Popping the hood on Vroom’s IPO filing

Good news! Companies like Vroom, CarMax, or Carvana selling used cars over the Internet are making the car market more competitive across state borders!



It is high time that new cars were sold the same way over the Internet across state borders! However, car dealerships in every state are represented by very entrenched, powerful vested interest groups protected and they habe been protected by exclusive state monopoly laws for many decades!



Popping the hood on Vroom’s IPO filing | TechCrunch

The Destruction Of Free Markets In The U.S Goes On - Tesla

Trigger

One of the big news in today’s (3/12/2014) Wall Street Journal was “Tesla vs. New Jersey: The Car Dealers Strike Back”.

Apparently, three states, i.e. Arizona (surprise), Texas (incredible), and now New Jersey, so far have prohibited direct sales of vehicles by Tesla Motors.

How Is This Possible In The United States Of  America?

An observer from China may conclude that the U.S. is sometimes worse than communist China in suppressing free markets and competition.

How is it possible that well organized, vested interests like car dealers in various or most states can carve out franchise privileges for themselves to exclusively sell cars at the expense of consumers?

Previous, Related Blog Posts

Here and here.

Car Dealerships Are An Obstacle To Software Updates

Trigger

I just read “Why Your Car Won’t Get Remote Software Updates Anytime Soon Software is taking over cars. But it may be a while before it can be updated without a trip to the dealer.”.

This article pointed out that one stumbling block to timely and convenient software updated to your car are the entrenched special privileges that car dealerships enjoy in most states.

When will these anachronistic anti free market franchise privileges finally be abolished? They are unconstitutional!

Tesla Trailblazer

“There is an alternative—the same sort of remote software updates used for PCs and smart phones. Indeed, one automaker, Tesla Motors, already provides what it calls “over-the-air updates,” which allowed it to execute a recent software fix without requiring anybody to bring in their cars (see “Tesla Motors’ Over-the-Air Repairs Are the Way Forward”).”

Previous, Relevant Blog Posts

Here.

Tesla Owner Takes On Car Dealer Ships

Update As Of 7/18/2014

The Cato Institute just published a paper titled “Tesla and The  Car dealers’ lobby” with more background on the government protected car dealerships.

Tesla Is A Contradiction In Terms

Recently, the Wall Street Journal has described in detail that Tesla Motors primarily profits from government subsidies and selling government mandated zero emission credits. I blogged about this here.

A few days ago, the Wall Street Journal reported on 6/18/2013 titled “Tesla Clashes With Car Dealers/Electric-Vehicle Maker Wants to Sell Directly to Consumers; Critics Say Plan Violates Franchise Laws” (Subscription required) that the owner of Tesla Motors, i.e. Mr. Elon Musk, is having a hard time to sell electric cars directly to customers, because local car dealerships are a government protected racket.

The Government Car Dealership Racket

In another previous blog post I raised the issue why it is not possible in the US to buy cars over the Internet from anywhere in the world.

It is quite remarkable how in the so called freest country on earth it is possible that local businesses like car dealerships in collusion with state legislators have for decades suppressed competition through among other things franchise laws. Thus, it appears that US car manufacturers are not allowed to sell directly to customers, but only through franchised dealers.

To quote from the above mentioned article: “These franchise laws have insulated car dealers from much of the e-commerce revolution that has hammered other sectors from books to electronics.”

Now, Mr. Musk is up against a formidable opposition by car dealerships and state lawmakers (including Republicans) in different states where he is trying to sell online or via his own stores.

Kudos And Best Of Luck!

I wish Mr. Elon Musk best of luck and lot’s of success to crack wide open this incredible example of cronysm in the United States of America. Hope, Americans will wake up!