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After Zenefits, Will VCs Rein in Their Unicorns?

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Re: After Zenefits, Will VCs Rein in Their Unicorns?

#71

Post by themagician »

skewart wrote: post #62

A number of commenters here have compared Zenefits' questionable compliance with Uber, Lyft, and Airbnb. What Zenefits was doing is fundamentally different, and much more problematic. Lyft and Uber skirt similar kinds of seemingly useless regulation but they're completely up front about it. They don't pretend that their drivers are licensed or get any benefit from having licensed drivers in any way. They're simply of…

Lyft, Uber, and Airbnb can't avoid regulation forever. They've just been lucky so far. Eventually there will be a high profile incident—someone important will get raped or murdered. The political response will be 1000x what their lobbyists can handle.

It is inevitable. The reality is that this is how a lot of regulation starts. It doesn't always come from an anticompetitive place. We just forget that we actually asked for the regulation. Once we have, it's nice to always be able to blame the government or some regulator when something goes wrong. And then someone else can come in and "disrupt" the market by using a loophole of pretending like the regulation doesn't apply to them, when it's clearly intended to.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#72

Post by JohnTHaller »

skewart wrote: post #62

A number of commenters here have compared Zenefits' questionable compliance with Uber, Lyft, and Airbnb. What Zenefits was doing is fundamentally different, and much more problematic. Lyft and Uber skirt similar kinds of seemingly useless regulation but they're completely up front about it. They don't pretend that their drivers are licensed or get any benefit from having licensed drivers in any way. They're simply of…

Airbnb regularly pretends that their rentals are legal in their advertisements to consumers despite knowing that the majority of their revenue in places like NYC is derived from illegal whole-apartment-without-the-owner-present rentals.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#73

Post by delazeur »

pj_mukh wrote: post #70
delazeur wrote: post #68

Earlier quoted context omitted.

The solution to silly regulations is to change them, not to ignore them or subvert them. Think what a can of worms would be opened if regulatory compliance was contingent on some ephemeral, arbitrary, socially defined notion of "silliness."

Nope. I don't want monied corporations anywhere near my regulations. Let's just have the pertinent regulatory agencies realize that making someone stare at a screen for 'X' minutes doesn't make a training program. You are asking for someone to side step that stuff. I would actually rather have companies like Zenefits sidestep regulations like that to show the regulators where they screwed up than Zenefits pump money…

So you don't want the government to change regulations because it would give rich corporations an opportunity to leverage their lobbying dollars. Instead, you want rich corporations to cheat their way around regulations at leisure. (Note that what Zenefits did was not a legal loophole, it was a method of falsifying compliance documentation.)

In any case, what's the point of "show[ing] the regulators where they screwed up" if you don't want them to change anything anyway? What's the point of having regulations at all if you're going to let them be a joke?

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#74

Post by lifeisstillgood »

themagician wrote: post #71
skewart wrote: post #62

A number of commenters here have compared Zenefits' questionable compliance with Uber, Lyft, and Airbnb. What Zenefits was doing is fundamentally different, and much more problematic. Lyft and Uber skirt similar kinds of seemingly useless regulation but they're completely up front about it. They don't pretend that their drivers are licensed or get any benefit from having licensed drivers in any way. They're simply of…

Lyft, Uber, and Airbnb can't avoid regulation forever. They've just been lucky so far. Eventually there will be a high profile incident—someone important will get raped or murdered. The political response will be 1000x what their lobbyists can handle. It is inevitable. The reality is that this is how a lot of regulation starts. It doesn't always come from an anticompetitive place. We just forget that we actually aske…

Excellent point. I think it is worth noting regulations can be classified into acute and chronic. Acute taxi regulation would have been disallowing criminal records after a series of rapes or robberies.

Chronic problems would be over charging - put it this way, the day before taxis were forced to charge a certain amount each mile, all taxis would have been free to charge different amounts as uber and lyft can.

We do ask for regulation - and always in response to symptoms. Regulation is not pre planned rational thought ...

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#75

Post by Outdoorsman »

sandworm101 wrote: post #59
twright0 wrote: post #52

Earlier quoted context omitted.

> Successful startups all, and I mean ALL, have serious compliance issues. This feels like a very hyperbolic claim. There are definitely high-profile examples of startups that had compliance issues and are struggling to bring them under control or remain in arguably grey areas (Zenefits is an example of the former, Airbnb the latter). But it's hard to imagine that it's a truly universal problem; many startups are in…

A successful startup is one that has grown rapidly in recent years. No growth = not successful, and not recent = not a startup. Any tech company that grows quickly starts bumping up against any number of compliance issues, both legal (ie HIPAA) and private (ie PCI). Today's growth curves don't keep pace with many of these regulations. As you expand laterally into new markets you constantly run into new obligations. A…

Agreed... A very astute comment...

Things move quickly...and that's an understatement...

There is a fever that descends upon a team on the brink of hitting a "home run"...the push is incredible..

Do what needs to be done NOW, we'll clean up afterwards...so difficult to resist...

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#77

Post by manishsharan »

Can someone tell me why is it such a big deal when person sells an insurance without having a proper license? Its not as if the insurance policy itself is fraudulent. The buyer is buying the insurance policy and not the credentials of the broker.

Other wise it seems to me that is requirement is just as unnecessary as requiring cosmetology license for hair braiding ( see http://www.texastribune.org/2015/04/06/bill-would-untangle-m...)

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#78

Post by jmount »

manishsharan wrote: post #77

Can someone tell me why is it such a big deal when person sells an insurance without having a proper license? Its not as if the insurance policy itself is fraudulent. The buyer is buying the insurance policy and not the credentials of the broker. Other wise it seems to me that is requirement is just as unnecessary as requiring cosmetology license for hair braiding ( see http://www.texastribune.org/2015/04/06/bill-wou…

I think the broker does make a number of attestations that if not properly done are fraud and render the policy void (as the insurance companies wrote the law).

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#79

Post by rosser »

manishsharan wrote: post #77

Can someone tell me why is it such a big deal when person sells an insurance without having a proper license? Its not as if the insurance policy itself is fraudulent. The buyer is buying the insurance policy and not the credentials of the broker. Other wise it seems to me that is requirement is just as unnecessary as requiring cosmetology license for hair braiding ( see http://www.texastribune.org/2015/04/06/bill-wou…

At a guess (and completely a guess), legal compliance. Insurance laws can vary widely, and subtly state-by-state. A licensed broker will understand the relevant intricacies and be able to sell you a policy that is compliant with them.

If you buy a policy from an unlicensed broker, and it turns out not to be in compliance, the carrier probably isn't obligated to pay out, whether you're paid up on your premiums or not. The carrier doesn't want to be at fault for not having to pay out, so they offload that onto the broker, and "protect" the consumer (really, though, themselves) with a licensure regime.

Insurance companies, being in the business of managing and mitigating risk, have all kinds of meticulous i-dotting and t-crossing procedure and regulation. This is — again, at a guess — just another example of that.

Re: After Zenefits, Will VCs Rein in Their Unicorns?

#80

Post by phonon »

geofft wrote: post #42
easong wrote: post #35

Earlier quoted context omitted.

We have a dysfunctional government that's clearly beholden to various powers, including ones whose business model relies on stupid laws not changing. (I'm not personally sure I would even call our government a plutocracy, since that implies some level of control or organization.) At this point the only way we are ever going to get change is if large numbers of people decide that stupid laws are stupid and ignore them…

Sure, but there's still a difference between large numbers of people in semi-public, and a single company in private. If Zenefits asked even their own customers if they agreed that these federal regulations were stupid, I doubt they'd get many yes answers (partly because, at least in theory, the intent of the regulation is to protect those customers). I am pretty okay with even large numbers of companies, with differ…

These are State licensing requirements, not federal regulations.
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