s not something I’ve actually seen firsthand, since the last time I had a contract that blocked it they attempted to do so at the network level.
I find the policy on tethering itself unreasonable, but the basic concept is that they’re aiming to limit your interaction with the network rather than specifically your use of your own hardware - the bleed into the latter sounds like an oversight more than a goal.
There absolutely are other examples of local-only hardware being locked out in software, from binned GPUs and CPUs to IBM mainframes, but there’s still something that feels more egregious about putting a software interlock on a purely hardware component in a car compared to just soft-disabling features that depend on firmware to run either way.
I guess what I’m trying to say here is that I hate all of this, but I do find BMW’s latest move to be a new and unique kind of bad.
I'm confused...as you saying that certain smartphones won't access WiFi without an active plan? Or that they can't broadcast/hotspot without it being in the plan?
In the USA, the major carriers won't let you share your phone's data plan to another device via a wire or wireless hotspot, unless you pay an additional fee for tethering.
So when I wanna browse the internet on my laptop instead of my phone, I have to pay $10/mo for them to remove the block they placed on my phone upon activation.
The reason the carriers (and apple/google) don't want you to have root is that it lets you easily bypass this bullshit.
They are saying that you cannot turn your phone into a wireless hotspot without an active service plan.
I don't think this is particularly unreasonable. How many people are trying to use their phones to run a mobile WLAN without internet access? Does the iPhone even allow clients to see eachother?
Who cares? The hardware and software have the capability to do that; it's unreasonable for Apple to put in extra effort to prevent users from using those existing features.
It's not like Apple makes money off your cell phone subscription plan. I was questioning GP's assumption that it was left out specifically to encourage people to buy cell phone plans.
This is exactly the kind of low-impact feature that gets put in the backlog and never gets dragged into a sprint because there are always higher priority bugs and features that need to be addressed. My own backlog is full of these kinds of features.
iOS hotspot clients are isolated and cannot talk to eachother. I don't have access to their code but it seems a bit presumptuous to assume that Apple's software supports this feature and they went out of their way to disable it.
Not every missing feature in a given piece of software is some grand conspiracy to make you spend more money.
I really don't see how you could implement a standards compliant IP stack that doesn't support this.
I'm pretty sure @Wulfsta is talking about charging to use the wireless hotspot feature of your phone, period. US phone carriers have been famous for charging extra to use features built into your phone. But in more recent years I thought they were all following T-Mobile's lead of "Unlimited everything (but not really because we throttle certain pipes anyways)" and stopped doing that.
I might be wrong.
This is the sentence that lead to my assumption. It sounds to me like they want to use their iPhone as a wireless router without internet access.
I've had cause to do this with my Android on a number of occasions, usually for p2p local file transfers in areas with no or limited service. It's often easier to make my phone into a hotspot with a short-lived web server than to rummage around trying to find the right combination of cables/sd cards/readers/adapters/system settings.
Services like AirDrop or whatever Google calls their "people nearby" sharing are getting better, but often still seem to need internet access or have other UX issues; everyone can connect to a hotspot and open their browser.
For what it’s worth, airdrop doesn’t need an internet connection. It uses Bluetooth to start an ad-hoc WiFi connection between the devices. This is also how macOS/iPad sidecar and continuity work. Airplay can work this way also (it will use a common WiFi network if possible, but it will do it with ad-hoc WiFi if needed).
I have no idea if google/Microsoft/Samsung versions work this way.
I'm not saying there is no valid use case, just that it is uncommon enough that it probably never came up when the hotspot feature was being designed and implemented.
It seems more likely to me that users trying to run an internet-less mobile WLAN from their iPhones were not even a consideration when the feature was designed.
Absolute bollocks, especially since there are zero ongoing costs to the company to keep the feature active.
That's completely unfair. How much do you think it costs them to host the server that authenticates that the car is able to use that feature? /s
I keep trying to play devil's advocate in my head, like maybe there is some fancy network-connected value-add to justify this. Like auto-activation based on local weather data? But no, that's completely stupid, and so is this whole anti-consumer stunt they're trying to pull. There is no justification.
Absolutely asinine.