I have been reading a lot of criticism of PE here at HN, with similar arguments as TFA. In the case of small companies - vet offices, medical practices, etc - it is usually claimed that a PE acquisition enforces a bunch of changes that are ultimely detrimental to the end product, like quality of care. However, if that's the case, shouldn't we see non-PE companies flourish in competition? Or PE firms emerging that respect the end product at the expense of short term profits?
I understand why enshittification and all these others process's occur when you have a monopoly or a large market share. I fail to see why it should not be punished by the market when applied to easily disruptable sectors.
It all comes down to available resources. It takes capital and motivated founders to create new vet clinics. Few will want to spread themselves thin enough to cover many clinics unless they are in the same geographic area, and even then the market has saturation limits. However, if an entity essentially resembling Chase bank in terms of capital resources comes into your town and either buys out or undercuts you drastically until you appear to be uncompetitive, and you can't make your mortgage payments, or cover your whole staff and equipment, what are you supposed to do? PE can starve you out, they have the resources, these small businesses do not. There is no competition in this instance, just a slaughter.
>> shouldn't we see non-PE companies flourish in competition?
It's seldom clear to patrons WHY things have changed. People get stuck in their habits and are hesitant to start somewhere new, particularly with things like medical services. My mom wouldn't recognize PE as the source of a problem at her doctor, dentist, vet or mechanic.
When I moved and was looking for a new vet and dentist, I specifically asked each one about their ownership structure and didn't choose any that were owned by a PE firm.
The problem is the PE company comes in and buys basically every vet clinic or nursing home in a city, undercutting the independents. Once the independents retire, shut down, or eventually sell, then the enshittification happens.
This has been a major problem in smaller communities where there is essentially no choice in services anymore.
"Undercutting the independents," or offering the independents a lot of money to stop being independent? Sounds like a windfall for those who sell to me.
I understand why enshittification and all these others process's occur when you have a monopoly or a large market share. I fail to see why it should not be punished by the market when applied to easily disruptable sectors.