Hacker News Re-Imagined

Apple execs: Let's take a 30% cut of Uber and Lyft's membership programs (2018)

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  • 13 days ago

  • @mdoms
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Apple execs: Let's take a 30% cut of Uber and Lyft's membership programs (2018)


@seabriez 13 days

Replying to @mdoms 🎙

30% seems to imply that Apple somehow brings 1/3 of the value, simply by not allowing you to sell anywhere outside of the marketplace. It's extreme lockin.

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@ameister14 13 days

Replying to @mdoms 🎙

This would be a weird thing to do, which is obviously why they made it optional in the end - it's such a large amount of money that it creates a massive incentive to switch or undercut apple's business.

Most teenagers use an apple, but it's not impossible to switch. In the 90's, almost all computer users were on PC's, and a big problem for apple was a lack of software offerings on their OS to compete with windows. It seems like some executives are interested in short term profits to the point that they are comfortable creating an environment that would seriously disincentivize use of apple products and the math on that is nuts - if it's no longer profitable (and I can't imagine it is at a flat 30% increased costs) then you remove the service.

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@bastian 13 days

Replying to @mdoms 🎙

Postmates founder here. I am subscriber to Internal Tech Emails and I couldn't help but smile reading these emails this morning. It was in 2017, around April 12th when we launched Postmates Unlimited - the subscription program that inspired all this. Now, we all know Postmates didn't win the space but some product decisions outlast a company and this was one one of them. I still remember the meeting when we decided to launch the subscription. No one had ever done it, the board thought it was nuts. It became the industry standard. ¯\_(ツ)_/¯

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@DaveExeter 13 days

Replying to @mdoms 🎙

The answer is simple. Uber, Lyft, and everyone else, should have different pricing on Android and iPhone.

For something that costs $10 on Android, charge $13 for iPhone.

This is a win-win solution. The app companies get more money and Apple gets positioning as a premium brand.

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@pookeh 13 days

Replying to @mdoms 🎙

Imagine if all the malls around the world that lease a physical store to Apple say to Apple: 30% of everything you sell at the store in our mall belongs to us.

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@netcan 13 days

Replying to @mdoms 🎙

Opinions/commentary on such things tend to focus on some detail, and judge it right or wrong. Is forced use of Apple's payment processor OK? Would X be ok if Apple provided some way of installing externally to the app store? Would 15% be OK.

I think these lines of thought miss the point. This discussion demonstrates, IMO, the mentality & reality of bigness/monopoly.

Mentality-wise, Sheree & Lindsey are expressing something more akin to "We feel that Apple is entitled to a 30% cut of this" than a business idea. Second it's obviously more about power than anything else. The "window of opportunity to set a precedent and claim this cut" is the reality.

Whether or not Apple adds value that reflects or justifies the revenue is irrelevant. That's not how they are making the revenue either way.

They get a big cut of Google's ad revenue on iphones via their default search deal. This is about getting a cut of ecommerce & such. Smaller developers are entirely exposed to their whims. It's too much power, and they are abusing it.

There are two levels to monopolism. One is simple prices. You own the only highway to MetroX. You charge truck drivers a high toll. They have to pay it, if they want to truck at all. The second level is when the highway owner wants a cut of all goods sold in MetroX stores. That's what's happening hered.

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@softwarebeware 13 days

Replying to @mdoms 🎙

Did anyone read the emails? That's not what they said at all. The reference to 30% was to an existing membership cut that predated these emails on their subscription platform. The language, "...would be a concern for them" indicates they're pointing out that they will have to adjust the 30% value.

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@endisneigh 13 days

Replying to @mdoms 🎙

use web apps, pay 0%

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@evancoop 13 days

Replying to @mdoms 🎙

Next week, on "lifestyles of the rich and rent-seeking," we'll speak to the folks from Apple, who have discovered how to extract copious sums from captive app developers and their downstream customers! You won't want to miss this episode!

(Of course, if you do, you can livestream from another app whose access they probably control)

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@Fomite 13 days

Replying to @mdoms 🎙

I'd be more sympathetic to this if Uber and Lyft hadn't built their businesses on the premise that regulations are for other people.

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@WisNorCan 13 days

Replying to @mdoms 🎙

I am hoping that the same scrutiny is quickly applied to other platforms that are getting a pass.

Like Roblox which only pays developers 25%. But even that is better than Peloton where I can't even install any other apps.

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@nabla9 13 days

Replying to @mdoms 🎙

Many don't know this, but monopoly is not illegal in the US.

Misusing monopoly power is.

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@mindwok 13 days

Replying to @mdoms 🎙

I feel like these marketplaces could maybe justify 30% on the purchase of an app up front, where there are clear benefits to the exposure and platform offered by them. But ongoing revenue is really attributable to the app itself and feels to me much harder to justify.

At this point I’d be happy if Apple just let me install apps outside their ecosystem, then they could at least defend themselves by saying if the developers aren’t happy with the terms of the App Store they can offer alternative methods.

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@librish 13 days

Replying to @mdoms 🎙

"Unfortunately, IAP being 'optional' means that no one will ever use it"

I think one of the biggest issue is that Apple is trying to capture all of the revenue from the App eco system from a single function, the in app billing. Which is an extremely bad value prop for any large corporation, and also means a lot of big apps get to use the AppStore completely free.

I think Apple needs to do some shuffling in how they charge for the AppStore.

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@cityzen 13 days

Replying to @mdoms 🎙

Oh, you mean this Apple:

Ten former members of Apple's supplier responsibility team told The Information that Suyin wasn't an isolated incident, and that Apple had refused or was slow to stop doing business with suppliers that had repeatedly violated labor laws or failed to improve workplace safety when it would have cut into its profits.

https://www.businessinsider.com/apple-knowingly-used-child-l...

If you're going to use child labor, i don't see any issue with charging 30% for anything you can get your hands on.

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@joebob42 13 days

Replying to @mdoms 🎙

I still don't think they deserve the 30%, but it's interesting that there doesn't seem to be any concern in that direction mentioned here. They mention in passing that the 30% may be a concern for partners but they seem basically unfased by it and don't mentioned that it might not be reasonable.

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@yua_mikami 13 days

Replying to @mdoms 🎙

This is good because the more large companies that Apple pisses off, the sooner the App Store garden walls will come down.

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@sub7 13 days

Replying to @mdoms 🎙

Apart from being entirely unearned and unfair, these 30% cuts incentivize platforms to not weed out scams and bad actors.

There are an infinite supply of bullshit apps that have been scamming people with subscriptions that are impossible to cancel. Apple/Google both just send out lip service.

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@kache_ 13 days

Replying to @mdoms 🎙

I seriously don't understand why people purchase apple devices.

SWEs too, just use linux.

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@pabs3 13 days

Replying to @mdoms 🎙

Apple should split up the 30% cut into different portions of their value add, and then let developers choose which portions they want to have access to. Dropping the Apply Pay stuff would be 5% or whatever. Access to the Apple Store would be 5% or whatever. They could even charge more over the 30% by offering additional stuff, like auctioning off "app of the week" on the Apple Store.

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@account-5 12 days

Replying to @mdoms 🎙

Can someone confirm that apple here are trying to get other companies to pay them if that other company offers its customers a subscription service?

What is apple offering the other companies for the pleasure of paying apple?

I feel like I'm missing something.

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@Andrew_nenakhov 13 days

Replying to @mdoms 🎙

How come some people still don't consider Apple a monopoly is beyond me.

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@JoeJonathan 13 days

Replying to @mdoms 🎙

Wow. You know you're in a weird echo chamber when you hear an outpouring of sympathy for such deeply reviled companies.

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@mikl 13 days

Replying to @mdoms 🎙

Apple execs might have convinced themselves that they are entitled to a huge cut of pretty much everything that goes on an iPhone/iPad/etc.

To everyone else, this just looks like mustachio-twirling, cackling evil and unfathomable greed from a company that’s already the world’s richest and sitting on a mountainous pile of cash.

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@hatware 13 days

Replying to @mdoms 🎙

I don't get the point of this. Am I supposed to feel bad for Uber and Lyft? Am I supposed to feel some need for justice against Apple?

What's the narrative?

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@onphonenow 13 days

Replying to @mdoms 🎙

Folks here seem fixated on companies being able to make money when using Apple. Why is that such a policy priority? Most of these companies are scammers.

I really wish politicians and everyone would focus on USER experience here.

Apple benefits because there is a ton of crap and user harm in the marketplace that goes COMPLETELY unaddressed. We are just getting around to rules on subscription cancellation practices on the web more generally. Apple has this solved.

Additionally, with a lot of these big players, only apple has negotiating leverage, no individual user could EVER force them to accept things like hide my email or clear trial periods or non-scam cancellation policies. So USERS benefit from the power apple has in some cases.

Is it worth the apple tax? For some it is worth it even though apple has relatively small smartphone marketshare.

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@exabrial 13 days

Replying to @mdoms 🎙

Apple need to be broken up into tiny tiny tiny companies.

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@stakkur 13 days

Replying to @mdoms 🎙

Uber and Lyft execs: let’s take a 30% cut of every driver’s income while trying to classify them as contractors and avoid employee costs and other bothersome rules.

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@andi999 13 days

Replying to @mdoms 🎙

Since this is from 2018: how did it play out?

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@midjji 12 days

Replying to @mdoms 🎙

Its astonishing that the sellers of branded small laptops get away with this shit at all. Its orders of magnitude higher than any other infrastructure provider gets alwat with.

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@tylerchilds 13 days

Replying to @mdoms 🎙

You know who would love a 30% cut of Uber and Lyft's membership programs?

Drivers.

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@mabbo 13 days

Replying to @mdoms 🎙

This is just textbook rent-seeking.

Like the classic example is someone setting up a barrier on the river and charging boats that want to pass through. There's no value being added by the person blocking the river.

Just the same, when Apple says "Let's charge for this", what value are they adding for doing so? They make money off the current system. They just want to make more money while providing zero additional value to consumers or to app makers.

All I can ask is "How do you sleep at night?" but I'm sure I'll get the Rainier Wolfcastle's answer.[0]

[0]https://www.youtube.com/watch?v=GO0JaecRWy0

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@tech-no-logical 13 days

Replying to @mdoms 🎙

maybe I'm a cynic, but why should I care that Evil Corp A tries to rip off Evil Corp B and Evil Corp C ?

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@maerF0x0 13 days

Replying to @mdoms 🎙

I wonder how this model compares to things like videogame consoles where the device is (afaik) sold below cost but then made up in licensing fees and royalties on sales?

I think it's a good comparison and would give insight into how a similar scenario has played out in adjacent industries

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@Mentlo 12 days

Replying to @mdoms 🎙

Someone working on a subscription application here and quite intimiately know all data around our acquisition, retention, engagement - you can subscribe to us through apple or you can subscribe outside the apple ecosystem - and apple only takes the cut when through them.

Ultimately - it's the user choice where they're going to do it - and if the user wants to reward the company, they could subscribe through other means. Most users don't know this, obviously, but it is a possibility. And if we reach them through a different acquisition channel, the users won't subscribe through Apple, they will subscribe elsewhere.

However, the customers who subscribe through Apple are usually a lot more valuable to us (more affluent, stable payments, more engaged), and even with the 30% cut, having Apple as an acquisition channel is valuable. It is not worth it for us to go out of Apple's ecosystem.

Apple know this - and are just playing the economics. They are aware the added benefits to the user and the marketing pull they have in their store. The next step for App Store is going to be changing the 30% to fit the business model of whatever they're marketing - if they're rational. There was already suggestion that for streaming apps (very high operating cost, very low margin) they might drop to 15% - because they'll try matching the economics to the barely positive tradeoff for the businesses using the app store.

I see nothing wrong with the Apple model from a business standpoint of a multi-platform business. When something is specifically an app business it becomes more tricky because essentially in order to acquire the customer they have to install the app so the app store becomes your main acquisition channel. But even there you could argue that your business model wouldn't exist if Apple wasn't providing the customers, OS, app store and marketing. So it makes sense for Apple to take a larger cut (in relative terms per acquisition volumes).

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@DrBenCarson 13 days

Replying to @mdoms 🎙

> "Unfortunately, IAP being 'optional' means that no one will ever use it," writes App Store VP Matt Fischer

Um...yeah, that's pretty damning.

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@friedman23 13 days

Replying to @mdoms 🎙

Someone give me a good argument for why Apple deserves a THIRD of revenue generated from apps on their platform? Apple's app store is pure rent seeking. Even the supposed curation everyone is paying for is lackluster. People are scammed left and right.

Funnily enough, this applies to Uber and Lyft too. These middlemen companies have too much power to unilaterally dictate what cut they get from their service.

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@miguelazo 13 days

Replying to @mdoms 🎙

Unbelievable level of hubris. Another shining example of why we need massive antitrust actions across the tech industry.

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@emsy 13 days

Replying to @mdoms 🎙

Just now there’s also an ongoing coverage about scammy Wordle clones that currently haunt the App Store. Their whole protect the customer narrative is a sham when it comes to the App Store. I think the only upside are easily cancellable subscriptions, which, if you think about it, is actually a problem that is a result of their push for the subscription model and should be solved by regulation: mandatory reminders for subscriptions and easy cancellation. There, problem solved for all platforms not just Apple’s.

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@starik36 13 days

Replying to @mdoms 🎙

Why stop there? If I have money in my pocket and place the iPhone there as well, Apple should be entitled to 30% of it.

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@phs318u 13 days

Replying to @mdoms 🎙

I think a lot of the takes on this are coming at it from the wrong angle - "Why does Apple deserve a third of app revenue?"

What if we flip it to: "Why do app developers deserve access to Apple's customers?"

30% is the price to access Apple's customers.

If you're a developer and don't like this, then don't build an iOS app. Build Android-only, or build a web app.

If you're a customer and don't like this, then don't buy an iPhone. Vote with your feet. Buy an Android. Or a Pinephone/Fairphone/Librem which are as close to a general purpose computer-as-a-phone outside of the Apple-Google duopoly that there is at the current time.

I understand that the value of the Apple ecosystem is not just what Apple bring to the table. It's the ecosphere of apps available. So there's definitely a symbiosis here. But Apple is like China here. No matter how ethically questionable, there will always be those for whom the market that Apple represents is too tempting to ignore. Even with a 30% cost of doing business. Meaning there will always be app developers building apps for iOS.

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@skc 12 days

Replying to @mdoms 🎙

I'm still looking in those emails for the oft quoted HN comment of "Apple does all the heavy lifting wrt payment processing and discovery so 30% is fair"

All I see there is talk of how to make even more money.

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@ksec 13 days

Replying to @mdoms 🎙

> It is Apple's Devices, Apple's Software, Apple's Platform, Apple's user and Apple's Customer, everything belongs to Apple. But Apple is very generous and give "70%" of those revenue to developers and business partners.

> These companies and developers are greedy. They want even more than 70%! Uber and Lyft should be kicked out of the App Store.

> Laws and Regulations wants to fine Apple for Anti-Trust and Anti Competitive practice, Apple should pull out those market, that is the EU common market, Australia, Japan, South Korea, Russia, India!

I wish I made these sentiment up, except you will find many Apple apologist supporting Apple writing exactly that.

But none of these matters to the general public. Apple is Three Trillion Market Cap company, they are very successful, selling iPhone and Mac in record numbers. Tim Cook will continue to tell you Apple is making the world a better place. To enrich people's lives. And privacy is a fundamental human right. [ Subject to Terms and Condition ]. With a big smile on the face.

On another note it is interesting this isn't the first time Phil Schiller has been fighting the battle for users and developers. But now he is "promoted" ( cough ) to Apple Fellow. And Eddy Cue......

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@krisdigital 12 days

Replying to @mdoms 🎙

Nice read after my app update got rejected some weeks ago for not using in app purchases, even though it was already on the store for a year. It is a news reader app, but they said it does not fall under the "reader" category where they make an exception. I did not even want to make an app, but basically all the feedback from users I got was: is there an app out yet? Sadly progressive web apps are bullied, for example you cannot play audio in the background as I do for podcasts. But there is no way I will add IAP, I am not even trying to sell anything, it just for existing users. Kind of sad you cannot just provide an app even though you pay a fee for the store as developer.

The second problem I have as someone who is offering subscriptions himself, is how Apple earns money with scam subscriptions. I could have justified the closed Appstore in the past by saying that they take care that you do not get trash on your phone, but - the App Store is full of trash. Check the top two guitar tuners, they are free. Open them up and you will see a 8$/week subscription, that you accidentally agree to with the finger on your home button. The ratings are full of people complaining, but Apple puts them at the top. There is no way they don't see this shady business. Wonder how much of their revenue comes from shitty scam apps.

People who suggest to just not be present on the app store, it is just not an option for many businesses, as the App Store is basically a monopoly.

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@bsaul 13 days

Replying to @mdoms 🎙

what happened to the pressure US senate was supposed to put on those platforms to stop behaving like the mafia ?

Apple lowered its fees to 15% but that can't be the end of the story, right ?

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@jokoon 8 days

Replying to @mdoms 🎙

It's strange how I remember that there was a time where microsoft was the evil corporation and Apple was the cool underdog.

I mean microsoft didn't sell hardware, and now Apple sells hardware and software and takes a cut from software sales.

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@pyuser583 13 days

Replying to @mdoms 🎙

I’d more interest in how Apple decided 30%. Why not 20%? 25%? 35%?

They can make up whatever number they want.

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@MattGaiser 13 days

Replying to @mdoms 🎙

The tweet seems to be gone. What did it say?

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@2OEH8eoCRo0 13 days

Replying to @mdoms 🎙

30% is obscene. Apple obviously deserves to get paid. Either abolish app store fees (Apple gets paid by selling hardware) or force them to allow 3rd party stores on their own store with transparency reporting requirements to foster competition.

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@quantum_state 13 days

Replying to @mdoms 🎙

This is yet another sign that we the people should have a good open source phone.

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@Barrin92 13 days

Replying to @mdoms 🎙

Apple is a small country disguised as a company. This is nothing else but essentially a tax, collecting economic rent from their digital fiefdom. Of course unlike actual nation states, Apple's not really in the business of providing many public services in return.

Seems like we're kind of at the point where actual nation states should take that as a sign of peer competition and do something about it because I honestly have no idea why we're tolerating this.

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@whiddershins 13 days

Replying to @mdoms 🎙

The cut apple takes is too big, and, afaict the cut seamless and Instacart and probably Uber and Lyft take is way too big too.

Technology can increase ease while also lowering prices, but it’s just so easy for it to go the other way.

I think Uber and Seamless are most obvious to me in NYC. The overall cost of doing basic stuff was initially depressed and now has increased way over inflation.

Regulators have played their part.

Contrast with Amazon who we all like to hate on, and who may be abusive to retailers and manufacturers, but the savings is clearly passed on to the consumer.

No real ideas. Just an observation.

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@cardosof 13 days

Replying to @mdoms 🎙

I just wonder how history would be if in the 90s the Microsoft suits tried to get a cut of everything running on Windows. "Oh you used Windows and Internet Explorer to buy AutoCAD?"

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@objektif 13 days

Replying to @mdoms 🎙

This I believe is exactly how empires go down.

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@xyst 13 days

Replying to @mdoms 🎙

Greedy fucks get 30% for doing nothing. You already got your massive nut [from iDevice sales and first party subscriptions] and now they want a piece of everybody's smaller nut [from the developers via "IAPs" shares].

Not to mention the yearly fees you pay to apple if you want to publish to the App Store. I really hope the anti-trust laws come down heavy on Apple, Google, and et al.

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@cblconfederate 13 days

Replying to @mdoms 🎙

The companies that don't take their business out of app stores deserve all the pain in the world. I'm with apple on this

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@mrtksn 13 days

Replying to @mdoms 🎙

I think, if they did not insist on the %30, which I believe is fine when it comes for stuff that scale with almost no cost increase(like crystals in a game), and came up with something reasonable to accommodate transactions with thin margins they would have actually provide a good service. Receiving payments via IAP is hugely valuable because it reduces friction big time, however it is unreasonable to ask %30 in businesses where margins are %10 or even lower.

I think Apple realised that to some degree as they have much lower commission for certain categories like 1:1 tutoring etcetera.

Anyway, I think Apple might have crossed a line on these commissions and we see rulings all over the world requiring Apple to allow alternate payment methods.

With my user hat put on, I'm not excited about that because it's actually much much pleasant experience to use IAP because you have all your subscriptions in one place and Apple is super good on refunds.

What I would like to see one day is some kind of "Universal payment protocol" that provides standardised UI for mobile payments. Imagine the IAP interface being able to accept any kind of payment(like paying with your card of choice with Apple Pay) and keeps track of these payments in your iDevice with a button for cancelling subscriptions that makes an API call to the payment provider.

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@stanmancan 13 days

Replying to @mdoms 🎙

I love that Apple forces subscriptions on their platform through Apple Pay. As a consumer, it's incredibly easy for me to view and cancel subscriptions in one central location. I've signed up for tons of services in the past and all to often they decide to make it a nightmare to try and cancel.

The 30% might suck as a developer, but then just charge more for Apple customers. As long as the rule is applied to all apps on the platform then everyone is playing by the same rules. Nobody is forcing you to release your app on the Apple Ecosystem, you -want- to because it's a huge potential customer base. If you want to participate then play by their rules. If it's too expensive, then don't build your app there. If more developers refused to release their app on iOS they would start to re-evaluate their 30% fee.

My only qualm is the news that in certain situations they have lowered their fee's which isn't fair as it gives those companies a competitive advantage as they can charge less.

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@FpUser 13 days

Replying to @mdoms 🎙

I suggest those execs ask governments for a special Apple tax to make sure there is guaranteed cash flow.

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@heavyset_go 13 days

Replying to @mdoms 🎙

Both Apple and Google enforce using their payment methods on any app distributed on their app stores. That means that there's a 15% to 30% rent incurred on all revenue in the mobile app space. Just to participate in the mobile app market, you need to give up to 30% of your revenue to either company.

The entire mobile app market essentially has to pay either company a significant chunk of their revenue just to exist. That's insane.

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@righttoolforjob 13 days

Replying to @mdoms 🎙

The argument against an app store being controlled by a private entity is to me similar to that of other infrastructure, like broadband, roads, utilities, access to the market itself, etc. It should be available to everyone at self-cost or less. Major and common infrastructure must abide under special rules.

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