Next Level BS #15: The Government Conspiracy to Kill Tesla Motors Innovation

a reply to: Rosinitiate

The q surcharge is a semi pretend fuel levy, and a money maker...trust me I know.

Im not discussing whether agencies are profitable, Im not discussing agencies at all, if a agency cant manage a profit they are doing something wrong. I am intimately aware of how it works, It's about volume not per item mark up.

I however am disscussing that the product owner (the airline or hotel) moved to OBEs to increase their distribution and profit. You need to reread my babble.

I am referring to the airlines.
I think you have mistaken my message.

originally posted by: zazzafrazz
a reply to: Rosinitiate

The q surgarge is a fuel levy, and a money maker...trust me I know.

Im not discussing whether agencies are profitable, if a agency cant manage a profit they are doing something wrong. I am intimately aware of how it works. It about volume not per item mark up.

I however am disscussing that the product owner moved to OBEs to increase their distribution and profit. You need to reread my babble.

I would have to continue to disagree, humbly.

The airlines hate OBE's for various reasons. Sabre being one of the three major online booking engines was in a class action lawsuit for well over a year just about a year ago with American Airlines.

There was also a few threats from major carriers just last year of not allowing an OTA from selling on their site. It should be noted however to which I agree with you that airlines do use these systems. In fact they don't have a choice unless they want to build their own platform. AirTran, Jet Blue and a couple others are the only self-ticketing carries.

I don't see the airlines of wanting to use OBE they would simply be operating at a loss or hike up prices if they did it themselves. Besides, without OBE's there would be way more miss connections. Lol

Eta: I realize now, I'm using two different terms OBE v OTA. The premiss still stands but I should probably clarify.

you are disagreeing with something I am not talking about.

a reply to: Rosinitiate

originally posted by: zazzafrazz
you are disagreeing with something I am not talking about.

a reply to: Rosinitiate

OBE's = Sabre, Amadeus and WS right?

I initially wasn't separating that from OTA's = Travelocity, Orbitz, Expedia, etc.

I don't think the airlines necessarily prefer using OBE's other than to reduce cost and better communicate with other carriers. Like I was saying before with the class action between AA and Sabre, the relationship is bitter sweet. The cost of carries that are self-ticketing are generally cheaper than those through an OBE.

I realize most of my previous posts we incoherent. Sorry bout that.

a reply to: Rosinitiate

yeah im not talking about a GDS

Product = Telsa/Airline

Distribution = Tesla inhouse / AIrlines that started as low cost inhouse have all bar jet blue (and one other i think ) moved to a distribution channel.

It doesn't matter which GDS channel, Tesla like airlines and hotel moved after gaining client knowledge of their product to a "middleman" to increase their reach globally.

If you don't outsource, you have far greater liability with human resource which is approx 65-80% of your cost

TESLA WILL get someone else to distribute for them in the long run after their marketing and their consumer base is established. Like Virgin did 'we are the small good guy come directly to us to book' that has now changed to 'use anyone to book us'. Distribution through channels where they do not have staff costs and more importantly liabilities will be the business model they end up with.

If I am wrong, and they never move I will buy you and Bill and Joe a chocolate milkshake....but I bet I'm right

a reply to: zazzafrazz

Tesla's too strong of a company. Just there battery innovations over the next decade should be impressive alone. I also don't doubt they will eventually use distributors in the future because in the end it isn't worth the battle. I'm not particularly for or against them selling straight from the manufacturer and middlemen always jack the price. It's their WIFM. But not everyone can manufacture and people need jobs, so there's that too.

I think what's happening to Tesla is more about the car itself than it is about middlemen. It's probably why Tesla is selling it themselves because the auto middlemen would be lobbied not to sell them from very powerful people inside and outside government.

It's never about just the brand. A strong brand like Virgin can't make it about just their name. It is literally the strongest brand name in the world.
ANyhoo, my arm hurts I'm off to self medicate with wine

a reply to: Rosinitiate

originally posted by: zazzafrazz
I however am disscussing that the product owner (the airline or hotel) moved to OBEs to increase their distribution and profit. You need to reread my babble.

I have some experience here, last decade, working with an airline marketing department.

But first, the example doesn't relate to Tesla at all. Airlines still sell tickets directly to consumers, and always have… and prefer to do so.

Travel agencies and booking agents sprung up to offer travelers package discounts. Initially, the packages included airline tickets purchased significantly in advance, and because so, at a discount. Airlines initially resisted working with travel agencies when the boom started up in the '50's -- thinking the booking agents would hurt customer loyalty... which is why there's no commission on airfare.


With regard to your other post:
a reply to: zazzafrazz

I think a major aspect of the point is being missed. Even with all the fanfare, hope, and well-founded hype, Tesla cars are still a specialty niche product. Their sales are a long way from threatening any of the major car makers. But on concept and quality, Mercedes and BMW are much more conceded about Tesla than GM, Ford, Chrysler, etc.

And really… there's no good reason to single out cars and trucks as the only product that must be sold through dealers, and not directly by the manufacturer to consumers.

a reply to: SkepticOverlord

It is a perfectly good example, what cheek. I'm highlighting new low cost carriers that were all the flavour this last decade... I know you worked on airline after your disco DJ days, not in the last few years

There IS commission on airfares and/or commission overrides distribution gets paid millions back end annually to reach sales targets for the carrier. Distribution still makes between 5% and 10% on fares. It is just hidden well. This includes domestic, yes domestic fares pay back end....

Secondly, Tesla may be niche, their approach smacks of introducing the new good guy. Airlines can and do sell direct and through distribution, Tesla will end up doing the same or stay niche...very niche.

I am not saying that the states haven't been playing dirty with Tesla by any means, I admire your pointing it out.
That said, don't be surprised at how WELL funded Tesla is, they have more money in their coffers than established businesses. I am trying to point in a nutshell, that someone at Tesla read the marketing manual for Virgin Airlines for when they took on British Airways and the government at start up time.

They will market to come direct initially and then they will attach themselves to the global tentacle sales network established.

It doesn't matter if we agree or not, the car world will keep on churning.

a reply to: zazzafrazz

Nah… I had other concerns as a disco DJ --

It was just 10 years ago, when Priceline was doing some irritating things. But that's another story.

I don't think Tesla has any aspirations beyond staying niche, at least not for a very long time. And their funding is fair (not great for the aspirations) with a surpisingly good 10Q that surprised a few analysts. But they're getting ready to spend at least half of their cash on a big production facility in Reno. And they still can't build enough cars for the demand. They're in a very tough time.


Their approach is more than "just a car," it's something else… almost applying the Apple i-device ecosystem to transportation. With their free charging stations stringing across the country, Tesla owners are in a different category, on some routes, driving for free. Or, if the station has the battery swap option, for the typical price of a full tank of gas, you can get fully-charged batters in less than 2 minutes.


DISCLAIMERS:

I hate auto dealers. Being in the wonderful land down under, I don't know how much you know about the arduous process of actually buying a car here in the states. It's horrible, and I'm biased in favor of anything/anyone going against the BS laws that force the horribleness on consumers. I bought my last car (used Jeep) with a credit card after I got the price down… just to avoid the madness.

And I've ridden in a Tesla… it really is amazing.

I live in the states now. Just purchased a new car 1 month ago.... I found the process titilating to say the least.


All this Telsa business, reminds me of well you know the start of the car industry...sound familiar when you read it?

Interest in motor vehicles increased greatly in the late 1890s and early 1900s. Electric battery-powered taxis became available at the end of the 19th century. In London, Walter C. Bersey designed a fleet of such cabs and introduced them to the streets of London in 1897. They were soon nicknamed 'Hummingbirds’ due to the idiosyncratic humming noise they made.[20] In the same year in New York City, the Samuel's Electric Carriage and Wagon Company began running 12 electric hansom cabs.[21] The company ran until 1898 with up to 62 cabs operating until it was reformed by its financiers to form the Electric Vehicle Company.[22]

In 1911, the first gasoline-electric hybrid car was released by the Woods Motor Vehicle Company of Chicago. The hybrid was a commercial failure, proving to be too slow for its price, and too difficult to service.[23]

en.wikipedia.org...

All the crony chip cashing is going to happen.
Tesla knows this and are still more than able to buck the pressure but the patents on the most important parts of their propulsion system will be tough to overcome by competition, before they get their battery source and manufacturing tooled up.

Saw my first Tesla charging station in a highway Mobil station in Connecticut. Made me happy.

Big Oil / Big Gov't do not want to see the implementation of electric cars. It is their bread and butter.

originally posted by: xuenchen
Looks like corporatism is alive and well !!

With no end in sight.

Hmmm.

Gotta wonder if there is an "international" angle to this?

Oil/Gasoline

You wonder?

a reply to: theNLBS
Another great show. I'm thinking unions have some say in this also, along what some others have mentioned about oil and gas. Keep up the good work.

If you want to hear more of Joe's dulcet tones, he is joining us on ATS Live radio to talk Nlbs. Call in 📞 or tune in 📡
www.abovetopsecret.com...

You must be very naive. This is elite-sponsored project.

This annoys me so massively. New tech getting held back by a generation hellbent on protecting their own economic wellbeing at the expense of the worlds future.

Electric cars always seemed to get a lot of government hype and a helping hand when it comes to trying to compete in the industry. They get incentives paid for by the government, the Volt was somehow named car of the year even when its sales were terrible and it was nothing special and now Tesla is getting the same PR treatment.
If anything they'd be unable to compete if they weren't subsidized.
I'm not saying electric cars are bad ideas, they make sense in urban areas and in retirement communities in the south replacing those golf cart jobbies. They're just not economically as viable as they want us to believe.

originally posted by: SkepticOverlord
a reply to: zazzafrazz

Only to get their new batter factory locked in for the state. Until they were in the running for that, Nevada politicians were under the same pressures to ban Tesla sales.

Not surprising at all. Unfortunate, though.