It isn't the name of the actual mechanism for the financial gain. It's a title for the idea of doing something wasteful, perhaps even net negative for society, for a very minor personal surplus. In this example, the guy wasted gas, created traffic, occupied employees time, put wear and tear on vehicles and roads and spent two days driving in circles...all for $2000.
People are free to do what they want, and the "exploitation" is fair game, but it seems odd to me too.
My point is that he didn't earn anything. He was given something worth €3000 after performing assorted actions. But earning is about an exchange of value. He did nothing valuable for Avis; he instead wasted their time and resources.
He only earned this money to the extent that pickpockets earn what they take out of wallets, or what con artists take from their victims. Sure, they work hard, and sure, they get money from it. That's not earning, that's taking.
That's a bit harsh, comparing this to pickpockets and con artists.
Also consider that he now has 185k miles that he didn't have before. He might use those miles to take a vacation that he wouldn't otherwise have taken, which will in turn pour real money into the local economy of the place he visits.
I agree that it's an unpleasant truth, but I think it's the truth.
Imagine he went to a local car company that had just two stores. Imagine he says to the owner, "Hey, I'm going to pay you €418 to drive one of your cars back and forth between your stores for two days. You do all the paperwork as if I'm renting the car 36 times. And then you buy €3000 worth of air miles and give them to me. How about it?"
No rational business owner would do that. They only reason Avis did that is that they are so large that they can't run it sensibly; instead, like programmers, they try to construct systems of rules that approximate a sane business. This guy found a bug in the system, forcing Avis to do something that is definitely not in their best interests.
It's a smart and well-constructed scam, but it's definitely a scam. And the guy knows it. He carefully tests Avis rules. He works around Avis's safeguards. He knew not to push it too far, which is why he limited it to two days. And I'll lay good money right now that there's already some programmer at Avis who is writing code to look for reservations like this and automatically consolidate them, as well as a lawyer who's wondering how to change the T&Cs to prevent this.
As to the latter bit, that is true of any scammer. For example, think of all the good that fake Nigerian princes could do with the money they take.
So, I can sort of appreciate where you are coming from: if someone doesn't buy salt and instead keeps going to the fast food restaurant down the street grabbing handfuls of salt packets, they are being a pretty awful leech, as the reason salt packets are free and just available like that is because we trust people to not abuse the process like that. The alternative turns into what we have to do with packets of BBQ sauce, carefully limiting how many people are allowed for various food purchases, and then charging them $0.25 for extra.
I can also see an argument that this person has discovered a security exploit that they are taking advantage of, akin to someone stealing wifi from an airplane hotspot. Whether because the person figured out an SQL injection attack in the website or because they figure out they can tunnel TCP over DNS, the more ethical thing to do is probably to report the bug to the company instead of abusing it to steal resources.
This, however, is a different situation: AVIS seems to seriously be mis-pricing their core product, and in a way that is kind of sketchy to begin with. Here we have a company that is doing something I can't imagine many of us actually like: they have built a ludicrous time wasting procedure by which they abuse human psychology to encourage specific buying patterns, and they did it in a way that is well-known to be dumb. The way they have done this is by manipulating prices of products and providing an alternative currency with incentives for specific behaviors. If you want to see threads worth of people hating on this, search Hacker News for SkipLagged (the site that was sued for finding open jaw flight segments being priced incorrectly by airlines).
Let's say I go into a Walmart, and they have decided to offer a $40 off discount on jeans, but they sell a pair of one of their brands jeans for $30, and the register treats the $10 as a credit. I tell the person at the counter about this, and they tell me "yeah, it's dumb; I just work here". And then I go to the checkout with a massive pile of jeans, and the people at the register at first give me a funny look, but then a wave of realization hits them and they start laughing. And then every day I come in and they have a basket of jeans sitting at the counter waiting for me. And they just don't care. In fact, the way you should model this is "Walmart seriously believes the price of jeans to be -$10", not "we are stealing money from Walmart". Sure, we think they are daft for valuing jeans at -$10, but we even told the people there and no one cared. They helped us do this.
If you want a real world example, Sony sells Playstations at a loss. Some people would buy Playstations, install Linux on them, and then use them as nodes in Beowulf clusters, or as cheap fileservers for their house. Sony does this as an exploit against our buying behavior, making us more willing to put down the initial investment for the game console so we are more likely to buy games later. They then put a ton of DRM on their hardware, require companies who want to distribute software for their platform to pay them a royalty fee, and extract their rent from game developers.
I see why they do this, but I hate it. It means that their entire business model is built in a way that encourages them to do things like sue people who jailbreak their consoles, as their profit is now tied to their ability to get paid for people developing and distributing software. If you ever wonder why Apple is so benign against jailbreakers while Sony sues them to death, it is because Apple has a business model where they make all their money on hardware (the App Store pretty much breaks even), making them only care about what you do with your device after you pay for it due to a combination of a control fetish, a strong aversion to bad PR, and a feeling of responsibility to protect their beginner userbase.
But like, even barring these indirect effects, Sony has incorrectly priced something they have put on the market. They haven't done anything fundamentally different from someone willing to sell stock at a price higher than the market rate. When people here talk about arbitrage, it is because that is exactly what has happened: someone is pricing their product in a way that has encouraged someone to figure out how to extract value from it. Maybe you also hate high frequency traders, but it isn't quite fair to equate them to pick pockets and con artists. If we found out the people selling the stock were doing it at a loss, it makes them dumb, not the high-frequency traders evil.
So while I can't imagine spending time finding these pricing mistakes, much less making all these phone calls and doing all this traveling to take advantage of them, the idea that this guy did is something I am totally fine with: "more power to him", I say. The usual worst case scenario that could come out of this is the "that's why we can't have good things" result of "no more stupidly complex promotional programs" (a similar situation to "no more free BBQ sauce packets"), but again: that would be a good thing, so I am having a difficult time feeling like this was due to someone doing something bad for humanity.
(For my part, I run a marketplace, and I have a strict policy against illogical pricing promotions: I stare at every single discount a developer wants to have me apply to sales made via my platform, and I verify they don't have pricing paradoxes that would lead customers to have to waste their lives trying to figure out how to get the software they want at the cheapest possible price. And I really do consider doing anything else, as is all too typical in the travel industry, kind of scummy :/.)
If you are ok with "this is why we can't have nice things", fine. Me, I like a world with nice things.
Also, you seem to have a false exclusion there. Many people taken advantage of by scams are dumb, or at least making dumb mistakes. But that does not mean that the scam artists aren't morally bereft. Indeed, I think it's part of what makes them awful.
I also, like you, think that the whole manipulative airline miles system is repugnant. It's another giant waste of humanity's time; if it were banned tomorrow we'd all be better off. But that doesn't make this guy's actions better to me; all the mile-pointers are just playing into it. It reminds me of a Russian expression, "One thief sits atop another thief, using a third thief for a whip."
I don't think your first paragraph is compatible with your last paragraph: I pointed out the "this is why we can't have nice things" argument specifically to note that it doesn't apply here, as this isn't a nice thing... and you agree with me... which means you are actually defending a world with bad things, and are arguing on the side of the actual scam artists: the people behind these systems you have yourself now called "manipulative" and "repugnant". You have chosen to defend an entity that makes money by taking advantage of dumb psychological bugs in humans, a process they do deliberately and opaquely (as if people knew too much it would harm their business), against another entity who was transparent in their dealings. This makes it difficult for me to accept at face value the moral high ground you have taken in this argument you started :(.
As for your paragraph about scam artists not being defined by the people they are calling dumb, I tried to make the key difference very clear, but maybe I wasn't quite direct enough for it to be noticed: if you take the time to report the issue to the other party, if the scam artist actually says "you realize this is a scam, right? I leave from this with all of your money", and the other party still insists they want to perform the transaction and even helps you do it, I don't see how you can believe it is a scam. What makes a scam artist morally bereft is when they lie or hide their cards: AVIS was actively playing along with this scenario.
Put another way, to believe this is a scam would also require thinking almost any transaction anyone makes ever is a scam, as the entire reason people ever buy anything is because the value they assign to the good is at least slightly greater than the value the other person assigned to the good (which is good for everyone as these transactions are generally non-zero sum). I personally try my damndest to make certain that all of the merchants I use on a daily basis make money on me, as I want them to value my patronage, even going or of my way to pay extra for things that they market as "free", so I truly get where you are coming from... it just doesn't apply here, and you haven't yet connected the dots.
To make the picture even more complex, it isn't ever clear who is making money from what other players. AVIS is giving out EuroBonus miles. Maybe EuroBonus really really wants people to have miles and use them, as they get a kick back primarily from airlines for them being spent, and so they have encouraged car rental companies to give out these offers. Maybe the reason that the branch manager found out from their boss that it was OK to do this was because it actually makes money for AVIS. You just don't know here, but thankfully, AVIS clearly is informed enough to make the decision for themselves: they know these schemes have these holes, they know these schemes are designed to manipulate peoples' incentive structures, and they were even informed of this particular instance. The way this guy keeps saying "I told them what I was doing, expected them to stop me, and they cheered me on" is really telling about his ethics here.
Don't get me wrong: I agree scam artists suck, but the "false exclusion" you are trying to pin on me is clearly unfair :(. Like, if we are going to start throwing "rules of argument" stones, you still haven't defined scam in a way that is precise enough to include this person while excluding AVIS, Sony, or someone buying a house. The only definition to date is essentially "net negative to society for the transaction", but you actually have admitted that the entire pricing model of travel is "another giant waste of humanity's time". If you are going to cast such damning aspersions on to people--calling them scam artists, comparing them to pick pockets, and likening them to parasites--it would be good to at least provide some guidance as to what, specifically, they actually did wrong.
I'm not "defending" Avis here; nor am I attacking this guy. I'm critiquing a behavior.
That an exploiter is exploiting another exploiter does not seem morally better to me. I also think being tactically honest while still attempting to find the precise boundaries of how much he can scam without triggering an immune response is not notably virtuous. Many manipulative people are excellent at telling carefully measured amounts of truth.
The basis of commerce is positive-sum exchanges of value. You create something for me that I value; I give you something you value in return. This guy is intentionally engaging in a negative-sum exchange to fill his pockets. He knows it, which is why he was very careful to trick Avis's system and limit the amount he extracted to a level where Avis was unlikely to bother to stop him. I am perfectly comfortable calling that a scam, and it is definitely parasitic, in that it consumes resources without creating value.
(wow, I've never experienced "that comment was too long" from Hacker News before... :/)
(part 2/2 <- make certain to read part 1/2 first)
> He knows it, which is why he was very careful to trick Avis's system and limit the amount he extracted to a level where Avis was unlikely to bother to stop him. Many manipulative people are excellent at telling carefully measured amounts of truth.
This would be a great argument, and again, is one I would entirely agree with... but the only evidence I see of this is "I figured two days would be enough, or the reps might become fed up with me", which is not because he is concerned he is extracting too much value from AVIS but instead seems to be due to not wanting to make the on-the-ground employees unhappy that they are having to do a bunch of repetitive labor. I make the same tradeoffs when I order things at restaurants that I feel quite confident the restaurant will make money and where they would want me to get what I want, because I feel for the people at the bottom who are being paid some fixed wage. He mentions the workload again later, seemingly because he actually cares.
I think you need to be very careful in this situation (as in all situations) to not try to generalize it to other situations you have dealt with and turn it into "just another instance": once we lose the specific situation, it becomes tempting for us to think we see evidence or facts that help us fit a specific situation into an overall narrative we have seen in the world--I will happily admit that I have made this mistake at many times--but it is important to always look back at the specifics of the situation we have chosen to discuss.
To recap, what seems to have happened here is you have two reasons for why we should be unhappy with this person. The first, is that we should simply dislike anyone participating in a transaction that is "a net negative for the society as a whole" (which is an exact quote of yours, and is similar to the "the idea of doing something wasteful, perhaps even net negative for society, for a very minor personal surplus" definition given by forgetsusername that you said "has [you] exactly right" in the comment I first replied to, and seems exactly to be what you mean given your usage of the phrase "the whole system" when you first posted). This metric is nice, because it is sounds like it would be reasonably objective and measurable, but it is very difficult to correctly evaluate:
- it requires an analysis of numerous third-party actors who are involved in the extended transaction (as it could be that AVIS and this person are accidentally colluding against EuroBonus, as in the realistic contract scenario I previously discussed),
- it leaves factors outside the control of the actor whose morals are in question to sway the balance (as maybe for this one time doing this it is a big win for AVIS's marketing department, making our moral judgements incapable of being repeated),
- it causes confusion with regards to who actually is causing the problem (as with the housing crisis or with network neutrality: we suddenly have to blame people who are obtaining short-term benefits by, for example, buying houses with inflated credit),
- it puts us into the horrible situation of realizing that most of us might constantly be immoral (as we spend money on useless junk that fails to make us any happier and ends up in a trash bin somewhere, instead of feeding someone else),
- it absolutely requires us to take into account the morality of all actors and how their decisions affect future outcomes (so we have to judge if AVIS's program should exist in the first place to see if undermining it is a "net negative to society").
As this argument path becomes more complex, rather than attempting to delve into any of the intricacies (which I personally find quite interesting! hence again, why I spend so much time talking to people about the careful interplay between "unlimited" bandwidth and network neutrality, and why I have carefully laid out so many fun examples), you have instead ended up moving to a new definition: that none of this actually matters, as we should be judging how the person we are accusing of exploitation treats the exploited. This metric is also nice in a different way, as it is conveniently local, but it then requires us to actually lay down what the person is doing that we don't like and "stick to it". The thing we classically don't like about "scam artists", "pickpockets", and "parasites" is that they do things to other people without informed consent.
This new definition has nothing at all to do with negative sum transactions and should not be modeled at the level of society. We often judge pickpockets even when they take something from someone who has enough money that their marginal utility of their possessions is much lower, and you have expressly rejected (which I don't disagree with) the notion that someone isn't a scam artist just because they scam someone we dislike (which I will again point out is an analysis we are absolutely required to do if we insist on a definition of morality that looks at the impact of transactions on the state of "society" or "the whole system").
Now, it isn't clear to me that this person actually acted in this way. It seems to me more likely that AVIS as a system is simply OK with this happening, at least today (due to PR), if not often... as in all seriousness, I have no clue where EuroBonus miles come from: there seems to be a treaty signed by the actual countries involved that defines some of how it works; one can trivially imagine situations like the one I described earlier: hell, the entire banner ad industry is set up like this, leading to the "collusion" problem of people who run popular web properties often encouraging and colluding with people who perform casual click fraud :/. Again: this entire space is fascinating, and it is really difficult to throw stones at people as flippantly as you have seemed to here.
But yeah: I feel like you either now need to actually take some deep dives into the complexity of your original position (and be prepared to judge AVIS, EuroBonus, and your own buying behavior as we attempt to analyze "the whole system" and apply that brutally objective metric to everyone, including those people you have attempted to protect in the past), or be willing to entirely discard it for the new definition which is both less controversial of a morale to possess (and so many people who are in this conversation, including myself, would likely not have bothered responding), but no less contentious as to whether it actually is safe to apply in this particular situation (and I truly feel like the case from the provided material is just not there).
(wow, I've never experienced "that comment was too long" from Hacker News before... :/)
(part 1/2)
> I'm not "defending" Avis here; nor am I attacking this guy. I'm critiquing a behavior.
You actually are "attacking this guy", because you are "critiquing a behavior" he has performed and using it to justify calling him a "scam artist", a "pickpocket", and a "parasite". I am not certain how else to describe what you are doing. That isn't to say that attacking someone is bad... far from it... only that you should do it with care, and preferably not attempt to hide or sugar coat the action :(.
> That an exploiter is exploiting another exploiter does not seem morally better to me.
So, I agree with this. I primarily had to bring this up, as it completely decimates the "this is why we can't have nice things" argument that tends to come up in these situations. (Which makes it was all the more strange that you were trying to use that argument after we showed that this isn't a nice thing; it is like, by arguing against it, I reminded you of its existence, but you had totally ignored the part where I had made the argument not function by undermining "nice thing".)
Really, my argument has not been "this person deserves what they got", it is that we are attempting to define what this guy did that makes you feel he is worthy of the labels you have given him, and it turns out that we have two potential definitions so far from you, and one of them actually doesn't work without taking a step back and putting it in the greater context. I will again address that one first, as it is related to this paragraph.
> The basis of commerce is positive-sum exchanges of value. You create something for me that I value; I give you something you value in return. You create something for me that I value; I give you something you value in return. This guy is intentionally engaging in a negative-sum exchange to fill his pockets.
Yes: I understand how this works. In fact, I brought up the non-zero sum analysis of transactions in our back and forth. I also, in bringing it up, demonstrated how complex it is for you to attempt to model the scenario in this limited way by trying to "pull back the curtain" on how business arrangements with companies like AVIS and EuroBonus might operate. However, we can build a model of this situation that is even more simple than that: this entire thing is actually an interesting marketing stunt. Most of the things people do on websites like flyertalk is pretty obviously to everyone not negative-sum any more than people in retirement homes clipping coupons is bad for business.
When companies look like they have "retracted" promotions they have provided, they tend to look really bad to this actually-profitable-to-them community. (I point out "to them", as often these transactions end up hurting companies with travel expense accounts, which is yet another way in which this is all fascinatingly complex.) We therefore actually can make a reasonable argument that this specific transaction is actually positive sum to AVIS, because it shows "wow, AVIS is friendly, we should spend more time staring at AVIS". Which is again why trying to just claim "it is bad when the transaction is negative sum" is such a difficult argument to make: I've already pointed out how it requires a God's-eye view of the accounting, I've already pointed out how it essentially paints this entire industry
While I am concerned that my careful attention to concrete scenarios has been a waste of time so far in this conversation, I will give you another one: personally, I think everyone who covets "unlimited Internet" plans are doing something absolutely horrible for society: I think they are undermining innovation and free speech by encouraging scenarios where network neutrality is almost required to make the accounting work out correctly. I make that argument (on talks that I give at conferences and in panels at conventions), because I think we should have long-term views of the future, and we should decide which agents to blame in situations that are leading us down the wrong paths. In this case, I actually think consumers are more to blame than AT&T.
That said, I don't actually judge these people as bad people, because that is a really complex argument (one I'm not even laying out here, though if you really cared, I was on a panel as part of the EFF Track at DragonCon 2014 talking about this, an event that has an audio recording floating around the EFF website). There is a much simpler argument, of course, but I think the simpler argument actually falls to the same problem that it just requires people to care too much about someone else's business model: "you quite obviously can't get unlimited anything for a limited number of dollars". While maybe it would be fun to do so, we can't call people who complain that the unlimited plan they bought from AT&T was first rate limited and then terminated any of "scam artist", "pickpocket", or "parasite".
The argument, of course, is one that you have yourself made in the past, as in when you said "There's a clear information asymmetry here, and therefore a clear power differential. But so many people are instantly willing to blame the weaker party for being trusting, rather than blaming the stronger party for abusing their customers." when Joyent ended their lifetime hosting accounts, and people were here on Hacker News defending their decision. For this and the other reasons I have so far argued, we thereby really need to reject the simple "negative sum" argument for why we should denigrate this particular actor. Instead, we have to turn to the other argument you have made as the real reason why he could deserve our scorn.
He also had fun, or at least his writeup sounded like he enjoyed his adventure.
Right now I'm remodeling my home. It's laborious, costly, consumes resources that could be spent on building housing for those less fortunate, occupies the time of employees at the home stores I frequent when I ask questions, but I enjoy it. One has a hard time calling it "exploitation", but aren't I exploiting resources that are available to me for personal gain (albeit in a very literal definition)?
What you do with the resources you control is an interesting question. But the one I'm pointing at here is how you get those resources.
If you read about scam artists from the late 1800s and early 1900s, there was a lot of innovation where people filled their pockets in ways that were perfectly legal but negative sum for the society as a whole. (Joseph "Yellow Kid" Weil's biography is a fun read.) This led to a whole new series of laws, including those relating to wire fraud.
How those innovative scammers spent their ill-gotten gains is a separate question from asking whether the way they filled their pockets was right.
Not sure why people are downvoting this comment, even if they disagree with your assessment of the FT poster's behavior, since you were pointing out what the OP was looking for.
I just refer to it as the perilous incentive structure of late capitalism.
It isn't the name of the actual mechanism for the financial gain. It's a title for the idea of doing something wasteful, perhaps even net negative for society, for a very minor personal surplus. In this example, the guy wasted gas, created traffic, occupied employees time, put wear and tear on vehicles and roads and spent two days driving in circles...all for $2000.
People are free to do what they want, and the "exploitation" is fair game, but it seems odd to me too.